When private and public enforcement overlap – defendants swiftly dismissed
Shareholder class action – Concurrent ASIC regulatory proceeding raising same or similar issues – Trial of class action to commence immediately after conclusion of trial of ASIC regulatory proceeding before same judge – Application to vacate trial of class action on basis that there will inevitably be apprehended bias arising from hearing of ASIC regulatory proceeding – Application dismissed
This is another chapter in the saga of the GetSwift shareholder class action. It is to be recalled that proceedings have also been brought against the company and some of its directors by ASIC. Both the ASIC proceeding and the class action are on Lee J’s docket. This decision concerned an application made by the respondents (GetSwift and one of its directors, Joel MacDonald) alleging a “high” or “substantial” likelihood of a future apprehension of bias due to Lee J hearing the initial trial of the class action immediately after hearing the trial in the ASIC proceeding.
His Honour’s decision is relevant for its examination of the principles concerning apprehended bias and its endorsement of a single judge case managing parallel regulatory and class action proceedings.
The respondents’ arguments
- The respondents cited (at ) a number of factors in support of their application, including that:
- there is “significant overlap” in both the legal and factual issues and the evidence and submissions in both proceedings;
- the Court would likely be asked to “form views as to the credibility of witnesses” common to both proceedings; and
- following the ASIC trial, there would be circumstances to support an application for his Honour to be disqualified from hearing the class action and that costs would be wasted if the class action trial was to be vacated at short notice.
The respondents argued (at ) that an apprehension of bias was likely to arise for the following reasons:
- his Honour would “… be deciding, at least to a significant extent, the same issues against the same respondents in both proceedings, a fair-minded lay observer would consider that a judge might not be able to entirely disregard the evidence and submissions in one proceeding in deciding those same issues in the other proceeding”; and
- “having necessarily formed views in the ASIC proceeding before the hearing of the class action begins, there will be a reasonable apprehension by a fair-minded lay observer that the trial judge might not be able to put aside these views”.
His Honour dismissed the respondents’ application. In discussing the applicable legal principles, his Honour cited his earlier decision in McKenzie v Cash Converters International Ltd (No 3)  FCA 10, which discussed the test set out by the High Court in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 and further examined in Isbester v Knox City Council (2015) 255 CLR 135. To that test, his Honour also added (at ) that “… the rule against actual or apprehended bias is directed to pre-judgment incapable of being altered by evidence or argument. It is not directed to predisposition capable of being swayed by argument or by evidence”, and then continued (at ):
As touched on above, often a judge will hear extensive cross-examination on a voir dire which may not be admitted as evidence in a trial. Some evidence adduced on a voir dire may involve attacks on the qualifications, experience or creditworthiness of a witness. The duty of the judge is to determine the facts and issues in the trial on the basis of the material adduced in relation to them. It is realistic to recognise that the judge may have received, through exposure to extraneous material, some predisposition or tentative views, but the key is whether or not those views are open to persuasion on the basis of different evidence or different submissions.
His Honour stated that there were a number of things that could occur which could mean that an apprehension of bias would be unable to coalesce, including that the class action could settle before trial. Although noting that the issue of bias could conceivably arise, his Honour noted that it was his view that the respondents’ assessment of the likelihood of it materialising was exaggerated. The argument that costs would be wasted if another judge was to be appointed was also met with disapproval, with his Honour emphasising that, “[t]he efficient use of the judicial and administrative resources available for the purposes of the court and the efficient disposal of the court’s overall caseload are important factors to take into account” (at ).
His Honour continued (at ):
This problem will arise again. There are great economies likely to be achieved by the one docket judge case managing both regulatory proceedings and a class action if they involve consideration of the same underlying facts. If an issue arose which went to the proper constitution of the court then, naturally enough, the necessity for the proceedings to be determined according to law by a properly constituted court would trump any cost considerations, but this is not the present case.
Webb v GetSwift Limited (no 5)  FCA 1533
- Federal Court of Australia, Lee J, 16th September, 2019
- Applicant’s Solicitors: Phi Finney McDonald;
- Applicants’ Funder: Therium Australia Ltd;
- Respondent’s Solicitors: Quinn Emanuel
Read more about this case on Austlii: Webb v GetSwift Limited (no 5)  FCA 1533
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