In a significant judgment on Wednesday, the High Court dismissed a challenge to a decision of the NSW Supreme Court that gave Maurice Blackburn carriage of the sole surviving shareholder class action against AMP after a flurry of proceedings were filed.

A majority of the High Court said where the interests of AMP and other defendants were not impacted, the court could determine which proceeding going ahead would be in the best interests of group members.

“The Supreme Court’s power to grant a stay of competing representative proceedings is not confined by a rule or presumption that the proceeding filed first in time is to be preferred,” the High Court said.

And while litigation funding arrangements were not a “mandatory consideration” for judges deciding among competing class actions, they were not irrelevant, the majority said.

There was no error in Justice Julie Ward’s decision to conduct a multi-factorial analysis, according to the High Court, although there are other ways a court could decide the issue and the analysis would “invariably” be case-specific.

The High Court’s decision confirms the approach taken by courts in tackling the so-called multiplicity problem when duplicate class actions are filed. Competing class action battles that were put on hold pending Wednesday’s decision can now move forward.

Maurice Blackburn principal lawyer Vavaa Mawuli said the firm was pleased with the High Court’s decision to uphold the Supreme Court’s ruling.

“The Supreme Court found that the funding arrangements offered by Maurice Blackburn were superior to the other competing actions as they were most likely to produce the best returns for group members. We are pleased with this result and see it as a significant win for class members in the shareholder class action against AMP,” Mawuli said.

A spokesperson for AMP said it welcomed the High Court’s decision for providing certainty about which law firm was bringing the proceedings.

“We will continue to vigorously defend the class action,” the spokesperson said.

First to file not the presumptive winner

The High Court agreed to take up the challenge by AMP shareholder Marion Wigmans, whose class action was brought by law firm Quinn Emanuel Urquhart & Sullivan in May 2018, the first of five cases over AMP’s fees for no service scandal.

In asking the High Court to weigh in, Wigmans argued that the later filed cases by Maurice Blackburn, Phi Finney McDonald, Slater & Gordon and Shine Lawyers were vexatious or oppressive and should have been stayed in the absence of any inadequacy in her case.

Wigmans also argued that Justice Julie Ward — whose decision was upheld by the Court of Appeal in October 2019 — had no power to pick Maurice Blackburn’s action based on a prediction that the case, which was funded on a no win, no fee basis and would not seek to recover a funding commission, might yield a higher return for group members.

In upholding Justice Ward’s ruling, the appeals court dismissed arguments by Wigmans that the contest was decided in error and that the subsequently filed representative proceedings were an abuse of process.

Backed by the other four judges, Justice Andrew Bell, President of the Court of Appeal, found that the judge’s approach was “open and undertaken without error” and that the alternative approach proffered by Wigmans strongly favoured the first filed class action by arguing that subsequently filed proceedings were vexatious.

The so-called first mover advantage did not get Wigmans any further before the High Court.

In their decision, which adopted the “no one size fits all” language of Justice Bell, Justices Stephen Gagelar, Michelle Gordon and James Edelman said there was no presumption that the first commenced proceeding should prevail. 

Nothing in section 67 of the Civil Procedure Act, which grants the court power to stay proceedings, supported Wigmans’ argument that a judge’s decision be confined to a first-in-time rule, the majority said. 

“Contrary to Ms Wigmans’ submission, recognition that there may be multiple representative proceedings which overlap in various ways is not inconsistent with one objective of Pt 10 [of the CPA] being ‘to increase the efficiency of the administration of justice by allowing a common binding decision to be made in one proceeding rather than multiple suits’. That objective poses the question of how to resolve multiplicity when it arises. It does not answer it,” they said.

Wigwam’s first-to-file presumption would also be “unworkable”, the majority found. In addition to encouraging a rush to court with artificially broad pleadings designed to gain a juridical advantage, it would not cure the problem that later filed cases are often not completely duplicative but are separate matters involving different but overlapping group members and claims.

Multiplicity may be addressed by a variety of means, High Court says

There is no exhaustive list of the factors that may be relevant to deciding which of multiple class actions should be stayed, and a court should decide “by reference to all relevant considerations”, which case would be in the best interests of group members, the majority said.

Wigmans’ argument that competing funding proposals, costs estimates and net hypothetical return to members were not relevant was rejected by the High Court, which said they were neither mandatory nor irrelevant considerations.

“Part 10 recognises that litigation funding arrangements are a distinct feature of representative proceedings, and, evidently, there will be cases where the difference between litigation funding arrangements is so stark that to exclude it from consideration in determining whether to exercise the stay power would not be consistent with the court seeking to act in accordance with the dictates of justice under s 58. But that is not to say that litigation funding arrangements must always be relevant, still less determinative,” the majority said.

The High Court noted that the likely success of a claim or the possible recovery were “well established” as relevant matters by courts determining the appropriateness of litigation by trustees or approving a liquidator’s application to enter a funding agreement to bring litigation.

“There is no reason to exclude those considerations in exercising the power under s 67 to stay one or more of representative proceedings in relation to the same controversy,” the majority said.

The High Court said the “adversarial” approach to resolving the issue of competing class actions was preferred to a judge playing “inquisitor”.

As foreshadowed by questions from the bench during oral argument, the majority suggested that one approach could be the appointment of a special referee to compare the funding arrangements and other characteristics of each case. Another approach would be for the court to appoint a contradictor who would represent common group members.

“Adopting one or more of these approaches, the court’s task could not be characterised as an ‘auction process’. It would instead be more akin to that used when considering the position of trustees, liquidators, attorneys or persons under disability and would include considerations such as prospects of success and cost of the proceedings. No less significantly, it would allow for conflicts of interest and the best interests of the group members to be neutrally and squarely addressed,” the majority said.

First-filed case entitled to be heard, dissenting judges say

In their dissent Chief Justice Susan Kiefel and Justice Patrick Keane said the lower courts erred in not granting Wigmans her right to pursue her case as the first to make it to court. Wigmans had a “prima facie entitlement” to “insist upon the determination of her proceedings” and the four class actions that followed offered no legitimate juridical advantage.

Neither the Civil Procedure Act nor the inherent powers of the Supreme Court to prevent abuse of process allowed the court to select a winner among a group of duplicate class actions, Chief Justice Kiefel and Justice Keane said.

“That is emphatically so where the proceedings to be so sponsored are to be determined by the same court,” the dissenting judges said.

“The Supreme Court’s fundamental function as the independent arbiter of the merits of the group members’ claims as between them and the defendant sits awkwardly with the assumption, without legislative direction, of a role whereby the court makes a reputational investment in the choice of sponsor.”

The dissenting judges said the text of section 171 of the CPA did not contemplate a class action beauty parade, but was intended to ensure justice between the plaintiffs and the defendant. 

“Whether one sponsor might be likely to secure a greater level of recovery than another because it is more experienced or better resourced or more highly incentivised financially is no doubt a matter of lively interest to those on the plaintiffs’ side of the record; but it has nothing to do with the doing of justice between the plaintiffs and the defendant according to their respective merits in relation to the dispute to be resolved by the Supreme Court,” they said.

Section 183 of the Act was no help either, Chief Justice Kiefel and Justice Keane said, citing the High Court plurality in the Brewster decision on common fund orders.

“Whether those on the plaintiffs’ side of the record might be better served by proceedings sponsored by another funder is not a question as to whether ‘justice is done in the proceedings’ as between the plaintiffs and the defendant,” they said.

The CPA is not modelled on US law, which requires adjudicating a contest when there are multiple class actions, they said.

“It is telling that, when the CPA was enacted, the Parliament of New South Wales had before it the example of the legislative regime that operates in the United States to facilitate the determination by the courts of the competition between would-be sponsors of class actions, but did not adopt that example or any relevant aspect of it.”

Concerns about lawyers rushing to the courthouse to be the first to file were a “distraction”, they said.

Wigmans is represented by Justin Gleeson SC and Adam Hochroth, instructed by Quinn Emanuel. AMP is represented by Elizabeth Collins SC and Imtiaz Ahmed, instructed by Herbert Smith Freehills. Maurice Blackburn’s Komlotex class action is represented by Cameron Moore SC and Guy Donnellan.

The appeal is Marion Antoinette Wigmans v AMP Limited & Anor.

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