Smith v Australian Executor Trustees Limited; Creighton v Australian Executor Trustees Limited [2016] NSWSC 17

Smith v Australian Executor Trustees Limited; Creighton v Australian Executor Trustees Limited [2016] NSWSC 17

The Court declined to impose a choice between two properly brought representative proceedings where they advanced materially different cases and funding models, and where debenture holders could be given a mechanism to choose between them. However, overlapping class membership was not in the interests of justice because it would create serious settlement difficulties for AET and the class members. The appropriate immediate orders were that the proceedings be heard together and that evidence in one be evidence in the other, with further orders to be considered to require an early opt out process and to prevent members of the Smith Class from also remaining in the Creighton Class.

Jurisdiction
Australia
Judgment Date
05 February 2016
Procedural Posture
Representative Proceedings Arising Out of Alleged Breaches of Duties by a Debenture Trustee Under the Corporations Act 2001 (cth) / Procedural Ruling on Competing Representative Proceedings, Stay and Conduct Orders
Outcome
Orders made that the two proceedings be heard together and evidence in one be evidence in the other; further issues stood over for submissions and directions.
Legal Topics
['competing Representative Proceedings' 'stay of Proceedings' 'consolidation' 'opt Out Procedure' 'debenture Trustee Duties' 'litigation Funding']
['civil Procedure' 'representative Proceedings' 'corporations'] ['competing Representative Proceedings' 'stay of Proceedings' 'consolidation' 'opt Out Procedure' 'debenture Trustee Duties' 'litigation Funding']

Case Brief

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Procedural Posture

Representative Proceedings Arising Out of Alleged Breaches of Duties by a Debenture Trustee Under the Corporations Act 2001 (cth) / Procedural Ruling on Competing Representative Proceedings, Stay and Conduct Orders

Legal Issues

  1. 1 ['Whether both representative proceedings against Australian Executor Trustees Limited should be permitted to continue and, if so, on what terms.' 'Whether one proceeding should be stayed or discontinued as a representative proceeding under the Civil Procedure Act 2005 (NSW).' 'Whether the proceedings should be consolidated or managed by orders concerning hearing together, evidence, class membership and opt out procedures.']

Ratio Decidendi

The Court declined to impose a choice between two properly brought representative proceedings where they advanced materially different cases and funding models, and where debenture holders could be given a mechanism to choose between them. However, overlapping class membership was not in the interests of justice because it would create serious settlement difficulties for AET and the class members. The appropriate immediate orders were that the proceedings be heard together and that evidence in one be evidence in the other, with further orders to be considered to require an early opt out process and to prevent members of the Smith Class from also remaining in the Creighton Class.

Court Disposition

Orders made that the two proceedings be heard together and evidence in one be evidence in the other; further issues stood over for submissions and directions.

Orders

  • ['The two proceedings be heard together.' 'Evidence in one proceeding be evidence in the other.' 'Otherwise, the proceedings stand over to a date convenient to the parties for submissions on what further orders should be made.' 'A date should be fixed by when class members should opt out of the proceedings, with a...