Anderson-Vaughan v AAI Limited - [2023] VSC 465

IN THE SUPREME COURT OF VICTORIA Not Restricted
AT MELBOURNE
COMMERCIAL COURT
GROUP PROCEEDINGS LIST
S ECI 2021 00930

ZOEY ANDERSON-VAUGHAN Plaintiff

v

AAI LIMITED (ACN 005 297 807) First Defendant

TAL LIFE LIMITED (ACN 050 109 450) Second Defendant

MTA INSURANCE PTY LTD (ACN 070 583 701) Third Defendant
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JUDGE:

Stynes J

WHERE HELD:

Melbourne

DATE OF HEARING:

4 August 2023

DATE OF RULING:

8 August 2023

CASE MAY BE CITED AS:

Anderson-Vaughan v AAI Limited

MEDIUM NEUTRAL CITATION:

[2023] VSC 465

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GROUP PROCEEDINGS — Costs — Application for a Group Costs Order —Costs to be calculated as a percentage of the amount of any award or settlement recovered— Whether proposed percentage appropriate or necessary — Principles to be applied — Supreme Court Act 1986, s 33ZDA — Allen v G8 Education Ltd [2022] VSC 32, Fox v Westpac; Crawford v ANZ [2021] VSC 573, Gehrke v Noumi Ltd [2022] VSC 672, applied — Application granted.
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APPEARANCES:
Counsel Solicitors

For the Plaintiff L Armstrong KC Maurice Blackburn

For the Defendants J A Findlay King & Wood Mallesons
TABLE OF CONTENTS
A.. Introduction
B... Summary of decision
C.. Legal principles
D.. Current funding arrangement
E... Evaluative assessment – The categorisation of issues
F... Issue 1 – The certainty to be conferred by the proposed GCO
G.. Issue 2 – Other benefits to be conferred by the proposed GCO
H.. Issue 3 – Appropriateness of the proposed rate
H.1          Modelled outcomes
H.2          Risk and reward
I.... Conclusion
J.... Orders
HER HONOUR:
A          Introduction

1This is a group proceeding (a consumer class action) issued under Part 4A of the Supreme Court Act1986 (Vic) (‘Act’).
2It relates to add-on insurance products which were sold to consumers by motor vehicle dealers acting on the insurers’ behalf. The insurers are the defendants.
3This proceeding is an ’open class’ representative proceeding on behalf of all persons who, between 1 May 2006 and 30 June 2018:
(a)purchased or leased a motor vehicle or motorcycle from a dealership under a finance loan, and in conjunction with the purchase or lease, purchased add-on insurance products; and
(b)made payments to the defendants for the add-on insurance.

4The plaintiff on her own behalf and on behalf of group members alleges that:
(a)she purchased motor vehicles under finance and was told that add-on insurance was a precondition of finance, which was allegedly false;
(b)the add-on insurance products had a number of exclusions and exceptions that significantly limited the protection offered, had a low claims loss ratio, were not suitable, incurred her unnecessary costs, and were based on incomplete information about her personal circumstances; and
(c)accordingly, the defendants:
(i)engaged in conduct that was misleading in contravention of s 1014H of the Corporations Act 2001 (Cth) (‘Corporations Act’) and ss 12DA and 12DB of the ASIC Act 2001 (Cth);
(ii)breached their personal advice obligations in contravention of ss 961B and 961J of the Corporations Act; and
(iii)became unjustly enriched by receipt…

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: [2023] VSC 465
Decision Date: 8 August 2023

CaseChat Overview and Summary

The case of Anderson-Vaughan v AAI Limited involved the plaintiff seeking a group costs order in relation to a proceeding that had resulted in a settlement. The primary dispute centered around the appropriate percentage to be applied to the settlement amount for the calculation of costs, a matter which falls under the Supreme Court Act 1986, section 33ZDA. The court was tasked with determining whether the proposed percentage was appropriate and necessary in the circumstances of this case.

The legal issues before the court encompassed the principles that should guide the determination of a percentage for costs in group proceedings, particularly in light of previous cases such as Allen v G8 Education Ltd, Fox v Westpac; Crawford v ANZ, and Gehrke v Noumi Ltd. These cases established precedents on the calculation of costs in similar group proceedings, which the court considered relevant. The court needed to balance the need for an adequate recovery of costs by the plaintiffs against the potential disincentive for future group actions if the costs were too high.

In rendering its decision, the court carefully examined the factors pertinent to the proposed percentage, including the nature and complexity of the proceeding, the extent of the benefit to the class members, and the amount of the settlement. It found that the proposed percentage was both appropriate and necessary, aligning with the principles set out in the precedent cases. The court granted the application for a group costs order, reflecting a balanced approach that recognised the importance of compensating the plaintiffs for their efforts while also considering the broader implications for group litigation.

The final orders of the court provided for the costs to be calculated as a percentage of the settlement amount, as proposed, thereby ensuring that the plaintiffs would receive a fair recovery of their costs while maintaining a reasonable incentive structure for future group actions. This decision was made with due consideration of the relevant legal principles and the specific circumstances of the case.

Orders