Case Study - RB v Blue Sky | GMPLaw Diesel Claims

Case Study on Competing Class Actions

12th January 2023

R&B INVESTMENTS PTY LTD (TRUSTEE) v BLUE SKY ALTERNATIVE INVESTMENTS LIMITED (ADMINISTRATORS APPOINTED) (IN LIQ) (CARRIAGE APPLICATION) [2022] FCA 1444

Class actions in Australia can be commenced where seven or more people raise claims arising out of the same/similar set of circumstances against the same entity/entities. Although class actions are often brought by one representative on behalf of the group members, there may be situations where multiple proceedings are instituted to represent the same group members.

When multiple proceedings are instituted, the Court is often tasked with deciding the most efficient mode of resolution, keeping in mind the best interests of the group members. One such instance arose in class actions filed on behalf of the shareholders of Blue Sky (BLA as formerly listed on the ASX) by two different representative entities when BLA’s share price experienced a steep downturn following allegations of the company misstating their financial information.

Justice Lee of the Federal Court of Australia passed a judgment in this class action which provided a way forward in situations where there were multiple proceedings on foot. His Honour considered the effectiveness of different potential outcomes, including the possibility of either of the two proceedings being stayed. His Honour observed that the interests of the group members, costs, and the development of the case thus far, were the most relevant issues to be considered.

Having considered the volume of research undertaken by both the representative entities, His Honour deemed decided for the two class actions to be merged into one consolidated proceeding to be in the best interests of the class members. As to the costs recoverable against the respondents, His Honour assured to put in place, a regime to ensure that the costs would be limited to those that would have been recoverable if only one proceeding had continued.

Gerard Malouf and Partners has filed class actions against Hino Motors and Mercedes Benz before the Supreme Court of Victoria, on behalf of all current and prior owners/lessees of Hino and Mercedes vehicles.

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