Lendlease Corporation Ltd v Pallas
High Court of Australia · 2025
Lendlease Corporation Ltd v Pallas [2025] HCA 19
The New South Wales Court of Appeal followed its own earlier decision even though the Full Federal Court had called that decision plainly wrong. The High Court reversed it. Did it also rule on how courts should handle such a clash?
What happened?
Shareholders in Lendlease brought a representative proceeding in the Supreme Court of New South Wales alleging breach of continuous disclosure obligations and misleading conduct (joint reasons [15]; Gordon and Steward JJ [50]-[51]). Lendlease wanted group members told that if they neither opted out nor registered, it would seek an order that they stay bound by any settlement but could not share in it without leave of the Court (Gordon and Steward JJ [52]). Whether the Court could order that notice under s 175(5) of the Civil Procedure Act 2005 (NSW) went to the Court of Appeal as a separate question.
An earlier Court of Appeal decision, Wigmans v AMP Ltd, had held there was no such power. The Full Federal Court in Parkin v Boral Ltd, on the materially identical Federal Court Act provisions, held Wigmans plainly wrong. The Court of Appeal, constituted by five judges, concluded that Wigmans was not plainly wrong, followed it, and answered the question in the negative (joint reasons [2]).
What did the Court decide?
The High Court was a bench of seven and gave four sets of reasons: Gageler CJ, Gleeson and Jagot JJ jointly; Gordon and Steward JJ jointly; Edelman J; and Beech-Jones J. The appeal was allowed, the Court of Appeal's order was set aside, and the separate question was answered in the affirmative (Gordon and Steward JJ [104]). Section 175(5) empowers the Supreme Court to order the notice, and concerns about conflicts of interest bear on whether the power should be exercised, not on whether it exists (joint reasons [3], [46]; Beech-Jones J [149]).
Proposition
What is the principle?
The Court's disposition rested on the construction of the statute. On the clash between intermediate appellate courts, the joint reasons said that the circumstance that the Court of Appeal faced a Full Federal Court decision calling an earlier Court of Appeal decision plainly wrong "provides no occasion to add to or modify the rules of precedent applicable between intermediate appellate courts" (joint reasons [32]).
Gordon and Steward JJ treated the argument as an "additional error" that it was "strictly unnecessary" to consider, and made "brief remarks" ([100]-[101]). Beech-Jones J agreed with them on this topic ([150]), and Edelman J agreed generally with their reasons ([105]).
Edelman J alone went further in separate reasons ([109]-[120]). He described the rule as one established "in seriously considered obiter dicta", said that "in language that should be preferred" the test is whether "there is a compelling reason to do so", and said that whether an intermediate court may prefer its own earlier decision was "not fully argued in this Court" ([109], [120]).
Why does this case matter?
Most students meet this case through a footnote and a quoted sentence, and that is how one Justice's wording comes to be described as the law. An opponent in a precedent argument will turn to the paragraph and check whose it is; you should do it first.
It is also a useful model for reading a modern High Court judgment: start with the orders, then the heading under which each passage sits, then the author of the paragraph, and only then decide what weight a sentence carries.
Exam and application relevance
Attribute precisely. Name the Justice for Edelman J's "compelling reason" wording and do not write that the High Court has replaced "plainly wrong". Use the joint reasons' [32] for what the Court itself did with the rules.
Do not cite the case for the result on s 175(5) in a precedent question, or for the precedent passages in a class action question. Keep the case's decision (the power to order the notice) separate from what was said about precedent along the way.
Check your understanding
1. Which Justices wrote separately on the rules of precedent, and what did the joint reasons say about whether to modify them? 2. Why is Edelman J's statement at [112] about ratio relevant to how you describe his reasoning? 3. A student writes that in Lendlease the High Court held the test for departing from another intermediate court is a compelling reason. What is wrong with that sentence?