FEDERAL COURT OF AUSTRALIA
Evans v Davantage Group Pty Ltd (No 4) [2021] FCA 1634
File number(s): VID 982 of 2018 Judgment of: BEACH J Date of judgment: 22 December 2021 Catchwords: REPRESENTATIVE PROCEEDINGS – undistributed remainder of settlement sum – competing claims to the residual – application of s 33V(2) of the Federal Court of Australia Act 1976 (Cth) – relevance of equitable principles – relevance and scope of cy-près doctrine – power to impose a cy-près analogue remedy – potential windfall gain to group members – entitlement of funder to a top up commission – claim by respondent to the residual – whether modification to settlement deed or settlement distribution scheme required – relevance of US and Canadian legal frameworks concerning the distribution of residuals in class action settlements – orders made Legislation: Federal Court of Australia Act 1976 (Cth) ss 33V, 33ZA, 33ZF Cases cited: BMW Australia Ltd v Brewster (2019) 269 CLR 574
Evans v Davantage Group Pty Ltd [2019] FCA 884
Evans v Davantage Group Pty Ltd (No.2) [2020] FCA 473
Evans v Davantage Group Pty Ltd (No.3) [2021] FCA 70
Kuterba v Sirtex Medical Ltd (No 3) [2019] FCA 1374
Simpson v Thorn Australia Pty Ltd t/as Radio Rentals (No 5) (2019) 141 ACSR 424
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 119 Date of hearing: 29 November 2021 Counsel for the Applicant: Mr BF Quinn QC with Mr D Fahey Solicitor for the Applicant: Baker & McKenzie Counsel for the Respondent: Dr CO Parkinson SC Solicitor for the Respondent: Herbert Smith Freehills Counsel for the Intervener: Mr LW Armstrong QC with Mr M Guo Solicitor for the Intervener: Aptum Legal ORDERS
VID 982 of 2018 BETWEEN: BRETT WILLIAM EVANS
Applicant
AND: DAVANTAGE GROUP PTY LTD (ACN 161 967 166)
Respondent
ORDER MADE BY:
BEACH J
DATE OF ORDER:
22 DECEMBER 2021
THE COURT ORDERS THAT:
1.After the payment of the applicant’s legal costs and the legal costs of Vannin Operations Limited (the funder) referred to in order 2, any remaining surplus of the settlement fund be distributed:
(a)as to 56.5%, to the Consumer Action Law Centre; and
(b)as to 43.5%, to the funder.
2.To the extent not already provided in or deducted under prior orders, the costs of the applicant and the funder of and incidental to the present application be paid out of the settlement fund currently administered by FTI Consulting (Australia) Pty Ltd.
3.There be no order as to costs in favour of or against the respondent.
4.There be a stay on the operation of orders 1 and 2 for a period of 28 days.
5.There be liberty to apply concerning the recipient referred to in order 1(a) and concerning any further orders consequential upon the settlement of the proceeding.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BEACH J:
In a context that resonates with the…
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- Case
- [2021] FCA 1634
- Decision Date
CaseChat Overview and Summary
The court considered whether the funder, Vannin Operations Limited, was entitled to a top-up commission from the residual sum. The court found that the residual sum arose due to Vannin taking a reduced commission, and thus, it was just to allocate 43.5% of the sum to Vannin. The court also examined the relevance of US and Canadian legal frameworks concerning the distribution of residuals in class action settlements. The court concluded that equitable principles and the cy-près doctrine were relevant and that a cy-près analogue remedy could be applied.
The court ordered that the remaining surplus of the settlement fund be distributed 56.5% to the Consumer Action Law Centre and 43.5% to the funder, with a 28-day stay on the operation of the orders to allow for any challenges. The court also ordered that the costs of the applicant and the funder be paid from the settlement fund, with no order as to costs in favour of or against the respondent. The court granted liberty to apply concerning the recipient and any further orders consequential upon the settlement of the proceeding.
Orders
Orders of the court
1. After the payment of the applicant’s legal costs and the legal costs of Vannin Operations Limited (the funder) referred to in order 2, any remaining surplus of the settlement fund be distributed:
(a) as to 56.5%, to the Consumer Action Law Centre; and
(b) as to 43.5%, to the funder.
2. To the extent not already provided in or deducted under prior orders, the costs of the applicant and the funder of and incidental to the present application be paid out of the settlement fund currently administered by FTI Consulting (Australia) Pty Ltd.
3. There be no order as to costs in favour of or against the respondent.
4. There be a stay on the operation of orders 1 and 2 for a period of 28 days.
5. There be liberty to apply concerning the recipient referred to in order 1(a) and concerning any further orders consequential upon the settlement of the proceeding.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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