New class action against Boral Ltd faces multiplicity issues

What is the duty of solicitors to notify Court of competing (or potentially competing) class actions, and should the resolution of multiplicity issues await determination of the High Court?

In this matter there are two largely duplicative open class actions, and potentially a third duplicative open class action coming. The first proceeding was commenced by Quinn Emanuel Urquhart & Sullivan (QE Proceeding). The QE Proceeding was commenced on 19 March 2020, and was listed for an initial case management hearing on 23 April 2020, at which time various timetabling orders were made for the filing of pleadings, and in relation to discovery. At that time, the Court was unaware of the prospect of there being any competing class action(s).

The second proceeding was commenced by Maurice Blackburn on 28 May 2020 (MB Proceeding). No prior notice had been given to the Court that the MB Proceeding would be commenced, or was likely to be commenced. It also appears that a third proceeding may be commenced by Phi Finney McDonald (PFM), but no such proceeding has, as yet, been commenced.

In circumstances where both MB and PFM were aware of the initial case management hearing to be conducted in the QE Proceeding on 23 April 2020, Lee J was critical of both firms for not having notified the Court of the likelihood or possibility that they would be commencing a competing class action, and instead allowing the Court to proceed to make timetabling orders in the QE Proceeding. His Honour said (at [10]):

These multiplicity disputes present challenges for the Court. They have delayed, sometimes substantially, the progress of matters both in this Court and in other courts. The time has long passed, if it ever existed, where firms of solicitors can sit back and stay schtum when a not unrealistic prospect exists that a substantially duplicative open class proceeding will be commenced. In the present circumstances, both experienced class action firms stayed mute when the matter was first before the Court. Such a course should not happen again – it amounts to conduct inimical to the resolution of the disputes between claimants and a respondent as quickly, inexpensively and efficiently as possible. Indeed, these events have necessitated the vacation of the substantive orders made on 23 April 2020, with the consequence that the underlying dispute remains in stasis while plaintiff lawyers and funders consider their respective positions.

His Honour (at [11]) also once again deprecated any ‘first in time’ rule:

The relevant professional obligations of lawyers, and the encouragement of mature reflection and proper pleading of claims, has informed the view (expressed by judges on a number of occasions), that to approach carriage of open class proceedings in a way which encourages a race to the “courthouse steps” would be highly unfortunate and potentially deleterious to the administration of justice.

His Honour then indicated that, in ordinary circumstances, he would be inclined to resolve the multiplicity issue swiftly, and at a minimum of cost. For the time being, however, his Honour ordered that:

  • the extant timetabling orders in the QE Proceeding be vacated, and the QE Proceeding and the MB Proceeding be case managed together;
  • any applications filed by the parties, and any competing class action commenced by PFM, be made returnable before his Honour on 10 July 2020; and
  • at that time he will determine whether it is appropriate to resolve the multiplicity issue promptly, or whether any resolution of that issue should await the determination by the High Court of the appeal in Wigmans v AMP Ltd (as contended by both the applicant in the QE Proceeding and by the respondent, and which his Honour indicated (at [15]) that “there may be some merit” in doing).

CJMCG Pty Ltd (as trustee for CJMCG Superannuation Fund) v Boral Ltd [2020] FCA 914

Federal Court of Australia, Lee J,

19 June 2020

Applicants’ Solicitors: Quinn Emanuel Urquhart & Sullivan / Maurice Blackburn;          

Respondent’s Solicitors: Herbert Smith Freehills;

Applicants’ Funder: N/A

Austlii link: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2020/914.html?context=1;query=CJMCG;mask_path

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