Burke v Ash Sounds Pty Ltd (No 4)
[2020] VSC 581
•9 September 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2017 00891
BETWEEN:
| MICHELA JOY BURKE | Plaintiff |
| v | |
| ASH SOUNDS PTY LTD trading as THE FALLS MUSIC AND ARTS FESTIVAL (ABN 67 160 019 152) | Defendant |
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JUDGE: | Incerti J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 September 2020 |
DATE OF RULING: | 9 September 2020 |
CASE MAY BE CITED AS: | Burke v Ash Sounds Pty Ltd (No 4) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 581 |
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PRACTICE AND PROCEDURE – Application for approval of settlement of group proceeding – Supreme Court Act 1986 (Vic) Part 4A – Whether terms of settlement fair and reasonable – Whether settlement distribution scheme fair and reasonable – Whether claim for legal fees and disbursements reasonable – Settlement approved.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr TP Tobin SC | Maddens Lawyers |
| For the Defendant | Mr PA Scanlon QC with Ms M Lang | Lander & Rogers |
HER HONOUR:
This proceeding arises out of events that took place at the Falls Music and Arts Festival (‘festival’) in Lorne, Victoria on 30 December 2016. The defendant, Ash Sounds Pty Ltd, was the organiser of the festival. The plaintiff, Michela Joy Burke, and group members were patrons of the festival. The plaintiff claims damages for herself and group members for injuries suffered as a result of a crowd crush (‘the crush’) at the festival on 30 December 2016.
The parties have agreed, subject to the Court’s approval, to settle the proceeding on the basis that the defendant will pay to the plaintiff $5,700,000 (in addition to payments already made to six group members of $1,275,000) (‘the settlement sum’) inclusive of interest and costs, on the terms set out in the settlement agreement executed by the parties (‘the settlement agreement’).
These are my reasons for approving the settlement distribution scheme (SDS), which is at Annexure A to these reasons. This ruling does not address the plaintiff’s solicitor’s application for costs, which will be determined in a further ruling.
The crush
The festival is a large multi-day music festival, held over four days over the New Year’s Eve and January period. It is held annually in different cities across Australia, including Lorne, and hosts contemporary music performances as well as other art forms. The venue in which the festival was held is a largely undeveloped landholding. Acts perform on temporary stages and patrons camp onsite for the duration of the festival.
At approximately 10pm on 30 December 2016, the group members were present at a performance in ‘grand theatre’ tent. The tent was fitted with two small exits which led to another stage where the headline act was due to commence performing. The group members and other patrons were attempting to exit the grand theatre tent when where was a crowd surge. The plaintiff and group members were injured in the crush of people that ensued. The nature of the injuries sustained range from bruising and scratches to extreme ‘burn-like’ grazing, fractured limbs and ACL injuries. Many of the patrons believed that they would die in the crush and developed post-traumatic stress disorder since the event.
The plaintiff allege that the crush was caused by the defendant:
·failing to ensure that the grand theatre had an adequate means of safe exit;
·restricting the area of exit from the grand theatre in a manner which caused crushing of persons attempting to exit;
·scheduling events at the festival, and in particular around the time of the crush, so that large numbers of people were moving quickly between venues at about the time of the crush;
·failing to have systems in place to ensure that there would be safe movement between venues at the time of the crush;
·failing to have any or any adequate surface in place at the exit of the grand theatre so as to ensure safe passage of those exiting from the grand theatre;
·failing to have any adequate marshalling of patrons at the conclusion of the events at about the time of the crush;
·failing to provide any adequate instruction to patrons as to their movement at the time of the crush;
·failing to undertake any or any adequate risk assessment in respect of the movement of patrons from the grand theatre at about the time of the crush and to accommodate the risks associated therewith; and
·adopting a different style of marquis from the grand theatre tent as compared to the previous years without undertaking any or any adequate risk analysis in respect of the alterations thereof and the effect upon the movement of patrons.
Procedural history
The proceeding was commenced by writ, as a representative proceeding in this Court on 15 March 2017 (‘Class Action Proceeding’). Subsequently, the plaintiff filed and served a second amended statement of claim. On 15 November 2018 the defendant filed its amended defence to the second amended statement of claim in which it admitted it was liable for the crush.
On 9 October 2018 orders were made for the opt-out procedure of the group proceeding. Pursuant to these orders, the date by which a group member may opt out of the Class Action Proceeding was fixed at 30 October 2018 (‘Registration Date’). A total of nine group members opted out of the proceeding.
As at the Registration Date, 76 group members had registered with Maddens to participate in the Class Action Proceeding. One further group member registered on 25 January 2019 with Maddens since the Registration Date. No further group members have registered with Maddens since 25 January 2019.
Prior to the defendant’s admission of liability, discovery had been made, lay witnesses’ outlines had been filed and the plaintiff and defendant had filed expert evidence, including joint expert reports as to risk management and crowd science issues in the proceeding.
A court ordered mediation was conducted on 12 June 2018. The mediation was unsuccessful. A second mediation was held on 19 October 2018 and it too was unsuccessful.
As a result of the defendant’s admission of liability the trial was confined to one issue that was in dispute between the parties relating to the relationship between s 28LE of the Wrongs Act 1958 (Vic) (‘Wrongs Act’) and s 267 and s 274 of the Australian Consumer Law.[1] The plaintiff contended that s 28LE of the Wrongs Act would not apply to a claim under s 267 of the Australian Consumer Law.
[1]The Australian Consumer Law is contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth).
The trial proceeded for a half day before the Honourable Justice McDonald at the Supreme Court in Melbourne on 19 November 2018.
The Honourable Justice McDonald found in favour of the defendant.[2]
[2]Burke v Ash Sounds Pty Ltd [2018] VSC 771.
A further two mediations were conducted, the first on 24 January 2019 and the next on 26 March 2020. Both were unsuccessful.
Informal negotiations between the parties continued following the fourth mediation and on 6 May 2020 a proposed settlement was agreed between the parties.
Application for settlement approval
Section 33V of the Supreme Court Act 1986 (Vic) (‘the Act’) provides that a group proceeding may not be settled without the approval of the Court. If the Court gives such approval, it may make such orders as it thinks fit with respect to the distribution of any money paid out under the settlement or paid into court.
By summons dated 9 July 2020 the plaintiff seeks approval of the proposed settlement. Four affidavits have been filed in support of the summons:
(a) affidavit of Kathryn Amy Emeny dated 9 July 2020;
(b) two affidavits of Kathryn Amy Emeny respectively dated 18 August 2020;
(c) confidential affidavit of Brendan Francis Pendergast dated 31 July 2020;
(d) confidential affidavit of Kathryn Amy Emeny dated 31 August 2020;
(e) confidential affidavit of Elizabeth Mary Harris dated 3 September 2020; and
(f) confidential affidavit of Kathryn Amy Emeny dated 3 September 2020.
In addition to the above affidavits, the following documents have been provided to the Court by Maddens Lawyers:
(a) proposed SDS; and
(b) proposed orders.
The plaintiff relies on the written opinion of her counsel as to whether the proposed settlement is fair and reasonable and in the interest of group members (‘the confidential opinion’). The confidential opinion has been filed on a confidential basis in accordance with the settlement orders and with the established practice in group proceedings under Part 4A of the Act.
Because of the restrictions imposed as a result of the COVID-19 pandemic, the plaintiff’s solicitors filed all confidential affidavits electronically with the Court, directly to the Class Actions Coordinator.
The Court has made orders preserving the confidentiality of those documents. Confidentiality has been preserved because these documents contain material which exposes the frank views of the plaintiff’s legal advisers about the merits of her claims and the risks associated with the action, and all material which is subject to a claim for legal professional privilege.
The Court convened remotely on 4 September 2020 to hear submissions from the plaintiff as to why the settlement ought to be approved.
Group members/claimants
There are 77 people who have registered as group members. The membership of the group is almost exclusively persons who were at the time of the injuries single and under 30 years of age. The majority were between 18 and 25 years of age. Nearly all were either students or having recently completed their tertiary studies. Many had or were working to support themselves in part-time employment in hospitality or the retail industry.
The settlement
As noted above, the parties agreed to settle the proceeding on the basis that the defendant pay $5,700,000 settlement sum in settlement of the lead plaintiff and group members’ claims inclusive of interest and legal costs. The settlement sum is in addition to the $1,275,000 settled claims settlement sum previously paid by the defendant on account of six group members’ claims. The agreement provides that the claims in the proceeding were fully and finally settled, and the plaintiff discharged and released the defendant from any related future claims. A list of registered group members was annexed to the settlement agreement.
Notices to group members
Once the plaintiff made the application for approval of the settlement, the Court required notice of the settlement and of the plaintiff’s application for the Court’s approval of the settlement, to be given to group members. Notices were published by email, on Maddens’ website, on the Supreme Court website and on the Maddens Lawyers Facebook page.
No group member objected to the proposed settlement.
Applicable principles
Section 33V of the Act provides that a group proceeding may not be settled without the approval of the Court. If the Court gives such approval, it makes such orders as it thinks fit with respect to the distribution of any money paid out under the settlement.
The principles to be used as a guide in settlement approval applications are well established. First, in Williams v FAI Home Security Pty Ltd (No 4),[3] Goldberg J identified the following factors:
[3][2000] FCA 1925, [19].
(a) the amount offered to each group member;
(b) the prospects of success in the proceeding;
(c) the likelihood of the group members obtaining judgment for an amount significantly in excess of the settlement offer;
(d) the terms of any advice received from counsel and from any independent expert in relation to the issues which arise in the proceeding;
(e) the likely duration and cost of the proceeding if continued to judgment; and
(f) the attitude of the group members to the settlement.
His Honour also applied the following factors, adopted by the United States Court of Appeals for the Third Circuit in Re General Motors Corporation Pick-up Truck Fuel Tank Products Liability Litigation:[4]
[4](1995) 55 F.3d 768 (‘Re General Motors’).
(a) the complexity and duration of the litigation;
(b) the reaction of the class to the settlement;
(c) the stage of the proceedings;
(d) the risks of establishing liability;
(e) the risks of establishing damages;
(f) the risks of maintaining a class action;
(g) the ability of the defendants to withstand a greater judgment;
(h) the range of reasonableness of the settlement in light of the best recovery;
(i) the range of reasonableness of the settlement in light of all the attendant risks of the litigation.
The Supreme Court Practice Note for class actions[5] provides that, when applying for court approval of a settlement, the parties will be required to address at least the Re General Motors factors, and includes an additional factor, being:
[5]Supreme Court of Victoria, Practice Note SC Gen 10: Conduct of Group Proceedings (Class Actions) (First Revision), 1 July 2020, [15.6].
(j)the terms of any advice received from counsel and/or from independent expert in relation to the issues which arise in the proceeding.
Having regard to the requirements of paragraph 15.6 of the Court’s Practice Note the plaintiff is required to address each of the nine factors in assessing whether the settlement is fair and reasonable as between the parties.
In relation to the role of the Court in a settlement supervision, the Full Federal Court in ASIC v Richards[6] said:
[6][2013] FCAFC 89 [8] (citations omitted).
The role of the Court [in a settlement approval application] is important and onerous. It is protective. It assumes a role akin to that of a guardian, not unlike the role a court assumes when approving infant compromises.
The court must also be alive to the possibility of conflicts of interest. As the Court said in Kelly v Willmott Forests Ltd (in liq) (No 4):[7]
[7](2016) 335 ALR 439 [63].
It should be kept in mind that the Court assumes its onerous burden at a stage of the proceeding when the interests of the applicant and the respondent have merged in the settlement and neither side seeks to critique the settlement from the perspective of class members. Both sides have become ‘friends of the deal’.
In Matthews v AusNet Electricity Services Pty Ltd, Osborn J outlined the two critical questions in an application for court approval of a settlement under s 33V of the Act:[8]
[8][2014] VSC 663 [34] (‘Matthews’).
(a) whether the proposed settlement is fair and reasonable as between the parties having regard to the claims of group members; and
(b) whether the proposed settlement is in the interests of the group members as a whole.
The Court must be independently satisfied of the fairness and reasonableness of the proposed settlement. It will not be sufficient to simply assess whether the opinions expressed by the plaintiff’s legal advisers appear on their face to be reasonable.[9]
[9]Ibid [37].
The settlement is in circumstances where liability has been established and so a number of the factors in Practice Note are of little relevance in this case.
Is the settlement fair and reasonable between the parties?
I am satisfied that the settlement is fair and reasonable as between the parties, and is in the interests of group members as a whole.
In circumstances in which the defendant has admitted liability, the approval of the settlement in this matter is confined to the question of quantum of the settlement.
When considering the reasonableness of the settlement, I have had regard to and was assisted by the opinion of counsel and several affidavits sworn by the plaintiff’s solicitors, Ms Emeny and Mr Pendergast. Although I make clear that while this material was of assistance, it was not determinative.
The litigation has been ongoing for in excess of three years. The key issue facing the group members would have been obtaining certification for significant injury under the Wrongs Act. This would have necessitated an assessment of each group member by doctors and following that, the Medical Panel. It likely that if this matter had proceeded, it would have continued through 2021 and possibly until 2022.
In the event that group members were unsuccessful before the Medical Panel, they would have lost their entitlement to damages for pain and suffering. There was a real risk that some group members, including those who seemed to be among the most significantly injured, who were assessed by doctors as not being at the requisite level to satisfy the Wrongs Act threshold.
There were no objections by group members to the settlement. Many group members were keen to avoid the Medical Panel and were concerned not to have to relive their experiences in the crowd crush.
In Matthews, Osborn J identified a number of incidental advantages to settlement:
(a) early finalisation of the proceeding;
(b) avoidance of continuing personal anxiety, stress and suffering;
(c) advancement of payment; and
(d) containment of legal costs.[10]
[10]Matthews [308].
As noted by Emerton J in Rowe v AusNet Electricity Services Pty Ltd & Ors, these factors, although not determinative are relevant to the reasonableness of the proposed settlement.[11]
[11][2015] VSC 232 [65].
In circumstances such as these, where group members were described by Counsel as being ‘profoundly affected’, there is a clear advantage in the early finalisation of the proceeding. Counsel submitted that many group members are suffering from ongoing anxiety and trauma and were keen to put this experience behind them. Group members were worried about being repeatedly examined and being asked to re-tell their stories and would become distressed even in conversations with their own representatives. Plainly, there is considerable benefit to achieving finality in the litigation and being able to move on with their lives.
The benefit of advancement of payment should also be considered. As noted above, group members are all young people, some of whom are still studying and have lost the benefit of part-time or casual work as a result of the pandemic. It is in their interest to receive their settlements as soon as possible. As a result of the work undertaken by Maddens and Counsel, group members have all been given an estimate of their likely settlement amount which will further accelerate the process of getting the settlement monies to the group members.
Finally, there are a clear advantages to the containment of legal costs. Litigation would have increased the already significant costs of the proceeding in circumstances where there was no guarantee of a greater return, particularly in light of the risks that some group members would not satisfy the Wrongs Act threshold.
Is the settlement fair and reasonable as between group members?
In Downie v Spiral Foods Pty Ltd, J Forrest J observed that it is necessary to consider the internal workings of the settlement to identify any differentiation between the treatment of individual group members and in particular, their entitlement to an award.[12] If any differentiation between the group members exists, then it is necessary to determine if such differentiation is fair and reasonable.[13]
[12][2015] VSC 190 [51].
[13]Ibid [53].
The likely amounts payable to group members have been estimated through detailed individual assessments of each group member’s claim by Counsel who is experienced in personal injury claims.
The group members’ claims were divided into three categories:
(a) settled claims;
(b) large claims; and
(c) small claims.
Settled claims refer to the six claims settled in June 2019, and as referred to above at [2].
The ‘large claims’ group encompasses claims identified as potentially involving a significant injury. Approximately 70% of this group had attended medico-legal examinations to seek certification of a significant injury under the Wrongs Act. The remaining group members were yet to attend a medico-legal examination at the time the parties entered into a settlement agreement but were assessed by Counsel as suffering a significant injury.
The remaining group members, those who fell into the ‘small claims’ group, did not have a significant injury, as assessed by Counsel, and in the main had claims for loss of earnings and some medical treatment.
In June 2019, Maddens wrote to group members in the small claims category in the form of an ‘assessment report’ which advised what their claims had been assessed at and asked the group members to confirm that accuracy of the assessment. Group members were advised that if they did not contact Maddens within seven days, that the accuracy of the assessment report would be deemed to have been accepted. The same process was carried out by Maddens in July 2020 in relation to the large claims category and again in relation to some small claims group members that had not been contacted previously.
As a result of the work undertaken by Counsel, each group member knows how much they are likely to receive as a result of the settlement. As noted above, all group members have either expressly agreed to the assessment in their assessment report or are deemed to have agreed to it.
On the question of quantum, the plaintiff’s solicitor Mr Pendergast considered (on the basis of costs incurred to date and assessments undertaken of each individual claim) that the proposed settlement sum represented approximately 70% of the value of claims, after costs.
This assessment is necessarily an estimate, due to uncertainties in relation to the ultimate costs (whether or not they are approved in full by the Court) but I am satisfied that the settlement is fair and reasonable as between group members.
The differentiation of group members is logical and fair and the SDS is likely to operate fairly and efficiently due to the work undertaken by Maddens and Counsel in individually assessing the value of each claim in regular consultation with the group members themselves.
How will the proposed settlement operate?
The proposed SDS appoints Ms Emeny as administrator. Ms Emeny will be assisted by Maddens and Counsel in discharging her duties under the SDS.
The SDS provides that the administrator is entitled to recover the reasonable administration costs of the SDS, to be assessed by an independent costs consultant.
Each group member’s assessed damages will be individually assessed by Counsel or the administrator. The assessments will be conducted on the basis of information contained in the claimant records – a database of information relating to each group member. Settled claims will not be subject to an assessment under the SDS as they have already received their settlement amounts.
As the compensation pool is less than the total amount claimed by group members, each of the group members’ assessed damages will be adjusted to reflect their entitlement to a proportion of the total compensation pool.
As noted above, each group member has been provided with a copy of their ‘assessment report’ advising them of the assessed damages as at the date of the settlement approval and were given the opportunity to raise any objections.
Prior to final distribution, each group member will be advised of their ‘assessment entitlement’, namely the amount of the proportionate entitlement after adjustment to reflect the smaller compensation pool. Group members will have ten days to notify the administrator of any error or omission.
Prior to any final distribution to group members, the administrator will cause the payment of the following (subject to the approval of the Court):
(a) common benefit legal and administration costs to be paid to Maddens; and
(b) a reimbursement payment to Ms Burke, as the lead plaintiff.
Any amount remaining after these payments have been made to Maddens and Ms Burke, will be distributed to group members.
I note that there is limited opportunity for a review of the assessment entitlement beyond what I have noted above. However, I still consider the SDS to be fair and reasonable in light of group members receiving detailed individual assessments prior to the settlement approval.
Annexure A
Falls Festival Class Action
Michela Joy Burke v Ash Sounds Pty Ltd | SCI 2017 00891
SETTLEMENT DISTRIBUTION SCHEME
Approved by the Honourable Justice Incerti by orders made on 9 September 2020
BACKGROUND and SUMMARY(i)
This part of the Scheme does not have legal effect but is provided to assist group members understand how the Scheme will operate.
A.By the Settlement Agreement the plaintiff and defendant agreed to settle Supreme Court of Victoria Proceeding No. S CI 2017 00891, subject to the approval of the Court. The Court approved the settlement on 9 September 2020.
B.This Scheme establishes a procedure for distributing between Group Members the Compensation Pool, which has been paid or is to be paid by the defendant, Ash Sounds Pty Ltd (ABN 67 160 019 152) (the Defendant).
C.This Scheme is to be read with reference to the Deed of Settlement and Release between the plaintiff and the Defendant.
D.This Scheme provides for:
(a)the procedure for assessing the individual damages of Group Members;
(b)the pro rata calculation of the entitlement of each Group Member to a distribution from the Compensation Pool.
E.Ms Kathryn Emeny, a principal in the Class Actions Department of Maddens, will act as Administrator of the Scheme.
F.To assist the Administrator manage this Scheme:
(a)instructions provided by Group Members in respect of their injuries and associated medical expenses and loss of income, information from private health insurers and Medicare, clinical notes, medical reports and assessments prepared by Tim Tobin SC, an experienced barrister in personal injury law, will provide the basis of assessments under this Scheme;
(b)the Administrator, at her discretion, may request additional information in relation to losses suffered by each Group Member.
(c)If the Administrator does not receive a Group Member’s response to any request for further information within 14 days, she will assess that Group Member’s entitlements in accordance with the information in her possession.
G.The Administrator will be assisted by Maddens and will be entitled to recover the reasonable administration costs of this Scheme including reasonable costs related to the assessment of Group Members’ loss and damage. Such costs are to be assessed by an Independent Costs Consultant and will form part of the Common Benefit Legal Costs.
H.Group Members who seek specific legal advice, or require other work beyond the routine information-gathering and assessment tasks undertaken by the Administrator, will be entitled to retain other solicitors as they wish but at their individual cost.
The Court will have ongoing supervision over the implementation of this Scheme.
J.The operative provisions of this Scheme are set out below.
OPERATIVE CLAUSES(ii)
Interpretation
1.1.In this Scheme, the following terms have the meanings defined (clause references are references to the clauses of this document unless otherwise specified):
Act means the Supreme Court Act 1986 (Vic).
Administration Costs means the disbursements (including the costs of any expert advisers and barristers) and costs incurred by the Administrator in connection with the administration of this Scheme, including but not limited to, assessing Group Member claims and administering the Scheme. These costs shall form part of the Common Benefit Legal Costs which will be assessed by an independent costs consultant and approved by the Court.
Administrator means Ms Kathryn Emeny, the principal in charge of the Class Actions Department of Maddens, or another person appointed by the Court as Administrator of the Scheme.
Agreement means the executed counterparts of the Deed of Settlement and Release between Michela Joy Burke and the Defendant.
Assessment Entitlement means the amount of the proportionate entitlement of a Group Member to compensation from the Compensation Pool calculated in accordance with clause 6 of this Scheme.
Assessed Damages means the damages assessed by Tim Tobin SC and/or the Administrator based on the information available as at the date of Settlement Approval and provided by Group Members and/or medical evidence in relation to the quantum of the Group Member’s damages calculated in accordance with clause 5 of this Scheme.
Assessment Report means a report sent to all Group Members advising of the Assessed Damages of their individual claim prepared by Senior Counsel for the Large Claims and by the administrator for the Small Claims
Claimant Records means a database or other records constructed by or on behalf of Maddens to contain the information for each Group Member and any information required to identify the Group Member, including names, addresses and telephone numbers and all insurance claims notified to Maddens.
Claims means all manner of actions, suits, causes of action, arbitrations, debts, dues, costs, claims, demands, verdicts and judgments either at law or in equity or arising under statute and whether or not the facts, matters or circumstances giving rise to those Claims are known to any Group Member at the date of the conclusion of the Scheme.
Common Benefit Legal Costs means professional fees and disbursements incurred by Maddens in relation to the Proceeding, the assessment of Group Member claims for the purposes of mediation and preparation for trial, and in connection with obtaining Settlement Approval, and which have been assessed by an independent costs consultant appointed by the Court on 3 August 2020, and approved by the Court which are to be shared by all Group Members, including the Settled Claims pursuant to the independent costs consultant’s report
Compensation Pool means the Settlement Sum plus the Settled Claims Settlement Sum, less Common Benefit Legal Costs, less Administration Costs and less the Reimbursement Payment.
Court means the Supreme Court of Victoria.
Crowd Crush means the crowd crush that occurred on 30 December 2016 at the Falls Music and Arts Festival in Lorne, Victoria.
Group Member means a person defined as a group member in the Second Amended Statement of Claim filed in the Proceeding on 25 October 2018 who has registered with Maddens pursuant to orders of the Court closing the class made 9 October 2018.
Insurer means any private health insurer of a group member who has paid a benefit in respect of medical treatment solely related to injuries received as a result of the Crowd Crush.
Insurer Assessed Entitlement means the component of the total Assessment Entitlement of a Group Member that is payable to the Group Member’s Insurer pursuant to the Group Member’s obligation to account to the said insurer.
Large Claims means Group Members assessed by Senior Counsel as having the potential to meet the significant injury threshold under s28LE of the Wrongs Act.
Maddens means Maddens Lawyers ABN 94 831 504 106.
Plaintiff means Michela Joy Burke.
Proceeding means Michela Joy Burke v Ash Sounds Pty Ltd, Supreme Court of Victoria, Proceeding No (SCI 2017 00891).
Reimbursement Payment means the payment made to the plaintiff in the sum of $15,000 as approved by the Court.
Rules means Supreme Court (General Civil Procedure) Rules 2015.
Scheme means the terms of this Settlement Distribution Scheme as approved by the Court.
Settled Claims means the claims of the Group Members set out in paragraph 5.2 of the Agreement.
Settled Claims Settlement Sum means the aggregate of the amounts set out in paragraph 5.2 of the Agreement.
Settlement Approval means the making of orders granting approval of the terms of settlement of the Proceeding and the Scheme by the Court pursuant to section 33V of the Act.
Settlement Distribution Fund means a controlled moneys account as defined in the Legal Profession Act 2004 to be established by Maddens with Westpac Banking Corporation to hold moneys for the purpose of the Scheme, and where the context admits, will include a reference to all moneys in the account.
Settlement Sum means the amount of $5,700,000, plus any interest accruing on that Sum in the Settlement Distribution Fund. For the avoidance of doubt, the Settlement Sum is in addition to any amount previously paid by the Defendant in settlement of the Settled Claims and is inclusive of the party-party costs component of the Settled Claims.
Small Claims means Group Members assessed by Senior Counsel as having no prospects of meeting the significant injury threshold under s28LE of the Wrongs Act.
1.2.Headings are for convenience only and do not affect interpretation. The following rules apply unless the context requires otherwise:
(a)the singular includes the plural, and the converse also applies;
(b)a gender includes all genders;
(c)if a word or phrase is defined, its other grammatical forms have a corresponding meaning;
(d)a reference to a person includes a corporation, trust, partnership, unincorporated body or other entity, whether or not it comprises a separate legal entity;
(e)a reference to dollars and $ is to Australian currency;
(f)a reference to anything done by any person includes a reference to the thing as done by a director, officer, servant, agent, personal representative or legal representative if permitted to be so done by law or by any provision of the Agreement or this Scheme.
Scheme Administrator
2.1.The Settlement Distribution Fund shall be administered and applied by the Administrator. The Administrator, at her discretion, may utilise the services of and may in administering the Settlement Distribution Fund or Scheme as applicable delegate any power under this Scheme to any persons employed or engaged by her including barristers, accounting or other experts and rely upon their work, information and opinions.
2.2.In acting as Administrator (including any incidental functions) the Administrator's obligation is to do so properly on behalf of the Group Members and Insurers as a whole.
2.3.Neither Maddens, the Administrator nor any person employed by Maddens will act as the lawyer for any individual Group Member or Insurer in relation to his, her or its claim under the Scheme in relation to that Group Member’s individual claim for compensation or Insurer Assessed Entitlement under the Scheme.
2.4.Following Settlement Approval and payment of the Settlement Sum in accordance with the Agreement, the Administrator shall hold the moneys in the Settlement Distribution Fund subject to and in accordance with the terms of this Scheme.
2.5.The Administrator may rely on any information or declarations provided by the Insurer of any Group Member as if such information has been provided by the Group Member.
2.6.Notwithstanding anything elsewhere contained in this Scheme, the Administrator may at any time correct any error, slip or omission occurring in the course of her administration of the Scheme.
Group Member Information
3.1.The Administrator shall maintain the Claimant Records and use reasonable endeavours to ensure the accuracy of the information they contain.
3.2.The Claimant Records shall contain the information for each Group Member provided by the Group Member or obtained by the Administrator or Maddens, including any information provided by a Group Member’s insurer or an Insurer or otherwise.
3.3.The Claimant Records shall include Assessments of each Group Member’s claim in accordance with the provisions of this Scheme.
3.4.The accuracy of the information in the Claimant Records shall be deemed to be accepted by each Group Member. The Administrator shall use reasonable endeavours to ensure the accuracy of the information recorded in the Claimant Records.
3.5.Subject to clause 3.6, a Group Member shall not be entitled to amend the information contained in the Claimant Records after Settlement Approval.
3.6.The Administrator may, in the Administrator’s absolute discretion, request and take into account additional documentation or information in relation to a Group Member’s Claim.
Information Held by Administrator and Basis of Assessment
4.1.Subject to clause 4.2:
(a)for the purpose of the administration of this Scheme, information provided by Group Members or held by the Administrator may be relied upon as accurate by the Administrator, in her absolute discretion, when administering the Scheme; and
(b)each Group Member’s distribution from the Compensation Pool will proceed on the basis of the information contained in the Claimant Records.
4.2.If in the Administrator's opinion, the information held in the Claimant Records or provided by any Group Member or otherwise:
(a)insufficiently substantiates the claim or part of a claim made by a Group Member or an Insurer, the Administrator, in her absolute discretion, may:
(i) determine that the claim or part of the claim as the case may be is not eligible for any distribution from the Compensation Pool;
(ii) by written notice require the Group Member or an Insurer to provide and verify by a further declaration or otherwise such further information as the Administrator may require. If the Group Member or the Insurer does not provide the further information in the form requested, within 14 days of such a request being made, the Administrator may determine that the claim or part of the claim as the case may be is not eligible for any distribution from the Compensation Pool;
(b)is sufficient notwithstanding that some information may not be included, the Administrator, in her absolute discretion, may accept it as complete.
Assessment of Individual Entitlements
5.1.Each Group Member’s Assessed Damages will be assessed by Senior Counsel or the Administrator in accordance with clauses 5.3 to 5.8 below. The Assessed Damages will be set out in an Assessment Report.
5.2.The Administrator will create and maintain a database in the form of an Excel Spreadsheet recording each Group Member’s Assessed Damages and Assessment Entitlement.
Small Claims
5.3.In respect of the Small Claims each Group Member’s information contained in the Claimant Records will be the basis of the Assessed Damages for each Group Member.
5.4.For the purposes of the Compensation Pool, the Assessed Damages of the Small Claims will be assessed by the Administrator on the basis of any medical evidence, instructions and supporting materials provided by the group member to Maddens Lawyers.
5.5.The assessments will be subject to any reductions or increases considered necessary by the Administrator, to ensure that the assessment reflects a reasonable assessment of the Group Member’s loss that is as accurate as possible having regard to the available information.
Large Claims
5.6.In respect of the Large Claims each Group Member’s information contained in the Claimant Records and any supporting documentation or medical evidence has been provided to Mr Tim Tobin SC who is experienced in personal injury law.
5.7.For the purposes of the Compensation Pool, the Assessed Damages of the Large Claims will be assessed by Mr Tobin SC on the basis of any medical evidence and instructions and supporting materials provided by the group member to Maddens Lawyers.
5.8.The assessments will be subject to any reductions or increases considered necessary by the Administrator, to ensure that the assessment reflects a reasonable assessment of the Group Member’s loss that is as accurate as possible having regard to the available information.
Settled Claims
5.9.For the avoidance of doubt, the Settled Claims will not be subject to an assessment under this Scheme. The Assessed Damages for the Settled Claims will be the amount their claim settled for.
Calculation of Aggregate Losses and Proportionate Entitlements to the Compensation Pool
6.1.Because the Compensation Pool is less than the total amount claimed by the Group Members, each Group Member’s Assessed Damages must be adjusted to reflect their entitlement to a proportion of the Compensation Pool. The intent of the formula for calculation of that Assessment Entitlement is that each individual Group Member will be compensated for an equal portion of their total loss.
6.2.The aggregate loss is the Assessed Damages for all Group Members added together (gross quantum).
6.3.Each Group Member’s proportion of the Compensation Pool for distribution will be calculated using the following pro rata distribution formula:
(Group Member Assessed Damages / gross quantum) x 100 = Assessment Entitlement %
then
Compensation Pool x Assessment Entitlement % = Assessment Entitlement
Medicare
6.4.Where a Group Member’s Assessed Damages are in excess of $5,000 Medicare will be entitled to recover a component of the Group Member’s Assessment Entitlement (Medicare Payment).
6.5.Any Medicare Payment will be paid to Medicare by the Administrator pursuant to the Notice of Charge issued by Medicare.
Centrelink
6.6.Where a Group Member’s Assessed Damages are inclusive of loss of earnings which may create a liability to Centrelink, the Administrator, pursuant to a Notice of Charge issued by Centrelink will make said payment to Centrelink (Centrelink Payment).
Private health insurers
6.7.Where a Group Member’s Assessed Damages includes a component covered by private health insurance:
(a)the insurer may be entitled to recover a component of the Group Member’s Assessment Entitlement (Insurance Payment);
(b)the Administrator will use her best endeavours to agree with the relevant Insurer any repayment of the Insurance Payment;
6.8.Any Insurance Payment will be paid to the Group Member’s insurer by the Administrator.
Assessment Entitlement Notices
7.1.Each Group Member has been provided with a copy of their Assessment Report and been given the opportunity to raise any objections or concerns.
7.2.A Group Member together with his or her Insurer (where applicable) will be advised in writing of their respective Assessment Entitlements prior to final distribution.
7.3.A Group Member or Insurer (where applicable) will have 10 days, from the date of issue of their Assessment Entitlement, to notify the Administrator of any error, slip or omission in the Assessment Entitlement.
7.4.In the event of a notification under clause 7.3, the Administrator shall:
(a)undertake a review of the Assessment Entitlement for the purposes of identifying or considering any error, slip or omission;
(b)at her sole discretion make a determination as to whether an error, slip or omission has occurred; and
(c)within 10 days issue a further Assessment Entitlement either correcting the error, slip or omission or confirming the original Assessment Entitlement.
7.5.The accuracy of an Assessment Entitlement shall be deemed to be accepted by a Group Member or Insurer and shall be final under the Scheme if the Group Member has not notified the Administrator of any administrative error, slip or omission in the Assessment Entitlement within 10 days of the date of issue.
Group Member's obligations, indemnities and reimbursement of statutory benefit receipts
8.1.Each Group Member shall act honestly, and do all things necessary to ensure that any agent or representative of the Group Member acts honestly, in anything done in or for the purposes of participating in this Scheme and any person discharging any function or office created by this Scheme shall be entitled to rely upon the accuracy of the thing done.
8.2.Payment of compensation pursuant to this Scheme may be subject to obligations under statutes and regulations. Accordingly, each Group Member indemnifies the Administrator in respect of all such obligations, including but not limited to payments or repayments relating to the Australian Taxation Office, Social Security, Medicare, Worker Compensation or any other statutory benefits paid to or for the benefit of the Group Member under this Scheme.
8.3.If a Group Member has a legal obligation, whether by reason of statute, contract or otherwise, to an agency, compensation payer or insurer to pay or repay a sum from the amount payable to the Group Member under this Scheme, the Group Member shall, as a condition of its entitlement to receive payment, indemnify the Administrator in respect of any and all such obligations.
8.4.Without limiting any other obligation or discretion of the Administrator under this Scheme, for the avoidance of doubt the Administrator may make such adjustments or withholdings from any payment otherwise due to a Group Member pursuant to this Scheme as may be necessary to:
(a)comply with any statutory or regulatory obligation to pay or refund any amount to a statutory or other agency; or
(b)effect any indemnity given or equitable or contractual obligation owing by a Group Member under this Scheme.
8.5.Where the agency administering any State or Federal scheme notifies the Administrator in writing that any amount is payable to the agency from any payment payable to a Group Member under this Scheme, the Administrator:
(a)shall pay the said amount to the agency prior to any final distribution of the balance of the Group Member’s entitlements pursuant to this Scheme;
(b)shall notify the Group Member of the payment to the agency; and
(c)without affecting any other privilege or immunity under this Scheme, shall have no further obligation to the Group Member in respect of the said amount;
but nothing in this section shall affect any right the Group Member or the agency might have against each other in respect of the said amount.
Distribution of Compensation Pool
9.1.The Compensation Pool shall be allocated between Group Members on a pro-rata basis according to the relative values of their Assessment Entitlements.
9.2.Upon application to the Court, the Administrator may make interim distributions of up to 50% of the Assessed Damages of the Compensation Pool, prior to the final distribution of the Compensation Pool.
9.3.Prior to any final distribution from the Settlement Distribution Fund, the Administrator will cause:
(a)Common Benefit Legal Costs as approved by the Court to be paid to Maddens;
(b)Administration Costs as approved by the Court to be paid to Maddens;
(c)the Reimbursement Payment as approved by the Court to be paid to the Plaintiff.
9.4.If after the final distribution of the Compensation Pool to Group Members:
(a)any amount remains or is held in the Compensation Pool; or
(b)any cheque remains un-presented for a period of 90 days or such further period that the Administrator otherwise deems appropriate;
the amount shall be distributed to Group Members, subject to clause 9.5.
9.5.At the Administrator's absolute discretion, the following amounts required to be distributed under clause 9.4 may instead be paid to Beyond Blue (a non-profit organization working to address issues associated with depression, suicide, anxiety disorders and other related mental illnesses):
(a)if the total amount to be distributed is less than $3,000 the total amount; or
(b)if the amount to be distributed to any individual Group Member is less than $100, that amount.
Immunity from Claims
10.1.The completion of distributions made pursuant to clause 9 (including distributions made by cheques that remain un-presented for 90 days) shall satisfy:
(a)all Claims made by Group Members (including the Plaintiff) in the Proceeding; and
(b)any Claims made by Group Members (including the Plaintiff) arising out of or relating in any way to the facts matters or circumstances set out in the pleadings in the Proceeding or any matter that is the subject of the Proceeding or has been the subject of the Proceeding.
10.2.Upon final distribution of the Settlement Distribution Fund in accordance with this Scheme, the Administrator shall have no further liability in respect of the Settlement Sum, the Compensation Pool or the implementation of this Scheme.
10.3.Without limiting any other provision for immunity in this Scheme, the Administrator in relation to this Scheme shall have the same immunities from suit as attach to the office of a judicial officer of the Court.
Disclosures to agencies and insurers
11.1.Where necessary or reasonable for the purposes of this Scheme or compliance with any statutory or contractual obligation owed by, or in respect of any compensation payable to any Group Member, the Administrator may release to:
(a)a statutory or other agency;
(b)an insurer; or
(c)the Australian Taxation Office;
details of a Group Member's name, address, identifying particulars, tax file number and any Assessment Entitlement relating to the claim.
Supervision by the Court
12.1.The Administrator may refer any issues arising in relation to the Scheme to the Court for determination or advice.
12.2.Any costs incurred in any such referral to the Court made by the Administrator shall be deemed to be a part of the Administration Costs.
Administration Costs
13.1.Fees payable in respect of work performed by or on behalf of the Administrator pursuant to this Scheme shall be assessed by an independent costs consultant and payment of those costs to the Administrator will be subject to approval of the Court.
13.2.Notwithstanding any other provision of this Scheme, and without reducing any other rights which the Administrator might have, any costs, expenses, taxies, levies, duties, charges, fees or other imposts or obligations arising in connection with the administration of this Scheme (including without limitation the creation, retention, investment or disbursement of any part of the Settlement Distribution Fund) incurred by the Administrator over and above the Administration Costs will be borne by the Administrator.
Approval of Administration Costs
13.3.All fees and disbursements payable to any person in relation to the administration of this Scheme shall:
(a)form part of the Administration Costs of the Scheme;
(b)be identified in a report to the Court prior to any disbursement from the Settlement Distribution Fund to the person claiming the costs or disbursements; and
(c)be disbursed from the Settlement Distribution Fund upon and to the extent of approval by the Court.
13.4.Nothing in this Section shall affect any rights or obligations as between a solicitor and client of that solicitor in respect of costs incurred pursuant to any retainer or costs agreement between the solicitor and that client.
Notice
14.1.Any notice or document to be given (or delivered) pursuant to this Scheme shall be deemed to be given (or delivered) and received for all purposes associated with this Scheme if it is:
(a)addressed to the person to whom it is to be given; and
(b)either:
(i) delivered, or sent by pre-paid mail, to that person's postal address (being, in respect of any Group Member, the postal address recorded in the Claimant Records, as obtained from or directly from the Group Member);
(ii) sent by fax to that person's fax number (being, in respect of any Group Member, the fax number provided by the Group Member) and the machine from which it is sent produces a report that states that it was sent in full; or
(iii) sent by email to that person's email address (being, in respect of a Group Member, the email address provided by the Group Member, and a server through which it is transmitted produces a report that states that the email has been "sent" to the inbox of the specified email address.
14.2.A notice or document that complies with clause 15.1 will be deemed to have been given (or delivered) and received:
(a)if it was sent by mail to an addressee in Australia, three (3) clear business days after being sent;
(b)if it is sent by mail to an addressee overseas, five (5) clear business days after being sent;
(c)if it is delivered or sent by fax, at the time stated on the report that is produced by the machine from which it is sent; and
(d)if it is sent by email, at the time it is sent.
14.3.The Administrator's address, fax number and email address shall be as set out below unless and until the Administrator notifies the Group Members otherwise:
Attention: Kathryn Emeny
Falls Festival Class Action
Maddens Lawyers
219 Koroit Street
Warrnambool VIC 3280
Fax: (03) 5560 2000Email: [email protected]
Time
15.1.The time for doing any act or thing under this Scheme may be extended by order of the Court.
END OF SETTLEMENT DISTRIBUTION SCHEME
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