My Submissions for Feb 2023 Hearing in Crypto Class Action - Part 1/ 3

in #cryptoclassaction3 months ago (edited)

If I've been a little quiet on Hive lately, here is why.

Set out below (so they are on-chain) are my submissions against Meta and Google's interlocutory application to stay or declass the proceedings (litigation tactics to try to avoid a hearing on the substantive issues).

I had only one week to prepare these submissions (after receiving Meta and Google's submissions) and they are 16,800 words.

They are so large that I've had to split them into three posts because of Hive blockchain post size limits.

If you want to see the stamped originals of Meta, Google and my submissions in PDF form they are available on the JPB Liberty website:

Apologies for the paragraph numbering re-setting at each heading - this is a Hive front-end rendering issue and is not how the text appears on the Hive blockchain or in the stamped original document.

Please vote for my Hive witness. (KeyChain or HiveSigner)

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Andrew Paul Stuart Hamilton v Facebook Inc. & Google LLC NSD899/2020

Submissions of Applicant - Against Declassing / Stay

  1. "FCAA" means the Federal Court of Australia Act 1976 (Cth).
    "CCA" means the Competition and Consumer Act 2010 (Cth) and
    "Part IV" means part IV of that Act. "FCr" means the Federal
    Court Rules 2011 (Cth).

  2. "MAW - 2" means Exhibit MAW - 2 to the affidavit of Mark Anthony
    Wilks dated 8 November 2022. "LFA" means JPB Liberty Pty Ltd's
    Litigation Funding Agreement. "Conflicts Policy" means JPB
    Liberty's Conflicts of Interest Policy

  3. The Applicant's Consolidated Submissions on Leave to
    Serve dated 13 July 2021 ("ConSub") are incorporated in these


  1. The Respondents seek to stay or declass an important public interest
    class action affecting the welfare of millions of Australians,
    purportedly "in the interests of justice" (FCr 1.32 & FCA Act s 33N)
    on the basis of alleged conflicts of interest and/or alleged
    prohibited contingency fees arising from the litigation funding

  2. There is no authority allowing proceedings in which the jurisdiction
    of the Court has been regularly invoked to be stayed on this basis.

  3. Conversely binding High Court authority:

    1. permits a broad range of litigation funding arrangements,
      despite substantial inherent conflicts of interest (far greater
      than those here)[1]; and

    2. provides that a plaintiff who has regularly invoked the
      jurisdiction of a court has a prima facie right to insist upon
      its exercise[2]; and

    3. holds that the jurisdiction to grant a stay is to be exercised
      "with great care" or "extreme caution"[3].

  4. The litigation funding arrangements in these proceedings are
    superior to typical class actions funded by large litigation
    funders, both in having far less conflict of interest and providing
    a more efficient and economic method for the group members to pursue
    their claims.

  5. It is entirely disingenuous and perverse for the Respondents to
    assert[4] that the Court, in exercising its protective jurisdiction
    over group members[5], should effectively extinguish the rights of
    those group members to obtain remedy for the Respondents unlawful
    and highly damaging conduct. The Respondents have no genuine
    interest in protecting the rights of group members and instead
    engage in unmeritorious litigation tactics to attempt to deprive the
    Applicant and group members of their right to be heard on the

  6. Binding Full Court authority limits the use of the FCAA s 33N
    declassing power to situations where multiple individual proceedings
    would be more in the interests of justice than the actual
    representative proceedings on foot[6]. The section requires the
    comparison between these two scenarios only, on the four criteria in
    s 33N (a) - (d). It does not provide a general power to declass
    because of alleged conflicts of interest arising from litigation
    funding arrangements.

  7. Declassing is clearly not in the interests of justice, particularly
    the efficient administration of it, in the current situation where
    millions of people have legally identical claims against the
    Respondents at the liability stage. This is particularly the case
    when a large percentage of the group members have claims which are
    too small to be economic to pursue individually.

  8. In circumstances where the Court has already determined[7]:

    1. a prima facie case exists, and has clearly set out that case;

    2. there is a substantial public interest in the proceedings,
      including as private enforcement of Part IV of the CCA;

    3. that the public interest in Part IV enforcement is enhanced by
      the proceedings being representative proceedings,

the over-riding interests of justice require the Court to hear and
determine the Part IV claims on their merits as representative

  1. A public interest strong enough to override an exclusive
    jurisdiction clause[8] is strong enough to override any issue
    arising out of litigation funding arrangements, which have never
    been a basis for staying proceedings, even when litigation funding
    was illegal[9].

  2. In the further circumstances that:

    1. the ACCC has not commenced or even foreshadowed enforcement or
      investigatory action, despite numerous notifications by the
      Applicant, the ACCC's ongoing enquiries into the application of
      Part IV to the Respondents and the establishment of a prima
      case in these proceedings; and

    2. traditional litigation funding firms have been unwilling to fund
      the proceedings, despite it having a very high value book build
      (MAW - 2 pg 453) and the establishment of a prima facie case,

the current proceedings are the only viable mechanism to enforce Part
IV against the Respondents and the only viable method for group
members to pursue their damages claims against the Respondents.

  1. The blocking of the only viable mechanism to enforce Part IV and for
    group members to obtain damages against the Respondents would
    fundamentally undermine the principles of equality before the law
    and access to justice. The public would rightly conclude that the
    Respondents were above the law.

  2. In the further circumstances that the Respondents:

    1. are among the most powerful and wealthy companies in the world;

    2. control crucial channels of communications and information flows
      relied upon by the public, businesses and governments alike;

    3. have exercised their power to influence political, legislative
      and regulatory processes in their favour, de-platform entire
      industries and become the arbiters of acceptable speech,

the blocking of the only viable mechanism to enforce Part IV and for
group members to obtain damages against the Respondents would
undermine public confidence in the justice system and bring it into

  1. The Applicant's substantive claims rely on the Respondents' own
    public documents (which the First Respondent has already admitted
    the authenticity of) and reveal a case of very substantial merits,
    the legal and factual basis of which has already been set out in
    detail in ConSub. This is a further factor against a stay or
    declassing of proceedings.

  2. To the extent that the Court considers that the concerns raised by
    the Respondents have any validity, they can be easily managed and
    mitigated by the Court's extensive powers, including under Part IVA
    of the FCAA, to manage proceedings, practitioners, costs and approve

  3. If the Court considers that the Respondents concerns justify
    exceptional measures, it is bound exercise its power under s 43 (1)
    of the FCAA to order the Respondents to provide funding to allow the
    Applicant to retain a top-tier law firm and senior counsel to
    prosecute proceedings (as the Supreme Court of Canada has done)[10]
    rather than stay proceedings.

  4. In light of the above, the Respondents attempts to prevent the
    substantive hearing of the Applicant[']{dir="rtl"}s Part IV claims
    via interlocutory applications (including this application and the
    foreshadowed strike out application) threatens to bring the system
    of justice into disrepute and are clearly not in the interests of
    the efficient administration of justice.

  5. The Applicant seeks that:

    1. the Respondents interlocutory applications be dismissed;

    2. the Applicant be awarded his out of pocket costs of this
      application, such costs to be immediately taxed[11].

Conflict of Interest Generally

  1. The Respondents allege that the current litigation funding
    arrangements involve conflicts of interest.

  2. The Applicant submits that:

    1. all litigation funding arrangements and indeed all litigation
      involving legal representation involves potential and actual
      conflicts of interest;

    2. any conflicts of interest involved in the current arrangements
      are both quantitively fewer and qualitatively less problematic
      than both those approved by the High Court in Fostif and
      regularly occurring in typical funded class actions.

    3. the Court has the necessary tools to manage and mitigate any
      conflicts of interest, if and when they arise, as proceedings

  3. The starting point for examining conflicts of interest is to to

    1. who are the relevant parties to an arrangement between whom
      conflict of interest could exist;

    2. what is the source of potential conflict, in particular how do
      the interests of the parties potentially pull in opposite

  4. In the simplest form of (non-representative) litigation, an
    applicant appears for themselves and there is no conflict of of
    interest because there is only one person involved on the
    prosecuting side.

  5. The introduction of legal representation adds one (solicitor) and
    usually two (solicitor and barrister) additional parties prosecuting
    the action and with it potential conflicts of interest.

  6. Solicitors and barristers have duties both to their client and to
    the Court, as well as their own financial incentives. Solicitors may
    be remunerated on a time based fee, fixed fee or success fee (25%
    uplift of regular fees upon success) while barristers are
    remunerated on a time based fee basis.

  7. All of this creates substantial potential and actual conflicts of
    interest, including the following.

    1. Where all fees are time based, the client's interests are to
      minimise legal costs, while succeeding in the action (more
      efficient, success focus
      ), while the solicitor and barrister
      interests are to maximise billable hours while, remaining less
      concerned about success (less efficient, success neutral).

    2. Where solicitors have a success fee arrangement, their interests
      in success become more aligned with the client, but the interest
      in maximising billable hours still remains opposite to the
      client's interests (less efficient, success focus).

    3. Barristers and solicitors also have different financial
      interests in litigation because the majority of solicitor work
      is done in the earlier stages of litigation (front loaded)
      while the majority of barrister work is done in the later
      stages, particularly in appearance work at contested hearings
      (back loaded). Thus barrister's financial interests are in
      litigation proceeding to trial while the solicitors have a
      greater interest in early settlement. Barristers also gain
      experience and reputational benefits from actual Court
      appearances, particularly in contested trials.

  8. These conflicts of interest are managed by solicitor and barrister
    rules, costs assessment procedures, the active management of the
    Court, and to some extent, competitive, marketplace pressures.

  9. A typical externally funded class action (ie a shareholder class
    action) introduces two or three additional party types into this
    (already conflicted) arrangement:

    1. the litigation funder;

    2. the group members who have signed the litigation funding
      agreement (and agreed to the deduction of legal costs and the
      funder's commission from their damages) ("funded group
      "); and

    3. unfunded group members (who absent Court intervention have no
      deductions from their damages).

  10. In the Australian Securities and Investment Commission Litigation
    schemes and proof of debt schemes: Managing conflicts of interest
    Regulatory Guide 248
    , ("ASIC Guide") states, at
    RG. 248.11, that:

["]{dir="rtl"}The nature of the arrangements between the parties
involved in a litigation scheme or a proof of debt scheme has the
potential to lead to a divergence between the interests of the members
and the interests of the funder and lawyers because:

(a) the funder has an interest in minimising the legal and
administrative costs associated with the scheme and maximising their

(b) lawyers have an interest in receiving fees and costs associated
with the provision of legal services; and

(c) the members have an interest in minimising the legal and
administrative costs associated with the scheme, minimising the
remuneration paid to the funder and maximising the amounts recovered
from the defendant or insolvent company

  1. In addition, the unfunded group members have different interests to
    the funded group members because (absent a common fund order or cost
    sharing order) they obtain the benefit of success in proceedings
    without paying the costs of obtaining it out of their damages award.

  2. Thus a typical funded class action has up to six separate groups who
    have substantial potential and actual conflicts of interest.

  3. Furthermore, the interplay of financial incentives and reward is
    both complex (because of numerous different remuneration bases) and
    opaque to the group members (who generally do not have the capacity
    to understand either the complex inter-relationships between funder,
    solicitors and barristers or which legal costs are necessary and
    efficient and which are not).

  4. These additional conflicts are managed by the ASIC Guide, funder's
    conflict management policies, as well as Court practice notes and
    active management by the Court.

  5. Despite all of the above conflicts of interest, the High Court, in
    Fostif, authorised a wide range of litigation funding arrangements
    under the broad public policy rubric: "[t]he law now looks
    favourably on funding arrangements that offer access to justice so
    long as any tendency to abuse of process is controlled

  6. And a wide variety of litigation funding arrangements are now a
    regular part of the Australian litigation landscape[13].

Conflict of Interest in these Proceedings

  1. These proceedings involve far fewer parties than a typical funded
    class action and much less conflict of interest.

  2. Self representation by the legally experienced Applicant removes
    solicitors and barristers conflicting financial interests from the

  3. The sole ownership of the litigation funder by the Applicant further
    removes potential conflict between funder and the representative
    Applicant. As the First Respondent has accepted, the interests of
    the funder are entirely aligned with those of the applicant.[14]

  4. As a self represented applicant is unable to claim legal costs for
    his/her time[15], and the litigation will only proceed if a No
    Adverse Cost Order is granted[16], the issue of the legal costs of
    prosecuting the claim and of adverse costs disappears. These costs
    are the main driver of conflicts of interest in typical litigation
    and funded class actions as outlined above.

  5. Far from creating a conflict of interest, the Applicant's interest
    in the funder, JPB Liberty Pty Ltd, and in SUFB Tokens, serves to
    better align the Applicant's interests with those of both the funded
    group members and the group members as a whole.

  6. The interests of the Applicant and group members are fully aligned
    from the reward perspective because:

    1. all parties obtain financial benefit only upon success;

    2. rewards are calculated on the same basis, as straight
      percentages of total damages without deductions (other than
      disbursements) calculated on a different basis (ie legal costs
      or management fees); and

    3. where the percentage shares are pre-agreed (in the litigation
      funding agreement) and the 25% share allocated to Token Holders
      is further allocated in advance of any final payout in a
      transparent manner (displayed on the Hive blockchain in real
      time) in proportion to the party's contribution to the success
      of proceedings.

  7. While the interests of the Applicant and group members are not
    aligned from the risk perspective, this is no different from any
    other class action where the Applicant and/ or funder takes the risk
    of their own legal costs and adverse costs orders and group members
    are not directly liable for any legal costs[17].

  8. The only conflict of interest which arises from non-aligned risk
    between an applicant / funder and group members is the risk of an
    applicant accepting a low settlement offer that does not properly
    reflect the value of the group members's claims or otherwise seeking
    to discontinue or abandon proceedings because an applicant / funder
    may determine that risk outweighs potential reward.

  9. This issue is partly dealt with by the requirement for Court
    approval of settlements and discontinuance and also, in these
    proceedings, by ensuring that the Applicant / funders' potential
    reward is high enough to justify the risk.

  10. The Applicant's cryptocurrency holdings were relatively small (under
    A$10,000) in the early 2018 period for which the majority of market
    based causation damages are claimed (see [9] and Annex C of Andrew
    Hamilton 10 December 2020 Affidavit).

  11. As can be seen from the tables listing funded group members produced
    by the Applicant (MAW - 2 pages 196 -211), many of the funded group
    members had substantially larger cryptocurrency holdings than the
    Applicant in this period. A number can be seen to have holdings in
    the US$1 - 10 million range.

  12. The total claim of the funded group members exceeds A$1 billion
    (see MAW -2 page 453 - 456) while the total claim of the many
    millions of group members is approximately US$400 billion (see
    MAW-2 pages 232, 238, 326, 347, 453-456) which is over A$500
    billion. Thus funded group members represent approximately 1/ 500th
    of the total claim[18].

  13. Another method of coming to a similar conclusion is to compare
    approximately 650[19] funded group members to the tens or hundreds
    of millions of total group members[20].

  14. The Litigation Funding Agreement (clauses 10.1 and 10.2) provides
    for 25% of the Litigation Proceeds (of funded group members) to be
    paid to Token Holders and 5% to JPB Liberty Pty Ltd.

  15. The Applicant owns 100% of JPB Liberty Pty Ltd and a 48% effective
    interest in the SUFB Tokens (see [3] of Andrew Hamilton 23 October
    2022 affidavit) leading to a ~17% total interest in the claims of
    the funded group members. This is an approximately 0.034% interest
    (17% / 500) in the total claim of all group members.

  16. If the Applicant's financial interests in the proceedings were
    limited to his own personal damages claim, there would a gross
    imbalance between the potential returns to the Applicant from
    success and the potential returns to many individual group members
    and the group members as a whole.

  17. The Applicant would be carrying all the risk, expending all the
    time, while having little upside to incentivise the continued
    prosecution of proceedings. This would create conflict of interest
    risks to the abandonment, discontinuance or settlement of
    proceedings for a low sum that would not properly reflect the value
    of group members claims.

  18. The effect of the Applicant's interests in the funder and SUFB
    Tokens is to shift the Applicant from having a very small relative
    financial interest in the potential proceeds, to having sufficient
    interest to match some of the larger cryptocurrency holders, while
    still being a very small percentage of the overall claim of group

  19. This addresses the potential conflict of interest between the
    Applicant and group members from the risk perspective.

  20. It provides an appropriate balance between risk and reward while
    providing the lowest possible cost method of group members
    prosecuting their claims.

  21. Traditional litigation funding arrangements would deduct substantial
    legal fees from litigation proceeds prior to the percentage split,
    whereas the current self representation arrangements mean funded
    group members pay no legal fees out of their damages award.

  22. Compared to the complex and opaque interplay of financial incentives
    in a typical funded class action (as outlined above), the
    arrangements in these proceedings are far simpler, more transparent,
    fairer and more easily understood by group members.

  23. The current arrangements eliminate the reward side conflicts of
    interest in typical funded class actions and substantially mitigate
    the risk side conflict of interest, inherent in all class actions.
    They also eliminate the concern of proceedings being controlled by a
    third party (the litigation funder) who is not before the Court.

  24. The interests of the applicant, litigation funder and group members
    are entirely aligned from the reward perspective and as closely
    aligned as possible from the risk perspective.

  25. The current arrangements are far superior to typical funded
    litigation arrangements, particularly from the perspective of the
    group members.

Benefits of Legally Experienced Self Representation

  1. Self representation by a legally experienced applicant brings
    substantial benefits to group members because it is far more
    efficient and can deliver superior results in the right

  2. There are large inherent inefficiencies in the traditional client -
    solicitor - barrister model of conducting litigation.

  3. The client, who has the greatest factual understanding of the case,
    needs to spend extensive time (and money) explaining a myriad of
    factual matters and commercial interests to the solicitors.

  4. The solicitors then spend a great deal of time and money converting
    that information into a legally usable form (pleadings, evidence

  5. The solicitors then need to brief counsel and explain all the
    relevant facts and legal bases all over again to counsel, who will
    then conduct their own analysis of fact and law and prepare
    submissions to the Court. Often there is an addition layer of junior
    as well as senior counsel.

  6. This involves a huge amount of triple (or even quadruple) handling,
    which is one of the reasons litigation in Australia is so expensive.

  7. With every communication and information exchange there is the
    opportunity for mistakes and oversights and expenditure of time and
    the client's money. There are an array of competing interests that
    complicate things (as outlined at [23 -26] above). The process can
    make it quite time consuming to do seemingly simple tasks.

  8. While it is rare for a self represented applicant to have the
    necessary mix of skills and experience to both prepare proceedings
    and act as an advocate in Court such a situation is ideal for group
    members because it dramatically reduces costs and increases

Respondents alleged conflicts of interest

  1. In Fostif at [93] the High Court stated:

"As for fears that "the funder's intervention will be inimical to
the due administration of justice"[ ], whether because "[t]he
greater the share of the spoils ... the greater the temptation to
stray from the path of rectitude"[ ] or for some other reason, it is
necessary first to identify what exactly is feared. In particular,
what exactly is the corruption of the processes of the Court that is

  1. The Respondents consistently speak of "intractable", "obvious" and
    "hopeless" conflicts of interest yet fail to properly conduct the
    basic first-principles analysis required to identify any real
    conflict of interest (see [22] above).

  2. The First Respondent sets out its alleged conflicts of interest at
    [33], [42], [45] and [46] of its submissions. I will examine
    each in turn.

  3. Subparagraph 33(a) alleges, without evidentiary basis, that the
    Applicant and JPB Liberty have an interest in minimising costs
    incurred in conducting proceedings whereas the funded group members
    would have an interest in the lead applicant incurring all costs
    necessary to give the greatest prospect of success. The example of
    expert evidence is given.

  4. This does not demonstrate even a potential conflict of interest:

    1. the Applicant has as much interest as any funded group member in
      ensuring the success of proceedings so has no interest in
      minimising costs to the point it would compromise the success of

    2. the funded group members do in fact have to pay (out of their
      damages) for all costs incurred in conducting successful
      proceedings, so it is difficult to see why they would want to
      increase these costs beyond what was strictly necessary to
      facilitate the successful prosecution of proceedings.

  5. The interests of the Applicant, funder and group members are
    substantially aligned, not in conflict.

  6. The proposition also proceeds on a number of faulty assumptions:

    1. while incurring certain costs may be essential to provide
      reasonable prospects of success, spending more money does not
      necessarily increase prospects of success;

    2. the Applicant's core cartel claim does not require economic
      expert evidence (often required in Part IV claims) as there is
      no requirement to establish a market or a substantial lessening
      of competition;

    3. the Applicant has already demonstrated the capability to prepare
      economic and market causation based evidence without relying
      upon experts;

    4. the Applicant may be able to obtain economic expert evidence
      without paying any or large amounts of money for it;

    5. there does not appear to be any controversy between the parties
      in relation to other areas where potential expert evidence might
      be required (eg cryptocurrency), in any case the Applicant
      himself is an expert in this area and is able to cite a wide
      range of external evidence to support his positions;

    6. if despite all of the above, it becomes apparent to the
      Applicant that it is necessary to obtain expert evidence or
      otherwise incur costs in order to not impair the Applicant's
      prospects of success, then such costs can be paid for out of
      existing JPB Liberty funds, sales of additional SUFB Tokens to
      raise additional funds or by seeking Court orders that the
      Respondents pay the costs of both set of experts or the
      appointment of a joint expert.

  7. Subparagraph 33(b) suggests that it may be in JPB Liberty's interest
    to settle for a reduced sum while it may be in the interests of
    group members to continue proceedings to seek a higher sum. Such
    potential conflict is resolved by the requirement that the Court
    approve settlements and by paragraph 3.17 of the Conflicts Policy
    which ensures all settlement offers are communicated to group
    members and they have the opportunity to require independent legal
    advice on whether to accept a settlement.

  8. Subparagraph 33(c) makes the entirely nonsensical suggestion that
    JPB Liberty, controlled by the Applicant, would seek to cease
    funding proceedings and that this would somehow expose group members
    to adverse costs orders. This does not make sense at all because:

    1. JPB Liberty would not act against the interests of the Applicant
      who controls it by ceasing to fund proceedings - if the
      Applicant / JPB Liberty wanted to cease proceedings the
      Applicant would need to apply to discontinue proceedings, which
      is subject to Court approval;

    2. group members would not be exposed to adverse costs orders even
      if this did occur because of FCAA ss 33Q-33R and because
      proceedings will only continue if a No Adverse Costs Order is

    3. the funding requirements on JPB Liberty while the Applicant
      remains self-represented are relatively small and JPB Liberty
      has no activity other than supporting these proceedings, so the
      risk of JPB Liberty having to cease funding to preserve solvency
      is negligible.

  9. Paragraph 42 suggests that it may be in the interests of the
    Applicant to crystallise his interest by settling proceedings at an
    early stage when a smaller number of SUFB Tokens have been issued,
    giving him a higher pro-rate share.

  10. What this suggestion ignores is that early settlement is generally
    for a smaller sum (as noted by the First Respondent at [33(b)])
    while later settlement may well be for a much larger sum. Thus the
    hypothesised increase in SUFB Tokens on issue would be offset by the
    large settlement sum.

  11. In light of the inherent uncertainties in litigation, damages
    calculations, settlement offers, future funding and SUFB Token
    issuance requirements, it is very difficult to draw the conclusion
    that the First Respondent suggests, or indeed the opposite
    conclusion. There is no conflict of interest because the actual
    interests of both Applicant and group members on this issue cannot
    be accurately determined and are not inherently in conflict.

  12. Settlement offers will need to be assessed at the time by the
    Applicant, with the input from group members and external legal
    advice as provided for by paragraph 3.17 of the Conflicts Policy and
    if a decision is made to accept will then be subject to Court
    approval. There is no conflict of interest and the interests of
    group members are well protected.

  13. Subparagraph 45 suggests that the Applicant has an interest in
    earning SUFB Tokens as cheaply as possible whereas it is in the
    interests of the group members that any renumeration by way of SUFB
    Tokens be structured so as to provide incentives for "very
    significant" contribution to the prosecution of their claim. But
    this is precisely the structure achieved by the litigation funding
    arrangements - SUFB Tokens will be worthless unless the
    self-represented Applicant does "very significant" work to ensure
    the success of proceedings. It would be utterly pointless for the
    Applicant to accumulate SUFB Tokens but not do the work to ensure
    the group members damages claims are vindicated and thus the SUFB
    Tokens become valuable. This is an alignment of interests, not a
    conflict of interest.

  14. Subparagraph 46 suggests that the Applicant has an interest in JPB
    Liberty issuing a minimum number of additional SUFB Tokens while the
    group members have an interest in JPB Liberty issuing the full 18
    million tokens to build the maximum "war chest": neither of those
    assumptions is correct.

  15. The real interest of the Applicant, JPB Liberty and the group
    members is to match fundraising via sale of SUFB Tokens on an
    ongoing basis to the actual financial needs of the proceedings to
    ensure they are successful. The idea that JPB Liberty should issue
    all 18 million SUFB Tokens at some relatively early point to build
    up a maximum war chest fails to understand the basic laws of supply
    and demand and how startup businesses must fundraise.

    1. Firstly, there is currently insufficient demand for SUFB Tokens
      for JPB Liberty to sell 18 million of them to build up a maximum
      war chest;

    2. Secondly, demand for the SUFB Token will likely increase as the
      proceedings move forward. As the Applicant gets "runs on the
      board" and outside observers both become aware of the case and
      consider the prospects of success more likely, demand for and
      the price of SUFB Tokens will increase;

    3. Thirdly, the actual funding requirements to prosecute
      proceedings effectively and efficiently are unknown at this time
      and will only become apparent as the proceedings progress;

    4. The above three considerations mean that it is in the interests
      of the Applicant, JPB Liberty and the group members to fund
      raise progressively on an as-needs basis to take advantage of
      increases in demand and thus price of SUFB Tokens and greater
      clarity on actual funding needs as time progresses while always
      retaining a substantial amount of SUFB Tokens and liquid assets
      in reserve for contingencies.

    5. Fourthly, the classic litigation funding approach of raising a
      large war chest in the early stages leads to self-fulfilling
      over estimation of costs which is not in the interests of group
      members (who ultimately must pay those costs plus a reasonable
      ROI for the litigation funder).[22]

  16. The First Respondent makes a number of arguments at [35] - [40]
    identifying two circumstances where it says that the interests of
    group members are unprotected because JPB Liberty's interests are
    fully aligned with the Applicant' interests:

    1. in the event of JPB Liberty considering ceasing funding of
      proceedings at [35 - 36];

    2. upon settlement or potential settlement of proceedings at [37 -

  17. The idea that JPB Liberty, fully controlled by the Applicant, would
    cease to fund the proceedings in a way that would leave the
    Applicant, but none of the group members liable to pay the costs of
    proceedings, is ludicrous. Companies are controlled by their
    directors and shareholders and the Applicant would never have any
    reason to cause his own company to act against himself.

  18. In any case the interests of the group members are not affected by
    such an entirely hypothetical decision by JPB Liberty to cease to
    fund proceedings. It is only if the Applicant was to seek to
    discontinue proceedings that the interests of the group members
    would be affected. As discontinuance is subject to Court approval,
    the interests of the group members would be protected.

  19. The issue that the First Respondent raises regarding clauses 11.6 to
    11.8 of the LFA providing a conflict resolution method regarding
    settlements that is only triggered if the Applicant and JPB Liberty
    disagree is resolved by section 3.17 of the Conflicts Policy, which
    provides an alternative mechanism to resolve such conflict.

  20. Section 3.17 ensures both that group members will have visibility of
    all settlement offers and that there is a mechanism for group
    members to force the Applicant & JPB Liberty to take independent
    legal advice on a settlement offer. This protects the interests of
    the group members and eliminates the concern raised by the

  21. In any case both the LFA and the Conflicts Policy can be amended to
    address any deficiencies which the Court may identify.

  22. The Second Respondent sets out its alleged conflicts of interest at
    [52] of its submissions. I will examine each in turn.

  23. Subparagraph 52(a) merely identifies that the Applicant benefits
    from a share of the funded group members damages in addition to his
    own. But both the group members and the Applicant only obtain this
    benefit if proceedings are successful and damages payable and both
    obtain nothing if proceedings are unsuccessful. This is an alignment
    of interests, not a conflict of interest.

  24. Subparagraph 52(b) suggests that the Applicant has in interest in
    earning SUFB Tokens as cheaply as possible whereas it is in the
    interests of the group members that any renumeration by way of SUFB
    Tokens be structured so as to incentives real meaningful
    contribution to the prosecution of their claim. But this is
    precisely the structure achieved by the litigation funding
    arrangements - SUFB Tokens will be worthless unless the
    self-represented Applicant does real, meaningful work to ensure the
    success of proceedings. It would be utterly pointless for the
    Applicant to accumulate SUFB Tokens but not do the work to ensure
    that the group members damages claims are vindicated and thus the
    SUFB Tokens become valuable. This is an alignment of interests, not
    a conflict of interest.

  25. Subparagraph 52(c) merely identifies the different risk profiles
    between a representative applicant and group members that is
    inherent in all representative proceedings. This issue is examined
    at [43 - 56] above. The litigation funding arrangements in these
    proceedings substantially mitigate this potential conflict of

  26. Subparagraph 52 (d) alleges, without evidentiary basis, that the
    Applicant and JPB Liberty have an interest in minimising out of
    pocket expenses and that, somehow, creates a conflict of interest,
    presumably with group members. The actual mechanism for this alleged
    conflict of interest is not identified. There is no evidence that
    group members have an interest in maximising out of pocket
    expenses, such as would be required for there to be a conflict with
    this alleged interest. Indeed it is unclear why group members would
    wish to increase costs which they ultimately must pay out of their
    damages award if the case is successful. The Second Respondent seems
    to have an unstated assumption that more money equals a better
    result. This is a false assumption.

  27. However the real interest of the Applicant, JPB Liberty and the
    group members is to match fundraising via sale of SUFB Tokens to the
    actual financial needs of the proceedings to ensure that they are
    successful. Self representation by the Applicant frees up funds
    raised from sales of SUFB Tokens to allow them to be spent on
    necessary external expenses, as and when required, rather than on
    legal fees.

  28. Traditional litigation funders build up a large "war chest",
    sufficient to cover all anticipated needs (including their own
    costs, adverse costs orders and security for costs) plus
    contingency, prior to commencing proceedings. They then need to
    ensure that money is spent and an appropriate return on investment
    (ROI) is achieved on this large investment. However this is not the
    only way to fund litigation, nor is it necessarily in the interests
    of group members. A large war chest and the ROI required by it
    necessarily comes out of the group members' pockets, usually by way
    of legal costs and disbursements. The knowledge of a large war chest
    encourages law firms to do more work and charge more money, but does
    not necessarily lead to better litigation outcomes.

  29. JPB Liberty has created a structure where SUFB Tokens can be sold on
    an ongoing basis as proceedings continues to fund out of pocket
    expenses as and when they become necessary. In particular, the
    Applicant's cartel claim proceeds on the basis of the Respondent's
    public documents (now admitted as authentic by the First Respondent)
    and will likely not require any expert evidence to prove liability.

  30. Thus the Respondents have failed to identify a single real conflict
    of interest arising out of the litigation funding arrangements in
    these proceedings.

Legal Basis for Staying Proceedings

  1. The High Court has consistently held the power to stay otherwise
    lawful proceedings, preventing them from continuing to a hearing on
    the merits is one to be exercised only in "the most exceptional
    circumstances"[23] and is a "highly unusual" step[24] to be
    exercised with "great care" and "extreme caution"[25].

  2. Kirby J in Fostif at [142 - 145] examines this issue in detail,
    both in the context of representative proceedings and generally and
    states the following:

"it is important to recognise how exceptional it is for a court to
bring otherwise lawful proceedings to a stop, as effectively the
primary judge did in this case. It is very unusual to do so by
ordering the permanent stay of such proceedings"

"The reason why it is difficult to secure relief of such a kind is
explained by a mixture of historical factors concerning the role of
the courts; constitutional considerations concerning the duty of
courts to decide the cases people bring to them; and reasons grounded
in what we would now recognise as the fundamental human right to have
equal access to independent courts and tribunals[]. These
institutions should be enabled to uphold legal rights without undue
impediment and without rejecting those who make such access a reality
where otherwise it would be a mere pipe dream or purely theoretical."

  1. The correct law on whether there is an abuse of process which may
    justify a stay of proceedings in the context of litigation funding
    agreements is: "whether proceedings funded by a litigation funder
    are an abuse of process depends on whether the role of that funder
    'has corrupted or is likely to corrupt the process of the court to a
    degree that attracts the extraordinary jurisdiction to dismiss or
    stay permanently for abuse of process

  2. The "corruption of the processes of the Court" is identified as
    "the champertous maintainer might be tempted, for his own person
    gain, to inflame the damages, to suppress evidence, or even suborn

  3. It is most certainly not mere conflict of interests, which "are an
    inevitable by-product of a regime where the self appointed
    representative applicant's individual claim is the vehicle through
    which the common questions are to be tried
    ."[28] As demonstrated
    above, the conflicts of interest in these proceedings are far less
    than in typical funded class actions.

  4. Gaudron J in Jago also examines the nature of the power to grant a
    permanent stay.

"The nature of the power to grant a permanent stay of proceedings
itself reveals an important principle which confines its exercise. The
power is, in essence, a power to refuse to exercise jurisdiction. It
is thus to be exercised in the light of the principle that the
conferral of jurisdiction imports a prima facie right in the person
invoking that jurisdiction to have it exercised. In this context it is
relevant to note the remarks of Deane J. in Re Queensland Electricity
Commission; Ex parte Electrical Trades Union of Australia [1987] HCA
27; (1987) 61 ALJR 393, at p 399; 72 ALR 1, at p 12, that the "prima
facie right to insist upon the exercise of jurisdiction is a
concomitant of a basic element of the rule of law, namely, that every
person and organisation, regardless of rank, condition or official
standing, is 'amenable to the jurisdiction' of the courts and other
public tribunals". Thus, the power is one that is readily seen as
exercisable (whether in civil or criminal proceedings) only in
exceptional cases or, as was said by this Court in refusing special
leave to appeal in Attorney-General (NSW) v. Watson (1987) 20 Leg Rep
SL 1, "sparingly, and with the utmost caution". See, generally,
Cocker v. Tempest [1841] EngR 242; (1841) 7 M & W 502 (151 ER 864);
Lawrance v. Norreys, at p 219; Humphrys, at p 26; and Reg. v. Derby
Crown Court; Ex parte Brooks (1984) 80 Cr App R 164, at p 168."[29]

  1. The already very high bar to ordering a permanent stay established
    by the above High Court authority, rises even higher when, as in
    these proceedings, the Court has already determined that the
    Applicant has a prima facie case and that there is public interest
    and has actively exercised its discretion to exercise

  2. This issue was examined in detail in Williams v Spautz[31] where
    the High Court held that where a litigant has a prima facie case,
    a predominant improper purpose in bringing and maintaining proceeds
    is not enough to justify a stay. It must also be shown that the
    litigant does not intend to pursue the cause of action to a

  3. In light of the above there is a real question as to whether this
    Court is effectively estopped by its previous decision in Hamilton
    to exercise jurisdiction (on a prima facie case and public
    interest basis) from subsequently refusing to exercise jurisdiction
    "in the interests of justice", unless it was convinced that a prima
    case and public interest no longer existed.

  4. The Respondents have cited no authority supporting the proposition
    that mere conflicts of interest arising from litigation funding
    arrangements rises anywhere near the level of predominant improper
    purpose or is in any way exceptional, especially when as outlined in
    detail above, conflicts of interest are common place in funded class

  5. Moreover, even prior to the Maintenance, Champerty and Barratry
    Abolition Act
    1993 (NSW), when litigation funding arrangements were
    considered unlawful maintenance and champerty or trafficking in
    litigation, such concerns were not a ground for staying

  6. It is also notable that the arrangements in the current proceedings
    would not have infringed those now abolished prohibitions because
    both JPB Liberty Pty Ltd and all the Token Holders are group members
    in the proceedings (by virtue inter alia of their holdings of
    Listed Cryptocurrencies) and thus have an interest in the subject
    matter of proceedings independent from their right to share in the
    litigation proceeds deriving from the LFA.[34]

Footnotes / Endnotes

  1. Campbells Cash and Carry Pty Limited v Fostif Pty Limited
    [2006] HCA 41 (Fostif) at [83] - [95] per Gummow, Hayne
    and Crennan JJ; Gleeson CJ agreeing at [1] ("Fostif

  2. Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; 171 CLR 538
    (Voth) at [30].

  3. ibid

  4. See Meta submissions at [4] and Google submissions at [3].

  5. Parkin v Boral Ltd (Class Closure) [2022] FCAFC (Parkin)
    at [126] per Murphy and Lee JJ, Beach J agreeing at [156]

  6. Perera v GetSwift Limited [2018] FCAFC 202 (Perera) at

  7. Hamilton v Meta Platforms, Inc (Service out of Jurisdiction)
    [2022] FCA 681 (Hamilton) at [40]

  8. Epic Games, Inc v Apple [2021] FCAFC 122 (Epic)

  9. Fostif at [81 - 82] per Fostif Majority.

  10. British Columbia (Minister of Forests) v Okanagan Indian Band
    [2003] 3 SCR 371, 398 [38]

    (LeBel J for McLachlin CJ, Gonthier, Binnie, Arbour, LeBel and
    Deschamps JJ) (Okanagan) at 400 [41].

  11. See Spotwire Pty Ltd v Visa International Service Association
    (No 2)
    [2004] FCA 571 at [104]. The Respondents' misuse of the
    Court's processes to avoid substantial hearing should be
    discouraged. The proceedings are likely to continue for years.The
    Respondents were given early and clear notice of the fundamental
    defects in their interlocutory applications before they were filed
    (failure to identify and particularise conflict of interest,
    reliance on clearly weak, wrong and inapplicable cases).

  12. Fostif at [65] per Fostif Majority and Kirby J at [135 -
    136] [142- 145]

  13. See Integrity, Fairness and Efficiency - An Inquiry into Class
    Action Proceedings and Third-Party Litigation Funders [2018] ALRC
    134 ("ALRC 134") at [2.11 - 2.16].

  14. Meta submissions at [32].

  15. Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29.

  16. [5] of Applicant's Interlocutory Application dated 27 August

  17. other than costs incurred solely in relation to a group member's
    individual claim. See FCAA ss 33Q-33R, 43(1A).

  18. The Applicant has explained the basis for these claim value
    calculations at [141 - 157] of the Applicants Consolidated
    Submissions dated 13 July 2021 with links to relevant filed
    affidavit material all of which was served on the Respondents in
    August 2022. In any case it is the relativity between the value of
    claims of funded group members to total group members that is
    relevant for these purposes, not absolute numbers.

  19. "over 650" as per [38] of 27 August 2020 affidavit of Andrew
    Hamilton and verifiable by counting the lines in the tables listing
    funded group members produced by the Applicant (MAW - 2 pages 196

  20. See [9 - 10] and Annex B of Andrew Hamilton 23 October 2022

  21. per Fostif Majority.

  22. See more detailed discussion on this point at [98] below.

  23. Jago v District Court of NSW [1989] HCA 46; (1989) 168 CLR 23
    (Jago) at pg 34 per Mason CJ at [14]

  24. Fostif per Kirby J at [143].

  25. Voth at [30].

  26. Fostif at [63] per Fostif Majority.

  27. id. at [93]

  28. Parkin at [126].

  29. Jago per Gaudron J at [14], Brennan J at [13] making the
    same point.

  30. Hamilton at [36 - 41].

  31. Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509
    (Spautz) at [23 - 24] per Mason CJ., Dawson, Toohey and
    McHugh JJ.

  32. Note also the statement of Toohey J in Jago at [29] that it
    is only in cases of improper purpose that no remedy other than a
    stay is appropriate.

  33. Fostif at [81 - 82] per Fostif Majority.

  34. Fostif at footnote 58 and [73] per Fostif Majority.


Your work on this has been epic. Seriously. In less than 7 days you produced a blockbuster reply to two of the biggest law firms in Australia (which are actually both international firms as well).

Not only that, the full response (which I thoroughly recommend anyone to read) is a work of art and it was actually fun at times to read through drafts of this as it was written.

If you don't look at anything else, look at the conclusion:

The Respondents have utterly failed to provide any factual or legal
basis for their interlocutory applications to stay or declass an
important public interest class action affecting the welfare of
millions of Australians, purportedly "in the interests
of justice" on the basis of alleged conflicts of interest and/or
alleged prohibited contingency fees arising from the litigation
funding arrangements.
The Respondents' interlocutory applications must be dismissed.

The Applicant requests the Court to consider appropriate measures
to discourage the Respondents from making further unmeritorious
interlocutory applications for improper purposes, given that the
usual threat of adverse costs is not applicable to the Respondents
both because the Applicant is self represented and because of the
immense wealth of the Respondents.

Epic work! Respect!