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On 14 April 2021 Lee J delivered judgment in respect of a carriage dispute between three law firms that had each filed open class representative proceedings against Boral Ltd (CJMcG Pty Ltd atf the CJMcG Superannuation Fund v Boral Ltd (No 2) (2021) 389 ALR 699; [2021] FCA 350 – see April 2021 Crayfish Report). His Honour determined that the Maurice Blackburn led Parkin proceeding ought to go ahead as the only open class proceeding, on the basis that it was likely to produce the greatest return to class members in the very significant majority of conceivable scenarios. His Honour permanently stayed the Quinn Emanuel led CJMcG proceeding, but allowed the Phi Finney McDonald (PFM) led Martini proceeding to go ahead as a closed class proceeding (at least for the time being) due to the significant number of institutional investors that had signed up with PFM.

In this judgment his Honour ordered that opt out notices be sent to PFM’s clients (who were class members in both the Parkin and Martini proceedings) setting out the steps they would need to take should they wish to opt out of the Parkin proceeding and continue to advance their claims in the Martini proceeding. In doing so, his Honour held that the Court has power to fix an opt out date for, and issue opt out notices to, a sub-set of class members only (here, PFM’s clients). His Honour said that this conclusion was based on the text, context and purpose of Pt IVA of the Federal Court of Australia Act 1976 (Cth) (FCAA):

  • text: section 33J of the FCAA provides that the Court must fix a date before which “a group member” may opt out of a class action, which suggests that it is possible to fix an opt out date for, and provide notice to, some class members only;

  • context: section 33J(3) of the FCAA contemplates that there may be different opt out dates for different class members, and s 33K of the FCAA contemplates that the class description may be amended from time to time, which suggests that opt out may occur at different times in the proceeding; and

  • purpose: the Court having power to order opt out and issue notices to only some class members is consistent with the opt out regime established by Pt IVA of the FCAA, including because class membership may have “significant heterogeneity” and certain information may be critical to some class members but irrelevant to others (e.g. where there is an amendment under s 33K of the FCAA and new class members come into the proceeding).

Finally, his Honour foreshadowed the likely need to carry out a registration process before mediation, and the potential that a ‘soft class closure’ order may be sought. His Honour observed that “there is presently real doubt as to the ability of the Court to make such an order” in the wake of the New South Wales Court of Appeal’s decisions in Haselhurst v Toyota Motor Corporation Australia Ltd (2020) 101 NSWLR 890; [2020] NSWCA 66 (see April 2020 Crayfish Report) and Wigmans v AMP Ltd (2020) 102 NSWLR 199; [2020] NSWCA 104. Given that opt out notices would be sent to PFM’s clients only, there was no need for his Honour to consider the issue at this stage of the proceeding. However, he noted that were he asked to make such an order, it would need “to be the subject of detailed argument at a later time” and he would “give consideration as to whether this issue should be raised with the Chief Justice as being suitable for a direction under s 20(1A) of the [FCAA] [i.e. for referral directly to a Full Court]” (at [21]).

Parkin v Boral Ltd (Opt Out Notices) [2021] FCA 478

Federal Court of Australia, Lee J,  
27 April 2021

Applicant’s Solicitors in Parkin proceeding: Maurice Blackburn;
Applicant’s Solicitors in Martini proceeding: Phi Finney McDonald;
Respondent’s Solicitors: Herbert Smith Freehills;
Applicant’s Funder in Parkin proceeding: N/A;
Applicant’s Funder in Martini proceeding: Therium Litigation Finance Atlas AFP IC

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