Clime Capital Limited v UGL Pty Limited

In the Federal Court of Australia, Clime Capital Limited sought approval for a settlement with UGL Pty Limited regarding a representative proceeding. The dispute involved alleged non-disclosure issues concerning a major project, the Ichthys Project, which was a $900 million power plant construction project in the Northern Territory. The court had to decide whether a funding equalisation order (FEO) could be made under section 33V of the Federal Court of Australia Act 1976 (Cth) as an alternative to a common fund order (CFO) under section 33ZF. The court also needed to assess if the proposed settlement was fair and reasonable for all group members.

The court's reasoning was grounded in the well-established principles for approving settlements in representative proceedings. The primary task was to ensure the settlement was fair and reasonable for group members. The court relied on previous case law and expert opinions to conclude that a FEO could indeed be made at the conclusion of a proceeding or upon settlement. The court found that while a CFO might not be appropriate for an early stage settlement unrelated to compromise approval, a FEO could equitably distribute costs among group members. The court approved the settlement after determining it was within the range of reasonable outcomes, taking into account various factors such as the complexity of the litigation, the stage of the proceedings, and the risks involved. The settlement included provisions for the distribution of settlement sums, funding commission payments, and reimbursement of legal costs.

The final orders approved the settlement agreement between the parties, appointed an administrator for the settlement distribution scheme, dismissed the claims between the parties, and outlined the terms for the distribution of settlement sums, costs, and expenses. The court also granted a funding equalisation order to ensure equitable distribution of costs among group members. The court further ordered that certain evidence not be disclosed without prior consent or leave of the court to prevent prejudice to the administration of justice.