Johnstone v HIH Insurance Limited [2004] FCA 1414 and Johnstone v HIH Limited [2004] FCA 190

PRACTICE AND PROCEDURE - REPRESENTATIVE PROCEEDINGS - pleading - particulars - motion to strike out pleadings - purpose of pleadings and particulars generally - particulars of alleged state of mind - inadequacy of pleadings - deficient formulation of pleadings - requirement that material facts and allegations be properly pleaded - (CTH) Federal Court Rules O 11, O 12. 

PRACTICE AND PROCEDURE - REPRESENTATIVE PROCEEDINGS - threshold requirements for bringing representative proceedings in the Federal Court - every group member must have a claim against all respondents - pleadings must describe or otherwise identify the group members - claims must arise of out of similar or related circumstances - claims must give rise to substantial common issues of law or fact - requirements for applications commencing a representative proceeding - necessity of being able to define with precision who the members of the group are - group members' ability to opt out - possibility of meeting requirements by redrafting pleadings - (CTH) Federal Court of Australia Act 1976 ss 33C33H33N.

CORPORATIONS - shareholders - noteholders - diminution in share value - company as proper claimant - derivative actions - where shareholder or noteholder has suffered personal loss - case law unsettled - shareholder or noteholder may be able to sue on the basis of a loss that is separate and distinct from any entitlement of the company. 

TRADE PRACTICES - misleading and deceptive conduct - misleading and deceptive conduct by silence - pleading of material facts must justify conclusion that silence would amount to misleading and deceptive conduct - accessorial liability - knowing involvement - requisite knowledge - reliance - requirement of a precise formulation of the causal nexus between the conduct alleged and the loss claimed - (CTH) Trade Practices Act 1974 ss 52 and 75B.

PRACTICE AND PROCEDURE - SECURITY FOR COSTS - security for costs application - orders for costs against individuals only to be made in rare circumstances - financial hardship - frustration of proceedings - strength of applicant's case - orders sought at premature stage - issues impossible to determine on present pleadings.

PRACTICE AND PROCEDURE - REPRESENTATIVE PROCEEDINGS - direct communication by solicitors to group members - solicitors made statements about potential group members' ability to join group proceedings and their financial liabilities - statements inaccurate - effect of statements - discretion of the Court to determine matters in relation to representative actions - ability of Court to order notices be given to group members - rectification of misleading communications to group members - correction letter necessary - (CTH) Federal Court of Australia Act 1976 

Johnstone v HIH Limited  [2004] FCA 190

Johnstone v HIH Insurance Limited  [2004] FCA 1414