Collin v Aspen Pharmacare Australia Pty Ltd
[2013] FCA 1336
FEDERAL COURT OF AUSTRALIA
Collin v Aspen Pharmacare Australia Pty Ltd [2013] FCA 1336
Citation: Collin v Aspen Pharmacare Australia Pty Ltd [2013] FCA 1336 Parties: RODNEY COLLIN v ASPEN PHARMACARE AUSTRALIA PTY LTD and ELI LILLY AUSTRALIA PTY LTD File number(s): VID 5 of 2010 Judge(s): DAVIES J Date of judgment: 9 December 2013 Catchwords: PRACTICE AND PROCEDURE – Representative proceedings – Application for Court approval of in-principle settlement – Federal Court of Australia Act 1976 (Cth), s 33V – Whether proposed settlement is fair and reasonable – Approval granted. Legislation: Federal Court of Australia Act 1976 (Cth), s 33V Cases cited: Collin v Aspen Pharmacare Australia Pty Ltd [2013] FCA 952
Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 459
Australian Securities and Investments Commission v Richards [2013] FCAFC 89
Darwalla Milling Co Pty Ltd v F Hoffmann – La Roche Ltd (No 2) (2006) 236 ALR 322
Lopez v Star World Enterprises Pty Ltd [1999] FCA 104
P Dawson Nominees Pty Ltd v Brookfield Multiplex Ltd (No 4) (4) [2010] FCA 1029
Pathway Investments Pty Ltd v National Australia Bank Ltd (No 3) [2012] VSC 625
Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2011] FCA 671Date of hearing: 29 November 2013 Date of last submissions: 29 November 2013 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 8 Counsel for the Applicant: R Gorton QC with J Rowe Solicitor for the Applicant: Arnold Thomas & Becker Counsel for the First Respondent: A Payne SC with P Wallis Solicitor for the First Respondent: KWM Counsel for the Second Respondent: S. Sanderson SC with J Slattery Solicitor for the Second Respondent: Clayton Utz
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 5 of 2010
BETWEEN: RODNEY COLLIN
ApplicantAND: ASPEN PHARMACARE AUSTRALIA PTY LTD
First RespondentELI LILLY AUSTRALIA PTY LTD
Second Respondent
JUDGE:
DAVIES J
DATE OF ORDER:
9 DECEMBER 2013
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
Aspen
1.Pursuant to ss 33V and/or 33ZF of the Federal Court of Australia Act 1976 (Cth) ("the Act") the settlement of the representative proceeding and of the claims of the Applicant and of each Group Member in accordance with the terms of the Aspen Deed (annexure MLS-21 to the affidavit of Moira Saville sworn 3 September 2013) is approved.
2.Pursuant to ss 33V and/or 33ZF of the Act, the Aspen Settlement Distribution Scheme (annexure AG-82 to the affidavit of Allanah Goodwin sworn 11 November 2013) is approved.
3.Pursuant to s 33ZF of the Act, the payment of the Aspen Proposed Costs Sum (referred to in the affidavit of Allanah Goodwin sworn 15 November 2013) on account of costs and disbursements of the Applicant and of all Group Members (including all past and future costs and disbursements in relation to the preparation and performance of the Aspen Deed and the administration of the Aspen Settlement Distribution Scheme) is approved.
4.All costs orders in the proceeding made in favour of or against the First Respondent be vacated.
5.Pursuant to s 33ZF of the Act, the Applicant is authorised nunc pro tunc to execute the Aspen Deed of Settlement on behalf of each Group Member.
6.The proceeding against the First Respondent is dismissed with no order as to costs.
Eli Lilly
7.Pursuant to ss 33V and/or 33ZF of the Act the settlement of the representative proceeding and of the claims of the Applicant and of each Group Member in accordance with the terms of the Eli Lilly Deed (annexure RDM-X to the affidavit of Ross McInness sworn 9 September 2013) is approved.
8.Pursuant to ss 33V and/or 33ZF of the Act, the Eli Lilly Settlement Distribution Scheme (annexure AG-83 to the affidavit of Allanah Goodwin sworn 11 November 2013) is approved.
9.All costs orders in the proceeding made in favour of or against the Second Respondent be vacated.
10.Pursuant to s 33ZF of the Act, the Applicant is authorised nunc pro tunc to execute the Eli Lilly Deed of Settlement on behalf of each Group Member.
11.The proceeding against the Second Respondent is dismissed with no order as to costs.
Confidentiality
12.Pursuant to s 37AF of the Act, until such further order, the disclosure (by publication or otherwise) of:
a. The affidavit of Allanah Goodwin sworn 11 November 2013 including annexures AG-80 to AG-83;
b. The Affidavit of John Rowe sworn 11 November 2013 including annexures JR-1 and JR-2;
c. The affidavit of Allanah Goodwin sworn 14 November 2013 including annexure AG-84
d. The affidavit of Allanah Goodwin sworn 15 November 2013 including annexures AG-85 to AG-86;
e. The affidavit of Joseph Mazzeo sworn 15 November 2013 including annexures JAM-1 and JAM-2;
is prohibited except that this suppression order does not prohibit disclosure of those documents to the parties to the proceeding or to their legal representatives. For the purposes of s 37AG of the Act, this suppression order is made on the ground that it is necessary to prevent prejudice to the proper administration of justice.
13.Until further order, the disclosure (by publication or otherwise) of those things said at the Interlocutory Application heard on 29 November 2013 (and as identified below in the transcript) regarding the Verification process and the Settlement Distribution Schemes is prohibited. This suppression order is made on the ground that it is necessary to prevent prejudice to the proper administration of justice for the purposes of section 37AG of the Act.
14.The confidentiality order extends to the following sections of the transcript:
p5.8 to 5.9, excluding the first three words of the sentence and the rest of the sentence which starts "a deed poll needs to be presented…";
p5.13 to p8.5;
p9.43 to p10.5;
p10.22 to p11.10 up to and including the work Aspen, but not including the sentence which commences "On the question of costs…"
Persons who are bound
15.The persons affected and bound by these orders are the Applicant, the Respondents and the Group Members as defined in the Revised Third Application dated 2 October 2012, but excluding any person who has opted out of the proceeding under s 33J of the Act.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 5 of 2010
BETWEEN: RODNEY RODNEY COLLIN
ApplicantAND: ASPEN PHARMACARE AUSTRALIA PTY LTD
First RespondentELI LILLY AUSTRALIA PTY LTD
Second Respondent
JUDGE:
DAVIES J
DATE:
9 DECEMBER 2013
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
The applicant (“Mr Collin”) and the respondents seek the Court’s approval of the in-principle settlements that they have reached in this proceeding, which is a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) (“the Act”). The Court’s approval is required by s 33V of the Act.
Mr Collin brought this application on his own behalf and on behalf of persons who took dopamine agonist tablets known under the trademark or brand “Permax”/“Pergolide” (“the tablets”) seeking compensation for loss and damage. It was alleged against the respondents that they failed to warn, or adequately warn, consumers about potential side effects of the tablets which were claimed to cause obsessive or compulsive behaviours. The allegations were denied and the claims defended by both respondents.
The proceeding was commenced in 2010. In July 2013, the parties agreed on an in- principle settlement subject to the approval of the Court. In September 2013 the Court made orders that had the effect of closing the class of group members by precluding a group member from pursuing a claim for compensation from the respondents unless that group member registered as a participating group member by 11 November 2013. Orders were also made directing the notification and advertisement of the proposed settlements and of the requirement for registration: Collin v Aspen Pharmacare Australia Pty Ltd [2013] FCA 952. At the time that the orders were made, there were 31 identified group members. Following the notification and advertisement of the proposed settlements, one further person came forward who also qualifies as a group member.
The principles guiding whether the Court should approve, or should decline to approve, a settlement under s 33V of the Act are well established. The task of the Court is to determine whether the proposed settlement is fair and reasonable, having regard to the claims made on behalf of the group members who would be bound by the settlement. The Court’s concern here is whether the settlements have been undertaken in the interests not merely of Mr Collin and the respondents, but also in the interests of the group members as a whole: Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 at 258 per Branson J; Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 459 at [19] per Goldberg J; Australian Securities and Investments Commission v Richards [2013] FCAFC 89 (“ASIC v Richards”). The Court’s role is to protect those group members who are not represented and whose interests may be prejudiced by their absence, not unlike the role a court assumes when approving infant compromises: ASIC v Richards at [8]. The practical judicial approach is to identify whether there are features of the settlements that involve any actual or potential unfairness to any group member or categories of group members having regard to all relevant matters, including:
·whether the proposed settlements involve some unfair compromise by some members or categories of members for the benefit of others; and
·whether the proposed distribution scheme fairly reflects the apparent, or assumed, relevant losses suffered by particular members or categories of members: Darwalla Milling Co Pty Ltd v F Hoffmann – La Roche Ltd (No 2) (2006) 236 ALR 322.
In Lopez v Star World Enterprises Pty Ltd [1999] FCA 104 (“Lopez v Star World Enterprises”) Finkelstein J described the task of the Court as an onerous one, especially where the application was not opposed, as it is not in this case.
In support of the application for approval is a confidential opinion of senior counsel for Mr Collin in which he recommends the settlements for the reasons given. In assessing whether the proposed settlements are fair and reasonable, the Court must necessarily place considerable reliance on such an opinion: P Dawson Nominees Pty Ltd v Brookfield Multiplex Ltd (No 4) [2010] FCA 1029 (“Brookfield Multiplex”); Lopez v Star World Enterprises; Pathway Investments Pty Ltd v National Australia Bank Ltd (No 3) [2012] VSC 625 (“Pathway Investments”) at [3]. The Court relies on the parties’ lawyers to give the Court sufficient information to assess whether a proposed settlement should be approved, which includes the frank and candid opinion of the legal advisors in relation to the litigation. In Pathway Investments, Pagone J explained the importance of the need for candour in the expression of opinion:
The need for candour in the expression of opinions by the practitioners is in part the “necessary consequence of their client instituting a representative action” and flows from the need to inform the Court of everything that may reasonably and probatively bear upon the task which the parties seek the Court to discharge. The position of the respective lawyers for the parties to a group proceeding is, to some extent, akin to that of expert witnesses whose opinions may more helpfully than submissions inform a Court’s decision for approval. The need for candour is also in part occasioned by the duty of the practitioners to reveal to the Court matters concerning their position in relation to the proposed settlement which might reflect upon the weight which may be given by the Court to the opinions which the lawyers express. Thus, in the appropriate case, it will be both relevant and necessary for the practitioners to reveal particular benefits or advantages flowing to them of a financial or other kind from the settlement which they may be seeking the Court’s approval on behalf of their client: at [3] (citation omitted).
Whilst the applicant’s lawyers carry the burden, all parties bear the responsibility of ensuring the Court is provided with the information necessary to assess the fairness and reasonableness of the proposed settlement: Brookfield Multiplex at [4]; Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2011] FCA 671 at [77].
In the present case the terms of the proposed settlements (which are not set out because they are confidential) require the payment by each respondent of a settlement sum. The opinion given by senior counsel for Mr Collin refers to the legal and factual issues that would be raised in this proceeding if it went to trial, the matters that must be established by Mr Collin in order to succeed in this proceeding, the strengths and weaknesses of Mr Collin’s case and the risk factors involved. As the opinion is confidential, it is not appropriate to set out the views expressed and the reasons given but it is appropriate to state that the matters disclosed provide a strong basis for concluding that the settlement sums that the respondents will pay are fair and reasonable for group members as a whole.
The terms of the proposed settlement also provide for the settlement sums to be distributed in accordance with a confidential settlement distribution scheme. The distribution scheme makes provision for the settlement sums to be paid to group members pro rata to the loss and damage suffered by each of them. An opinion provided by junior counsel for Mr Collin explains the methodology for assessing each group member’s loss and damage. It is relevant to note that the same methodology applies to each group member in respect of the assessment of his or her loss or damage and that an assessment of each group member’s loss and damage has been made in accordance with that methodology and each group member has given instructions to Mr Collin’s solicitors that his or her assessment is acceptable as reasonable in all the circumstances. On that basis, I am satisfied that the proposed settlement distribution scheme does establish a procedure for distributing the settlement sum to group members in a way that is fair and reasonable for group members as a whole.
Finally, the terms of settlement also include the payment by each of the respondents of an amount to cover the costs and disbursements of Mr Collin incurred on his own behalf and on behalf of all group members calculated on a solicitor/client basis. The payment of those legal costs will be in addition to the payment of the settlement sums and will not come out of the settlement sums. Mr Collin’s solicitors have funded the litigation themselves and will accept payment of the approved costs in full satisfaction of their fees and disbursements, including estimated fees and disbursements with respect to the approval application and administration of settlements in accordance with the proposed settlement distribution scheme and no amount will be payable by any of the group members towards, or in respect of, those costs and disbursements. In evidence is an affidavit sworn by an independent costs assessor, Mr Joseph Mazzeo, who has assessed the solicitors’ costs and disbursements chargeable pursuant to Mr Collin’s retainer. Mr Mazzeo assessed those costs and disbursements in an amount that is more than, but not significantly greater than, the amounts that the respondents will pay under the settlement deed in respect of those costs and disbursements. Mr Mazzeo concluded that the solicitors properly incurred the assessed fees and disbursements pursuant to that retainer and that the disbursements were properly and reasonably incurred and reflect reasonable expenditure for the furtherance of the proceedings. Mr Mazzeo also expressed his opinion that no significant costs or disbursements have been incurred unnecessarily or inappropriately and that the amount assessed by him for the solicitors’ costs and disbursements, including estimated approval and administration costs is fair, reasonable and appropriate in the circumstances. In the circumstances, I am satisfied that this aspect of the proposed settlement is also fair and reasonable to group members as a whole.
I will therefore make the orders proposed by the parties.
I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies. Associate:
Dated: 9 December 2013
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