The class action will be jointly financed by litigation funders IMF Bentham and Burford Capital, while a third funder — Investor Claim Partners — is out.

Quinn Emanuel, Piper Alderman and Shine Lawyers all filed representative proceedings after RCR Tomlinson reported a $57 million write-down on its Queensland solar farms last year and its share price tumbled by 60 per cent.

NSW Supreme Court Justice David Hammerschlag last week refused to entertain a beauty contest between the firms and instead decided to consolidate the three competing proceedings whether they “agreed or not”. The consolidation order was conditional on each litigation funder having the option to participate equally in the funding arrangement.

Unable to agree on joint funding terms, the parties returned to court a few days later for directions, but were told to “work it out” themselves or face the consequences. Justice Hammerschlag refused to order the parties to confer, exclaiming that litigation funding was “not rocket science”.

Counsel for the Quinn Emanuel-led class action, Elizabeth Collins SC, told a hearing on Thursday that the parties had now agreed on future funding and management arrangements for the consolidated proceedings.

Quinn Emanuel will continue as the solicitors on record, while neither Shine nor Piper Alderman will participate in the proceedings. All of the lead plaintiffs have confirmed they will go forward in the consolidated action, except for some applicants in the Shine proceeding, who are still deciding whether to continue.

Collins said Piper Alderman’s funder, IMF Bentham, had taken up its option to participate in the proceedings, while ICP, which was Shine’s funder, had declined. The consolidated class action will be funded under a “50-50 arrangement” with IMF and Quinn Emanuel’s funder Burford Capital, she said.

Justice Hammerschlag congratulated the parties for reaching an agreement less than two weeks after the consolidation orders were made.

“I was going to say with a certain degree of scepticism when I came in, ‘tell me the good news that you’ve agreed’, but you did – well done,” Justice Hammerschlag said.

‘Inconceivable’ that defendants will have to pay three sets of plaintiff costs

Justice Hammerschlag previously indicated that the plaintiffs’ costs incurred to date should be treated as costs in the cause of the proceeding, meaning they would only be paid by RCR Tomlinson if the company lost the case.

Lawyers for RCR Tomlinson director Bruce James, who was joined as a defendant to the Shine proceeding, argued that costs should instead be reserved, to avoid a situation where the defendants would potentially be liable for three sets of plaintiff costs.

James’ counsel, James Hutton, said the approach taken in the AMP beauty contest should be applied, where Chief Judge in Equity Julie Ward said that costs incurred by unsuccessful plaintiff solicitors should be reserved until the end of proceedings upon application.

Hutton said if Justice Hammerschlag had stayed the proceedings, instead of consolidating them, the defendants would never be in a position where they would be hit with the costs of the Shine and Piper Alderman proceedings.

But the judge refused to stay any proceedings in order to reserve the question of costs in the way proposed by Hutton.

“This is a problem where there’s no problem, because those costs will become costs in the cause and ultimately if there’s ever going to be a taxation, someone will assess how much of those costs should be paid,” Justice Hammerschlag said.

“It is inconceivable that on assessment, the defendant will have to pay three times the costs. You might be ordered to pay one third of each, I’ve got no idea, but you won’t be mulcted in three sets of costs in the same thing.

“If it comes to conception, if that becomes a reality, come back here and I’ll stop it. It won’t be permitted to happen.”

Multiplicity motions ‘nothing to do with substantive’ case, defendants want costs

Barrister Guy Donnellan argued the legal costs relating to the multiplicity motions should be not have to be paid by his client, former RCR Tomlinson CEO Paul Dalgleish, who was also joined as a defendant to the Shine proceedings.

“This was a commercial dispute between funders and solicitors and it had nothing to do with the substantive proceedings at all, therefore it should be paid,” Donnellan said.

“We had to attend, we had to protect our client’s interests, there was a lot of submissions and evidence to read. In AMP, her Honour did also suggest that this spectacle should not happen again and in the end here, the parties capitulated to your Honour’s sensible suggestion of consolidation.”

Collins argued for the plaintiffs that the costs of the multiplicity motions should instead be reserved, noting that Justice Ward did not make an order in relation to the defendant’s costs in the AMP class action beauty contest.

“[AMP] basically had to wear them. Now that might be different here, but if there is a settlement, which happens in most of these cases, your Honour ultimately will have to approve costs. So we say there is sufficient protection built in as to what’s ultimately going to be recoverable,” Collins said.

Judge warns he will never order defendants to pay for plaintiffs’ ‘bickering’

Justice Hammerschlag refused to reserve the costs of the multiplicity motions. He ordered they would also be considered costs in the cause of the proceeding, but warned the parties that in the end, the defendants would not have to bear those costs.

“The defendants are never going to have to pay for all of those motions where the plaintiffs are bickering amongst themselves. I will do lots of things, but I won’t order them to do that,” Justice Hammerschlag said.

Despite a court practice note to the contrary, Justice Hammerschlag made an order that no costs incurred along the way would be assessable or payable until the conclusion of the proceedings at first instance.

“I’m not going to have people running off to tax costs in a proceeding like this. So either way, [the defendants] are not going to get those costs now even if they were entitled to them,” Justice Hammerschlag said.

“I think the fair thing in these circumstances is to order that the costs are costs in the cause and the plaintiffs will never get them and ultimately if [the defendants] win, they’ll get them.”

The parties scheduled a timetable for the future management of the consolidated class action and the matter was stood over until October 25.

RCR Tomlinson went into administration in November 2018 following a number of issues with solar farm contracts it had entered into between May 2016 and April 2018. Most notably, RCR announced in August 2018 that it would raise $100 million from investors to address cost overruns.

The class actions variously alleged that RCR breached its prospectus disclosure obligations and continuous disclosure obligations and engaged in misleading or deceptive conduct. They say that RCR was aware, or ought to have been aware, of the risks associated with the company’s portfolio of solar projects.

Elizabeth Collins SC represented the consolidated class action, to be funded by Burford Capital and IMF Bentham and instructed by Quinn Emanuel. Nicholas Owens SC represented the Piper Alderman-led class action funded by IMF Bentham and the Shine Lawyers-led class action funded by Investor Claim Partners. RCR Tomlinson was represented by Mark Newton, instructed by Colin Biggers & Paisley. Former RCR Tomlinson CEO Paul Dalgleish was represented by Guy Donnellan. RCR Tomlinson director Bruce James was represented by James Hutton, instructed by Johnson Winter & Slattery.

The Quinn Emanuel-led class action is Ashita Tomi Pty Ltd as trustee for Esskay Super Fund v RCR Tomlinson Ltd. The Shine Lawyers-led class action is Barry Jones v RCR Tomlinson Limited. The Piper Alderman-led class action is CJMcG Pty Ltd at the CJMcG Superannuation Fund v RCR Tomlinson Limited.