Dillon v RBS Group (Australia) Pty Limited (No 2)
[2018] FCA 395
•20 March 2018
FEDERAL COURT OF AUSTRALIA
Dillon v RBS Group (Australia) Pty Limited (No 2) [2018] FCA 395
File number: NSD 1016 of 2014 Judge: LEE J Date of judgment: 20 March 2018 Catchwords: PRACTICE AND PROCEDURE – s 33V application – proper role of applicants to deal only with the claims the subject of the class action and not with other ‘claims’ – issue of whether orders made pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) are sufficient to quell the entire controversy between the applicants, group members and the respondents – where respondents submitted that there was ‘uncertainty’ regarding the binding of participating group members to a settlement as approved by order of the Court – where settlement agreement included provision for the execution of a deed poll by participating group members as a condition of participating in the settlement distribution scheme – observations as to why there is no reasonable basis for uncertainty upon a proper construction of Part IVA – discussion as to why obtaining deed poll releases from group members is superfluous
PRACTICE AND PROCEDURE – settlement distribution schemes – solicitors ought not assume that they will be appointed administrators of settlement distribution schemes approved by the Court
Legislation: Federal Court of Australia Act 1976 (Cth), Pts IVA, VAA, ss 4, 33A, 33J, 33V, 33X(5), 33ZB, 37AE, 37AG(1)(a), 37AG(1)(b), 37AG(1)(c), 37AG(1)(d), 54A
Federal Court Rules 2011 (Cth), r 28.67(1)
Supreme Court Act 1986 (Vic), Pt 4A
Cases cited: Blairgowrie Trading Ltd v Allco Financial Group Ltd (recs and mgrs apptd) (in liq) (No 3) [2017] FCA 330; (2017) 118 ACSR 614
Camilleri v The Trust Company (Nominees) Limited [2015] FCA 1468
Collin v Aspen Pharmacare Australia Pty Ltd [2013] FCA 952
Dillon v RBS Group (Australia) Pty Limited [2017] FCA 896; (2017) 252 FCR 150
Farey v National Australia Bank Ltd [2016] FCA 340
Harrison v Sandhurst Trustees Ltd [2011] FCA 541
Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651
Lee v Westpac Banking Corporation [2017] FCA 1553
Lifeplan Australia Friendly Society Limited v S&P Global Inc (Formerly McGraw-Hill Financial, Inc) (A Company Incorporated in New York) [2018] FCA 379
Timbercorp Finance Pty Ltd (In Liquidation) v Collins [2016] HCA 44; (2016) 259 CLR 212
Date of hearing: 20 March 2018 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 84 Counsel for the Applicants: Mr D Campbell QC and Mr Q Rares Solicitor for the Applicants: Shine Lawyers Counsel for the Respondents: Mr DFC Thomas and Mr PJH Holmes Solicitor for the Respondents: King & Wood Mallesons
Table of Corrections 3 May 2018 In [49], the word “work” has been inserted after the word “otherwise”, and the word “ground” after the word “whereby” has been replaced with the word “group” 3 May 2018 In [15], [37] and [38], reference to the reported version of the judgment has been added. ORDERS
NSD 1016 of 2014 BETWEEN: REBECCA LOUISE DILLON
First Applicant
REBECCA JANE DOBSON
Second Applicant
AND: RBS GROUP (AUSTRALIA) PTY LIMITED
First Respondent
RBS ALTERNATIVE INVESTMENTS (AUSTRALIA) PTY LIMITED ACN 154 251 671
Second Respondent
RBS NOMINEES (AUSTRALIA) PTY LIMITED (AS TRUSTEE) ACN 094 599 989
Third Respondent
JUDGE:
LEE J
DATE OF ORDER:
20 MARCH 2018
THE COURT ORDERS THAT:
In these Orders:
Administration Costs has the same meaning as it does in the Settlement Deed.
Applicants’ Costs has the same meaning as it does in the Settlement Deed.
Group Member/s means the persons described in paragraph 2 of the third amended statement of claim as amended on 14 February 2018, other than any such person who has opted out of the proceedings
Settlement Deed means the Deed of Settlement executed on 16 February 2018 which is tab 2 of Exhibit CVA 1 to the confidential affidavit of Vicky Antzoulatos sworn 8 March 2018.Settlement Scheme means the document which is annexure B to the Settlement Deed.
1.Pursuant to s 33X of the Federal Court of Australia Act 1976 (Cth) (Act), group members Mr Gregory Edward Hancock and Mrs Jutka Suzanne Mavromatis be emailed a copy of the notice annexed to these Orders.
2.Pursuant to s 33V of the Act, the settlement of the representative proceeding and the claims of the applicants and of each Group Member be approved on terms set out in the Settlement Deed; and the Settlement Scheme including, payment in accordance with the Settlement Scheme of: (a) the applicants’ Costs in the amount of $4,486,787.96; (b) the Administration Costs in the amount of a maximum of $250,000; and (c) the additional applicants’ Costs associated with the approval application in the amount of $169,000.
3.Shine Lawyers be appointed administrator of the Settlement Scheme.
4.The second amended originating application and the third amended statement of claim be dismissed.
5.The administrator and any participating Group Member have leave to approach the Court to seek directions in relation to the administration of the Settlement Scheme.
6.Forthwith upon the conclusion of the administration of the Settlement Scheme, the administrator is to file a report including confirmation of the amount that has been charged in relation to the administration of the Settlement Scheme.
7.All previous costs orders in the proceedings be vacated.
8.There be no order as to the costs of the proceedings.
9.Pursuant to ss 37AF and 37AG(1)(a) of the Act, until further order of the Court, in order to prevent prejudice to the proper administration of justice, paragraphs 15-19, 22-33, 36, 39-47, 48-51 and tabs 1,2,5,6,7 and 9 of Exhibit CVA1 of the confidential affidavit of Vicky Antzoulatos sworn 8 March 2018 is not be published or made available and not be disclosed to any person or entity.
10.Other than order 1 (which binds the applicants) and order 9 (which applies generally), pursuant to s 33ZB of the Act, the persons affected and bound by the balance of these orders, including the s 33V order, are the applicants, the respondents and the Group Members who have not opted out of the proceedings.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure
Dear [insert name]
You are presently a Group Member in the matter of Dillon & Anor v RBS Group (Australia) Pty Ltd & Ors (NSD1016/2014) in the Federal Court of Australia.
The case has settled for $12.58 million, inclusive of the applicants’ legal costs of approximately $5 million.
On 20 March 2018 the Court made orders that you be informed of two options which are available to you, namely:
1)Opt out; and
2)Not opt out (and remain a Group Member).
As a Group Member you will be entitled to a payment as a result of the settlement of the matter. We estimate that your payment would be about [insert amount].
If you opt out, you will not be able to receive any payment from the settlement.
We would appreciate it if, within 7 days, you would email Vicky Antzoulatos at [email protected] and indicate whether you would like to opt out of this action or remain as a Group Member and participate in the settlement and be paid an amount of approximately [insert amount]. In exchange for participating in the settlement as a Group Member you will have to sign a Deed Poll releasing the Royal Bank of Scotland (RBS) from liability in respect of the claims the subject of this action.
If you do not respond to this email within 7 days, you will be deemed to be a “Non-participating Group Member” which will mean that you will be bound by the settlement but will not receive any settlement payment.
Yours sincerely
REASONS FOR JUDGMENT
(Revised from the transcript)LEE J:
A INTRODUCTION
By amended interlocutory application filed on 20 March 2018, the applicants seek orders for the approval of a settlement of this representative proceeding pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (Act). Unlike approval applications in most proceedings, this approval application raises at least two important points of principle, which I identify below.
The balance of these reasons will be divided into the following headings:
·B Principles in Approaching Approval Applications
·C Consideration of Fairness and Reasonableness of Settlement Sum Generally
·D Consideration of Fairness of the Settlement Distribution Scheme
·E The Application for Late Opt-Out
·F The Proposed Deed Poll
·G Deductions from the Settlement Sum
•G.1 Legal Costs
•G.2 Applicants’ Reimbursement
·H Conclusion
•H.1 Bespoke Notice to Group Members seeking Late Opt‑out
•H.2 Non-publication Orders
·I Orders
B PRINCIPLES IN APPROACHING APPROVAL APPLICATIONS
The principles to be applied in considering any settlement of a representative proceeding are well known and do not require, yet again, extensive repetition. It suffices, for present purposes, for me to refer to the principles summarised by Moshinsky J in Camilleri v The Trust Company (Nominees) Limited [2015] FCA 1468 at [5] and [40]-[51], and by Beach J in Blairgowrie Trading Ltd v Allco Financial Group Ltd (recs and mgrs apptd) (in liq) (No 3) [2017] FCA 330; (2017) 118 ACSR 614 at 638 [82]-[85].
C CONSIDERATION OF FAIRNESS AND REASONABLENESS OF SETTLEMENT SUM GENERALLY
As is usual on s 33V approval applications, I have had the benefit of confidential material put before the Court by the applicants’ legal representatives, including an opinion prepared by Mr Campbell QC, Mr Pike SC, Mr Rares and Mr Olsen. The opinion is comprehensive and expresses cogent reasons for the conclusion that the overall settlement sum is fair, reasonable and adequate. Although it does not do so in terms, the opinion has regard to the matters set out in the Class Actions Practice Note (GPN-CA) and, in particular, paragraph [14.4], which relevantly provides that a party applying for the Court’s approval of a proposed settlement will usually be required to address:
(a)the complexity and likely duration of the litigation;
(b)the reaction of the class to the settlement;
(c)the stage of the proceedings;
(d)the risks of establishing liability;
(e)the risks of establishing loss or damage;
(f)the risks of maintaining a class action;
(g)the ability of the respondent to withstand a greater judgment;
(h)the range of reasonableness of the settlement in the light of the best recovery; and
(i)the range of reasonableness for settlement in light of all the attended risks of litigation.
The fact that the opinion has not addressed these matters in some sort of formulaic way is not intended, in any respect, to be a criticism. Indeed, there is a certain artificiality in addressing some of these matters in the context of individual cases. A good example is presented by this proceeding, where the ability of the respondents to withstand a greater judgment is hardly a relevant consideration. I should add that the submissions filed by the applicants and the respondents (RBS) do address the matters in the Practice Note (but only to the extent that they can be said to be material).
It is fair to say that this proceeding is not straightforward. It is complex, both factually and legally. By way of illustration, the current iteration of the pleadings run to a remarkable 360 pages, and a plethora of causes of action are relied upon. The RBS parties have joined issue with a number of positive defences, including limitation defences and proportionate liability defences. Similarly, as is common in litigation of this type, the evidence is lengthy, dense, and complex. Again by way of illustration, the expert reports filed by the applicants run to approximately 700 pages, and RBS’ expert reports in response run to approximately 600 pages. Additionally, eight lay witnesses were proposed to be called to give evidence.
In what perhaps could be described as a triumph of hope over expectation, I set down the matter for hearing for three weeks commencing on 13 March 2018. I very much doubt, having reviewed the material for the purpose of the hearing of the approval application, that there was a substantial likelihood that the initial trial would have been completed during this period.
It is unnecessary to provide a detailed description of the applicants’ case. In very broad terms, the applicants’ claims centred on what were described as ‘claim warrants’, being instalment warrants issued by RBS, which the applicants allegedly acquired on the advice of their financial advisor, Navra Financial Services Pty Limited (Navra). Among other things, it was alleged that:
(a)RBS breached implied statutory warranties by failing to issue the claim warrants with due care and skill, which also amounted to a breach of duty of care;
(b)RBS acted unconscionably in connexion with the entry into contracts with the applicants in respect of the claim warrants, and that the contracts entered into by the applicants were unjust, unfair or unconscionable, contrary to various statutory norms; and
(c)RBS was liable for being knowingly involved in misleading or deceptive conduct by Navra, and that it was liable, as principal, for the conduct of Navra as its agent.
One merely needs to state the nature of these claims to identify the broad scope of the matters that were likely to be in contest.
While it is inappropriate for me to go into detail, to the extent that attention is directed to the risks of establishing liability and loss or damage, multifarious risks were faced by the applicants with respect to their claims. Indeed, in some respects, this is an unusual representative proceeding in that so many of the statutory claims involve the Court being required to have regard to the individual circumstances of each bespoke case, and even if there was success or substantial success at the initial trial, this would not necessarily have determined the claims of individual group members.
Dealing with the reaction of the class to the settlement, the affidavit evidence indicates that the reactions from group members have been favourable. By order dated 14 February 2018, I ordered that a notice be sent to all group members containing important information about the proposed settlement. The following was said in that notice under the heading “Proposed settlement”:
6. The Applicants in the Proceeding are represented by Shine Lawyers.
7. The Applicants and RBS agreed to terms for the settlement of the Proceeding, subject to approval of the Federal Court, without any admission of liability. The terms provide that the claims of the Applicants and group members will settle for an amount of $12.58 million (Settlement Sum) inclusive of the Applicants’ legal costs of approximately $5 million (Costs). The Costs are subject to Federal Court approval.
[Please note: the settlement agreement requires the Settlement Sum to be kept confidential – it is only provided to you so you may consider your rights in relation to the proposed settlement]
8. If approved, the Settlement Sum will be distributed in proportion to the claim of each eligible group member who elects to participate in the settlement.
9. The detail of the process by which the Settlement Sum is proposed to be distributed will be outlined in the Settlement Scheme. This notice, the Settlement Deed and Settlement Scheme are confidential and may only be disclosed to legal and financial advisers and in certain other exceptional circumstances.
10. As an eligible group member, both the Settlement Deed and the Settlement Scheme can be made available for you to inspect at any office of Shine Lawyers nationally by prior appointment made by calling 1800-751-969 or emailing [email protected].
11. The Settlement Deed and Settlement Scheme can also be inspected online by eligible group members. If you wish to inspect the documents online, you need to send an email to [email protected]. Shine Lawyers will then verify that you are an eligible group member in the Proceeding and will provide you with a PIN in order to access the documents.
(Bolding, italics and underlining in original)
In response to the invitation to inspect the Settlement Deed and Settlement Scheme online, 29 requests for the password to access the documents were received. This is out of a class of about 130 group members who are to participate in the proposed settlement. I note, for the sake of completeness, that there are apparently 256 group members who would be bound by the proposed settlement, but approximately half of those persons are what are described as ‘non-participating group members’ (in that they are bound, but will receive no distribution).
The evidence establishes that between mid-February and 2 March 2018, immediately after the service of the notice, the applicants’ solicitors received approximately 80 telephone and email enquiries, and have continued to receive communications after the deadline identified in the notice for the lodging of any objections. I am satisfied, on the basis of the evidence, that only one objection has been lodged by a group member, who expressed concerns about the scope of the proposed release. For reasons I will come to in due course, I believe the releases sought in this case raise important points of principle (as to the form in which they are proposed to be obtained) but there is no valid objection to extinguishing group members’ claims against RBS and their privies, as this is naturally required by RBS as part of the bargain reflected in the proposed settlement, and this aspect of the deal does not mean the overall proposed settlement cannot be characterised as fair and reasonable.
Although not amounting to an objection to the proposed settlement, it is convenient to also record the only other reaction obtained from a group member (which is in evidence), who expressed the view:
Ten years of this to-ing and fro-ing of continual legal debacle has taken a big emotional toll. I’m at the stage of life where I don’t want to worry about financial issues…It all takes time, (negative) emotional energy, money. I’ve lost faith, I’ve lost energy, too much.
(Uncorrected)
Although the overall reaction to the proposed settlement has been favourable, it seems to me that it is likely that a large number of group members hold similar, albeit unexpressed sentiments as the group member whose reaction I just quoted at [14] above. The matters the subject of this proceeding occurred quite a number of years ago, and, as I noted in Dillon v RBS Group (Australia) Pty Limited [2017] FCA 896; (2017) 252 FCR 150 at 153 [9], the proceeding has not moved along with the speed of summer lightning. It is likely that a number of group members might feel some degree of frustration, accompanied by some relief, that their ordeal may come to an end in the event that the proposed settlement is approved.
While the precise settlement sum was agreed between the parties to be kept confidential, as can be seen from [11] above, the notice I approved included a clear notification of the settlement sum, inclusive of costs. There has been no complaint from group members and, for my part, I am more than satisfied that the overall settlement sum is reasonable in the circumstances.
D CONSIDERATION OF THE FAIRNESS OF THE SETTLEMENT DISTRIBUTION SCHEME
The Settlement Deed, entered into by the applicants, RBS and the solicitors for the applicants, is dated 16 February 2018. It is, in most respects, conventional. It provides for an amount to be paid, to be distributed to participating group members in final resolution of their claims. It provides for payment of the settlement sum into a fund and for application and distribution of that settlement sum to participating group members following various deductions, to which I will come in due course. The settlement is conditional upon approval orders being made.
I will return to the aspect of the Settlement Deed which causes me disquiet later in these reasons. Subject to this matter, I am satisfied that the Settlement Scheme operates in a regular and fair way. Before passing from the Settlement Scheme, I should make one further comment. A significant role is reserved to the administrator of the Settlement Scheme. The proposed Settlement Scheme presupposes that Shine Lawyers (Shine), the applicants’ solicitors, be appointed as administrator, including for the purpose of administering the settlement account.
In considering a settlement distribution scheme, I recently remarked in Lifeplan Australia Friendly Society Limited v S&P Global Inc (Formerly McGraw-Hill Financial, Inc) (A Company Incorporated in New York) [2018] FCA 379 at [54], that if there is a view among that part of the profession undertaking Part IVA work that solicitors for applicants are somehow automatically entitled to be appointed as settlement scheme administrators (as an incident of settlement), that part of the profession should be disabused of this misapprehension.
That being said, in the present case, it is sensible for Shine to be appointed as administrator, given that the proposed role of the administrator in this case involves a degree of complexity in carrying out individual assessments of group member claims. The role of solicitors in assessing individual claims with appropriate scrutiny will often be required in mass tort claims and sometimes very significant costs are required to be incurred for justice to be done, although, no doubt, much of this work could be done far more economically by eager junior barristers with lower charge-out rates. However, there are a significant number of cases where the role of an administrator is, or is largely, mechanical. In those cases, it seems to me, the Court ought to be alert to the prospect of non-lawyers being appointed who are able to perform the role of administrator at a cost far less than would be charged by lawyers for performing straightforward or routine work. This is commonplace in North America, and there is a need to guard against the settlement distribution process becoming, in routine cases, a ‘cottage industry’.
As I have said, however, this proceeding does not fall into this category and it seems to me appropriate that Shine conduct the role, subject to the Court’s supervision.
E APPLICATION FOR LATE OPT-OUT
I now come to the first point of principle.
In the approval application, an order is sought in the following terms:
Group members Mr Gregory Edward Hancock and Mrs Jutka Suzanne Mavromatis have opted out of this proceeding in accordance with the Court’s orders of 15 June 2017 and section 33J of the Federal Court of Australia Act 1997 (Cth).
(Errors in original)
This prayer for relief is framed in terms of a declaration, but I gather what is sought is that leave be granted to Mr Hancock and Mrs Mavromatis to opt-out of the proceeding, notwithstanding that they have not filed opt-out notices in accordance with the orders of the Court which fixed a date for opt-out in accordance with s 33J of the Act.
I am not satisfied that I should grant such leave on the basis of the material presently before me. It is unclear to me whether or not the relevant group members have been faced, in stark terms, with the choice that currently is presented to them. On the one hand, they can receive a distribution out of the Settlement Scheme if it is approved; on the other, they can have leave to opt-out late and receive nothing. I indicated to Mr Campbell QC that I would be disposed to make an order approving a short communication to the two relevant group members presenting this choice in pellucid terms and giving them the opportunity of indicating a preference, within a limited period. If those group members do not respond within seven days, then the appropriate course, in the event the proposed settlement is approved, is that they should become non-participating group members.
I regard this first point of principle as important because, like with a choice a group member needs to make in relation to opt-out, it is fundamental that any decision made by any group member (such as seeking leave to opt-out of the proceeding after the date for opt-out has passed) should take place with that group member being apprised, in direct terms, of all the facts necessary to make an informed decision.
F THE PROPOSED DEED POLL
The second and more fundamental point of principle arises from one aspect of the terms conditionally agreed to by the applicants. Clause 6 of the Settlement Deed is in the following terms:
6.1 Releases
Upon the Respondents complying with clause 3.1(iii) of this Deed:
(a) the Proceeding, including the Applicants and Group Members’ claims for damages, compensation, interest and legal and administrative costs and disbursements (present and future), is fully and finally settled; and
(b) the Applicants and Group Members release and discharge the Respondents and the Related Parties of the Respondents jointly and severally from all claims and actions (including any claim for costs), present and future, relating to the Dispute and the Proceeding.
6.2 Operation of clause
For the avoidance of doubt, clause 6.1 does not release the Respondents or the Related Parties of the Respondents or the Applicants or Group Members from the performance of their obligations under the Settlement or otherwise impact on the rights of any Party or Group Member to enforce the Approval Orders, this Deed, the Settlement Scheme or any related or incidental matters.
6.3 Benefit of release
(i) Without prejudice to the ability of the Respondents and each of the Related Parties of the Respondents to enforce this Deed for its or their own benefit, the Respondents hold the benefit of each release, discharge and indemnity contained in this Deed to the extent that it is expressed to apply in favour of a Released Party on trust for each of the Released Parties;
(ii) Each release, discharge and indemnity contained in this Deed, is held without prejudice to the ability of each of the Applicants and each Group Member to enforce each such release, discharge and indemnity contained in this Deed for their own benefit.
(iii) Upon payment of the Settlement Sum under this Deed the releases, representations, warranties and indemnities in this Deed given in favour of persons not a party to this Deed are intended to be, and are, directly enforceable by each of those persons, and this Deed operates as a deed poll in favour of those persons.
(Uncorrected, bolding in original)
In order to understand the above quote, the reference to cl 3.1(iii) of the Settlement Deed is to RBS causing the ‘Settlement Reserve Fund’ to be opened.
Also referred to in the Settlement Deed (cl 1.1) is what is described as a “Participating Group Member’s Deed” (Deed Poll), which is defined as being “[a]n individual deed of release in substantially the form contained at Annexure A to this Deed”. Clause 5.3(b)(v), which deals with the “[s]pecific obligations of Shine Lawyers” provides:
5.3 Specific obligations of Shine Lawyers
Shine Lawyers will:
…
(b) prepare the Settlement Scheme, which will contain provisions to the following effect:
…
(v) only those Participating Group Members who execute a Participating Group Member’s Deed is eligible to receive a distribution under the Settlement Scheme;
(Uncorrected, bolding in original)
The Deed Poll is a six page document which, among other things, imposes express obligations of confidence (cl 9). It provides for a participating group member to make a series of warranties (cl 5) which include, among other things, a participating group member providing warranties that they have not assigned or transferred any claim or cause of action and that they have provided the administrator with all “details of any recovery or anticipated recovery in relation to their investment in the Claim Warrants from any insurance scheme or source other than the Settlement of the Proceeding”. It also provides warranties (in the event that the participating group member is a personal legal representative) that the group member has been “duly appointed as such and [has] sufficient authority to bind the estate of the deceased Group Member by the execution of this Deed Poll”. It also involves the participating group member providing an indemnity to RBS against any liability, loss or cost which results from any breach, falsity or invalidity of any of the warranties it seeks to procure.
The Deed Poll, in terms, anticipates that the releasor may bear costs relating to the preparation or execution of the Deed Poll. From this I take it that the drafter of the Deed Poll anticipates that the participating group member may be required to incur legal costs in order to obtain advice to understand the Deed Poll and provide the warranties the drafter seeks to procure. Additionally, it provides for the participating group member to provide an express acknowledgement that the Deed Poll was executed voluntarily, “upon their own information, investigation and legal advice” (cl 7). It also includes some provisions, including cl 11, which contain what might be described as ‘boilerplate’ clauses, including such things as might appear, at the very least, obscure to a layman, such as cl 11(f)(ii) which provides:
(f) a reference to:
(ii) a thing (including, but not limited to, a chose in action or other right) includes a part of that thing;
In short, what the application to approve the proposed settlement asks the Court to do is to sanction requiring a participating group member to sign a complicated and difficult to understand document which involves a series of warranties, the provision of indemnities and the giving of releases in exchange for the participating group members’ participation in the Settlement Scheme. The key provision is cl 3, which is in the following terms:
3 Release
As consideration for the Settlement Payment, upon the later of Settlement Payment and execution of this Deed Poll, the Releasor:
(a) releases RBS from all Claims;
(b) agrees that RBS may plead this Deed Poll to bar any claim or action (including any claim for costs) brought by the Releasor relating to any Claim;
(c) agrees not to commence or maintain any claim or action (including any claim for costs) against RBS relating to any Claim; and
(d) to the extent the Releasor is the personal legal representative of a deceased person, agrees to procure that no action relating to any Claim is commenced or maintained on behalf of the deceased person.
(Uncorrected, bolding in original)
The provisions of the Deed Poll were not addressed in the material that was provided to the Court in advance of the hearing of the approval application, except in the most general terms. Having reviewed it in advance of the hearing, I indicated at the very commencement of the hearing that I had very serious misgivings about approving a proposed settlement which required a participating group member to sign a document of the type proposed. It is appropriate that I explain my reasons for having these misgivings in some detail.
The scheme set out in Part IVA of the Act has, as its centrepiece, the notion that one party, an applicant, can prosecute his or her own claim, together with the claims of represented persons.
In s 33A of the Act, a group member is defined as follows:
group member means a member of a group of persons on whose behalf a representative proceeding has been commenced.
(Original bolding and italics)
As is well known, s 33C of the Act provides that where seven or more persons have claims against the same person and the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances, and the claims give rise to a substantial common issue of law or fact, then a proceeding may be commenced by one or more of those persons representing the group members.
As I explained in Dillon at 159 [43]-[44]:
[43] The provision directs attention to the notion of a ‘claim’ – a fundamental concept in Part IVA proceedings. It is critical to understand that a ‘claim’ is not the cause of action pleaded: King v GIO Australia Holdings Limited [2000] FCA 617; (2000) 100 FCR 209 at 219 [23]-[24] and at 222-223 [34]-[35] per Moore J. It is a term to be given a wide meaning (Allphones Retail Ltd v Weimann [2009] FCAFC 135 at [80] per Tracey and McKerracher JJ) and need not be based on the same conduct and may arise out of quite disparate transactions. The breadth of the concept was explained by Lindgren J in Australian Competition and Consumer Commission v Giraffe World Australia Pty Limited [1998] FCA 819; (1998) 84 FCR 512 at 523:
As to the meaning of “claims” in s 33C(1)(a), certain matters are tolerably clear.
First, the claims must be claims recognised by the law.
Second, s 33C(2)(a)(i) shows… that the “claims” to which s 33C(1)(a) refers are not confined to claims to relief as of right.
Third, whatever the word “claims” in the provision denotes, they have an existence independent of, and antecedent to, the commencement of the proceeding, since it is only if seven or more persons have claims against the same person that a proceeding under Part IVA may be commenced by one or more of them. Perhaps this signifies that it is not a sufficient condition of the existence of a claim that a claim has been “made”, “asserted” or “threatened”.
Fourth, for obvious reasons, s 33C(1)(a) does not speak of a “right” or “entitlement” to relief — a matter which cannot be known until a final hearing.
Fifth, it is not required that the persons who have the claims be aware that they have them, let alone that they have asserted them.
(original emphasis)
[44] The ‘claims’ of all persons referred to in this ‘gateway’ provision are only required to be in respect of, or arise out of, similar or related circumstances and give rise to one substantial common issue of law or fact. It necessarily follows that the claims of the applicants (who represent the group) and group members (represented persons) can be quite different. As Gordon J explained in Timbercorp at [104], the legislative scheme:
…expressly contemplates and provides for the individuality of claims within a group proceeding. For example, a group proceeding may be commenced “whether or not the relief sought ... is the same for each person represented” and whether or not the proceeding “is concerned with separate contracts or transactions between the [respondent] and individual group members”, or “involves separate acts or omissions of the [respondent] done or omitted to be done in relation to individual group members”.
(citations omitted)
I also noted at 162 [53]-[54]:
[53] As can be seen by the way in which the notion of a claim is always employed in Part IVA, the key is to identify whether or not the relevant claim of a person has the characteristics identified in 33C, that is, that it has sufficient commonality in the sense that it is one of seven or more claims of persons which are in respect of, or arise out of, the same, similar or related circumstances and give rise to at least one substantial common legal or factual question. That claim is then the subject of the Part IVA regime until either opt out, settlement approved by the Court, judicial determination at an initial or later ‘group’ hearing (if the orders made at that stage, which are binding on the group member under s 33ZB, are determinative), or by judicial determination at an individual trial after a ‘declassing’.
[54] Of course, at the one time, one person may have a number of claims against another person but if there is a claim for the purposes of s 33C (and which allows a Part IVA proceeding to be brought), the relevant claim is singular. The point can be usefully illustrated by an example. Assume that there are two infrastructure projects conducted by the same state government. One (Project A) is approved but is in its infancy and a person wishes to challenge some aspect of the administrative decision making by which a decision was made to allow the project to go ahead. This claim might be advanced by the person affected by orthodox inter partes litigation, but if there were enough persons affected they may be entitled to do so by invoking the Part IVA procedure.
(Bolding and italics in original)
What is evident from the above is that in this proceeding, as in others, there may be a distinct claim of a participating group member which is not a claim for the purposes of s 33C. To use the words of the plurality (French CJ, Kiefel, Keane and Nettle JJ) in Timbercorp Finance Pty Ltd (In Liquidation) v Collins [2016] HCA 44; (2016) 259 CLR 212 at 235-236 [53], the claim is not “with respect to the claim the subject of the proceeding”, but rather, “with respect to their individual claims”. As the plurality makes clear at 236 [54]:
A conclusion that the representative capacity of a plaintiff in a group proceeding is limited to the claims giving rise to common questions is consistent with principles which underlie the concept of a privy in legal interest. The basic requirement of a privy in interest is that the privy “must claim under or through the person of whom he is said to be a privy”.
(Citation omitted)
The genius of Part IVA of the Act is that it provides a mechanism whereby a group of claims with certain characteristics can be identified, be the subject of proceedings commenced by a representative party, and then proceed through the Court to be determined collectively or individually by judicial determination or through non-curial means. The whole focus of Part IVA is on the claims of the group members which are subject to Part IVA, and not individual, distinct claims which do not arise out of the same, similar or related circumstances as the claims the subject of the proceedings. I sought to make this point in Dillon by way of example at [55]-[58].
It might be thought that being concerned about requiring a participating group member to sign a document as a precondition to participating in a settlement distribution scheme is to be too precious, but I reject this notion.
As I have noted above, this is a case where it is likely that group members have suffered, or at least a number of group members may have suffered, some emotional toll. To require them to jump through any hoop which is unnecessary seems to me to be inconsistent with the protective and supervisory role I am required to perform in relation to those group members.
Mr Thomas, who appeared on behalf of RBS, in the course of his able submissions which were required to be presented at short notice, sought to justify the provision requiring the Deed Poll on the basis that his client was entitled to have what he described as a ‘reasonable apprehension’ that without the protection of the Deed Poll, his client could not have the necessary comfort that the entire controversy between it, the applicants and the participating group members had been finally resolved. I think there are a number of things that can be said in relation to this contention.
First, no Deed Poll will be obtained from other group members who are bound by the settlement and yet are not participating. Plainly, the whole reason why the Court was asked to go through the process of putting in place a regime which required registration of details of claims and positive steps being taken by group members to participate, was that if group members failed to do so, such group members would (although not participating in the settlement) continue to be bound by the settlement. It was on this basis that the Court was invited to make such orders, and there is an inconsistency in the suggestion that on the one hand such non-participating group members are bound and on the other that participating group members would not have their controversy quelled as against RBS without the provision of the Deed Poll.
Secondly, perhaps in recognition of the first point, Mr Thomas did not seek to argue that Part IVA of the Act should be construed in such a way as requiring a deed poll in order for RBS to have certainty; rather, Mr Thomas’ argument was that it was a reasonable position for RBS to take given what was said to be ‘uncertainty’ as to the true legal position.
To the extent that there is any uncertainty, I will now seek to dispel it. The high water mark of the uncertainty is said to arise from Timbercorp at 235-236 [51]-[53] where the following was said in respect of the cognate provisions of Part 4A of the Supreme Court Act 1986 (Vic):
[51] Section 33Q provides that where it appears to the Court that the determination of the questions common to all group members will not finally determine the claims of all group members, the Court may give directions in relation to the determination of the remaining questions and for that purpose may establish sub-groups. Section 33R allows the Court to permit an individual group member to take part in the proceeding for the purpose of determining a question that relates only to the claim of that group member. In this circumstance, however, the group member is liable for the costs associated with the determination of that question, a liability which does not generally arise in the group proceeding itself.
[52] Part 4A creates its own kind of statutory estoppel. Section 33ZB requires that a judgment in a group proceeding identify the group members affected by it and, subject to a provision not presently relevant, provides that that judgment “binds all persons who are such group members at the time the judgment is given”. In order to understand that to which the group members are bound, it is necessary to read s 33ZB in the context of Pt 4A as a whole and ss 33C(1) and 33H in particular. By that process it will be seen that group members are bound by the determination of the claims giving rise to the common questions.
[53] The provisions of Pt 4A therefore confirm that a plaintiff in group proceedings represents group members only with respect to the claim the subject of that proceeding, but not with respect to their individual claims. The lead plaintiff is not a privy in interest with respect to the respondents’ claims. This is so regardless of whether they should have been raised in the group proceeding. That leaves for consideration the question whether the respondents themselves are estopped from raising them in these proceedings.
I do not read these passages as being in any way inconsistent with the notion that certainty is provided to a respondent without obtaining a separate release from individual group members. As their Honours explained at 235 [52], Part 4A “creates its own kind of statutory estoppel”.
Section 33ZB is perhaps the single most important provision in Part IVA of the Act. When read together with the relevant definitions in s 4 of the Act, s 33ZB provides:
Effect of judgment
A [judgment, decree or order, whether final or interlocutory] given in a representative proceeding:
(a) must describe or otherwise identify the group members who will be affected by it; and
(b) binds all such persons other than any person who has opted out of the proceeding under section 33J.
(Emphasis added)
It follows that if the Court makes an order which is said to bind all remaining group members, then those persons are, by force of that order, so bound. Part IVA would not otherwise work. In Timbercorp at 235 [52], reference was made to the process whereby group members “are bound by the determination of the claims giving rise to the common questions”. But this does not speak directly in terms of settlement of proceedings. In circumstances where the matter proceeds to determination, following identification of the common questions (or questions of commonality), s 33ZB will operate in that way; but that is not the extent of its reach. The importance of what their Honours say at 235-236 [53] ought not be understated.
There is a need to focus on the foundational notion that the representative person, or applicant, only represents group members with respect to the claim which is the subject of the proceeding, and no further. Put another way, the applicants have no role whatsoever in purporting to represent group members in respect of individual claims other than the claim of the individual group member that is the subject of the representative proceeding. This is the whole point of Timbercorp, which makes it clear that (to use a potentially misleading expression) the statutory ‘agency’ created by Part IVA of the Act is limited in scope.
What, then, is one to do with a provision of a proposed settlement in which the applicants have purported to bind the group members to something that goes beyond the limit of this statutory agency? On one level, the issue does not arise in this proceeding as it may do in some others. That is because the definition of ‘Claims’ in the Deed Poll provides as follows:
Claims means any and all claims, whether arising at common law, equity, under statute or otherwise, for any form of relief (present and future and including any claim for costs or interest) of the Releasor arising out of, or in connection with, any part of the subject matter of the Proceeding or arising out of, or in connection with, any allegation that RBS is liable for losses incurred by people who invested in Claim Warrants.
(Bolding in original)
In this sense at least, the release here is connected with the subject matter of the proceeding. Textually, the release seems to reflect an attempt to limit the scope of the release to the claim of the group member (to use that expression in the statutory sense). Mr Thomas provided me with examples where the Court has approved – on my examination, without any considered argument – releases which have, or may have, gone beyond dealing with the claim the subject of the settled proceeding: Harrison v Sandhurst Trustees Ltd [2011] FCA 541, Collin v Aspen Pharmacare Australia Pty Ltd [2013] FCA 952 and Lee v Westpac Banking Corporation [2017] FCA 1553.
In Harrison at [26], Gordon J observed as follows:
The release contained within the Settlement Deed is worded in a way that a full release is given by the person for all claims against Sandhurst arising from notes held by that person. There are group members who have notes in respect of which some distribution will be made under the scheme, and other notes for which no payment will be made. For those members, the release will operate in a way that extinguishes all of their rights, even in relation to those notes for which no distribution is made. In my view, this is not a fact which would result in the Court not approving the proposed settlement. First, it is not uncommon in settlements for full releases to be made of all outstanding claims, whether directly at issue in the proceedings or not. The releases are given, as Counsel for the applicant submitted, as the price of finality. Secondly, group members were given notice of this fact in paragraph 15 of the Notice of Opt Out and Notice of Settlement Approval Hearing.
Of course, an important distinguishing factor is that in Harrison, group members were apparently given specific notice in the notice of settlement of the scope of the release prior to the hearing of the settlement approval application and even though it is clear the release went beyond the proceeding, it is not at all clear to me whether the release actually went beyond the relevant claim (a broader concept which, as I have explained, has an existence anterior to, and separately from, the proceeding).
In Collin, the Court approved participation in a proposed settlement which involved the signing and returning of deed polls within a certain period. Again, it is unclear to me what the precise terms of the deed poll were, but the case is relevant to the extent that it did require the execution of a deed poll in order to participate in the proposed settlement.
In Lee at [11], there was brief reference to what were described as “standard releases between the parties to the settlement deed and further obligations requiring the parties to effect a settlement of the action before the Court”. Although R Derrington J’s judgment does not deal with the question of the deed poll, I am informed from the bar table, and accept, that a similar type of deed poll to that currently proposed was the subject of approval in that case.
Put in its starkest terms, what the proposed settlement requires is for me to endorse the imposition of an obligation upon persons in circumstances where I do not consider that it is consistent with the proper operation of Part IVA of the Act (which allows group members, before an initial trial, to enjoy an essentially passive role). There is simply no need for this imposition because I consider there is no doubt that orders can be fashioned to ensure that RBS is protected with certainty. Properly analysed, I do not believe that there is anything in Timbercorp which suggests that another available construction of Part IVA is either reasonable or open. The cases to which I was referred provide no precedential value, as the scope of the releases is not clear, the issue I have discussed was not directly considered and there is no suggestion from those judgments that the judges approving the settlements in those cases received any submissions on the point.
Having reached the conclusion the Deed Poll is, at best, an unnecessary imposition and, at worst, a vexation, Mr Thomas nevertheless urges upon me, with some force, that irrespective of the proper construction of Part IVA, the parties, as part of their bargain, were negotiating against a backdrop that similar deeds had been approved as part of settlements and there was an available view that the Court could not fashion a result, through Court orders, which would give RBS certainty in relation to group member claims.
This is a singular situation and, hopefully, one which will not be repeated in the future. I accept that hitherto there may have been some confusion (and those acting for RBS were entitled to act conservatively), but in the light of these reasons, this confusion should no longer exist.
It should go without saying that an applicant is only entitled to deal with any other person’s rights to the extent that the applicant is representing those rights. Indeed, it is simply wrong in principle for an applicant to presume to deal with the rights of third parties except to the extent that they are empowered by statute to deal with those rights. It follows it is inconsistent with the nature of the role of a representative party under Part IVA of the Act, as part of seeking to resolve a representative proceeding, to seek to settle all individual claims of group members howsoever arising against a respondent (in contradistinction to the claim the subject of the relevant proceeding).
There may, of course, be cases, perhaps in representative proceedings involving a relatively small number of group members who are represented, where the Court can be satisfied that individualised instructions have been given by group members to give releases which travel beyond the claims the subject of the proceeding. Questions of authority of the representative do not then arise, but the present proceeding (and the vast bulk of representative proceedings) does not involve such a situation.
Notwithstanding my very considerable reluctance, I am grudgingly persuaded to give approval in these unusual circumstances to the inclusion of the provision relating to the Deed Poll. As far as I am aware, this is the first case in which consideration of this issue has arisen directly, and I have no doubt said enough to ensure that it will not be taken as endorsing: (a) any argument that the Court lacks adequate power to provide certainty to respondents using the machinery in Part IVA of the Act; or, (b) that the contrary notion, rejected by this judgment, constitutes a reasonable and open construction of Part IVA going forward. At the risk of repetition, as a general proposition, there is no proper basis for individual releases being sought when the Act allows for controversies to be quelled, and to require individual group member releases is an inappropriate imposition on group members and is conducive to wasted costs. Moreover, I stress again that representative applicants should understand that their role is restricted to the claim the subject of the proceeding and nothing else.
G DEDUCTIONS FROM THE SETTLEMENT SUM
There are two species of deductions from the settlement sum that are sought to be approved, which I will consider in turn.
G.1 Legal Costs
The first and most significant is an amount of legal costs that have been incurred by the applicants. As part of the orders made on 14 February 2018 was the referral out, pursuant to s 54A of the Act, of the question of the fairness and reasonableness of the applicants’ claimed costs, for inquiry and report by Mr Roland Matters (Referee).
The Referee provided a report dated 17 March 2018 in which, after conducting a thorough review, he reached the following conclusions:
(a)the claimed costs of the proceeding in an amount of approximately $4.5 million are fair and reasonable;
(b)the proposed administration costs in the amount of $500,000 exceed a fair and reasonable amount, and instead a fair and reasonable amount is $250,000; and
(c)it was not possible to express a view about whether claims for compensation made by the applicants were reasonable (a matter to which I will return below).
It is clear from the Referee’s report (which I propose to adopt in full pursuant to FCR 28.67(1)), that the Referee had considerable assistance from the applicants’ solicitors, who engaged with the Referee in a manner which the Court hopes will be characteristic of the conduct of such references in the future. In my view, the reference process is a very considerable improvement on the self-serving process of applicants engaging cost consultants to provide expert opinion evidence as to the reasonableness of costs (a practice which, in my view, is less than satisfactory and should be consigned to the dustbin of procedural history).
Mr Campbell informed me that there were additional costs which were not the subject of the Referee’s report. This is evident from the terms of the report. These costs had been incurred in relation to the approval application and include legal professional fees and the fees of a forensic accountant. These are described in an affidavit of Ms Antzoulatos sworn 20 March 2018. The costs claimed in that affidavit appear to me, in all the circumstances, to be reasonable, and I am satisfied that I ought to approve the settlement distribution which is premised on them being paid.
G.2 Applicants’ Reimbursement
The applicants seek a reimbursement of $80,000 comprised of what is described as a “lead applicant fee” of $40,000 payable to each lead applicant. Despite what might have been initially thought by the applicants, these amounts are proposed to be deducted from the amount to be distributed to group members.
In her evidence, Ms Antzoulatos deposed to the fact that, at the time of the commencement of this proceeding, neither lead applicant was advised to keep time records of their time spent on the matter. I stress that this was at a time when Ms Antzoulatos was not involved in the proceeding. Ms Antzoulatos is correct that (subject to a matter mentioned below) it should be made clear to any applicant, at the commencement of any representative proceeding, that they are to keep time records which record, with some degree of precision, the amount that they have spent on the proceeding in their representative capacity and the amount that they have spent in prosecuting their own individual claim or in having wholly extraneous dealings with other group members or their solicitors.
What the evidence discloses, however, is that what was contemplated here was somewhat different. The applicants (and presumably those advising them) viewed the proposed fees not as a payment to compensate the applicants for their time, “but [rather] as an incentive to act as applicants in the proceedings”. This involves the application of different principles than a time based payment for representing group members.
In Farey v National Australia Bank Ltd [2016] FCA 340 at [43], Beach J observed as follows:
Professor Vince Morabito has undertaken empirical analysis of the justification for and the quantum of reimbursement payments to applicants (V Morabito, “An Empirical and Comparative Study of Reimbursement Payments to Australia’s Class Representatives and Active Class Members” (2014) 33 CJQ 175). On any view, the amount to be deducted for the applicants for the time expended is very modest when one considers the ranges reported by Professor Morabito. It is also to be noted that I am not approving any deductions for time spent on their individual claims. Moreover, the deductions are not some proxy for any incentivisation award; I am using “incentivisation” to refer here to reward rather than restitution in the sense of reasonable recompense for the time and effort expended. The deductions are just and there is adequate power to approve them as part of approving the settlement (ss 33V(2) and 33ZF(1)). But to say that the present proposed payments are not incentivisation payments should not be taken to indicate that such reward style payments cannot ever be authorised or justified. There is adequate statutory power (ss 33V(2) and 33ZF(1)) to approve incentive reward payments and their deduction from the settlement proceeds. But if such incentive mechanisms are to be invoked, in the usual case they should be approved at least in a preliminary or contingent way (subject to further order) at or close to the inception of the proceedings and then unconditionally approved (if appropriate) in the subsequent formal s 33V process. Of course, where there is an external litigation funder who has taken on the costs risk, including any exposure to an adverse costs order, it may be difficult to see how any such incentivisation award could ever be justified in addition to reasonably remunerating the applicant for the time spent in pursuing the proceeding for the benefit of the group members and any out of pocket expenses. I do not need to discuss the position where the applicant is a funder. Interestingly, and finally on this point, I note that Professor Morabito has reported on statistics that in one sense might seem to be counterintuitive. The Australian mean and median awards per class representative based upon a “restitution-only” approach have been substantially greater than the US awards that have been based upon the “reward/incentive” philosophy.
(Bolded emphasis added, italics in original)
As can be seen, payments to applicants fall into two different categories. First, there is the standard payment that has been made in a very large number of cases, to compensate an applicant for the time the applicant has spent representing interests other than his or her own. Secondly, there is the notion, referred to by Beach J, of ‘incentivisation’ payments in circumstances where there is no external litigation funder.
The reason why his Honour makes reference to an external litigation funder is that it is invariably the case that when a funder is involved, an indemnity is given by that funder to an applicant against adverse costs. Here there was no litigation funder, and the applicants were exposed, in a difficult and highly expensive proceeding, to the prospect of financial damnation in the event that the proceeding failed. I agree with Beach J’s observations, and if such incentivisation awards are to be made in the future, they ought, like common fund orders, be made at the earliest possible time rather than being raised at the heel of the hunt at the approval application stage.
Given the great risk that was taken by the applicants to proceed (in circumstances where I am informed by Mr Campbell that there were no other persons available to take the role), I am persuaded that the amounts claimed are appropriate, notwithstanding the failure for this amount to have been the subject of an earlier application. In this regard, an important discretionary factor I take into account is that Beach J’s comments were made some years after the commencement of this proceeding and the agreement of the applicants to undertake their role without the protection of indemnity against adverse costs. I repeat that if incentivisation awards are to be made in the future, they ought to be sought as soon as possible after commencement.
H CONCLUSION
It follows from the above that I am disposed to make the orders sought by the applicants in their amended interlocutory application, except in three respects.
H.1 Bespoke Notice to Group Members seeking Late Opt-out
The first exception is that, as discussed in Section E above, I am not disposed to grant leave for Mr Hancock and Mrs Mavromatis to opt-out of the proceeding at this late stage. Instead, I will order pursuant to s 33X(5) of the Act that a bespoke communication (which was the subject of discussion and my approval during the hearing) be given to Mr Hancock and Mrs Mavromatis. This communication will provide written notice to those group members, in stark terms, of the choice they are presently faced with, namely, either participating in the approved settlement or becoming non-participating group members and receiving no distribution from the Settlement Scheme.
H.2 Non-publication Orders
The second exception is that I am not disposed to make the raft of non-publication orders initially proposed by the applicants.
It must be remembered that Part VAA of the Act provides that the starting point for the consideration of non-publication orders is the safeguarding of the public interest in open justice. In that regard, s 37AE provides the mandatory consideration the Court must take into account in determining whether or not to exercise its power under Part VAA:
In deciding whether to make a suppression order or non‑publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.
(Emphasis added)
Non-publication orders should not be sought willy-nilly. The grounds for making an order require the Court to be satisfied that the making of the order, relevantly, is necessary to prevent the mischief identified in ss 37AG(1)(a)-(b) of the Act. Relevantly for present circumstances, the Court must be satisfied that the order is “necessary to prevent prejudice to the proper administration of justice” (see s 37AG(1)(a)). As the High Court remarked in Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 at 664 [30], the word ‘necessary’ is a “strong word”.
As is very commonly the case, large parts of the affidavit material in respect of which non-publication orders are sought, are not, in truth, confidential. I will calibrate a non-publication order in respect of those aspects of the affidavit material which I consider should appropriately be the subject of a non-publication order, operating in such a way as to reflect the statutory purpose of Part VAA.
I ORDERS
I propose to order, pursuant to s 33V of the Act, that the proposed settlement of the representative proceeding and the claims of the applicants and each group member be approved on the terms set out in the Settlement Deed and the Settlement Scheme, subject to the application of the applicants to amend the Settlement Scheme to limit the amount proposed to be deducted in respect of administration costs to $250,000. It follows that the costs and reimbursement identified in Section G above can be deducted from the amount to be distributed to the applicants and group members. I should further note that a condition of the approval, with which I have no difficulty, is that any costs orders made during the course of the proceeding be vacated and that there be no orders as to costs.
I will also make an order under s 33ZB of the Act which specifies that the persons affected and bound by the operative orders are the applicants, the respondents and the group members who have not opted-out of the proceeding.
The third difference to the proposed orders (as foreshadowed at [75] above) is that I do not propose to risk rendering the Court functus officio by making an order dismissing the entire proceeding at this time. Rather, I will direct that in due course Shine, as administrator of the Settlement Scheme, provide a report to the Court upon distribution of the settlement sum having been completed (which will also confirm the amount charged in relation to the administration of the Settlement Scheme). Instead of dismissing the proceeding simpliciter, I will now make an order dismissing the second amended originating application and the third amended statement of claim.
Finally, I reserve liberty for Shine and participating group members to approach the Court for directions concerning the Settlement Scheme.
I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee. Associate:
Dated: 4 April 2018
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