Francis (Trustee) v Oculus Accounting Pty Ltd (No 2)

The case of Francis (Trustee) v Oculus Accounting Pty Ltd (No 2) involved the applicants, who were clients of Oculus, seeking to discontinue a representative proceeding. The applicants claimed that Oculus provided them with investment advice regarding their investment in Guvera Limited shares, which they alleged was flawed, leading to significant financial loss. The applicants sought to discontinue the proceedings, which were on foot since January 2020, in light of having reached a settlement with Oculus. However, the proceedings included other group members with similar claims, and the applicants' proposed discontinuance raised several legal issues.

The court had to determine whether the discontinuance of the representative proceeding should be approved under section 33V of the relevant legislation. This required consideration of whether discontinuance would be fair and reasonable and in the interests of all group members, or if it was sufficient to show that discontinuance would not be unfair, unreasonable, or adverse to their interests. Additionally, the court had to consider whether the applicants were entitled to an order under section 33N of the legislation, which pertains to the settlement of a representative party's claim. The applicants also needed to address the implications of their settlement on the distribution of any settlement sum, as there was no clear mechanism or term in the settlement deed governing this distribution.

The court found that the applicants had not demonstrated that discontinuance would be fair and reasonable or in the interests of all group members. There was significant uncertainty regarding whether the applicants would receive any part of the settlement sum, as the settlement deed did not clearly outline the distribution of the settlement monies. Furthermore, the applicants did not provide any evidence to clarify this issue, and it was not established that they were legally bound to follow any proposed distribution schedule. Consequently, the court concluded that the application for discontinuance should be dismissed. However, the court noted that the issues raised were not insurmountable and could potentially be addressed in a future application. The court also reserved the matter of costs to allow the parties to make submissions on an appropriate order.