Tips from Graincorp: Converting an existing proceeding into a group proceeding

Green & Ors v Graincorp Oilseeds Pty Ltd [2023] VSC 395

Green & Ors v Graincorp Oilseeds Pty Ltd [2023] VSC 395 provides a recent example of an existing proceeding being successfully converted into a group proceeding. The first plaintiff sought to bring a representative proceeding pursuant to Part 4A of the Act, by way of an amendment to the existing claim.

For plaintiffs, it serves as a useful reminder of the requirements of a group proceeding under Part 4A of the Supreme Court Act 1986 (Vic) (Act).

For defendants, it provides guidance on how to tackle concerns with a group definition. Unless a requirement of Part 4A of the Act is not met (even where it is assumed that all allegations could be established at trial), concerns arising from the group definition may need to be raised via a separate pleadings application following the amendment – or simply pleaded by way of defence.

As stated by John Dixon J at [37]:

Accepting that a proper basis for the pleading has been certified and that the material allegations satisfy the statutory requirements, issues regarding the pleading and its particularisation could be enlivened by an appropriate application in due course, rather than providing grounds to refuse the proposed amendment.

What was the proposed group?

The first plaintiff sought to amend his existing pleading to commence a group proceeding on his own behalf and on behalf of all persons who had (at [6]):

  1. owned or occupied land in Numurkah, Victoria within 1 km of the Graincorp Factory;
  2. suffered loss or damage as a consequence of offensive odours and/or noise:
    1. emitted by the defendant from the Graincorp Factory; and
    2. caused by the defendant’s processing operations to manufacture oilseed at the Graincorp Factory, where ‘loss or damage’ means a capital loss (diminution in the capital value of the Plaintiff’s and Group Members’ interest in their land) and/or a loss of acoustic and/or olfactory amenity value (including sleep disturbance, distress, inconvenience, annoyance and upset) (amenity loss).

What was the source of the Court’s jurisdiction to ‘convert’?

Justice John Dixon accepted that a group proceeding may be commenced by amendment of an existing proceeding. If the powers in the Supreme Court (General Civil Procedure) Rules 2015 (Vic) are exercised in a manner that results in an existing proceeding being amended to comply with Part 4A of the Act, then a group proceeding has been commenced: [20].

Given that view, his Honour considered it was unnecessary to determine whether the power to commence a group proceeding by amendment was also conferred by the broad powers in either ss 47 and 48 of the Civil Procedure Act 2010 (Vic) or s 33ZF of the Act, although those powers would seem to facilitate the same conclusion: [22].

Why did the defendant oppose the application?

The defendant opposed the application to covert on the grounds that ([9]-[10]):

  1. the proceeding would not comply with s 33C of Act because the claims would not give rise to ‘a substantial common question of law or fact’;
  2. alternatively, the orders would be futile because the defendant would seek an order under s 33N of the Act that the proceeding no longer continue as a group proceeding on the basis that the lack of commonality between group members meant that the group proceeding would not provide an efficient and effective means of dealing with the claims, or it was otherwise inappropriate for the pursuit of such claims by means of a group proceeding.

What are the requirements to commence a group proceeding?

At [26], John Dixon J applied the principles on the application of s 33C of the Act (which concerns the requirements for commencement of a group proceeding) from Uber Australia Pty Ltd v Andrianakis (2020) 61 VR 580, 608 at [79]:

  1. The words of s 33C are wide and should be applied according to their terms and the expressed legislative purpose: to avoid multiplicity of proceedings and facilitate group proceedings, consistently with the requirements of fairness and individual justice.
  2. The only requirement to satisfy s 33C(1)(b) is that the circumstances underlying the various claims be similar or related. The word ‘related’ suggests a connection wider than identity or similarity.
  3. The requirement in s 33C(1)(c) for a ‘substantial’ common issue of law or fact refers to issues which are ‘real or of substance’, not ‘large’ or ‘of special significance’; in the sense that the question will ‘have a major impact on the … litigation’ or will be the ‘major’ or ‘core’ issue at trial.
  4. A claim will be sufficiently closely connected either if the underlying facts or the underlying legal principles raised by the facts are sufficiently closely connected.

As for s 33H of the Act which concerns identifying group members (as well as specifying the relief claimed and the common questions) in the originating process, the pleading must not be so vague or uncertain that potential group members cannot reasonably ascertain whether they are members of the group: [28] (citing Beach J in J Wisbey & Associates Pty Ltd v UBS AG [2021] FCA 36).

Why did the defendant’s opposition fail?

Justice John Dixon was satisfied that there were three specific characteristics of group membership which allowed membership to be determined (with legal advice if necessary), being that the group member: (1) owns or occupies affected land; (2) has experienced offensive odours and/or noise emitted from the Graincorp factory; and (3) suffered capital loss or amenity loss caused by Graincorp’s processing operations: [29]-[31].

His Honour addressed the following issues in rejecting the arguments made by the defendant:

  1. An application to convert does not concern the merits of the allegations: For the purposes of assessing whether a pleading complies with ss 33C and 33H, a party is not required to put on evidence as the court assumes the party can establish its allegations at trial. While that presumption can be rebutted, that is generally done by way of a summary judgment (or similar) application, supported by evidence on affidavit, which was not the application before the Court. The defendant’s submissions that the plaintiff had merely asserted that the claims gave rise to substantial common questions of fact and law without engaging with the underlying nature of the claims in nuisance and breach of a general environmental duty were considered ‘misconceived’ because they went to the merits of the allegations: [32]-[33].
  2. The group definition did not adopt an unduly broad starting point: The group definition did not impermissibly capture persons who had no entitlement to a claim in nuisance ([34(a)]):
    1. the words ‘owned or occupied land’ in the group definition would be interpreted sensibly;
    2. group members not entitled to claim in nuisance may be entitled to claim for breach of the general environmental duty; and
    3. each group member would need to satisfy all of the criteria to qualify.
  3. Dependence on individual circumstances, in addition to common questions of law and fact, was not an impediment to commencing a group proceeding given s 33C(2)(b) of the Act: Nuisance claims that depended on the conduct of the defendant as well as individual circumstances, and the different land use zonings in the 1km radius, were not considered obstacles to a group proceeding: [34(b)]. His Honour was not persuaded that the 1km radius was arbitrary or in need of justification: [34(c)]. Assessment of applicable statutory requirements on a case-by-case basis similarly was not a basis for rejecting the proposed claim: [34(d)].
  4. It was premature to determine whether each and every common question is appropriate: The relevant test was whether the pleading failed to identify any substantial common question of law or fact, taking into account that it was not clear whether the questions as presently pleaded would ultimately proceed to trial. His Honour was not persuaded there was no such question: [34(e)]. While there were differences as between individual claims of group members, once there was a focus on the conduct and operations of the defendant, some of the proposed common questions were appropriately raised by the proposed pleading: [36].
  5. Different considerations apply at settlement stage: Judicial observation at settlement stage that ‘it is not practicable to assess the position of each group member individually’ was irrelevant to the issues arising on the application to convert: [34(f)].
  6. Section 33N considerations did not persuade the Court to exercise a discretion not to permit the amendments on the basis that it would be inefficient or inappropriate for the proceeding to continue as a group proceeding:
    1. It was not necessary for the representative plaintiff’s claim to determine all, or even a substantial number, of the identified common issues: [39];
    2. It did not follow that the need for the resolution of individual claims, following the determination of the common questions, would result in an outcome that would not be substantially different to a process of requiring each affected person to pursue an individual claim: [40];
    3. The issue of the capabilities of the plaintiff’s solicitors was irrelevant to the s 33N questions: [41].
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