On Thursday (12 October), Justice Lee dismissed SDA’s application to stay a class action brought by two former McDonald’s employees, which overlaps with the 16 actions that were commenced by SDA before and after the class action commenced in December 2021.

Both proceedings concern an allegation that McDonald’s employees were not given a paid 10-minute break when working a shift of four hours or more, as they are required to under their own enterprise agreement and the Fast Food Industry Award 2010.

Justice Lee said that in dealing with the stay application, “it follows that we are now back to where we were immediately prior to last Christmas with no discernible advance on progressing the claims”.

“I regret to say I have misgivings about the litigation moving forward with efficiency and in the interests of those in respect of whom I presently have a protective role in the absence of the class action.

“Further, staying the class action in the present circumstances may have a dangerous normative effect, signalling that litigants may behave in a dilatory fashion, run misconceived arguments, and still trump another proceeding in a future, similar application,” Justice Lee said.

In addition to that finding, Justice Lee said the “time has come” for the arguments between the two warring proceedings to end so that SDA and the class action litigants advancing the same arguments can “concentrate on the worker’s interests rather than their own”.

Justice Lee took aim at SDA’s delay and said they must have been aware that third parties were preparing a class action on the same issue “while it sat back and only advanced a limited suite of claims”.

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Justice Lee said had SDA commenced some form of representative action and had then come up against a funded class action as it is now, “it is difficult to see why the interests of group members would not have required a stay of the funded class action”.

“Neither third party here would reasonably be expected to think the SDA would delay commencing [their] case the way it did if it was serious about advancing claims for all workers.

“I am satisfied funds were expended to finance the book building and then progress the proceeding without thinking the SDA would delay matters as it did,” Justice Lee found in his written judgment.

Shine Lawyers’ head of joint class actions, Vicky Antzoulatos, said the firm is looking forward “to progressing the class action for the thousands of group members we represent”.

“We’re privileged to have the opportunity to continue the fight on behalf of these workers, many of whom were teenagers when they were allegedly not given the rest breaks to which they were entitled.”

Precedent set for common fund orders

Run simultaneously alongside the stay application, the full court of the Federal Court was asked to consider whether it had the statutory power to make a settlement common fund order (CFO) under the Federal Court of Australia Act. It ruled that it did.

If granted, a CFO requires all group members to pay the litigation funder a commission from the proceeds of any settlement. If ordered by the court, it would form part of an approval.

The issue arose because the Federal Court must now approve the terms of a proposed opt-out notice to be sent to group members, and it is expected that information about a CFO would be included.

Justices Lee, Jonathan Beach and Craig Colvin were asked to consider whether the court has jurisdiction under section 33V(2) of the Federal Court of Australia Act – which reads that a court may make orders as are just with respect to the distribution of money paid under a settlement or paid into the court.

The question before them was whether this section should be read as not extending to allowing the court to make an order as to the distribution of money that may be described as a settlement, “even though the court is persuaded that the terms of the settlement be approved and concludes that is just to make orders of that kind”.

Justice Colvin said the court’s approval jurisdiction “is not confined in a manner that would prevent the approval of a settlement that included such a term”. He found there is “no reason” why the inclusion of the term “CFO” “would be a reason why a settlement must not be approved by the court”.

The next case management hearing has been listed in 21 days.