Allen v G8 Education Ltd (No 4) - [2024] VSC 487

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

GROUP PROCEEDINGS LIST

S ECI 2020 04339

PAUL ALLEN	First Plaintiff
MONIKA ALLEN	Second Plaintiff
v
G8 EDUCATION LTD (ACN 123 828 553)	Defendant

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JUDGE:	WATSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 July 2024
DATE OF JUDGMENT:	28 August 2024
CASE MAY BE CITED AS:	Allen & Anor v G8 Education Ltd (No 4)
MEDIUM NEUTRAL CITATION:	[2024] VSC 487

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REPRESENTATIVE PROCEEDINGS – Part 4A Group proceeding – Application for approval of settlement – Whether proposed settlement is fair and reasonable – Relevant considerations – Approval for payment of legal costs from settlement sum – Whether group costs order should be varied – No reason to vary group costs order – Approval of costs of settlement administration – Appointment of Scheme Administrator – Whether nunc pro tunc authorisation order required – Supreme Court Act 1986 (Vic) Part 4A, ss 33V, 33ZDA, 33ZF.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms F Forsyth KC Mr D Snyder Ms R Zambelli	Slater and Gordon Lawyers
For the Defendant	Ms J Findlay	MinterEllison
As Contradictor	Mr N De Young KC Ms K Burke
Slater and Gordon Lawyers (as Intervenor)	Mr W Edwards KC Mr G Rees

HIS HONOUR:

This is an application for the approval of a proposed settlement in a class action. The proposed settlement should be approved and orders made with respect to distribution of the money to be paid under the settlement.

The key questions

My consideration of the proposed settlement requires an answer to three interrelated questions:

(a) Should the Court approve the proposed settlement under s 33V(1) of the Supreme Court Act 1986 (Vic) (‘the Act’)?;

(b) Are the proposed orders in respect of the distribution of the settlement sum appropriate? and

(c) Should the group costs order made on 26 November 2021 (’the GCO’) be amended pursuant to s 33ZDA(3) of the Act?

The evidence before me comprises six affidavits of Emma Pelka-Caven, the general manager and head of class actions at Slater and Gordon, two of which are primarily directed to the question of the settlement approval and distribution, and four of which are directed primarily to the issue of whether the GCO should be amended.

For the reasons which follow the answers to the above questions are:

(a) Yes;

(b) Yes; and

(c) No.

The class action

The plaintiffs, Paul Allen and Monika Allen, bring a group proceeding (‘the class action’) under Part 4A of the Act against G8 Education Ltd (‘G8’).

The group members on whose behalf the plaintiffs claim are all persons who:

(a)entered into a contract (whether by themselves or by an agent or trustee) to acquire an interest in fully paid ordinary shares in G8 (‘G8 shares’) during the period between 23 May 2017 and 23 February 2018 (inclusive) (‘relevant period’);
(b)have suffered loss or damage by reason of the conduct of G8 pleaded in the statement of claim;
(c)were not, during any part of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] VSC 487
Decision Date: 28 August 2024

CaseChat Overview and Summary

In Allen v G8 Education Ltd (No 4), the court was asked to consider an application for the approval of a settlement in a group proceeding brought by parents of children enrolled in childcare centres operated by G8 Education Ltd. The dispute centred on the fairness and reasonableness of the proposed settlement, the payment of legal costs from the settlement sum, the variation of a group costs order, the approval of costs of settlement administration, and the appointment of a Scheme Administrator. The application was brought under the Supreme Court Act 1986 (Vic) Part 4A, specifically sections 33V, 33ZDA, and 33ZF.

The legal issues before the court involved whether the proposed settlement was fair and reasonable, taking into account relevant considerations such as the merits of the claims, the risks and costs of proceeding to trial, and the benefits of the settlement to the group members. The court also had to determine whether the group costs order should be varied, whether the costs of settlement administration should be approved, and if a nunc pro tunc authorisation order was necessary. The court's analysis required a careful balance of these factors, particularly in the context of the significant resources and time invested in the proceeding.

After considering the evidence and submissions from the parties, the court concluded that the proposed settlement was fair and reasonable. The court found that there was no compelling reason to vary the existing group costs order, and it approved the payment of legal costs from the settlement sum. The court also approved the costs of settlement administration and appointed a Scheme Administrator to manage the distribution of the settlement funds to the group members. Importantly, the court determined that a nunc pro tunc authorisation order was not required, as the settlement did not necessitate any retrospective approval or validation of actions already taken.

The final orders of the court included the approval of the proposed settlement, the maintenance of the existing group costs order, the authorisation of legal and administrative costs, and the appointment of a Scheme Administrator. These orders were designed to ensure the efficient and equitable distribution of the settlement funds to the group members, providing a resolution to the representative proceeding in a manner that was both fair and reasonable.

Orders