Murphy Operator & Ors v Gladstone Ports Corporation (No 9)

This case was an application for leave to amend the pleadings in circumstances where the amendment included new causes of action after the relevant limitation periods had expired. The complicating feature of this application was that the applicants were the representative parties in a representative proceeding under Pt 13A Civil Proceedings Act 2011. The Court was required to consider whether the representative parties had to show that the new causes of action arose out of the same facts or substantially the same facts pursuant to r 376(4) Uniform Civil Procedure Rules 1999, or alternatively, whether ss 103Z or 103ZA Civil Proceedings Act 2011 – which apply to a representative proceeding – relieved the representative parties from meeting this procedural requirement. Justice Crow held that s 103Z Civil Proceedings Act 2011 only extended to group members, not representative parties. This was a tension in the class action scheme under Pt 13A Civil Proceedings Act 2011, however, it could be resolved with the use of the Court’s discretionary power under s 103ZA to avoid what would be a bifurcation of issues for determination in a representative proceeding where group members would have a broader entitlement to relief than representative parties who control the litigation and assume its risks. The application was allowed with the parties to be heard on the appropriate form of order.

Crow J

20 March 2023

Background

Murphy Operator Pty Ltd, SPW Venturers Pty Ltd and Tobari Pty Ltd (together, the “plaintiffs” or the “representative parties”) instituted a proceeding against Gladstone Ports Corporation Limited (the “defendant”). [2]. The plaintiffs started the proceeding as a “representative proceeding” under Pt 13A Civil Proceedings Act 2011: see s 103B Civil Proceedings Act 2011 which prescribe the requirements for “starting a representative proceeding”. [2]. The plaintiffs were the “representative parties” for the purpose of the representative proceeding brought under Pt 13A: see Civil Proceedings Act 2011 s 103A (definition of “representative party”). [13], [22].

The representative parties applied for leave to amend the further amended statement of claim by a proposed second further amended statement of claim (2FASOC). [1]. The proposed 2FASOC included new causes of action for which the relevant limitation periods had expired. [7]. The amendment was opposed by the defendants: see [23], [36], [52]. Justice Crow considered that the primary issue for determination was the proper construction of ss 103Z and 103ZA Civil Proceedings Act 2011. [7]. Those provisions provide as follows:

“103Z Suspension of limitation periods

(1)On the starting of a representative proceeding, the running of any limitation period applying to the claim of a group member to which the proceeding relates is suspended.

(2)The limitation period does not start running again unless—

(a)the member opts out of the representative proceeding under section 103G; or

(b)the representative proceeding, and any appeal from the proceeding, is decided without finally disposing of the member’s claim.

(3)This section applies despite anything in the Limitation of Actions Act 1974 or any other law or rule of law.

103ZA General power of court to make orders

In any proceeding, including an appeal, conducted under this part, the court may, on its own initiative or on application by a party or group member, make any order the court considers appropriate or necessary to ensure justice is done in the proceeding.” [15]–[16].

The representative parties invited the Court to prefer a broad construction of s 103Z, the effect of which made it unnecessary for them to comply with the requirement of r 376(4) Uniform Civil Procedure Rules 1999 (i.e. to demonstrate that the inclusion of the new causes of action arose out of the same or substantially similar facts). [22]. In the alternative, the Court could use its discretion under s 103ZA to allow the proposed amendment. [34]. The representative parties maintained that even if the Court was against them on both these issues, they could meet the requirement of r 376(4) in any event. [36]. The defendant argued that it was necessary for the representative parties to comply with r 376(4) which was said to preclude the inclusion of the new causes of action. [23], [36], [52].

Whether leave should be granted to file the second further amended statement of claim

Section 103Z provides group members relief from the operation of a limitation period with respect to any part of a “claim” that meets the requirements of s 103B, which as discussed above, prescribes the requirements for starting a representative proceeding i.e. the circumstances are similar or related and they give rise to a substantial common issue. [29]–[31]. The word “claim” in s 103Z(3) means the existence of facts, circumstances and legal rights anterior to and independent of the representative proceeding. [22], but Cf. [19], [29]. It has a broader meaning than the phrase “cause of action”. [22], but Cf. [19], [29]. However, this relief did not extend to representative parties, only to group members. [32]. This was a tension in the scheme. [32].

Justice Crow observed that the consequence of this tension is the creation of a “dichotomy of rights” where, as a result of an amendment to the pleadings to include a new cause of action against a defendant, a group member may have a broader entitlement to relief than a representative party who controls the conduct of the litigation and assumes its risks. [39]–[44]. This was described as the bifurcation of the issues for determination in a representative proceeding. [34]. Justice Crow agreed with this characterisation and accepted that a means of resolving this tension, in the circumstances of this case, was the use of the Court’s wide discretionary power under s 103ZA to extend limitation relief to the representative parties. [45]–[46].

Disposition

Leave to file the second further amended statement of claim was granted with the parties to be heard on the appropriate form of order. [46].

D Kerr