Background
Peter Glen Inger, Joanne Inger, and Mark Bonnington commenced a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) on behalf of foreign nationals and foreign-owned entities who had paid Queensland’s additional foreign acquirer duty (AFAD) under the Duties Act 2001 (Qld) and the absentee owner land tax surcharge (LTS) under the Land Tax Act 2010 (Qld). The class covered nationals of eight treaty countries — Finland, Germany, India, Japan, New Zealand, Norway, South Africa, and Switzerland — who made such payments between 1 October 2016 and 8 April 2024 (AFAD) or 30 June 2019 and 8 April 2024 (LTS). The applicants contended that the Queensland provisions were inconsistent with Commonwealth law, including Australia’s international tax treaties, and sought declarations of invalidity and restitution of amounts paid.
The class action’s viability was severely undermined by the High Court’s decision in G Global 120E T2 Pty Ltd v Commissioner of State Revenue [2025] HCA 39; (2025) 99 ALJR 1465, handed down on 15 October 2025. The applicants’ solicitors at Johnson Winter Slattery formed the view that the High Court ruling eliminated all LTS claims and all AFAD claims arising on or after 1 January 2018. The residual pre-2018 AFAD claims faced a separate and likely insurmountable obstacle: Queensland’s one-year limitation period for recovering invalidly levied tax under s 10A of the Limitation of Actions Act 1974 (Qld), and further bar dates under ss 36 and 188 of the Taxation Administration Act 2001 (Qld) requiring commencement before 23 June 2023.
Following the High Court decision, the litigation funder (CASL) concluded that continuation was no longer commercially viable and indicated it would cease funding. The solicitors advised that there was no reasonable prospect of securing alternative third-party funding. The applicants accordingly filed an interlocutory application on 21 May 2026 seeking court approval under s 33V(1) of the Act to discontinue the proceeding, with the State of Queensland and the Commissioner of State Revenue consenting to discontinuance on a no-costs basis.
The Court’s Holding
Justice Hespe approved the discontinuance under s 33V(1), satisfied that it was not unfair, unreasonable, or adverse to the interests of group members. The Court adopted the formulation — whether the discontinuance would be “unfair or unreasonable or adverse to the interests of group members” — as the applicable standard where, as here, the practical effect of discontinuance is to return group members to the position they occupied before the proceeding commenced. This approach was appropriate because the orders preserved limitation period rights: under ss 33V(1) and 33ZF, the Court ordered that any remaining limitation period would begin running again only from 30 days after the date by which a notice of discontinuance is filed, giving group members an opportunity to seek independent advice before time starts running again.
The Court found the discontinuance was justified on multiple grounds: the High Court’s ruling had drastically narrowed the available claims; the residual claims faced near-certain limitation period bars; the lead applicants could no longer serve that role; litigation funding had been withdrawn with no viable alternative; and the respondents had agreed to bear no costs if the proceeding ended now. Importantly, the Court noted that discontinuance — unlike settlement — does not extinguish group members’ causes of action, merge their rights, or create res judicata or issue estoppel, so affected individuals remain free to commence their own proceedings, subject to applicable limitation periods.
The Court also addressed an unresolved question in Australian class action law: whether an approved discontinuance constitutes a “determination” for the purposes of s 33ZE(2), thereby restarting limitation periods automatically. His Honour noted the conflicting authorities but declined to resolve the debate, instead making an express order under ss 33V(1) and 33ZF to restart time 30 days after filing of the notice of discontinuance — providing certainty for all parties regardless of which view of s 33ZE(2) ultimately prevails.
Key Takeaways
- A court approving discontinuance of a Part IVA representative proceeding must be satisfied the discontinuance is not unfair, unreasonable, or adverse to group members’ interests — not that it is positively “fair and reasonable” — where the effect of the orders is to restore group members to their pre-litigation position.
- A High Court ruling that substantially eliminates the viable claims in a class action, combined with withdrawal of litigation funding and near-certain limitation period bars on residual claims, will ordinarily justify court approval of discontinuance.
- Because it is unsettled whether an approved discontinuance constitutes a “determination” automatically restarting limitation periods under s 33ZE(2), courts should — and here did — make an express order under s 33ZF restarting time at a defined point to provide certainty for respondents and group members alike.
- Group members whose claims are extinguished in scope by an adverse High Court decision, and who face short statutory limitation periods (here, one year under Queensland law), must seek urgent independent advice before any grace period expires following discontinuance.
Why It Matters
This decision is a significant practical consequence of the High Court’s October 2025 ruling in G Global, which appears to have foreclosed the bulk of claims by foreign nationals and foreign-owned entities for refund of Queensland’s AFAD and LTS surcharges. The case illustrates how a single appellate decision can collapse a fully-constituted class action by eliminating the legal foundation of most class members’ claims, and confirms that loss of litigation funding — where no alternative is available — weighs materially in the s 33V analysis.
More broadly, the judgment adds to a growing line of Federal Court authority grappling with the interaction between s 33ZE’s limitation period suspension and the mechanics of discontinuance. By making an express order under s 33ZF to restart time after 30 days, Justice Hespe adopted a pragmatic solution that provides certainty without resolving the underlying statutory ambiguity — a pattern likely to be followed until a Full Court or the High Court settles the question definitively. Attorneys advising foreign person surcharge payers in Queensland should treat the clock as having restarted and act without delay.