Furthering the reach of class actions: Gray v Cash Converters

Key Points:

Gray points to a more expansive reading of the class action requirements, but the issue will probably need to be determined once and for all by the Full Federal Court.

In class actions with multiple respondents there has been a long-running controversy (at least in the Federal Court and Victoria) about whether each group member must have a claim against each respondent. Conflicting Full Court authority has shrouded the issue in uncertainty for many years.

The most recent decision on the point - Gray v Cash Converters [2014] FCA 420 - prefers an expansive reading of the class action regime, which will further the reach of class action litigation and make them easier to pursue.

Background Section 33C(1) of the Federal Court of Australia Act 1976 (Cth) (and corresponding provisions in Victoria) outlines the requirements that must be satisfied for the commencement of a representative proceeding under Part IVA of the Act. One of those requirements is that a minimum of seven or more persons must have a claim against "the same person".

While it is clear that group members must have a claim against at least one respondent, there has been controversy over whether all group members must have a claim against each respondent, where there are multiple...