VIEW CASE

This case is a representative proceeding against a number of banks, alleging cartel conduct involving foreign currency spot and forward transactions. The central aspect of the applicant’s case is that there was one or more overarching contracts, arrangements or understandings (CAUs) between one or more of the respondents (and other entities) regarding information as to specific foreign exchange instruments which in turn impacted the price of those instruments. The applicant sought leave to file an amended pleading and originating application which was opposed by all respondents. His Honour Justice Beach refused leave to file the amended pleading and originating application and addressed a number of important aspects of the applicant’s case.

First, the respondents argued that the definition of the class did not comply with s 33H of the Federal Court Act 1976 (Cth) and that the group definition did not exclude group members who were already pursuing similar claims in foreign proceedings. Beach rejected those submissions, noting that the relevant defined terms provided sufficient information to allow ‘objective identification or verification’, and dismissed the submission put by one of the respondents that a residency requirement be included in the applicable definition for group members. Further, His Honour held that there was no need to provide for a specific exclusion in the definition of group members because there was not a substantial overlap between the current and overseas proceedings, and that any group members who were part of a foreign class action could be dealt with by a responsive pleading by a respondent regarding issue estoppel.

Secondly, in relation to the terms of the pleading, his Honour accepted a number of the respondents’ arguments regarding deficiencies. His Honour noted that applicant’s case could give rise to a multitude of possible CAUs between the respondents and other entities, and he agreed that without further specificity the respondents were not in a position to properly understand the case put against them. While Justice Beach accepted that there must be some flexibility in assessing a pleading regarding cartel behaviour, as it is often based on inferences and the party alleging such behaviour faces an information asymmetry, he held that these hurdles were not an excuse for the deficient form of the pleading.

Finally, His Honour was critical of the way in which the applicant sought to support the material allegations relating to the existence of CAUs that were said to support a finding of cartel behaviour. In particular, the applicant sought to rely on thousands of ‘chatroom communications’ between certain foreign exchange traders, some of whom were employees of the respondents, during the relevant period. Justice Beach held that the chats did not appear to support one or more of the alleged CAUs and the applicant’s particulars should be reformulated by providing specific sets of particulars to each respondent in support of how it alleges that each respondent was a party to, or gave effect to, each CAU.