Bywater v Appco Group Australia Pty Ltd - [2020] FCA 1877

FEDERAL COURT OF AUSTRALIA
Bywater v Appco Group Australia Pty Ltd [2020] FCA 1877

File number: NSD 1857 of 2016

Judgment of: LEE J

Date of judgment: 24 December 2020

Catchwords: REPRESENTATIVE PROCEEDINGS – settlement approval application pursuant to s 33V of Federal Court of Australia Act 1976 (Cth) – where respondent restructured business – investigations ordered into the financial position of the respondent including whether restructure is an attempt to defeat judgment or is a voidable or uncommercial transaction – application adjourned pending investigations – investigations did not yield additional useful information concerning further assets of the respondent – notice sent to group members reflecting this information – overwhelming support for the current settlement to be approved – further attempts to augment any settlement sum likely to be throwing good money after bad – settlement approved

Cases cited: Bywater v Appco Group Australia Pty Ltd [2020] FCA 1537

Division: Fair Work Division

Registry: New South Wales

National Practice Area: Employment and Industrial Relations

Number of paragraphs: 8

Date of hearing: 22 December 2020

Counsel for the Applicant: Dr K Hanscombe QC with Ms K Bowshell

Solicitor for the Applicant: Adero Law

Counsel for the Respondent: Mr S Keizer

Solicitor for the Respondent: Baker McKenzie

ORDERS

NSD 1857 of 2016

BETWEEN:
JACOB CORNELIUS BYWATER

Applicant

AND:
APPCO GROUP AUSTRALIA PTY LTD ABN 49 092 605 671

Respondent

ORDER MADE BY:

LEE J

DATE OF ORDER:

24 DECEMBER 2020

THE COURT ORDERS THAT:
Defined terms:
Act means the Federal Court of Australia Act 1976 (Cth).
Administration Costs means costs incurred by the Settlement Administrator in administering the Final Settlement Scheme.
Escrow Account means the escrow account described in the Settlement Deed.
Final Settlement Scheme means the Settlement Distribution Scheme as approved in the form of Annexure A.
Funder means Harbour Fund III, L.P.
Group Member has the meaning set out in the Settlement Deed and does not include any person who has opted out of the proceedings
Settlement Deed means the Deed of Settlement and Release between the applicant, the respondent, Appco Group Pty Ltd (ACN 151 870 343), the Funder and Adero Law Pty Ltd on 14 August 2020 as varied by the Deed of Variation between the applicant, the respondent, Appco Group Pty Ltd (ACN 151 870 343), the Funder and Adero Law Pty Ltd on 8 December 2020.
Settlement Distribution Scheme means the document which is exhibit RMM 2-31 to the Affidavit of Rory Michael Markham made 7 October 2020.
Settlement Sum means the moneys paid by the respondent into the Escrow Account in accordance with the terms of the Settlement Deed.
1.Pursuant to s 33V(1) of the Act, the settlement of the representative proceedings and the claims of the applicant and each Group Member be approved on the terms set out in the Settlement Deed and Settlement Distribution Scheme, which are respectively annexures RMM2-4 and RMM2-31 to the Affidavit of Rory Michael Markham made 7 October 2020, the latter being varied pursuant to Order 3 below.
2.Pursuant…

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: [2020] FCA 1877
Decision Date: 24 December 2020

CaseChat Overview and Summary

The matter of Bywater v Appco Group Australia Pty Ltd came before the court for the approval of a settlement reached in representative proceedings. The applicant sought approval of the settlement under section 33V of the Federal Court of Australia Act 1976 (Cth). The dispute originated from a restructuring of the respondent's business, which raised concerns about potential attempts to defeat judgments or uncommercial transactions. The court was required to decide whether the settlement terms were fair and reasonable, and if the respondent had undertaken any actions that could undermine the settlement's validity.

The court undertook a comprehensive review of the settlement agreement, considering the financial position of the respondent and the implications of the business restructuring. Investigations were ordered to ascertain whether the restructuring was an attempt to defeat judgments or constituted a voidable or uncommercial transaction. The court adjourned the application pending these investigations. Despite the investigations, no additional useful information concerning further assets of the respondent was obtained. The court noted that notice had been sent to group members reflecting this information. The overwhelming support for the current settlement indicated that further attempts to augment the settlement sum were likely to be futile. Consequently, the court approved the settlement on the terms set out in the Settlement Deed and Settlement Distribution Scheme.

The court's approval of the settlement was based on the comprehensive review of the evidence and the overwhelming support from the group members. The court varied the Settlement Distribution Scheme to reflect the final terms of the settlement and appointed Rory Markham as the Settlement Administrator. The court also ordered that the proceedings be dismissed with no order as to costs once the settlement distribution was completed. Certain documentary materials were to remain confidential to prevent prejudice to the proper administration of justice. The court extended the opt-out period for certain parties and vacated all outstanding costs orders in the proceedings. The final orders included the approval of the settlement, the appointment of the Settlement Administrator, and the dismissal of the proceedings with no order as to costs.

Orders

Orders of the court

Defined terms:

Act means the Federal Court of Australia Act 1976 (Cth).

Administration Costs means costs incurred by the Settlement Administrator in administering the Final Settlement Scheme.

Escrow Account means the escrow account described in the Settlement Deed.

Final Settlement Scheme means the Settlement Distribution Scheme as approved in the form of Annexure A.

Funder means Harbour Fund III, L.P.

Group Member has the meaning set out in the Settlement Deed and does not include any person who has opted out of the proceedings

Settlement Deed means the Deed of Settlement and Release between the applicant, the respondent, Appco Group Pty Ltd (ACN 151 870 343), the Funder and Adero Law Pty Ltd on 14 August 2020 as varied by the Deed of Variation between the applicant, the respondent, Appco Group Pty Ltd (ACN 151 870 343), the Funder and Adero Law Pty Ltd on 8 December 2020.

Settlement Distribution Scheme means the document which is exhibit RMM 2-31 to the Affidavit of Rory Michael Markham made 7 October 2020.

Settlement Sum means the moneys paid by the respondent into the Escrow Account in accordance with the terms of the Settlement Deed.

1. Pursuant to s 33V(1) of the Act, the settlement of the representative proceedings and the claims of the applicant and each Group Member be approved on the terms set out in the Settlement Deed and Settlement Distribution Scheme, which are respectively annexures RMM2-4 and RMM2-31 to the Affidavit of Rory Michael Markham made 7 October 2020, the latter being varied pursuant to Order 3 below.

2. Pursuant to s 33ZB(a) of the Act, the persons affected by these orders are the applicant and the Group Members who have not opted out of the proceedings.

3. The Settlement Distribution Scheme be varied as shown in the marked-up document at Annexure A, which is the Final Settlement Scheme.

4. Pursuant to s 33ZF of the Act, Rory Markham, principal of Adero Law, be appointed as the Settlement Administrator of the Final Settlement Scheme and authorised to act in accordance with the Final Settlement Scheme, subject to any direction of the Court.

5. The Settlement Administrator is to apply for orders dismissing the proceedings with no order as to costs within two days of completion of the Settlement Distribution in accordance with the Final Settlement Scheme.

6. Pursuant to ss 37AF and 37AG(1)(a) of the Act, in order to prevent prejudice to the proper administration of justice, the following documentary material is to remain confidential and its publication is prohibited until further order:

a. the opinion of counsel for the applicant dated and filed 7 October 2020 in relation to the application pursuant to s 33V of the Act for approval of the settlement;

b. annexures RMM1-1, RMM1-2 and RMM1-3 to the Affidavit of Rory Michael Markham made 6 October 2020;

c. the information redacted as shown at Annexure B to annexures RMM3-1 and RMM3-2 to the Affidavit of Rory Michael Markham made 27 November 2020; and

d. annexures RMM4-1, RMM4-2, RMM4-3, RMM4-4, RMM4-5, RMM4-6 and RMM4-7 to the Affidavit of Rory Michael Markham made 14 December 2020.

7. Pursuant to s 33J(3) of the Act, the time and date for Teleasha Conroy and Zo Griffin to opt out of this proceeding is extended to 5pm on 24 December 2020.

8. All outstanding costs orders in the proceedings be vacated.

9. There be no order as to costs of the proceeding or the interlocutory application for settlement approval dated 18 September 2020.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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File number:	NSD 1857 of 2016
Judgment of:	LEE J
Date of judgment:	24 December 2020
Catchwords:	REPRESENTATIVE PROCEEDINGS – settlement approval application pursuant to s 33V of Federal Court of Australia Act 1976 (Cth) – where respondent restructured business – investigations ordered into the financial position of the respondent including whether restructure is an attempt to defeat judgment or is a voidable or uncommercial transaction – application adjourned pending investigations – investigations did not yield additional useful information concerning further assets of the respondent – notice sent to group members reflecting this information – overwhelming support for the current settlement to be approved – further attempts to augment any settlement sum likely to be throwing good money after bad – settlement approved
Cases cited:	Bywater v Appco Group Australia Pty Ltd [2020] FCA 1537
Division:	Fair Work Division
Registry:	New South Wales
National Practice Area:	Employment and Industrial Relations
Number of paragraphs:	8
Date of hearing:	22 December 2020
Counsel for the Applicant:	Dr K Hanscombe QC with Ms K Bowshell
Solicitor for the Applicant:	Adero Law
Counsel for the Respondent:	Mr S Keizer
Solicitor for the Respondent:	Baker McKenzie

ORDER MADE BY:	LEE J
DATE OF ORDER:	24 DECEMBER 2020