class action getting traction?

JUDGE:

Justice Perram
DATE OF ORDER:

22 October 2013
WHERE MADE:

Sydney
THE COURT NOTES THAT:

1. Johnson Winter & Slattery, the solicitors for the Applicants, also act for Mr John Alexander Manton and Ms Elia Mary Lynch, as trustees of the Manlyn Superannuation Fund (Manton and Lynch).

UPON THE UNDERTAKING OF MANTON AND LYNCH THAT:

2. They will consent to any discovery order made against them in the proceeding; and
3. They will accept at trial that all procedural rules of evidence apply to them as if they were parties.



THE COURT ORDERS THAT:

4. Manton and Lynch give standard discovery pursuant to Rule 20.14 of the Federal Court Rules 2011 (Cth) by 25 October 2013.
5. The questions to be determined at the initial trial in addition to (A) the whole of the claim of Charles Hodges and Mark Hodges as trustees of the Charles Hodges Superannuation Fund (the Applicants) as set out in the Further Amended Statement of Claim (FASOC) and (B) the whole of the claim of Manton and Lynch as set out in the FASOC, in accordance with the principles explained by the Full Court in Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2009] FCAFC 26, are:

Claims against Ms Waters and KPMG

(a) In carrying out an audit of MFSIM’s compliance with the Compliance Plan for each of the periods 1 September 2004 to 30 June 2005, 1 July 2005 to 30 June 2006 and 1 July 2006 to 30 June 2007, and giving a report to MFSIM stating whether in the opinion of the first respondent (Ms Waters) MFSIM had complied with the compliance plan during each period, did Ms Waters owe a common law duty of care to Group Members by reason of the matters alleged in paragraphs [55] to [67] to prevent the economic loss pleaded in paragraph [95] of the FASOC?
(b) In carrying out an audit of MFSIM’s compliance with the Compliance Plan for each of the periods 1 September 2004 to 30 June 2005, 1 July 2005 to 30 June 2006 and 1 July 2006 to 30 June 2007, and giving a report to MFSIM stating whether in the opinion of Ms Waters MFSIM had complied with the compliance plan during each period did Ms Waters owe a statutory duty to exercise reasonable care and skill in carrying out that audit, and providing that report to MFSIM, to Group Members to prevent the economic loss pleaded in paragraph [95] of the FASOC, breach of which would entitle Group Members who had suffered that loss to compensation?
(c) Did the entry into any of the transactions listed in Section A of the particulars to paragraph [70] of the FASOC constitute a failure by MFSIM to comply with clauses 2.7 and 19 of the Fund’s Compliance Plan?
(d) Did the entry into any of the transactions listed in Section B of the particulars to paragraph [70] of the FASOC constitute a failure by MFSIM to comply with clauses 1.4 and 2.7 of the Fund’s Compliance Plan?
(e) If the answers to (a) and/or (b) above is yes, did Ms Waters breach her common law duty of care or her statutory duty of care by failing to exercise reasonable care, skill and diligence in carrying out the 2005 Compliance Audit and giving the Compliance Opinion in the 2005 Compliance Audit Report by reason of the matters set out in particulars to paragraph 74 of the FASOC?
(f) Did Ms Waters and KPMG make the KPMG 2005 Compliance Representations?
(g) If the answer to (f) above is yes, were, by reason of the matters set out in paragraphs 97A to 97E of the FASOC, any one or more of the KPMG 2005 Compliance Representations misleading or deceptive or likely to mislead or deceive in contravention of:
(i) section 9 of the FTA;
(ii) section 12DA of the ASIC Act;
(iii) section 1041H of the Corporations Act; and/or
(iv) section 52 of the TPA?
(h) If the answer to (e) and/or (g) above is yes:
(i) would ASIC and/or the directors of MFSIM have been notified by Ms Waters after the 2005 Compliance Audit that there had been breaches by MFSIM of the Fund’s Compliance Plan in the circumstances of all or any of the transactions listed in the particulars to paragraph [70] of the FASOC if Ms Waters had not breached her common law duty of care or her statutory duty of care or Ms Waters and KPMG had not made the KPMG 2005 Compliance Representations?
(ii) if the answer to (h)(i) is yes, what would ASIC and/or the directors of MFSIM have been notified of, and when and by who, and what, if anything, would they have done as a result of them being notified?
(iii) if they would have done something as a result of being notified, would that have prevented the entry into, or maintenance by, the Fund of all or any of the transactions that it is alleged in paragraph [92] of the FASOC occurred and caused loss or damage and, if so, what loss or damage has the Fund suffered?
(iv) was loss or damage of this nature caused as a matter of law by a breach by Ms Waters of her common law duty of care or her statutory duty of care in the manner set out in (e) above or the KPMG 2005 Contravening Conduct?
(v) further to (h)(iv) above, can the Group Members establish causation irrespective of whether they relied directly on the 2005 Compliance Opinion given by Ms Waters and/or KPMG?
(i) If the answers to (a) and/or (b) above is yes, did Ms Waters breach her common law duty of care or her statutory duty of care by failing to exercise reasonable care, skill and diligence in carrying out the 2006 Compliance Audit and giving the Compliance Opinion in the 2006 Compliance Audit Report by reason of the matters set out in particulars to paragraph 74 of the FASOC?
(j) Did Ms Waters and KPMG make the KPMG 2006 Compliance Representations?
(k) If the answer to (j) above is yes, were, by reason of the matters set out in paragraphs 97A, 97B and 97G to 97I of the FASOC, any one or more of the KPMG 2006 Compliance Representations misleading or deceptive or likely to mislead or deceive in contravention of:
(i) section 9 of the FTA;
(ii) section 12DA of the ASIC Act;
(iii) section 1041H of the Corporations Act; and/or
(iv) section 52 of the TPA?
(l) If the answer to (i) and/or (k) above is yes:
(i) would ASIC and/or the directors of MFSIM have been notified by Ms Waters after the 2006 Compliance Audit that there had been breaches by MFSIM of the Fund’s Compliance Plan in the circumstances of all or any of the transactions listed in the particulars to paragraph [70] of the FASOC if Ms Waters had not breached her common law duty of care or her statutory duty of care or Ms Waters and KPMG had not made the KPMG 2006 Compliance Representations?
(ii) if the answer to (l)(i) is yes, what would ASIC and/or the directors of MFSIM have been notified of, and when and by who, and what, if anything, would they have done as a result of them being notified?
(iii) if they would have done something as a result of being notified, would that have prevented the entry into, or maintenance by, the Fund of all or any of the transactions that it is alleged in paragraph [92] of the FASOC occurred and caused loss or damage and, if so, what loss or damage has the Fund suffered?
(iv) was loss or damage of this nature caused as a matter of law by a breach by Ms Waters of her common law duty of care or her statutory duty of care in the manner set out in (i) above or the KPMG 2006 Contravening Conduct?
(v) further to (l)(iv) above, can the Group Members establish causation irrespective of whether they relied directly on the 2006 Compliance Opinion given by Ms Waters and/or KPMG?
(m) If the answers to (a) and/or (b) above is yes, did Ms Waters breach her common law duty of care or her statutory duty of care by failing to exercise reasonable care, skill and diligence in carrying out the 2007 Compliance Audit and giving the Compliance Opinion in the 2007 Compliance Audit Report by reason of the matters set out in particulars to paragraph 74 of the FASOC?
(n) Did Ms Waters and KPMG make the KPMG 2007 Compliance Representations?
(o) If the answer to (n) above is yes, were, by reason of the matters set out in paragraphs 97A, 97B and 97K to 97M of the FASOC, any one or more of the KPMG 2007 Compliance Representations misleading or deceptive or likely to mislead or deceive in contravention of:
(i) section 9 of the FTA;
(ii) section 12DA of the ASIC Act;
(iii) section 1041H of the Corporations Act; and/or
(iv) section 52 of the TPA?
(p) If the answer to (m) and/or (o) above is yes:
(i) would ASIC and/or the directors of MFSIM have been notified by Ms Waters after the 2007 Compliance Audit that there had been breaches by MFSIM of the Fund’s Compliance Plan in the circumstances of all or any of the transactions listed in the particulars to paragraph [70] of the FASOC if Ms Waters had not breached her common law duty of care or her statutory duty of care or Ms Waters and KPMG had not made the KPMG 2007 Compliance Representations?
(ii) if the answer to (h)(i) is yes, what would ASIC and/or the directors of MFSIM have been notified of, and when and by who, and what, if anything, would they have done as a result of them being notified?
(iii) if they would have done something as a result of being notified, would that have prevented the entry into, or maintenance by, the Fund of all or any of the transactions that it is alleged in paragraph [92] of the FASOC occurred and caused loss or damage and, if so, what loss or damage has the Fund suffered?
(iv) was loss or damage of this nature caused as a matter of law by a breach of Ms Waters of her common law duty of care or her statutory duty of care in the manner set out in (e) above or the KPMG 2007 Contravening Conduct?
(v) further to (h)(iv) above, can the Group Members establish causation irrespective of whether they relied directly on the 2007 Compliance Opinion given by Ms Waters and/or KPMG?
(q) Is the loss or damage claimed in the FASOC actionable by the Group Members or is it barred by reason that:
(i) it is a reflective loss as alleged in paragraphs [95] and [97V] of the Amended Defence?
(ii) it is statute barred in whole or in part as alleged in paragraph [97V] of the Amended Defence?
(iii) the current responsible entity has commenced and continued to trial proceedings NSD 557 of 2013?
(r) Is KPMG’s liability limited by the Accountants Scheme in force under the Professional Standards Act 1999 (NSW) so as to limit its liability to the applicants and Group Members?
(s) Noting that the Applicants and Ms Waters and KPMG have agreed that every claim made by the Applicants in the FASOC against Ms Waters and KPMG is apportionable, which if any of the claims made against Ms Waters and KPMG are apportionable claims within the meaning of the Applicable Proportionate Liability Legislation, and which of the Applicable Proportionate Liability Legislation identified in subparagraphs [99(a) and (ab)] of the Amended Defence applies?
(t) Which if any of the alleged concurrent wrongdoers identified in subparagraph [99(e)] of the Amended Defence are concurrent wrongdoers for the reasons identified in sub-subparagraphs [99(e)(i)-(vii)]?
(u) If any of the alleged concurrent wrongdoers identified in subparagraph [99(e)] of the Amended Defence are concurrent wrongdoers, to what proportion, if any, of any liability that Ms Waters or KPMG are found to be liable to Group Members for should the Court limit their liability, having regard to the extent of their responsibility and the responsibility of any persons found to be concurrent wrongdoers?
(v) Should Ms Waters and KPMG be excused from any liability that they might otherwise have by reason of s 1318 of the Corporations Act?

Claims against Mr Kyling

(w) Did Mr Kyling contravene s 601FD of the Corporations Act by not preventing MFSIM making the 2008 MFS Living and Leisure Loans?
(x) What is the proper measure of damages or compensation for which Mr Kyling may be liable to Group Members?
(y) Which if any of the claims made against Mr Kyling are apportionable claims within the meaning of the Civil Liability Act 2002 (NSW) or any other proportionate liability regime of a State or Territory, and which proportionate liability regime applies?
(z) Which if any of the alleged concurrent wrongdoers identified in paragraph [321] of the Defence of Mr Kyling are concurrent wrongdoers for the reason identified in paragraphs [322] and [323]?

Claims against Mr Price

(aa) Did Mr Price contravene s 601FD(1)(b) and (f) of the Corporations Act by not voting against MFSIM making the 2007 MFS Living and Leisure Investment at the IAC meeting on 4 July 2006?
(bb) What is the proper measure of damages or compensation for which Mr Price may be liable to Group Members.
(cc) Which if any of the claims made against Mr Price are apportionable claims within the meaning of the Applicable Proportionate Liability Legislation, and which of the Applicable Proportionate Liability Legislation identified in subparagraphs [321(a)] of the Defence of Mr Price applies?
(dd) Which if any of the alleged concurrent wrongdoers identified in paragraphs [322] and [324] of the Defence of Mr Price are concurrent wrongdoers for the reason identified in paragraphs [322]-[323] and [324]?

Date that entry is stamped: