Federal Court drives through decision on making settlement CFOs in Maccas matter

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This judgment arose out of competing actions commenced against the respondent alleging contraventions of the Fair Work Act 2009 (Cth) (FWA) concerning the provision of rest breaks to employees. One of those actions was commenced as a conventional class action under Part IVA of the Federal Court of Australia Act 1976 (Cth) (FCAA), funded by a litigation funder (Part IVA Action). The other actions comprised non-Part IVA actions commenced by an industrial association on the employees’ behalf. In the context of resolving the multiplicity of actions, a question arose as to whether or not the Court had power to make a ‘Settlement CFO’ (given that such an order was proposed to be sought in the Part IVA Action).

Consequently, the following question was referred to a Full Court (CFO Question):

If it was just to do so, does the Court have the statutory power, pursuant to s 33V of the [FCAA], to make an order distributing money paid under a settlement in the form of a “Settlement CFO”, as that term is defined in Davaria Pty Ltd v 7-Eleven Stores Pty Ltd [2020] FCAFC 183; (2020) 281 FCR 501 (at 506– 507 [19], [22]-[25])?

Following the referral of that question, a separate issue arose, namely, as to whether a class action could even be commenced under Part IVA in relation to alleged contraventions of the FWA, or whether such an action was contrary to the scheme of the FWA. That issue arose from the fact that the FWA contains its own detailed regime for conferring standing, in certain circumstances, on employees, unions, industrial associations, etc to enable them to commence ‘representative’ style proceedings on behalf of employees, and was, in substance, argued to be an exclusive code which operated to oust the ability of persons to commence ‘representative’ style proceedings under other (inconsistent) regimes (i.e. by operating as a partial ‘implied’ repeal of Part IVA) (Standing Question).

All three members of the Full Court gave separate reasons; however, the leading judgment was given by Beach J. In relation to the Standing Question, Beach J rejected the argument that a class action was not able to be commenced under Part IVA in respect of alleged contraventions of the FWA, finding that there was no inconsistency between the two regimes (at [9], [15]-[89]) (see also Lee J at [341]-[363] and Colvin J at [447]-[449]).

In relation to the CFO Question, Beach J held that:

• the Court does have power to make a ‘Settlement CFO’, and nothing that was said by the High Court in BMW Australia Ltd v Brewster (2019) 269 CLR 574; [2019] HCA 45 was to the contrary, given that it concerned only the scope of the Court’s power under s 33ZF, not s 33V (indeed, his Honour (at [129]) ventured to suggest that nothing in Brewster prevented the Court from still making an ‘early CFO’ in reliance on s 23 of the FCAA, without any need to rely on s 33ZF) (at [10], [90]-[174]) (see also Lee J at [384]- [412] and Colvin J at [451]-[505]); and
  
  
• the making of a ‘Settlement CFO’ involves an exercise of judicial power by the Court, and in answering the ‘CFO Question’, there was a ‘matter’ before the Court, and the question was not hypothetical, principally because the answer to the question was relevant not Confidential and for internal use only 6 only to resolution of the ‘multiplicity’ question in this case but also to the content of notices that will in due course need to be distributed to class members (at [11]-[13], [175]-[317]) (see also Lee J at [364]-[383] and Colvin J at [450], [507]).

In relation to the CFO Question, Beach J said (at [103]):

But it is not in doubt that the purpose of Part IVA is to enhance access to justice by making some small claims economically viable to litigate, and to enhance efficiency in the administration of justice by enabling the Court to deal with common questions once and for all related claims. And it is not in doubt that commercial litigation funding has been firmly established as being conducive to the achievement of the legislative objectives of Part IVA. And in that regard CFOs and funding equalisation orders (FEOs) are also conducive to such objectives.

Elliott-Carde v McDonald’s Australia Ltd [2023] FCAFC 162 

Applicants’ Solicitors: Shine Lawyers, Lieschke & Weatherill
Respondent’s Solicitors: Ashurst Australia
Applicants’ Funder: N/A

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