Last week, a 5 judge bench of the New South Wales Court of Appeal provided class action practitioners with important guidance on the principles that apply to the giving of notices to group members in the context of a foreshadowed mediation.
The Court of Appeal was referred a special question as to whether notice could be given to group members of a right to register to participate in any settlement achieved through a mediation, coupled with notice of an intention that the parties, or alternatively the defendant, would seek an order binding unregistered group members to the terms of any resulting settlement and prohibiting them from seeking any benefit from the settlement. In Pallas & Anor v Lendlease Corporation Limited [2024] NSWCA 83 the Court of Appeal confirmed that such a notice is beyond power. That is because the proposed notice would promote a conflict of interest on the part of a representative plaintiff, who would be expected to act at mediation both in the interests of registered group members (whose interests may lie with settlement of the proceeding) and unregistered group members (whose rights may be extinguished upon settlement). Further, notices issued pursuant to section 175(5) of the Civil Procedure Act 2005 (NSW) are subject to two important constraints: they must relate to an event, and the event must have happened. Kate Morgan SC acted as Court appointed contradictor, Zoe Hillman was Ms Morgan SC’s junior.
Please follow this link to access the judgment.
