Group Members And Unsuccessful Class Actions In Australia—Anshun Estoppel And Abuse Of Process

Key Issues

• The issue to be resolved was whether a defendant in debt recovery proceedings, who was previously a group member in an unsuccessful class action, could raise individual defences that were not raised in the earlier class action to claims brought by a plaintiff that had previously been a defendant in the class action.
• The Supreme Court of Victoria, applying the law on Anshun estoppel and abuse of process, found that the defendant/group members could raise their individual defences.
• The outcome creates a potential conflict with earlier decisions, leaving Australian law uncertain.

Background

The Timbercorp Group was in the business of operating horticultural and forestry managed investment schemes ("MISs"). It invested in excess of $2 billion on behalf of about 18,500 investors. In addition, Timbercorp Finance Pty Ltd ("Timbercorp Finance") made loans to investors so they could invest in the MISs. In 2009, the Timbercorp Group was placed into