Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd (No 2)

[2006] FCA 1388

FEDERAL COURT OF AUSTRALIA

Darwalla Milling Co Pty Ltd & Ors v F Hoffman–La Roche Ltd & Ors (No 2) [2006] FCA 1388

REPRESENTATIVE PROCEEDING – settlement agreement – approval of settlement by court – whether proposed settlement scheme is fair and reasonable

Federal Court of Australia Act1976 (Cth): Pt IVA, ss 21, 33V, 51A
Trade Practices Act 1974 (Cth): ss 45, 80, 82, 87, 163A

Darwalla Milling Co Pty Ltd v Hoffman-La Roche Ltd [2006] FCA 915
ACCC v Chats House Investments Pty Ltd (1996) 71 FCR 250
Lopez v Star World Enterprises Pty Ltd [1999] FCA 104
Williams v FAI Home Security Pty Ltd (2000) 180 ALR 459
Georgiou v Old England Hotel Pty Ltd [2006] FCA 705
GM Corp Pick-Up Truck Fuel Tank Products Liability Litigation 55 F 3d 768 (1995)
Detroit v Grinnell Corp 495 F 2d 448 (1974)
Girsh v Jepson 521 F 2d 153 (1975)

DARWALLA MILLING CO PTY LTD (ACN 009 698 631), LIENERT AUSTRALIA PTY LTD (ACN 008 293 007) AND BRISBANE EXPORT CORPORATION PTY LTD (ACN 010 345 150) v F.HOFFMAN-LA ROCHE LTD, ROCHE PRODUCTS PTY LTD (ACN 000 132 865), ROCHE VITAMINS AUSTRALIA PTY LTD (ACN 000 991 793), ROCHE VITAMINS ASIA PACIFIC PTE LTD, AVENTIS SA, AVENTIS ANIMAL NUTRITION PTY LTD (ACN 009 718 245), AVENTIS ANIMAL NUTRITION SA, AVENTIS ANIMAL NUTRITION ASIA PACIFIC PTE LTD, BASF AKTIENGESELLSCHAFT, BASF AUSTRALIA LTD (ACN 008 437 867) AND BASF EAST ASIA REGIONAL HEADQUARTERS PTY LTD

VID359 OF 1999

JESSUP J
27 OCTOBER 2006
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID359 OF 1999

BETWEEN:

DARWALLA MILLING CO PTY LTD (ACN 009 698 631)
First Applicant

LIENERT AUSTRALIA PTY LTD (ACN 008 293 007)
Second Applicant

BRISBANE EXPORT CORPORATION PTY LTD (ACN 010 345 150)
Third Applicant

AND:

F.HOFFMAN-LA ROCHE LTD
First Respondent

ROCHE PRODUCTS PTY LTD (ACN 000 132 865)
Second Respondent

ROCHE VITAMINS AUSTRALIA PTY LTD (ACN 000 991 793)
Third Respondent

ROCHE VITAMINS ASIA PACIFIC PTE LTD
Fourth Respondent

AVENTIS SA
Sixth Respondent

AVENTIS ANIMAL NUTRITION PTY LTD (ACN 009 718 245)
Seventh Respondent

AVENTIS ANIMAL NUTRITION SA
Eighth Respondent

AVENTIS ANIMAL NUTRITION ASIA PACIFIC PTE LTD
Ninth Respondent

BASF AKTIENGESELLSCHAFT
Tenth Respondent

BASF AUSTRALIA LTD (ACN 008 437 867)
Eleventh Respondent

BASF EAST ASIA REGIONAL HEADQUARTERS PTY LTD
Thirteenth Respondent

JUDGE:	JESSUP J
DATE OF ORDER:	27 OCTOBER 2006
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The evidence contained in the confidential exhibits to the affidavit of Kim Elizabeth Packer affirmed on 29 September 2006, being the exhibits set out in the schedule to this order, not be published to any person without the order of the Court. 

Schedule:

·     Confidential Exhibit “KEP40”

·     Confidential Exhibit “KEP42”

·     Confidential Exhibit “KEP43”

·     Confidential Exhibit “KEP44”

·     Confidential Exhibit “KEP46”

2.The confidential exhibits referred to in Order 1 be sealed on the Court file and not be disclosed to any person without the order of the Court.

3.The settlement of this proceeding in accordance with the heads of agreement and the settlement distribution scheme set out in Schedules I and II respectively of the reasons of the Court published this day be approved.

4.The settlement sum referred to in cl 1.1(a) of the said heads of agreement be distributed to group members in accordance with those heads of agreement and the said settlement distribution scheme.

5.The settlement costs referred to in cl 1.1(b) of the said heads of agreement be dealt with in accordance with those heads of agreement and the said settlement distribution scheme.

6.All orders for costs made prior to this day be set aside.

7.There be no order as to the costs of the applicants’ Notice of Motion dated 11 July 2006.

8.The parties have liberty to apply.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID359 OF 1999

BETWEEN:

DARWALLA MILLING CO PTY LTD (ACN 009 698 631)
First Applicant

LIENERT AUSTRALIA PTY LTD (ACN 008 293 007)
Second Applicant

BRISBANE EXPORT CORPORATION PTY LTD (ACN 010 345 150)
Third Applicant

AND:

F.HOFFMAN-LA ROCHE LTD
First Respondent

ROCHE PRODUCTS PTY LTD (ACN 000 132 865)
Second Respondent

ROCHE VITAMINS AUSTRALIA PTY LTD
(ACN 000 991 793)
Third Respondent

ROCHE VITAMINS ASIA PACIFIC PTE LTD
Fourth Respondent

AVENTIS SA
Sixth Respondent

AVENTIS ANIMAL NUTRITION PTY LTD  
(ACN 009 718 245)
Seventh Respondent

AVENTIS ANIMAL NUTRITION SA
Eighth Respondent

AVENTIS ANIMAL NUTRITION ASIA PACIFIC PTE LTD
Ninth Respondent

BASF AKTIENGESELLSCHAFT
Tenth Respondent

BASF AUSTRALIA LTD (ACN 008 437 867)
Eleventh Respondent

BASF EAST ASIA REGIONAL HEADQUARTERS PTY LTD
Thirteenth Respondent

JUDGE:	JESSUP J
DATE:	27 OCTOBER 2006
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. This is a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (‘the Federal Court Act’). The applicants allege that the respondents contravened s 45 of the Trade Practices Act 1974 (Cth) (‘the Trade Practices Act’), and claim declarations pursuant to s 163A of that Act (and/or s 21 of the Federal Court Act), damages pursuant to s 82 of that Act, injunctions pursuant to s 80 of that Act, orders pursuant to s 87 of that Act and consequential relief.

2. Subject to approval by the court, the proceeding was settled by an agreement between the parties made in December 2005. By s 33V of the Federal Court Act, a representative proceeding may not be settled without the approval of the court. The question which now arises is whether the settlement of December 2005 should be approved by the court.

   THE PARTIES AND THE CLAIMS

3. The proceeding concerns certain vitamins used in the production of animal feed and animal feed supplements.  Those vitamins, which have been referred to as ‘class vitamins’, are vitamins A, E, B1, B2, B5 and C, and Betacarotene and Canthaxanthin.  The respondents produced and distributed those vitamins, in ways to which I shall refer in more detail presently, within the period to which the proceeding relates, 5 March 1992 to 31 December 1999 (‘the relevant period’).  The applicants and the group members whom they represent, purchased and used those vitamins, or product containing those vitamins.  The applicants alleged that, during the relevant period, a cartel existed between various of the respondents which would otherwise have been in competition with each other which was calculated to maintain the prices of the relevant class vitamins at levels higher than would have obtained in the absence of the cartel.

4. Neither the applicants nor the group members which they represent were end consumers.  The first applicant was a purchaser of premix containing certain of the class vitamins for animal nutrition or health purposes, and was a grower of chicken meat for human consumption with its own feed milling facilities.  The second and third applicants were manufacturers, distributors and suppliers of premixes which contained class vitamins, and manufacturers and sellers of vitamins and mineral premixes for use in animal feed.  

5. The group members are described as follows:

   ‘(a)manufacturers, distributors and suppliers of pre-mixes containing vitamins A, E, B1, B2, B5, C, Betacarotene or Cantaxanthin for animal nutrition or health purposes (together and severally the ‘class vitamins’);

   (b)manufacturers , distributors and suppliers of stock feeds containing class vitamins;

   (c)producers of livestock including poultry, pigs, sheep and cattle, and dairy farmers, egg producers and aquaculturalists, who purchased stock feeds containing class vitamins;

   (d)manufacturers, distributors and suppliers of veterinary and performance enhancing preparations and supplements containing class vitamins;

   (e)manufacturers and distributors of pet food containing class vitamins;

   who:

   (i)were at all relevant times ordinarily resident in or carrying on business in Australia; and

   (ii)paid at least two thousand Australian dollars (AUD$2000.00) in the period 5 March 1992 to 31 December 1999 for class vitamins or pre-mix or other animal health or nutrition products containing class vitamins; and

   (iii)are not Justices or Registrars of the High Court of Australia or the Federal Court of Australia.”

   This description of the group members reflects what the evidence discloses to have been typical supply, acquisition and use arrangements in the industries in which the group members operated.  It seems that vitamins used in the animal feed chain were almost always first incorporated into premixes of which there were, I was told, hundreds of different formulations.  The appropriate premix was then selected for incorporation into stock feeds of various kinds.  Those stock feeds were in turn selected by livestock producers of the kind referred to in par (c) of the description of the group members.  In addition, appropriate premixes were selected by manufacturers of veterinary and performance enhancement preparations and supplements, and of pet food of various kinds.

6. The respondents fall into three categories.  The first category are the ‘Roche respondents’, being four related companies ultimately owned by Roche Holding AG, a Swiss corporation.  F Hoffman-La Roche Ltd is a Swiss company which carried on business as a manufacturer and supplier of class vitamins in Switzerland, and which, on the applicants’ allegations, co-ordinated and supervised the manufacture and supply of class vitamins in Switzerland and elsewhere in the world through related companies.  Roche Products Pty Ltd is an Australian company which imported class vitamins, and supplied them in Australia, save that, it alleges, between 1991 and 1998 it supplied class vitamins only to Roche Vitamins Australia Pty Ltd.  That latter company is also a respondent and carried on business as a supplier of class vitamins (and, it alleges, premixes containing class vitamins) in Australia.  Roche Vitamins Asia Pacific Pte Ltd is alleged by the applicants (but it does not itself admit) to have been, since 3 April 1997, a supplier of class vitamins in Singapore to have co-ordinated and supervised the supply of class vitamins in the Asia Pacific region, including Australia.

7. The next category of respondents is what the applicants call the Aventis respondents.  Aventis SA is incorporated pursuant to the laws of France, and is the ultimate holding company of the other Aventis respondents.  The applicants allege that Aventis SA co-ordinated and supervised the manufacture and supply of class vitamins in France and elsewhere in the world through related companies, an allegation which is not admitted.  Aventis Animal Nutrition Pty Ltd is an Australian company which, according to the applicants’ allegations, carried on business as an importer, packager and supplier of class vitamins in Australia and which, according to its own admissions, was an importer and supplier of class vitamins, and a manufacturer/packager and supplier of premix containing class vitamins.  Aventis Animal Nutrition SA is a French company which carried on business as a manufacturer and supplier of class vitamins in France and, according to the applicants, co-ordinated and supervised the manufacture and supply of class vitamins in France and elsewhere in the world through related companies.  Aventis Animal Nutrition Asia Pacific Pte Ltd is a Singaporean company which carried on business as a supplier of class vitamins in Singapore and, the applicants allege, which co-ordinated and supervised the supply of class vitamins in the Asia Pacific region, including Australia.

8. The third category is what the applicants called the BASF respondents.  BASF AG is a German company which was the ultimate holding company of the other BASF respondents, which carried on business as a manufacture and supplier of class vitamins (not including, according to its own admissions, the manufacture of vitamin B1 in the relevant period) in Germany and elsewhere and, according to the applicants, which co-ordinated and supervised the manufacture and supply of class vitamins in Germany and elsewhere in the world through related companies.  BASF Australia Ltd is an Australian company which carried on business as an importer and supplier (and, the applicants allege, packager) of class vitamins in Australia (excluding, according to its own admissions, Betacarotene) and, it alleges, was a packager of premix.  BASF East Asia Regional Headquarters Ltd is a Hong Kong company which, according to the applicants, carried on business as a supplier of class vitamins in Hong Kong and co-ordinated and supervised the supply of class vitamins in the East Asia region, including Australia, but which, according to itself, was a service company only.

9. Although the applicants’ case as to the structure and operation of the three categories of respondents, and of the respondents themselves, is not wholly admitted, and although aspects of that case are denied, there are certain common features which may be regarded as having been established on the pleadings.  Within each corporate group, the ultimate holding company is incorporated in Europe and, by reason of that circumstance, may be assumed to exercise control over the other respondents in that group.  In each case there is a company established in the South East Asia region, although the significance to Australia, and actual role, of each such company remains controversial.  In each case there is at least one company operating in Australia, which, it is admitted, imported class vitamins and supplied them to the Australian market, and/or, in certain cases, incorporated them in premix which was, in turn, supplied to the Australian market.  This last aspect is significant for one element of the settlement.  As I have said above, Australian manufacturers of premixes containing class vitamins are group members in the proceeding. 

10. The applicants allege that there were, during the relevant period, arrangements or understandings as between the European respondents, to maintain agreed market shares with respect to the class vitamins, to adhere to agreed prices and to supply the class vitamins in volumes that were agreed between them. It is alleged that these agreements were made as between the European respondents with a view to being implemented in global markets. The applicants allege that there was communication between the European respondents over the course of the relevant period in which they affirmed these arrangements or understandings, and in which they agreed to procure the implementation thereof by causing companies elsewhere in the world within the relevant corporate groups to observe them. It is alleged that the arrangements or understandings, as made, had the purpose, and would have, or have been likely to have had, the effect of substantially lessening competition and, as given effect to from time to time, in fact had that purpose and had, or would have been likely to have had, that effect in each case contrary to relevant provisions of s 45(2) of the Trade Practices Act. The applicants make a series of allegations, to which I need not refer further for present purposes, which would, if accepted, justify the conclusion that the conduct of which they complain occurred in Australia.

11. The applicants also alleged that the European respondents implemented the arrangements or understandings within the South East Asian region by causing the regional respondents, within their respect corporate groups, to observe them.  According to the applicants’ allegations, the regional respondents were not involved (and it is not clear whether they existed) over the whole of the relevant period, the allegation in other respects being that the European respondents caused the arrangements and understandings to be implemented directly in Australia.  However, for part of the relevant period, the regional respondents were said to be involved in giving effect to the arrangements and understandings to which I have referred.

12. The applicants next allege that the Australian respondents reached their own arrangements and understandings for what was in effect a co-ordinated system of co-operation between them to confine themselves to agreed market shares, to observe prices for class vitamins which they had agreed between each other and to supply class vitamins only in agreed volumes. It is also alleged that the Australian respondents agreed with each other, and with others, to implement in Australia the arrangements and understandings to which I have referred above, that is to say, those originating at the level of the European respondents and, for at least part of the relevant period, passed down the line by way of the regional respondents. It is alleged that, in making and in subsequently giving effect to arrangements or understandings along these lines, the Australian respondents acted in contravention of s 45(2) of the Trade Practices Act.

13. The very brief survey of the applicants’ allegations which I have just set out does less than complete justice to a lengthy and complex Statement of Claim. In a contested proceeding, much greater care would need to be paid to each allegation, and to its relationship with other allegations. It should not be assumed, from the survey I have given, that the applicants have treated the three groups of respondents identically as between each other. Throughout the Statement of Claim there are differences in point of detail as between the groups of respondents, as between the respondents in each group and as between the allegations which relate to particular vitamins. For present purposes, it is sufficient to note that systematic and co-ordinated global arrangements, implemented in Australia, by which the respondents agreed on market shares, prices and volumes have been alleged against them by the applicants. Subject only to a possible qualification as to the application of the Trade Practices Act in the case of the respondents’ conduct occurring outside Australia, there can be little doubt but that the applicants’ allegations, if accepted, would amount to a serious contravention of s 45(2) of that Act.

14. In their defences, the respondents have made a number of admissions.  In no case is contravening conduct admitted with respect to the whole of the period for which the applicants sue.  However, in many cases, the admissions relate to a very substantial portion of that period.  The Roche respondents admit that there were arrangements of the kind alleged by the applicants at the global level in relation to all of the class vitamins, at the regional level in relation to five of the eight class vitamins, and at the Australian level in relation to vitamins A and E.  The Aventis respondents admit that there were arrangements of that kind, for some of the relevant period, at all three levels but in relation to vitamins A and E only.  The BASF respondents admit to the existence of such arrangements at the global level for all vitamins except B1, and at the Australian level for vitamins A and E only. 

15. When looked at within a purely Australian frame, the applicant has secured admissions from one respondent in each of the three corporate groups that arrangements or understandings of the kind alleged existed in Australia for a substantial part of the relevant period, but in relation to vitamins A and E only.  In other respects, there are no admissions as to arrangements and understandings occurring purely within Australia.

16. I should also mention at this stage that, on 28 February 2001, the court gave judgment in Australian Competition and Consumer Commission v Roche Vitamins Australia Pty Ltd (2001) 23 ATPR 42,806. The applicant Commission (‘the ACCC’) had commenced proceedings under s 77 for penalties under s 76 of the Trade Practices Act against each of the three Australian respondents concerned in the present proceeding. Each respondent admitted contraventions of s 45(2)(b) of that Act in relation to vitamins A and E, and joined with the ACCC in submitting that a penalty should be imposed. Acting on those submissions, the court imposed penalties totalling $26m, and each respondent was ordered to pay $65,000 towards the ACCC’s costs. This event is relevant in the present proceeding because the applicants proposed to rely on s 83 of the Trade Practices Act, under which findings of fact made in those proceedings would be prima facie evidence in this proceeding. 

    THE SETTLEMENT

1. Commencing in June 2005, the parties undertook settlement negotiations, culminating in a mediation which took place on 15 and 16 December 2005.  During the course of that mediation, the applicants accepted an offer from the respondents to settle the proceeding for the sum of $30.5m, plus costs of $10.5m.  The settlement was governed by ‘heads of agreement’ signed by the parties’ solicitors on 16 December 2005, and was subject to the approval of the court.  The agreement, the operative provisions of which are set out in Schedule I to these reasons, provides for the establishment of an interest-bearing account, called the ‘Vitamins Settlement Reserve Fund’ (‘the reserve fund’), into which the respondents would pay (and did pay) the total settlement of $41m by 13 January 2006.  The agreement provides that, if and when the court approved the settlement, the $10.5m costs figure will be paid to the applicants’ solicitors, and the $30.5m settlement figure will be paid into an account called the ‘Vitamins Settlement Distribution Fund’ (‘the distribution fund’).  The interest which has been earned on the reserve fund, and that which will, after approval, be earned on the distribution fund, are to the extent necessary to be applied to the payment of disbursements incurred in connection with obtaining court approval of the settlement and of the costs of administering the settlement scheme to which I next refer.

2. The agreement provides for a settlement scheme pursuant to which the settlement sum of $30.5m will be applied and administered to the benefit of the applicants and the group members.  The settlement scheme is the responsibility of the applicants, but, under the agreement, the respondents were given the opportunity to comment on it.  The settlement distribution scheme was eventually finalised by the applicants on 10 July 2006.  It is reproduced in Schedule II to these reasons.  Significant features of it are as follows:

   a.What are described as ‘reimbursement payments’ are first to be paid from the settlement sum to group members nominated by name in the scheme.  The purpose of these payments is to reimburse two of the group members for their out-of-pocket expenses incurred in connection with the prosecution of the proceeding, and to compensate seven of the group members for the time and effort which they have devoted to the proceeding on behalf of group members as a whole.  The total of these reimbursement payments, as amended shortly before the hearing of the applicants’ motion, is $418,360.00.

   b.What remains of the settlement sum is then to be divided into two parts.  The first part, 7.0/30.5 of the fund, is to be allocated to a ‘loss of market share fund’ (‘LMS fund’).  The remaining part, 23.5/30.5 of the fund, is to be allocated to an ‘overcharge fund’.  This division reflects the two main categories of damages which the applicants sought in the proceedings, to which I have referred above.  That is to say, the view was taken that, if the total settlement sum were notionally divided into 30.5 parts, 7.0 of those parts should be available as damages for those group members who lost market share as a result of the respondents’ conduct, and 23.5 of those parts should be available as damages for those group members who were obliged to pay more for vitamins, and/or for products containing vitamins, as a result of the respondents’ conduct.  There is, of course, no reason why a particular group member might not, depending on its circumstances, have legitimate claims under both categories.

   c.A group member who manufactured premix containing class vitamins during the relevant period, and which makes a properly documented claim, is treated as a ‘loss of market share’ claimant (or ‘LMS’ claimant) and is entitled to participate in the LMS fund.  That entitlement is based directly upon the member’s purchases of class vitamins during the relevant period and the purchases of class vitamins during that period by all LMS claimants.  In other words, the scheme in this respect is based upon an assumption that all manufacturers of premix will have lost some market share as a result of the respondents’ conduct, and should share in the fund established for that purpose rateably according to their purchases of class vitamins.

   d.The overcharge fund is available for distribution to all group members which have properly documented claims.  The distribution of the overcharge fund as between group members requires first the calculation, in respect of each group member, of a figure described as ‘overcharge’.  That having been done, the overcharge fund is to be allocated between group members rateably according to their established purchases of vitamins or of products containing vitamins.  As will be seen from Table 1 in the settlement scheme, the ascertainment of the ‘overcharge’ involves the application to established purchases by each group member of a percentage factor which varies according to whether the group member was a premix manufacturer, a feed manufacturer, a livestock producer or an integrated livestock producer (or, in the case of the veterinary  and  pet food sectors:  a manufacturer, distributor or supplier) and as to the particular industrial sector (or ‘supply chain’ as it is called) in which that group member operated.  The scheme does not provide details as to the derivation of the percentage factors (set out in the column headed ‘Vitamin Cost and Absorption Rate’), but this has been dealt with comprehensively in the evidence before me, and I shall refer to it below.

   e.The scheme will be administered by the applicants’ solicitors.  A group member seeking to participate will be required to lodge a proof of claim form in accordance with that set out in Schedule A to the scheme.  The form is required to be accompanied by such invoices or other business records as are necessary to establish the claim.

   f.The applicants’ solicitors, as administrators under the scheme, will issue an assessment notice for each group member who lodges a claim.  If the group member wishes to dispute that assessment, there will be a review procedure involving recourse to a named ‘independent counsel’.  Questions of law can be referred to the court.

   g.The court is also given a role under the scheme if any issue arises in relation to the scheme, or the administration or the implementation of the scheme, and in connection with the possible extension of time limits set out in the scheme. 

   THE PUBLICATION OF THE PROPOSED SETTLEMENT

3. On 11 July 2006, the applicants filed a Notice of Motion seeking inter alia orders for the publication to group members of a Notice of Proposed Settlement pursuant to s 33X(4) of the Federal Court Act. I dealt with that motion in the orders made on 18 July 2006: see Darwalla Milling Co Pty Ltd v Hoffman-La Roche Ltd [2006] FCA 915. That notice gave the group members an opportunity to object to the settlement, if they so desired, by notice sent to the court. The court received no objections.

4. I am satisfied that the s 33X(4) notice to which I have referred was published in accordance with the orders made on 18 July 2006. The applicants’ solicitors took the following steps:

   a.On 19 July 2006, they sent to the group members registered with them (142 in total) a letter informing them of the fact of the settlement and attaching the s 33X notice and the proposed settlement scheme, including schedules.

   b.They caused the s 33X notice to be published in the Adelaide Advertiser, the Brisbane Courier Mail, the Canberra Times, the Hobart Mercury, the Melbourne Hearld-Sun, the Northern Territory News, the West Australian, the Sydney Daily Telegraph and the Australian on 20 July 2006.

   c.They caused the s 33X notice to be published in Stock and Land (Vic), the Land (NSW), Stock Journal (SA), Farm Weekly (WA), North Queensland Register, Queensland Country Life and the Weekly Times on 27 July 2006.

   d.On 19 July 2006 they caused to be available on the internet a new domain, which was linked to the vitamin class action page on their own website.

   e.On 19 July 2006 they caused to be loaded onto the vitamins class action page on their own website, a statement informing the reader that a settlement had been reached in the vitamins class action, and providing a link to a representation of each of the s 33X notice and the settlement distribution scheme.

   f.On 25 July 2006 they sent a letter to each of 49 industry associations which they had identified as being likely to have members that included group members, such letter advising the addressee that a settlement had been reached in the vitamins class action, that the settlement might affect the addressee’s members and of certain basic features of the litigation and the settlement. A copy of each of the s 33X notice and of the settlement scheme was attached to the letter. The name and address of each of these industry associations is set out in a table contained in an exhibit to an affidavit upon which the applicants rely.

   g.On 17 July 2006 they caused to be issued to a number of major media organisations a press release headed ‘30.5 million dollar “vitamins” cartel class action for court approval’.  Although it is fair to say this document was promotional as well as informative, it was calculated to raise public awareness of the litigation and of the settlement.

5. The fact and size of the settlement was the subject of an item on the ‘PM’ program on ABC national radio at about 6:30 pm on 17 July 2006. Although the announcer described the litigation as ‘Australia’s first ever class action against a price fixing cartel’, it is, I find, unlikely that this news item would have gone further than merely to raise awareness, amongst members of the public, of the litigation in a general sense. It was not addressed to group members as such and there was nothing in it which is likely to have alerted a group member (otherwise only generally aware of the litigation) of the fact or purport of the s 33X notice.

6. By contrast, on 18 July 2006 at about 12:15 pm on the program ‘SA Country Hour’, the reporter said not only that Australia’s first ever class action against a price fixing cartel had been settled, but also that many farmers could be eligible for compensation, that the respondents had agreed to pay $30.5m in damages, that, upon endorsement by the court, farmers, feed lotters and feed suppliers would be among those eligible to claim damages and that the lawyers were keen to hear from anyone who thought they were affected, it not being too late to join the claim.  The applicants’ solicitor was interviewed on this program, and made it clear that persons who thought they were part of the group and had a claim should contact the solicitors and submit a proof of claim form.

7. On a television news item on ‘WIN News’ at about 6:10 pm on 14 August 2006, it was said that primary producers and businesses who lost money to a ‘pharmaceutical price fixing cartel’ were being called on to join a class action.  The announcer added that the court would decide whether to approve the settlement ‘for those who purchased vitamins from the companies for stock feed and veterinary use’.  The reporter referred to the applicants’ solicitors, and to their statement that it was now time for any producer who had spent more than $2,000 on relevant products to come forward.  The applicants’ solicitor was also interviewed on this program, and she made it clear that qualifying group members could share in the settlement if it were approved.

8. In the period subsequent to 17 July 2006, the litigation, and the settlement, were frequently mentioned in the print media.  However, of the items which were put in evidence before the court, only two contained any comment which might excite the interest of group members to the prospect that they had the opportunity to become involved in the litigation and to put their claims forward (an item in the Sydney Morning Herald on 18 July 2006 headed ‘Pharmaceutical Companies Settle First Cartel Class Action’ and an item in the Adelaide Advertiser on 22 July 2006 headed ‘Vitamins Settlement Businesses Can Claim’).

9. Since the publication of the s 33X notice, the applicants’ solicitors received about 30 inquiries from group members regarding the settlement. Of these, about 20 were from group members who were already registered with the solicitors, and the remaining ten were new inquiries. Various details were discussed and points of clarification dealt with. The solicitors also spoke with certain of the larger group members regarding the settlement and distribution scheme. The attitude of these group members towards the settlement was positive. No-one expressed an objection to the settlement or the distribution scheme.

10. In considering the probable efficacy of the steps taken to publish the s 33X notice, and of the applicants’ solicitors other steps calculated to publicise the facts of the litigation and of the settlement, I consider it significant that the group members were confined to businesses who had, over the relevant period, spent $2,000 or more upon vitamins or products containing vitamins, and did not include any end consumers. I am prepared to assume that persons in business of a particular kind would be more likely, one way or another, to encounter the publications to which I have referred above, and to be, at least broadly, conscious of the significance of them to their own circumstances. I also take into account the fact that the litigation has been on foot since 1999, and that the Australian respondents were the subject of orders by Lindgren J in the proceedings instituted by the ACCC to which I have referred in 2001.

11. The intent of the s 33X notices was to maximise the prospect that group members who had not previously made contact with the applicants’ solicitors and who were otherwise not directly involved in the proceedings, would become aware of the settlement, have the means of accessing the terms of the settlement scheme, and be conscious of the opportunity available to them to object to the settlement or to the scheme. I am satisfied that that objective has been substantially if not wholly achieved. As I have noted above, there have been no objections lodged to the settlement or the settlement scheme. In the circumstances, I infer that reasonable group members are at least broadly aware of the terms of the proposed settlement and are content with it. That provides a powerful reason why I should approve the settlement, not only to the extent that it relates to the actual views of these group members, but also to the extent that absence of objections after wide publication of the terms of the settlement might be regarded as providing objective confirmation of the proposition which lies at the core of the applicants’ case, namely, that the settlement is fair, reasonable and adequate in the interests of group members as a whole.

12. The notice under s 33X(4) informed group members that the applicants would seek the court’s approval of the settlement on 31 August 2006, the adjourned date of the applicants’ Notice of Motion of 11 July 2006. On 31 August, the applicants moved the court to approve the settlement, and the orders which they sought in that regard were consented to by the respondents.

13. Mr Pagone QC, who appeared with Mr McArthur SC and Mr Armstrong for the applicants, submitted that the settlement was fair, reasonable and adequate in the interests of the group members as a whole and should, therefore, be approved. 

    THE COURT’S APPROACH UNDER s 33V

14. In ACCC v Chats House Investments Pty Ltd (1996) 71 FCR 250, 258, Branson J considered that the purpose intended to be served by s 33V(1) of the Federal Court Act was obvious. Her Honour said:

    “It is appropriate for the Court to be satisfied that any settlement or discontinuance of representative proceedings has been undertaken in the interests of the group members as a whole, and not just in the interests of the applicant and the respondent.”

    The context in which Branson J made this observation was not one where her Honour was exercising jurisdiction under s 33V. Her Honour’s observation has been referred to on a number of occasions since by Judges of the court, but not, so far as I can find, for the purpose of identifying a criterion by reference to which approval should be given, or declined. Notwithstanding that circumstance, I consider, with respect, that Branson J accurately identified a consideration which must inform the exercise of the court’s discretion under s 33V, namely, the need to protect the interests of group members as a whole, and to ensure that those interests are not subordinated to those of the actual parties in the proceeding.

15. This kind of approach was also taken by Finkelstein J in Lopez v Star World Enterprises Pty Ltd [1999] FCA 104. Having pointed out that the court’s task was to assess whether the compromise, in that case, was fair and reasonable, his Honour continued (at [15]):

    “I am not so much concerned with the position of [the applicant] who, after all, has solicitors and counsel to advise him as to how his interests will best be served in the litigation.  The group members are not protected in this way.”

    In a passage which has been frequently referred to since, Finkelstein J pointed out that the court’s task under s 33V was, for that reason, an onerous one (at [16]).

16. In their written submissions in the present case, the applicants referred to Lopez, and also to the judgment of Goldberg J in Williams v FAI Home Security Pty Ltd (2000) 180 ALR 459. His Honour said (at [19]):

    “Ordinarily the task of a court upon an application such as this, is to determine whether the proposed settlement or compromise is fair and reasonable, having regard to the claims made on behalf of the group members who will be bound by the settlement. Ordinarily in such circumstances the Court will take into account the amount offered to each group member, the prospects of success in the proceeding, the likelihood of the group members obtaining judgment for an amount significantly in excess of the settlement offer, the terms of any advice received from counsel and from any independent expert in relation to the issues which arise in the proceeding, the likely duration and cost of the proceeding if continued to judgment, and the attitude of the group members to the settlement. In Re General Motors Corporation Pick-Up Truck Fuel Tank Products Liability Litigation 55 F 3d 768 at 785 the United States Court of Appeals for the Third Circuit referred to the nine-factor test it had adopted:

    "... to help district courts structure their final decisions to approve settlements as fair, reasonable and adequate as required by Rule 23(e) [which requires court approval for settlement of class actions]. See Girsh v Jepson 521 F 2d 153 at 157 (1975) (3d Cir). Those factors are: (1) the complexity and duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining a class action; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement in light of the best recovery; and (9) the range of reasonableness of the settlement in light of all the attendant risks of litigation."

    (See also County of Suffolk v Long Island Lighting Co 907 F 2d 1295 at 1323 (1990) (2nd Cir), 5 Moore´s Federal Practice 3rd ed, p 23-348.)  This nine-factor test is equally helpful in the Australian jurisdiction and I find it a useful guide in considering the present proposed settlement.”

    In their written submissions, having referred to the judgment of Goldberg J, the applicants continued:

    “The principles laid down by Lopez and Williams No 4 have been applied on numerous occasions in this Court: see eg., Neill v. P & O Cruises Pty Ltd [2002] FCA 1325 (Weinberg J) at [6-10]; Jarrama Pty Ltd v. Caltex Australia Petroleum Pty Ltd [2004] FCA 1114 (Crennan J) at [10]; Courtney v. Medtel Pty Ltd [2004] FCA 1406 (Sackville J) at [37-42]). They have similarly been adopted for the equivalent procedure in the Supreme Court of Victoria: see Tasfast Air Freight v. Mobil Oil Australia Ltd [2002] VSC 457 (Bongiorno J); Verschuur v. Vynotas Pty Ltd [2004] VSC 130 (Mandie J). It is firmly established that the central question is whether the proposed settlement is fair, reasonable and adequate in the interests of the group members.”

1. It is true that the judgment of Goldberg J in Williams has been referred to on a number of occasions by members of the court when exercising jurisdiction under s 33V. To the instances referred by the applicants as set out above may be added the judgment of Young J in Georgiou v Old England Hotel Pty Ltd [2006] FCA 705, [18]. In none of these cases (including the two Victorian ones referred to), however, does one find a practical elaboration of what it is about a particular settlement, or about settlements in general, that make it, or them, ‘fair and reasonable’. Further, although Goldberg J referred to a series of matters which the court would ordinarily take into account, subsequent judgments of the court under s 33V do not disclose any pattern of systematic consideration of such matters in the way, for example, of a check-list. In practice, every case is dealt with on its own merits, and by reference to specific factors which might raise serious doubts as to fairness and the like.

2. The present case provides an example of why a check-list approach will not always be appropriate. Goldberg J suggested that, ‘ordinarily, the court would take into account the amount offered to each group member’. As is apparent from the settlement distribution scheme in the present case, the court does not know (and the applicants do not know) what will be the final entitlement of each group member under the settlement. Necessarily, no amount has been ‘offered’ to each group member. Likewise, for reasons explained elsewhere in these reasons, it is difficult to reach any measure of ‘the likelihood of the group members obtaining judgment for an amount significantly in excess of the settlement offer’. The settlement here is based on formulae, rules of thumb and assumptions which the court may well consider to be fair and reasonable as a means of disposing of the issues which the group members as a whole confront in this litigation, but which defy any attempt to identify which particular group members, if any, would be likely to obtain judgment at trial in any particular amount. On the other hand, some of the matters to which Goldberg J referred are, with respect, very useful in the context of the present case. The advice which the applicants have received from counsel, solicitors and experts lies at the centre of their justification for the settlement. The terms and comprehensiveness of those advices have been critical to my consideration of the matters arising under s 33V. The likely duration and cost of this proceeding, were it to continue to judgment, is a factor of particular significance. The attitude of the group members to the settlement is also something which, as appears below, plays a useful role in the present case.

3. Save to the extent that they enunciate what would, with respect, be obvious, I have found myself less assisted by the nine factors which Goldberg J extracted from the judgment of the US Court of Appeals for the Third Circuit in re GM Corp Pick-Up Truck Fuel Tank Products Liability Litigation 55 F 3d 768, 785 (1995). An aspect of the extract from the judgment in GM Corp which appears on the face thereof, but which has not, I think, received explicit attention on the numerous occasions upon which the observations of Goldberg J have been followed, is that the Court of Appeals was operating by reference to r 23(e)(1)(C) of the US Federal Rules of Civil Procedure, which provides:

   ‘The court may approve a settlement, voluntary dismissal, or compromise that would bind class members only after a hearing and on finding that the settlement, voluntary dismissal, or compromise is fair, reasonable, and adequate.”

   By contrast, s 33V of the Federal Court Act identifies no criteria by reference to which the court should approve, or should decline to approve, a particular settlement. Although the notion that a settlement should be ‘fair and reasonable’ seems unobjectionable as a matter of principle, if that consideration is to inform the process of approval under s 33V, it should, in my respectful opinion, be because of its harmony with the scheme of Pt IVA of the Act, and because it tends to achieve the implicit object of the section. I can, with respect, see no particular warrant for incorporating into Pt IVA the requirements of rules of court in an overseas jurisdiction.

4. It seems that the factors referred to in GM Corp had their origin in Detroit v Grinnell Corp 495 F 2d 448 (1974). In that matter, the US Court of Appeals for the Third Circuit heard an appeal from the District Court, in which one group of appellants attacked the settlement of a class action ‘on the ground that it is so small as to be grossly unfair on its face’, and objected to the manner in which the District Court had approved the settlement, and a second group of appellants sought to overturn the award of fees for various attorneys. The Court of Appeals said (at 462-463):

   “The question becomes whether or not the District Court had before it sufficient facts intelligently to approve the settlement offer. If it did, then there is no reason to hold an additional hearing on the settlement or to give appellants authority to renew discovery. There is no doubt that it did. The Court specifically considered: (1) the complexity, expense and likely duration of the litigation, …  (2) the reaction of the class to the settlement, …  (3) the stage of the proceedings and the amount of discovery completed, …  (4) the risks of establishing liability, … (5) the risks of establishing damages, … (6) the risks of maintaining the class action through the trial, … (7) the ability of the defendants to withstand a greater judgment, … (8) the range of reasonableness of the settlement fund in light of the best possible recovery, … (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation,

   It appears, from the above extract, that the court in Detroit was not purporting to lay down a list of criteria by reference which applications for the approval of settlements ought to be decided, but rather was identifying the considerations which the District Court had in fact taken into account in determining the case before it on the facts. 

5. Those considerations were picked up by the US Court of Appeals for the Third Circuit in Girsh v Jepson 521 F 2d 153 (1975). The Court of Appeals said that the decision whether to approve a settlement was ‘left to the sound discretion of the District Court’ (at 156), and went on to say that ‘some of the factors which are relevant to a determination of the fairness of settlement were listed’ in Detroit (at 156-157). As it happens, the Court of Appeals held that the District Court, in Girsh, had referred to the nine factors in Detroit, but ought not, for other reasons, have approved the settlement in the case.  It was from the Court of Appeals judgment in Girsh that the same court derived the nine factors in GM Corp, to which Goldberg J referred in Williams.

6. I consider that the nine factors derived from GM Corp have at least two limitations for purposes of the present case. First, these factors were never stated to be exhaustive of the things which the court should consider under s 33V (and Goldberg J did not propose otherwise). As will appear from what follows hereunder, the present case involves specific problems and issues which no predetermined list could ever hope to anticipate. Secondly, as is apparent from the provenance of those factors to which I have referred above, their original purpose was substantially concerned with a consideration of the adequacy of an overall settlement sum. The factors throw little light on the proper resolution of the rather difficult inter se issues that arise in a proceeding such as the present. 

7. I have not found any discussion, either in the American or in the Australian authorities, as to the connotation that should be given to the words ‘fair’, ‘reasonable’ or (should it matter) ‘adequate’ in particular situations.  In both jurisdictions the expression seems to have been used as composite one.  The practical judicial approach has been, or so it appears to me, to identify any features of a settlement that are obviously unreasonable or unfair, a task which comes more easily to a court than the obverse one of assessing the reasonableness and fairness of a settlement in an environment generally devoid of negative indications.  Where some group members object to a settlement and state their reasons therefor, their reasons will provide a convenient focus by reference to which the court will decide matters of fairness and reasonableness.  They may, at the same time, distract the court from its task of critically evaluating the settlement in other respects.  I am spared such distractions in the present case, but I am, as a result, left with only the broadest criteria against which to undertake that task.

8. As appears from para 27 above, the applicants submitted that it was ‘firmly established that the central question is whether the proposed settlement is fair, reasonable and adequate in the interest of the group members’. I am minded to decide the present matter by reference to the question whether the proposed settlement is fair and reasonable in the interests of group members as a whole, but I must say that I approach the question of ‘adequacy’ with some caution. For reasons which I explain elsewhere, I doubt that the court is in the best position to assess the adequacy of the settlement in the present case, although I accept that manifest inadequacy would generally provide a strong reason to refuse approval under s 33V.

9. I propose to consider each of the two categories of loss which the applicants have identified – overcharge loss and LMS loss – discretely.  In relation to each, I propose first to consider whether the overall settlement sum is reasonable, having regard to the manner of its calculation and its relationship to a best possible case outcome for the group as a whole, the prospect of achieving an outcome at or near the best possible case, the extent of the weaknesses, substantive or procedural, in the applicants’ case, whether the settlement sum falls within a realistic range of likely outcomes, the forensic difficulties which would be involved in the conduct of the case to judgment, including the distractions, for an operating business, of being involved in such an undertaking, and the time and costs which have been saved by a settlement at this stage.  I propose to turn then to the question whether the settlement, including the distribution scheme, involves any actual or potential unfairness to any group members, or categories of group members, having regard to all relevant matters, including whether the overall settlement sum, even if reasonable as such, involves unfair compromises by some members, or categories of members, for the benefit of others, and whether the distribution scheme fairly reflects the apparent or assumed relative losses suffered by particular members, or categories of members.  Any consideration of the fairness and reasonableness of the settlement in the present case must take into account not only the overall settlement sum and its relationship with the amount that might be considered a best possible outcome after a successful trial, but also the structure and workings of the scheme by which that sum is proposed to be distributed amongst group members.  The fairness and reasonableness of the settlement, from the point of view of any one group member, will necessarily depend on both of these factors.

   FAIRNESS & REASONABLENESS OF OVERALL SETTLEMENT SUM

10. As I have said, the settlement scheme provides for an overall settlement sum of $30.5m. This was the amount that was paid into the reserve fund in January 2006. The interest subsequently earned on that fund was to be used to meet the disbursements involved in obtaining the court’s approval and the costs of administering the settlement scheme. It was from the outset contemplated as a possibility that these disbursements and costs would not use up all the interest earned since January 2006. Further, the so-called reimbursement payments (which I shall consider further below) are to be taken from the fund before any distribution to the generality of group members. For these reasons, when that distribution comes to be made, it would be a sheer coincidence if the sum remaining was exactly $30.5m. However, since the possibility of there being some residue of interest remaining in the fund must be considered speculative, and since the fairness etc of the reimbursement arrangements should be considered separately, it is appropriate to treat $30.5m as the sum for which the proceeding was settled. This sum is to be regarded as covering the applicants’ case for conventional loss and damage as well as their contingent claim for interest from the date when the cause of action arose under s 51A of the Federal Court Act.

11. The formula for dividing the settlement sum – whatever it may precisely be at the time when the division comes to be made – between overcharge damages and LMS damages requires, as mentioned earlier, that the total sum be divided into 30.5 parts, with 23.5 of those parts being allocated to the former category and 7.0 of those parts being allocated to the latter category.  From this it is implicit that the underlying settlement is one in which the respondents should be regarded as paying $23.5m as settlement for the claim relating to overcharge, and $7.0m as settlement for the claim relating to LMS.  The question is whether these sums are within the range of fair and reasonable outcomes by way of settlement of this proceeding.

12. Turning first to the overcharge damages, as I understand it, the applicants commence with the proposition that, prima facie at least, a trader who was affected by inflated prices the result of a cartel amongst its relevant suppliers was worse off by the amount of the additional expense to which it was put, in its purchases of vitamins or other affected product from those suppliers, as compared with the like expenses which would have been incurred in a non-cartel situation.  A calculation of this detriment required the applicants to have two things:  first, data showing the value of actual purchases of particular vitamins and product by group members over the relevant period; and secondly, a percentage figure representing the extent to which the price of each vitamin and product was higher than it would have been in a non-cartel situation.  Purchase data was, of course, available to the applicants themselves, as they had made their own purchases.  They had no reliable way of knowing, however, what was the actual value of the purchases across the whole group.  This deficiency was supplied by the respondents in the negotiations leading to the settlement in December 2005.  The respondents supplied the applicants, on a confidential basis, with details of their sales of each vitamin in Australia during the relevant period. 

13. Calculating the percentage by which the prices of the various vitamins and products were higher than they would have been in a non-cartel situation was a much more difficult task for the applicants.  The respondents took issue with the applicants’ basic proposition in this respect, and could not be expected to be the source of any particular co-operation.  The applicants’ approach to this task was to engage the services of two expert economists (one of whom had provided an expert opinion in similar litigation in Canada) to provide their estimates of those percentages.  This they did, but it is clear from their reports – which are contained in confidential exhibits – that their conclusions are, at several points, based upon assumptions rather than hard data and involve alternatives and ranges, largely dependent upon which of the assumptions one accepts, rather than a single, unique, outcome.  By applying the percentage so calculated, with all its imponderables, to the value of purchases from the respondents, in the way I have suggested, the applicants were able to derive an estimate of the additional amount which the group members as a whole spent on purchases of each vitamin over the relevant period.    

14. But the applicants were not entitled to assume that they would necessarily succeed for the whole of that amount. In this respect it is important to observe that, although the Australian respondents admitted the allegations of breach of s 45 of the Trade Practices Act in the proceedings brought by the ACCC to which I have referred, those proceedings related only to vitamins A and E, and they were not at all concerned with the matter of quantification of loss and damage. In the present proceeding too, the Australian respondents have admitted contraventions of the section in relation to those vitamins, but they have put in issue the very existence of the cartel in Australia in relation to the other vitamins, and the occurrence of loss and damage in relation to all vitamins. While the forensic realities which led the Australian respondents to make these admissions may have encouraged them likewise to participate in settlement negotiations, the really challenging task of quantification remained for the applicants, and in that they were provided with no admissions, and presumably could anticipate no particular assistance, from those or the other respondents.

15. An additional concern for the applicants was that the respondents had pleaded that, to the extent that the applicants’ case concerned loss and damage that occurred more than three years before the commencement of the proceeding, it was time-barred by s 82(2) of the Trade Practices Act. In so far as the applicants claimed damages under s 82, it is hard to see that they would have had any answer to this defence. The proceeding was commenced in July 1999, yet the applicants’ allegations of loss and damage ran from March 1992. As against this, the applicants would have been able to point to their claim for injunctions under s 80 of the Trade Practices Act, and to their allied claim for damages under s 87. The established jurisprudence in the Full Court is that there is no limitation period in such a situation: Mayne Nickless Ltd v Multigroup Distribution Services Pty Ltd (2001) 114 FCR 108. However, Mr Pagone stressed, and I accept, that, in a case of the size and importance of the present one, the prospect of an argument succeeding, at some level, that s 87 should not be construed so as to defeat the apparent policy of s 82(2) could not be disregarded. In the circumstances, it was well within the bounds of reasonable negotiation for the applicants to allow for some risk that the earlier parts of their damages claim might be defeated by a limitations defence.

16. The applicants were then obliged to confront the proposition, which the respondents took in their defences, that they did not in fact suffer any loss or damage at all, because the impact of higher vitamin prices (to the extent that there were any) was passed on down the line to their own customers, and ultimately to consumers.  This point had two dimensions:  first, the basic proposition itself, which had the potential, if accepted by the court, to make serious inroads into the case which the applicants might otherwise have been able to make in loss and damage;  and secondly, the significance of the proposition, to the extent that it was valid, for the apportionment of group-wide loss and damage as between group members in different categories (ie in the sense that, to the extent that one group member passed on the price increase to a customer who was a group member in a different category, the former’s gain would be the latter’s loss), a matter to which I shall turn below when considering the architecture of the distribution scheme itself. 

17. In addition to the matters I have mentioned, the applicants’ advisers considered a number of matters which might be regarded as posing actual or potential difficulties for their clients in the prosecution of the litigation.  These matters are canvassed in the confidential memoranda which have been made available to the court, and I am satisfied that each was and is a legitimate consideration influencing what should be regarded as a fair and reasonable settlement in the circumstances.

1. It is not, I consider, the court’s function under s 33V of the Federal Court Act to second-guess the applicants’ advisers as to the answer to the question whether the applicants ought to have accepted the respondents’ offer: the court’s function is, relevantly, confined to the question whether the settlement was fair and reasonable. There will rarely, if ever, be a case in which there is a unique outcome which should be regarded as the only fair and reasonable one. In settlement negotiations, some parties, and some advisers, tend to be more risk-averse than others. There is nothing unreasonable involved in either such position and, under s 33V, the court should, up to a point at least, take the applicants and their advisers as it finds them. Neither should the court consider that it knows more about the group members’ businesses than the applicants, or more about the actual risks of the litigation than their advisers. So long as the agreed settlement falls within the range of fair and reasonable outcomes, taking everything into account, it should be regarded as qualifying for approval under s 33V.

2. Here the applicants commenced with a figure which could have been regarded as a ‘best possible outcome’ one. They were then obliged to take into account the difficulties which they would encounter in proving their case, and the defences which the respondents raised. There was also the overarching consideration that, whether considered as a representative proceeding in the technical sense or merely as a proceeding in which there were numerous applicants, the evidentiary task of establishing that each claimant or applicant had in fact suffered loss and damage even approximately fitting the conceptual template discussed above would have been very onerous and, it must be assumed, problematic in some instances at least. Finally, there was the strong prospect that whatever damages figure was in fact established at trial would attract interest pursuant to an order under s 51A of the Federal Court Act. I am satisfied that all these factors were taken into account by the applicants and their advisers.

3. There is another matter which in a practical sense, added to the applicants’ justification for reaching a settlement at this stage of the proceeding.  Although the proceeding had, in December 2005, been on foot for six and a half years, discovery had not yet been given by the parties.  The potential size of the discovery process – even if limited to specific categories – in a proceeding such as the present needs only to be contemplated for the utility of avoiding it to be immediately apparent.  The applicants’ irrecoverable costs in that regard are likely to have been considerable.  I am satisfied that the applicants considered the cost saving which would result from a settlement achieved before discovery to be a significant practical inducement to settlement regardless of their views as to the strengths and weaknesses of their own case.  This was manifestly a reasonable approach to settlement.

4. In all the circumstances I am satisfied that the compromise settlement involving $23.5m for overcharge damages, including s 51A interest, is a fair and reasonable settlement in the circumstances facing the applicants and the group members.

5. On the matter of the LMS damages, the applicants’ case is based on the circumstance that certain of the respondents, by themselves engaging in the business of manufacturing and selling premix in Australia, enjoyed an unfair competitive advantage as against the group members which manufactured and sold premix because of their (the respondents’) access to vitamins at prices which were not affected by the cartel.  Accordingly, as mentioned above, the damages claimed here relate only to those group members which manufactured and sold premix. 

6. As a matter of calculation, the applicants were required to estimate the extent of the market share that was lost to the respondents as a result of their cartel pricing each year over the relevant period, the sales that were lost as a result, and the profit that was foregone on those sales.  The figures for the various years, which may not, and probably would not, have been the same, had then to be added together to give a total for the profits lost over the relevant period for all premix manufacturers.  More so even than in the case of the overcharge calculations considered above, these calculations required estimates and assumptions about states of affairs which would have, but which in fact did not, prevail.  There were a number of important imponderables.  The applicants had the advantage of what strikes me as a sophisticated analysis by one of their experts, Prof Philip Williams, but even he was obliged to make a number of assumptions, or to work to assumptions given to him by the applicants.  In addition, the various issues mentioned above in connection with overcharge damages (pass-on pricing, limitations defences etc) were equally present in connection with LMS damages.  I consider that the proof of the factual elements necessary to make good this head of damages would have been every bit as problematic as in the case of overcharge damages:  probably more so.

7. It is apparent from a reading of the applicants’ experts’ reports, and of the opinions of their legal advisers, that all concerned made a conscientious attempt to produce a systematic estimate of the actual group-wide lost market share damages, based on various assumptions. For this purpose they made use of the applicants’ own practical experience of the business and financial structures in the relevant market sectors, of the statistical tools available to the experts and of the professional experience and common sense of the legal advisers. For a number of reasons, they considered that this claim was likely to be more problematic than the overcharge claim – an assessment which, on my reading of the confidential material which was placed before the court, is well within the range of the reasonable. Each of the considerations to which I have referred in paras 44 to 53 above in the context of overcharge damages applies equally to the case of LMS damages. Taking those considerations into account, I am satisfied that the compromise settlement involvement $7.0m for LMS damages, including s 51A interest, is a fair and reasonable settlement in the circumstances facing the applicants.

   FAIRNESS AND REASONABLENESS OF DISTRIBUTION SCHEME

8. I consider next the structure and workings of those provisions of the settlement scheme which will govern the distribution of the settlement sum as between group members.  All group members will be entitled, on presentation of the required documentary proof of purchases, to participate in the distribution of the overcharge fund.  A qualifying group member will be entitled to payment of a sum calculated in accordance with the following formula:

   Entitlement  =  O_M / O_G x Overcharge fund

   where O_M is the ‘overcharge’ for the particular qualifying claimant and O_G is the total ‘overcharge’ for all qualifying claimants.  This simple formula is intended to entitle each claimant to the same proportion of the overcharge fund as is the proportion of its own ‘overcharge’ within the summed ‘overcharge’ of all claimants.  Evidently, the concept of ‘overcharge’ is central to the formula and thus to the entitlement of each group member.

9. Clause 6.4 of the distribution scheme defines ‘overcharge’, in relation to any one claimant, as the total Australian dollar value of all purchases of products containing class vitamins by that claimant during periods defined in the scheme multiplied by the applicable ‘vitamin cost and absorption rate’ set out in Table 1 (being part of cl 6.4).  Use of the value of purchases by each claimant is consistent with the basis of the applicants’ estimate of total overcharge damages to which I have referred earlier in these reasons, and I need say nothing more about it.  The real driver, as it were, of the distribution of the overcharge fund between group members is the concept of the ‘vitamin cost and absorption rate’.  As will be seen from Table 1, that rate is 6.692% for all premix manufacturers, but it is less for businesses further down each supply chain (poultry, pig, cattle, etc) and the rates in different supply chains, even at corresponding levels (eg feed manufacturers) are not the same.

10. As is apparent from the nomenclature – ‘vitamin cost and absorption rate’ – each such rate has been calculated by reference to two factors:  the higher cost of vitamins (or products containing vitamins) as a result of the cartel, and the absorption of that cost by the class of business in question.  As to the former, from the confidential reports and opinions which were disclosed to the court, and from the supplementary explanations which were provided by counsel for the applicants on 31 August 2006, I understand that the factor takes account of the estimated incremental price of each vitamin (or product containing vitamin), expressed as a percentage of the estimated price that would have prevailed in the absence of the cartel, and the contribution, relative to other costs, of that incremental vitamin (or product) price in the cost structure of the particular kind of business to which the relevant item in Table 1 refers.  As to the latter, from those same materials and explanations, I understand that the factor takes account of the estimated extent to which businesses of the particular kind absorbed, rather than passed on, the incremental cost of particular vitamins (or of products containing vitamins).  Here the applicants have recognised two things:  first, that to the extent that a particular increase in cost is passed down the line by way of higher prices to customers, it should not be treated as giving rise to any legitimate claim; and secondly, that in such a case, if the customer itself was a group member, that member’s higher costs arising from the first group member’s pass-down should be treated as giving rise to a legitimate claim.

11. The design of the regime of distribution for which cl 6.3 and cl 6.4 of the scheme provide is such as to make for the distribution of a finite fund between an as yet unknown number of qualifying group members in a way which recognises, at the level of principle at least, the nature and extent of the loss and damage most likely to have been suffered by them. It operates according to broad rules of thumb, of course, such as the implicit rule that group members operating at a certain stage of a particular supply chain will all have felt the impact of the cartel in the same way relative to their purchases. That this may not reflect the actual experience of particular group members may be a reality, and it may, ultimately, lead to particular group members getting a better, or a worse, deal than they ought to have got in an ideal world in which this complex litigation was fought to the end and damages were awarded to each group member according to its actual loss and damage. But I am satisfied that the vitamin cost and absorption rates contained in Table 1 have been developed with great care and after making every possible use of the applicants’ own knowledge of the industries involved and of the financial and statistical data which is available to the applicants, and will produce results which are as close as may reasonably be, within the practical constraints imposed by the overall size of the settlement and the resources of the applicants, to the true relative overcharge damages suffered as between the various categories of group members referred to in the table. Although it is correct to say, as I have, that rules of thumb are involved, they are rules which are likely to be closely aligned with reality.

12. Turning next to the distribution of the LMS fund, all independent premix manufacturers will be entitled, on presentation of the required documentary proof of purchases, to participate in that distribution.  The entitlement will be calculated in accordance with the following formula:

    Entitlement = P_M / P_G x LMS fund

    where P_M is the money value of purchases of class vitamins for the particular qualifying claimant and P_G is the total money value of the purchases of class vitamins by all qualifying claimants.  In other words, the LMS fund will be distributed pro-rata among qualifying claimants according to their expenditure on purchases of class vitamins during the relevant period.

13. The formula for the distribution of the LMS fund among qualifying premix manufacturers assumes that the detrimental impact of cartel pricing on the profits of the premix manufacturers (ie resulting from lost market share) would be directly related to the money value of purchases of class vitamins from the respondents by those claimants.  For example, it is assumed that a premix manufacturer whose purchases of class vitamins from the respondents during the relevant period were double those of a second premix manufacturer would have experienced a loss of profits twice the size of that experienced by the second premix manufacturer.  In the confidential material made available to the court, the applicants’ experts and advisers have discussed the limitations of this approach but, ultimately, they have expressed the view that, in practical terms, it provides a reasonable basis for distributing a finite sum amongst those who will become entitled to participate.  I am satisfied that the rule of thumb which the applicants have adopted in this respect provides a fair and reasonable approach to the distribution of the LMS fund amongst qualifying premix manufacturers.

14. The applicants have also attempted to address the situation of a premix manufacturer who was so badly affected by the cartel, and by the loss of market share caused by it, that it ceased manufacturing premix altogether during the relevant period, with the result that it then ceased purchasing vitamins from the respondents.  The applicants recognised that use of the value of vitamin purchases from the respondents over the relevant period would, in the case of such a business, understate the loss and damage suffered as a result of the cartel.  To make some allowance for this, the applicants (in cl 5.4 of the settlement scheme) allowed for an additional amount to be notionally added to the vitamin purchases of such a premix manufacturer, being, as I understand it, for each month after the particular claimant ceased manufacturing premix, up to a maximum of 18 months, one twelfth of the average annual purchases of premix by that claimant over the 3 years before it ceased manufacturing premix.  This would not apply in the case of a premix manufacturing business which was transmitted to a third party.  This formula is based upon a rule of thumb which, in effect, gives to a claimant which ceased manufacturing premix during the relevant period the credit of a further period, up to a maximum of 18 months, during which it is assumed that it would, had it not ceased manufacturing, have continued to incur ongoing loss of profits as a result of cartel pricing; and, of course, it is based also on the assumption that such a claimant, having been affected so seriously by the cartel as to make the decision to cease manufacturing premix altogether, should be regarded as at least as seriously affected by the cartel pricing as was a premix manufacturer who continued to manufacture premix for such an 18–month period.

15. There really is no way of knowing how close to reality are the rules of thumb and assumptions to which I have referred in the previous paragraph.  The applicants have persuaded me, however, that some allowance ought to be made in this regard, and I am in no position to second guess the actual details of the allowance which they have made.  In point of principle, the allowance is manifestly fair and reasonable, and I am prepared to accept it as such within the overall terms of the settlement.

    STRONG CASE AND WEAK CASE VITAMINS

16. At this stage, it is appropriate to mention an aspect of the settlement which gave me concern.  As I have indicated, the settlement involves a compromise in the way of most settlements.  The applicants have taken into account the risk that they may not succeed, or not wholly succeed, in deciding to what extent they would be prepared to accept a discount on the face value of their overall claims for the purposes of settlement.  This is, of course, a reasonable and commonplace approach.  However, as indicated above, it is self-evident that the applicants, acting reasonably, ought not to regard their case as equally strong, or even approximately so, in relation to all of the class vitamins.  In the case of vitamins A and E, the Australian respondents have admitted the existence of the cartel in Australia.  In that respect, the trial would have been concerned with an assessment of loss and damage only.  There are no admissions, however, in relation to the other vitamins.  Further, I am satisfied from a perusal of the expert advice, and legal opinions, provided to the applicants that there were no grounds upon which the applicants might have reasonably believed that the case in relation to each vitamin was equally as strong as the case in relation to each other vitamin.

17. What the applicants appear to have done is to have made a broad assessment, covering all vitamins, of the prospects of success of the case as a whole, taking due account of the particular vitamins in which the case would be a strong one, and of the vitamins in which the case was not self-evidently strong. On this ‘swings and slides’ approach, the applicants have derived an overall settlement figure which they considered to constitute a reasonable outcome. If taken by a single litigant, such an approach could not be criticised: in deciding whether to settle for a particular sum, he or she would inevitably tend to trade off strengths against weakness. Even in a case in which there are several applicants, it would be legitimate for them to reach terms amongst themselves in which those with a stronger case might agree to place those strengths on the scales in the interests of achieving a favourable overall settlement, to the advantage of those with a weaker case. However, different considerations apply in the case of a representative proceeding under Pt IVA of the Federal Court Act. In the present case, it must be assumed that, unbeknownst to themselves, group members with stronger cases would, by participating in the overall settlement, share the advantages of their stronger cases with their fellows who had weaker cases. Under s 33V(1) of the Federal Court Act, the role of the court is to protect the interests of those who have no voice at the bar table, and it must be said that there is no obvious reason why the court should not assume that those unheard group members whose cases are strong would regard it as unfair and unreasonable to make compromises in the interests of other group members whose cases are weak.

18. As a result of these concerns, I had my associate correspond with the applicants’ solicitors on 8 September 2006 in the following terms:

    “I am writing with regards to the application for approval of the proposed settlement scheme in the matter of Darwalla Milling Company Pty Ltd & Ors v F. Hoffman-La Roche Ltd & Ors VID359 of 1999 that was heard before his Honour on 31 August 2006.

    His Honour still has a concern as to the fairness of the settlement with respect to the issues dealt with at pp 42-47 of the transcript, namely, issues concerning the possible different relative utilisation of “strong-case” vitamins, and “weak-case” vitamins, as between group members, or categories of group members.   Counsel for the applicants suggested that his instructions were that the problem existed in the abstract only.  His Honour is not persuaded that it is satisfactory to leave the matter there, and is prepared to provide the applicants with an opportunity to file further evidence on the subject, on or before 29 September 2006.  If the applicants decide to follow that course, they should, if possible, ensure that that evidence deals with the question whether, during the claim period, there was in fact any, and if so what, difference, as between any, and if so what, group members, or categories of group members, in the relative values of their purchases of different vitamins from the Australian respondents and/or in the relative contribution, to the price of premix or feed, of the different vitamins.  The applicants may, if they choose, accompany any such evidence with appropriate supplementary written submissions.”

    In reply to this (and another) letter, the applicants’ solicitors filed further affidavit material, and written submissions by counsel, on 29 September 2006.

“Related Bodies Corporate” mean related bodies corporate as defined in Section 50 of the Corporations Act 2001 (Cth) which provides that: Where a body corporate is:

(a)a holding company of another body corporate; or

(b)a subsidiary of another body corporate; or

(c)a subsidiary of a holding company of another body corporate; the first-mentioned body and the other body are related to each other.

“Respondents” to the Vitamins Class Action are F. Hoffmann – La Roche Ltd, Roche Products Pty Ltd, Roche Vitamins Australia Pty Ltd, Roche Vitamins Asia Pacific Pte Ltd, Aventis SA (formerly Rhone-Poulenc), Aventis Animal Nutrition Pty Ltd, Aventis Animal Nutrition SA, Aventis Animal Nutrition Asia Pacific Pte Ltd, BASF AG, BASF Australia Ltd and BASF East Asia Regional Headquarters Pty Ltd.
“Settlement Scheme” means the Settlement Distribution Scheme in the Vitamins Class Action approved by the Court on [insert date].
“Supporting Documents” means documents including without limitation invoices, business, financial or other records, evidencing the purchase of Class Vitamins Products or where applicable, expenditure on additives such as medications, enzymes, pigments, flavours, ionophores or animal growth promotants.
 “Vitamins Class Action” means Federal Court of Australia Proceeding No. V359 of 1999, Darwalla Milling Company Pty Ltd & Ors v F. Hoffmann La-Roche Limited & Ors.
“Vitamins Class Action Settlement” means the settlement of the Vitamins Class Action approved by the Federal Court of Australia on [insert date].

2.       IMPORTANT INFORMATION

2.1You should obtain and read the Notice of Settlement dated [insert date] and the Settlement Scheme. These documents may be viewed at or obtained by telephoning the Claims Administrator on 1800 810 812 to request a copy.

2.2To be eligible to make a claim under the Settlement Scheme you must be a Group Member and submit a Proof of Claim by [insert date]. Excluded Group Members cannot make claims under this Settlement Scheme. If you are not sure whether you are a Group Member or an Excluded Group Member please call the Claims Administrator on 1800 810 812.

2.3If you are a Group Member and have not opted out of the Vitamins Class Action then you are already bound by the Vitamins Class Action Settlement. That is, you have no further legal recourse to the Respondents in respect of the subject of the Vitamins Class Action except under the Settlement Scheme.

2.4Any Group Member that fails to submit a Proof of Claim by [insert date] is not entitled to make a claim under the Settlement Scheme.

2.5It is impossible to determine the value of any individual entitlement of an Overcharge Claimant until all Overcharge Claims have been assessed and any Review Assessments have been completed. It is impossible to determine the value of loss of market share. The value of each individual entitlement depends upon, among other factors, the total number of valid claims submitted for each claim type and the assessed value of those claims.

3.       INSTRUCTIONS

To make a claim you must:

3.1Complete the Claim Form.  The Claim Form must be filled out completely and must be typed or printed.  You must complete the Claim Form accurately as you will be required to sign a Statutory Declaration and provide Supporting Documents to verify the information provided in your Claim Form.

3.2Complete a separate Claim Form for each Claimant which is a separate legal entity (for example where you operate a corporate group comprising more than one corporation).

3.3Provide a Historical Company Extract or Business Name Extract or equivalent for each Claimant.

3.4Arrange an authorised representative of each claimant to sign the Statutory Declaration before a person who is authorised to witness the signing of a Statutory Declaration and submit it with the Proof of Claim. A Proof of Claim submitted without a signed Statutory Declaration will be invalid and the claimant will not be entitled to make a claim under the Settlement Scheme.

3.5Provide such Supporting Documents as will prove your purchases of Class Vitamins Products on the balance of probabilities.  That is, the Supporting Documents must establish that it is more likely than not that the Claimant made the purchases of Class Vitamins Products that you claim were made. 

3.6Complete Schedule 1 to the Statutory Declaration (listing the Supporting Documents you are providing).  Where any Supporting Documents do not exist or are no longer in your possession you must provide an explanation as to why they do not exist or are no longer in your possession.

3.7Send by registered post or deliver your completed Proof of Claim so that the Claims Administrator receives it no later than [insert date].

3.8Retain a photocopy of your completed Proof of Claim (including all Supporting Documents and other attachments).

3.9Contact the Claims Administrator if you have any questions. DO NOT CONTACT THE COURT.

3.10Do not mail or deliver your Proof of Claim to the Court or to anyone other than the Claims Administrator.

4.       PROCEDURE FOR ASSESSMENT NOTICES

4.1The Claims Administrator will use your Proof of Claim to determine the Purchase Value of your purchases of Class Vitamins Products. 

4.2The Claims Administrator may require you to provide additional information upon 21 days’ notice to you. 

4.3If you do not provide sufficient information to prove your claim or any part of your claim, your claim or the relevant part shall be disallowed, subject to any Review Assessment. 

4.4The Claims Administrator has the right to adjust any claim based upon the information provided by you or from a third party. 

4.5The Claims Administrator will assess the individual overcharge for each Overcharge Claimant (Clause 5 of the Settlement Scheme) and the individual Class Vitamins Purchases for each Loss of Market Share Claimant (Clause 6 of the Settlement Scheme) and issue an Assessment Notice to each claimant.

4.6Any Review Assessments will be completed.

4.7Once all Review Assessments (if any) for the Overcharge Claims are complete, the entitlement of each Overcharge Claimant to the Overcharge Fund will be calculated and a distribution made to the Overcharge Claimant equal to that entitlement.

4.8Once all Review Assessments (if any) for the Loss of Market Share are complete, the entitlement of each Loss of Market Share Claimant to the Loss of Market Share Fund will be calculated and a distribution made to the Loss of Market Share equal to that entitlement.

4.9The Claims Administrator will act as lawyers to administer the claims on behalf of the Group Members as a whole, and not as the lawyer for any individual Group Member. The Claims Administrator can assist you with administrative questions regarding the preparation and submission of your Proof of Claim.  However, if you require individual legal advice regarding the preparation and submission of your Proof of Claim, you should retain solicitors other than MBC.

5.       DISPUTES REGARDING SETTLEMENT

5.1You may dispute your Assessment Notice by requesting that Independent Counsel perform a Review Assessment. 

5.2You will be provided with further information about the Review Assessment when your Assessment Notice is issued.

Office Use Only

Claim Number

VITAMINS CLASS ACTION SETTLEMENT

CLAIM FORM

TO:Claims Administrator

Maurice Blackburn Cashman Pty Ltd
Level 10, 456 Lonsdale St
MELBOURNE VIC 3000
PO Box 523J
MELBOURNE VIC 3001
Telephone: [phone]

1.       CONFIDENTIALITY AND PRIVACY

MBC requires that you provide certain information and documents to enable it to assess and administer your Claim.   MBC will keep the contents of any information you provide to MBC for this purpose confidential and in particular will not reveal the contents of any information you provide to MBC to other Group Members.  Upon completion of your Claim MBC will return your information at your request.  Otherwise, the information will remain stored in MBC’s possession for a period of seven years after completion of your Claim, following which MBC is authorised to destroy the information.  MBC has a Privacy Policy that explains how MBC collects, uses, discloses and protects personal and sensitive information.  You may view MBC’s Privacy Policy at its website at or by telephoning 1800 810 812 to request a copy.

2.       IS THIS CLAIM RELATED TO ANY OTHER CLAIM?

Have you completed a Proof of Claim for any other Claimant(s)?	£	Name of Other Claimant(s):	_____________________________ _____________________________
Is a Proof of Claim being submitted on behalf of any other Claimant which is a Related Body Corporate?	£	Name of Other Claimant(s):	_____________________________ _____________________________
Is the Claimant a member of a corporate group in which the ultimate holding company is foreign?	£	Name of the parent company of the Claimant	_____________________________ _____________________________

3.       CLAIMANT’S IDENTIFICATION AND CONTACT DETAILS

All correspondence to you concerning your claim will be sent to the postal address provided below. If your address changes after you submit this Proof of Claim, you must immediately notify MBC in writing.

Business or trading name of Claimant:
Legal status o  Corporation o  Executor	o  Sole proprietor o  Partnership o  Other ____________	Legal name of Claimant:
		ACN/ABN:
Postal Address
Residential Address (if different from above)
Address of principal place of business during the Claim Period
Contact person
Title/Position of contact person
Telephone Number (business hours)		(     )
Mobile Telephone Number
Email address
Facsimile Number		(     )

4.       RECEIPT OF ANY OTHER SETTLEMENT PAYMENTS ETC

Are you a Group Member to or for whom any of the Respondents or their Related Bodies Corporate have provided any payment, benefit or other advantage, including without limitation any discount, allowance, rebate or credit in relation to goods acquired, on account of or in connection with any claim, or any potential claim, arising out of the subject of the Vitamins Class Action?

Yes £               No £                 Unsure £

5.       TRANSFER OR ASSIGNMENT OF RIGHT TO CLAIM

If you acquired the rights that are the basis for the claim asserted herein from some other person or entity, for example, by transfer or assignment, attach a separate page explaining the legal basis for your derivative rights and attach documentation evidencing such rights.

6.       INCORPORATED ENTITIES - HISTORICAL COMPANY EXTRACT

If your business was operated by an incorporated entity at any time during the Claim Period, you must give the Claims Administrator a full company search, also called a historical company extract, in respect of that entity.  The historical company extract must be dated within 56 days of the date of your Proof of Claim.  Company extracts are produced by the Australian Securities and Investment Commission (“ASIC”).  To purchase a Company Extract you can:

(a)Contact ASIC for the nearest ASIC Service Centre on 03 5177 3988, 8.30am to 7pm Eastern Standard Time on weekdays, email [email protected], or visit or

(b)Conduct an online or telephone search using an Information Broker.  An Information Broker may include additional service delivery fees. You can search for an Information Broker on the ASIC website at

OR     My business is (or was) incorporated but I have been unable to obtain a Historical Company Extract  because:            

7.       OTHER REGISTERED ENTITIES

If your business was registered in your state or territory but was not incorporated at any time during the Claim Period, you must give MBC a business name extract or equivalent extract in respect of your business.  To purchase a business name extract you should contact the applicable Government Registry referred to below:

ACT	ACT Registrar General's Office
NSW	NSW Office of Fair Trading
NT	Department of Justice
QLD	Queensland Office of Fair Trading
SA	Office of Consumer & Business Affairs
TA	Consumer Affairs & Fair Trading
VIC	Consumer Affairs Victoria
WA	Department of Consumer & Employment Protection
ABR	Australian Business Register

ORMy business is (or was) registered but I have been unable to purchase a business name extract because:

8.       PREVIOUS DETAILS

If during the Claim Period you used a business or trade name or were located at an address other that the name and address set out above, indicate each such name and/or address.

Other Business or Trade Name Other Addresses Period

9.       INDUSTRY OF OPERATION

Please indicate in which of the following industries your business operated during any part of the Claim Period.  If none of those categories apply to your business operations please attach a separate page describing in detail those operations.

Premix Manufacturer	£		►	Types of Premixes:
Pig             £	Sheep/Cattle        £
Poultry        £	Aquaculturalist     £
Egg            £	Other                 £
Dairy          £
Feed Manufacturer		£		►	Type of Feed:
Pig             £	Sheep/Cattle        £
Poultry        £	Aquaculturalist     £
Egg            £	Other                 £
Dairy          £
Livestock Producer	£		►	Did you purchase Premix during the Claim Period?	Yes £	No £
Type of Livestock:
Pig            £	Sheep/Cattle        £
Poultry       £	Aquaculturalist     £
Egg            £	Other                 £
Dairy         £
Veterinary and/or Performance Enhancing Supplement Manufacturer	£
	Veterinary and/or Performance Enhancing Supplement Distributor/Supplier	£
	Pet Food Manufacturer	£
Pet Food Distributor/Supplier	£

10.     ADDITIVES

Did any of the Class Vitamin Products purchased by you during the Claim Period contain any of the following additives?

Medications	£	Pigments	£	Animal growth promotants	£
Enzymes	£	Flavours	£	Ionophores	£

11.     PURCHASES OF CLASS VITAMINS PRODUCTS

Class Vitamins Product	Purchase Period	Total Purchase Value of Class Vitamins Products purchased in the Purchase Period	Total tonnes of Class Vitamins Products purchased in the Purchase Period	Amount of expenditure on account of medications, enzymes, pigments, flavours, ionophores or animal growth promotants
Vitamin A	5 March 1992 to 31 December 1999
Vitamin B1	5 March 1992 to 30 April 1995
Vitamin B2	5 March 1992 to 31 October 1996
Vitamin B5	5 March 1992 to 28 February 1999
Vitamin C	5 March 1992 to 31 July 1996
Vitamin E	5 March 1992 to 28 February 1999
Canthaxanthin	5 March 1992 to 31 December 1998
Beta-carotene	5 March 1992 to 31 December 1998
Poultry Premix	5 March 1992 to 28 February 1999
Cattle Premix	5 March 1992 to 28 February 1999
Dairy Premix	5 March 1992 to 28 February 1999
Pig Premix	5 March 1992 to 28 February 1999
Horse Premix	5 March 1992 to 28 February 1999
Sheep Premix	5 March 1992 to 28 February 1999
Other Premix	5 March 1992 to 28 February 1999
Poultry Feed	5 March 1992 to 28 February 1999
Pig Feed	5 March 1992 to 28 February 1999
Cattle/Dairy Feed	5 March 1992 to 28 February 1999
Sheep Feed	5 March 1992 to 28 February 1999
Other Feed	5 March 1992 to 28 February 1999
Veterinary and/or Performance Enhancing Supplements containing Class Vitamins	5 March 1992 to 31 December 1999
Pet Food containing Class Vitamins	5 March 1992 to 31 December 1999

VITAMINS CLASS ACTION SETTLEMENT

Commonwealth of Australia

STATUTORY DECLARATION

Statutory Declarations Act 1959

I, ________________________________________________________________________________ [Name, address and occupation] make the following Declaration under the Statutory Declarations Act 1959 on behalf of  [Claimant].

1.I make this Statutory Declaration from my own personal knowledge except where otherwise stated.

2.I have the appropriate authority to submit this Proof of Claim on behalf of the Claimant.

3.I have read and understood the Notice of Settlement dated [insert date], the Settlement Scheme and the Proof of Claim. The terms used in this Statutory Declaration have the same meaning as defined in paragraph 1 of the Proof of Claim.

4.The Claimant is a Group Member.

5.The Claimant is not an Excluded Group Member.

6.The Claimant did not opt out of the Vitamins Class Action by filing a Notice of Opt Out with the Court.

7.No other claim under the Settlement Scheme has been or will be submitted by the Claimant, its directors, shareholders, officers or employees on behalf of the Claimant.

8.The Claimant has disclosed any and all transfers and/or assignments of rights to compensation regarding the vitamins price fixing cartel the subject of the Vitamins Class Action.

9.The Claimant has included information and documents in relation to only Class Vitamins Products purchased in Australia during the relevant Purchase Periods referred to in paragraph 10 of the Claim Form.

10.I acknowledge and agree that the Claims Administrator may disclose any and all information pertaining to this claim to the Federal Court of Australia.

11.All information provided by me in the Proof of Claim is true and correct and specifically, accurately reflects the Claimant’s purchases of Class Vitamins Products during the relevant periods.

12.The Settlement Documents provided by me and set out in Schedule 1 to this Statutory Declaration are true and correct copies of those documents and accurately reflect the Claimant’s purchases of Class Vitamins Products during the relevant periods.

I understand that a person who intentionally makes a false statement in a Statutory Declaration is guilty of an offence under Section 11 of the Statutory Declarations Act 1959, and I believe that all statements made by me in this Declaration are true in every particular.

Signature: ………………………………………..

Declared at   on           of  2006
Before me,

Signature (of person before whom the Declaration is made and who is a person described in Schedule 2): ………………………………..

Full name, qualification and address of person before whom the Declaration is made (in printed letters) ……………………………………………………………………………………………………………

VITAMINS CLASS ACTION SETTLEMENT

STATUTORY DECLARATION

Schedule 1: Supporting Documents

The following documents that I am providing are the best available documents in my possession, that evidence the Claimant’s purchases of Class Vitamins Products for the relevant periods:

Item	Document Date	Document Description	Purchases of Class Vitamins Products to which the document relates
1
2
3
4
5
6
7
8
9

The Claimant is unable to provide the following Supporting Documents:

Item	Document Date	Document Description	Purchases of Class Vitamins Products to which the document relates	Reason for not being able to provide this document
1
2
3
4
5
6
7
8

VITAMINS CLASS ACTION SETTLEMENT

STATUTORY DECLARATION

Schedule 2: Persons before whom a Statutory Declaration may be made

A statutory declaration under the Statutory Declarations Act 1959 may be made before–

(1) a person who is currently licensed or registered under a law to practise in one of the following occupations:

Chiropractor  Dentist  Legal practitioner
Medical practitioner     Nurse  Optometrist
Patent attorney  Pharmacist  Physiotherapist
Psychologist  Trade marks attorney                  Veterinary surgeon

(2) a person who is enrolled on the roll of the Supreme Court of a State or Territory, or the High Court of Australia, as a legal practitioner (however described); or
(3) a person who is in the following list:

Agent of the Australian Postal Corporation who is in charge of an office supplying postal services to the public
Australian Consular Officer or Australian Diplomatic Officer (within the meaning of the Consular Fees Act 1955)
Bailiff
Bank officer with 5 or more continuous years of service
Building society officer with 5 or more years of continuous service
Chief executive officer of a Commonwealth court
Clerk of a court
Commissioner for Affidavits
Commissioner for Declarations
Credit union officer with 5 or more years of continuous service

Employee of the Australian Trade Commission who is:

(a) in a country or place outside Australia; and

(b) authorised under paragraph 3 (d) of the Consular Fees Act 1955; and

(c) exercising his or her function in that place

Employee of the Commonwealth who is:

(a) in a country or place outside Australia; and

(b) authorised under paragraph 3 (c) of the Consular Fees Act 1955; and

(c) exercising his or her function in that place

Fellow of the National Tax Accountants’ Association

Finance company officer with 5 or more years of continuous service

Holder of a statutory office not specified in another item in this list

Judge of a court

Justice of the Peace

Magistrate

Marriage celebrant registered under Subdivision C of Division 1 of Part IV of the Marriage Act 1961

Master of a court

Member of Chartered Secretaries Australia

Member of Engineers Australia, other than at the grade of student

Member of the Association of Taxation and Management Accountants

Member of the Australasian Institute of Mining and Metallurgy

Member of the Australian Defence Force who is:

(a) an officer; or

(b) a non-commissioned officer within the meaning of the Defence Force Discipline Act 1982 with 5 or more years of continuous service; or

(c) a warrant officer within the meaning of that Act

Member of the Institute of Chartered Accountants in Australia, the Australian Society of Certified Practising Accountants or the National Institute of Accountants

Member of:

(a) the Parliament of the Commonwealth; or

(b) the Parliament of a State; or

(c) a Territory legislature; or

(d) a local government authority of a State or Territory

Minister of religion registered under Subdivision A of Division 1 of Part IV of the Marriage Act 1961

Notary public

Permanent employee of the Australian Postal Corporation with 5 or more years of continuous service who is employed in an office supplying postal services to the public

Permanent employee of:

(a) the Commonwealth or a Commonwealth authority; or

(b) a State or Territory or a State or Territory authority; or

(c) a local government authority;

with 5 or more years of continuous service who is not specified in another item in this list

Person before whom a statutory declaration may be made under the law of the State or Territory in which the declaration is made

Police officer

Registrar, or Deputy Registrar, of a court

Senior Executive Service employee of:

(a) the Commonwealth or a Commonwealth authority; or

(b) a State or Territory or a State or Territory authority

Sheriff

Sheriff’s officer

Teacher employed on a full-time basis at a school or tertiary education institute

Schedule B. Class Vitamin Products and Relevant Periods

Class Vitamin Products	Relevant Period
Vitamin A	5 March 1992 to 28 February 1999
Vitamin B1	5 March 1992 to 30 April 1995
Vitamin B2	5 March 1992 to 31 October 1996
Vitamin B5	5 March 1992 to 28 February 1999
Vitamin C	5 March 1992 to 31 July 1996
Vitamin E	5 March 1992 to 28 February 1999
Beta-carotene	5 March 1992 to 31 December 1998
Canthaxanthin	5 March 1992 to 31 December 1998
Premix containing any Vitamins A, B1, B2, B5, C, E, Canthaxanthin or Beta-carotene	5 March 1992 to 28 February 1999
Feed containing any Vitamins A, B1, B2, B5, C, E, Canthaxanthin or Beta-carotene	5 March 1992 to 28 February 1999
Pet Food containing any Vitamins A, B1, B2, B5, C, E, Canthaxanthin or Beta-carotene	5 March 1992 to 28 February 1999
Veterinary and Performance Enhancing Supplements containing any Vitamins A, B1, B2, B5, C, E, Canthaxanthin or Beta-carotene	5 March 1992 to 28 February 1999