Today, the High Court delivered judgment in Lendlease Corporation Ltd v Pallas [2025] HCA 19, finding unanimously that the Supreme Court of NSW has power to order that a notice be given to group members in representative proceedings of the intention of the defendant (and possibly the representative plaintiff) to seek an order at any settlement approval hearing that group members who have neither opted out nor registered to participate shall remain group members but not be permitted to receive the benefits of the settlement without leave of the Court.
This decision resolves conflicting decisions of the Full Federal Court in Parkin v Boral Ltd (2022) 291 FCR 116, which held that the Federal Court did have such power under equivalent provisions in the Federal Court of Australia Act 1976 (Cth) and the decisions of the NSW Court of Appeal below and in Wigmans v AMP Ltd (2020) 102 NSWLR 199, which held that the Court did not.
In separate judgments, the High Court held that:
- The giving of the notice did not transform the statutorily mandated opt out scheme into an impermissible opt in scheme, including because the notice did not contingently extinguish the claims, or otherwise affect the legal rights, of unregistered group members and the opt out scheme did not impose an absolute constraint on the court’s power to order a group member to take action before the conclusion of proceedings: at [38], [42], [47] (Gageler CJ, Gleeson and Jagot JJ); [81], [95]-[97] (Gordon and Steward JJ); [142]-[143] (Beech-Jones J)
- By facilitating the possibility and effectiveness of settlement and finality in the resolution of claims, the proposed notice was not inconsistent with the aims of the statutory scheme: [19]-[20], [47] (Gageler CJ, Gleeson and Jagot JJ); [93]-[94] (Gordon and Steward JJ)
- The purpose of notice provisions in s175(5) of the Civil Procedure Act 2005 (NSW) is to ensure that group members are kept informed; it should be construed broadly, subject to questions of relevance: at [40]-[41] (Gageler CJ, Gleeson and Jagot JJ); [87], [91] (Gordon and Steward JJ); [133]-[138] (Beech-Jones J)
- If the notice could give rise to a conflict of interest, such conflicts are an inevitable feature of class actions, which are managed in accordance with the statutory scheme and the Court’s supervisory role. This did not preclude the Court from having power to order the proposed notice: at [44] (Gageler CJ, Gleeson and Jagot JJ); [98]-[99] (Gordon and Steward JJ); [147]-[149] (Beech-Jones J).
Edelman J agreed with the reasons of Gordon and Steward JJ and provided observations on the rules of precedent where an intermediate appellate court is faced with a conflict between its own previous decision and a decision of a court of coordinate jurisdiction.
Bronte Lambourne appeared for the Appellant, led by Liz Collins SC and Celia Winnett.
Ryan May appeared for the Respondent, led by William Edwards KC
