FEDERAL COURT OF AUSTRALIA
Ghee v BT Funds Management Limited [2023] FCA 1553
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- Case
- [2023] FCA 1553
- Decision Date
CaseChat Overview and Summary
The court assessed the settlement's fairness and reasonableness by considering the nature of the claim, the risks involved, and the proposed funding terms. It was noted that Therium, the litigation funder, required a higher commission return if it could not recover its after-the-event insurance costs. The court found that the settlement was fair and reasonable, taking into account the complexities and risks of the claim, as well as the terms negotiated between Therium and Slater & Gordon, the law firm representing the group members. The court also considered the proposed litigation funding charges and found them to be reasonable and proportionate, given the need for after-the-event insurance and the overall context of the litigation.
The court approved the proposed settlement and the settlement distribution scheme, authorising the representative plaintiff to act on behalf of the group members. It also appointed Slater & Gordon as the Settlement Administrator and approved various distributions from the settlement fund, including the funder's commission, reimbursements, and administrative costs. The court further directed that the settlement administrator could apply for additional administrative costs and ordered that the proceeding be dismissed with no order as to costs once the settlement distribution was complete.
Orders
Orders of the court
Confidentiality
1. Until further order, pursuant to ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) (the Act), on the ground that the order is necessary to prevent prejudice to the proper administration of justice, the material listed in Annexure A is confidential and not to be published or made available to any person other than:
(a) the Court;
(b) the Applicant and her legal representatives;
(c) Therium Litigation Finance Atlas AFP IC (Therium) and its legal representatives; and
(d) in relation only to the independent costs referee report of Kerrie Rosati dated 7 June 2023, a group member subject to the group member first signing an appropriate confidentiality undertaking.
2. Pursuant to ss 37AF and 37AG(1)(a) of the Act, on the ground that the order is necessary to prevent prejudice to the proper administration of justice, until 25 January 2024, or if an appeal or application for leave to appeal has been filed in respect of these orders by that date then until further order, the material listed in Annexure B is confidential and not to be published or made available to any person other than:
(a) the Court;
(b) the Applicant and her legal representatives;
(c) Therium and its legal representatives; and
(d) in relation only to the independent costs referee report of Kerrie Rosati dated 7 June 2023, a group member subject to the group member first signing an appropriate confidentiality undertaking.
Approval of Settlement and Settlement Distribution Scheme
3. Pursuant to s 33V(1) of the Act, settlement of the proceeding be approved on the terms set out in the Heads of Agreement executed by the Applicant, the Respondents, Therium, Slater & Gordon Limited and Westpac Banking Corporation dated 14 October 2022 (Heads of Agreement), a copy of which is exhibited as Exhibit NDR-46 to the affidavit of Nathan Daniel Rapoport affirmed 2 December 2022.
4. Pursuant to s 33ZF of the Act, the Applicant is authorised nunc pro tunc for and on behalf of the group members as defined in paragraph 2 of the Further Amended Statement of Claim dated 2 December 2021, and for the avoidance of doubt, excluding any person who opted out in accordance with order 5 of the orders dated 29 September 2021 (Group Members), to enter into and give effect to the Heads of Agreement and the transactions contemplated for and on behalf of Group Members.
5. Pursuant to s 33ZB(a) of the Act, the persons affected and bound by these orders are the parties to the Heads of Agreement and the Group Members.
6. Pursuant to s 33V(2) of the Act, the Settlement Distribution Scheme (SDS), exhibited at pages 15 – 34 of Bundle Exhibit NDR-51 to the affidavit of Nathan Daniel Rapoport affirmed 9 November 2023, is approved.
7. Pursuant to ss 33V(2) and 33ZF of the Act, Slater and Gordon Limited is appointed as the Settlement Administrator (as defined in the SDS).
8. Pursuant to ss 33V(2) and 33ZF of the Act, for the purposes of the SDS the “Registration Deadline” is fixed as the date two weeks after the date of these orders.
9. The Settlement Administrator has liberty to apply in relation to any matter arising under the SDS.
10. Slater and Gordon release to Therium the amount of $20,000 which was paid into the trust account of Slater and Gordon as security for costs pursuant to order 1(c) of the orders of the Honourable Justice Lee made 21 February 2020.
Group Member Data
11. If the Settlement Administrator considers that the entitlement of a Registrant to receive a distribution through the SDS needs to be verified, then:
(a) the Settlement Administrator may request BT Funds Management Limited (BTFM) carry out automated and manual data matching checks to ascertain whether any particular Registrant should be accepted as a Registered Member Account Holder, a Registered Spouse, a Registered Death Benefit Recipient, a Registered Beneficiary or a Registered Legal Personal Representative (Registered LPR) (and if so in relation to which Member Account(s), and in the case of a Registered Death Benefit Recipient which Member Account(s) and which payment record), or alternatively found to be an Ineligible Registrant;
(b) the Settlement Administrator is to provide to BTFM such information provided by the Registrant as is necessary to enable BTFM to carry out the necessary checks;
(c) if such a request is made, BTFM is to comply with the request reasonably and as quickly as reasonably practicable after receiving the request;
(d) on completion of the checks, BTFM is promptly to notify the Settlement Administrator whether the particular Registrant should be accepted as a Registered Member Account Holder, a Registered Spouse, a Registered Death Benefit Recipient, a Registered Beneficiary or a Registered LPR (and if so in relation to which Member Account(s), and in the case of a Registered Death Benefit Recipient which Member Account(s) and which payment record), or alternatively found to be an Ineligible Registrant, and the basis for forming that view; and
(e) in making its determination for the purpose of paragraph 3.2 of the SDS, the Settlement Administrator may act on the basis of the determination by BTFM.
12. Any personal information provided to BTFM pursuant to Order 11 or to the Settlement Administrator in response to a request made pursuant to Order 11 is to be deleted from BTFM’s or the Settlement Administrator’s system (as applicable) and otherwise destroyed within 14 days of the conclusion of the Settlement Distribution Scheme.
13. Where, after being notified by BTFM of the matters in Order 11(d), the Settlement Administrator acting reasonably and in good faith considers it necessary for the purpose of making a determination in respect of a particular Registration under paragraph 3.2 of the SDS:
(a) the Settlement Administrator may request that BTFM securely provide access to the records relevant to the assessment of the Registration within the BT Datasets (as defined in the SDS); and
(b) BTFM must provide the Settlement Administrator with secure access to those records within 5 business days of the request through the provision of an appropriately secured and air-gapped laptop computer containing those records and provided on the basis that it be stored securely by the Settlement Administrator and returned to BTFM immediately after the Settlement Administrator has made its determination in relation to the entitlement of the relevant Registrants.
Deductions from Settlement Fund
14. Pursuant to s 33V(2) of the Act, the following distributions from the Settlement Fund (as defined in the SDS) are approved for the purposes of the SDS (inclusive of GST if applicable):
(a) the “Applicant’s Unpaid Legal Costs”, being the Applicant’s professional fees and disbursements on a solicitor and own client basis, including incurred in connection with the proceeding on her own behalf and on behalf of all Group Members in the proceeding, not already paid by Therium, in the amount of $4,700,555;
(b) the “Funder’s Reimbursement”, in the amount of:
(i) $2,716,489, being the sum paid by Therium to Slater & Gordon for legal fees and disbursements; and
(ii) $1,180,000 being the sum paid by Therium for procuring ‘After the Event’ insurance and associated deeds of indemnity;
(c) the “Funder’s Commission”, in the amount of $5,708,500;
(d) the “Applicant’s Reimbursement Payment”, being the Applicant’s reasonable claim for compensation for the time and expenditure reasonably incurred by the Applicant in the interests of prosecuting the proceeding on her own behalf and on behalf of all Group Members, in the amount of $15,000; and
(e) the “Settlement Administration Costs”, as defined in the SDS, being professional fees, administrative costs and disbursements incurred in connection with administering the SDS, in the amount of up to $215,000.00;
(f) the “Mercer Costs”, as defined in the SDS up to a maximum of $30,000.00.
15. The Settlement Administrator is granted liberty to apply for additional amounts of Settlement Administration Costs.
16. Pursuant to s 33V(2) of the Act, for the purpose of clause 9.1 of the SDS, the Consumer Action Law Centre is approved.
Final orders
17. The Settlement Administrator shall within 20 Business Days of the conclusion of distribution of the Settlement Fund, as defined in the SDS, apply to the Court for orders dismissing the Proceeding with no order as to costs and all costs orders vacated.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ANNEXURE A
EXHIBITS TO AFFIDAVIT OF NATHAN DANIEL RAPOPORT DATED 28 SEPTEMBER 2023
#
EXHIBIT
CONFIDENTIAL PART (INCLUSIVE)
1.
NDR-50 – Counsel Opinion
All
INDEPENDENT COSTS REFEREE REPORT OF KERRIE ROSATI DATED 7 JUNE 2023
#
PARAGRAPH
CONFIDENTIAL PART (INCLUSIVE)
2.
33
4th sentence
3.
68
$ value of estimate of total legal costs and estimated uplift fee
4.
140
All words after “as expert” in 1st sentence
5.
142(k)
Words between “Dr Hathaway” and “in relation to”
6.
169
Last row of table
7.
171
Whole paragraph except first sentence
8.
172
3rd row of table
9.
174
1st, 4th and 5th sentences
10.
213
2nd sentence
11.
Annexure KAR-2: 63-66
Whole paragraphs
12.
Annexure KAR-2: 70
Whole paragraph
13.
Annexure KAR-2: 71
2nd sentence
14.
Annexure KAR-2: 89-91
Whole paragraphs
AFFIDAVIT OF LOUISE ANNE HIRD SWORN 12 OCTOBER 2023
#
PARAGRAPH
CONFIDENTIAL PART (INCLUSIVE)
15.
33
Partial:
a. third line, fifth and last words; and
b. fourth line, first, seventh and eighth words.
16.
58
Partial: third line, sixth word to end of paragraph.
17.
70
Partial: fourth line, last word.
18.
98(c)
Partial: last six words.
ANNEXURES TO AFFIDAVIT OF LOUISE ANNE HIRD SWORN 12 OCTOBER 2023
#
PARAGRAPH
CONFIDENTIAL PART (INCLUSIVE)
19.
LAH-1 - Email from Nathan Rapoport to Louise Hird sent 29 May 2019 at 2:27pm.
All
20.
LAH-2 - Slater & Gordon Proceeding Budget (Claim Budget)
All
21.
LAH-3 - Email from Nathan Rapoport to Louise Hird sent 6 June 2019
Partial: from (and including) the words ‘From: Louise Hird [mailto:louise.hird@therium.com]’ on page 1, to the end of the email.
22.
LAH-4 - Case summary provided to the Therium Investment Committee around July 2019
All
23.
LAH-5 - Minutes of the Investment Committee meeting on 30 July 2019
All
24.
LAH-6 - Bundle of documents being copies of invoices and certificates of currency related to ‘After the Event’ adverse cost risk insurance held by Therium Atlas AFP and deeds of indemnity
Page 64
In the box titled ‘Payment Method’, the fourth to seventh lines inclusive
25.
Page 67
Under ‘International UIG Bank details are as follows’, all four lines inclusive
26.
Page 69
In the box titled ‘Payment Method’, the fourth to seventh lines inclusive
27.
Page 70
In the box titled ‘Payment Method’, the fourth to seventh lines inclusive
28.
Page 71
In the box titled ‘Payment Method’, the fourth to seventh lines inclusive
29.
Page 72
In the box titled ‘Payment Method’, the fourth to seventh lines inclusive
30.
LAH-7 - Email from Mathew Chuk to Simon Dluzniak and Louise Hird sent 18 March 2022 at 1:10pm and attachments
All
31.
LAH-8 - Email from L Hird to N Rapoport, C Pirie, R Hayne and M Chuk sent 11 April 2022 at 11:49am
All
32.
LAH-9 - Email from Mathew Chuk to Louise Hird sent 23 May 2022 at 1:38pm
All
FUNDER’S OUTLINE OF SUBMISSIONS DATED 16 OCTOBER 2023
#
PARAGRAPH
CONFIDENTIAL PART (INCLUSIVE)
33.
25
Partial: fourth line, last word.
34.
47
Partial:
a. second line, fifth and sixth words.
ANNEXURE B
INDEPENDENT COSTS REFEREE REPORT OF KERRIE ROSATI DATED 7 JUNE 2023
#
PARAGRAPH
CONFIDENTIAL PART (INCLUSIVE)
1.
66
Whole paragraph
2.
102(b)
All words after the first occurrence of “to”
3.
102(c)
All words after the first occurrence of “to”
4.
102(d)
All words after the first occurrence of “to”
5.
102(e)
All words after the first occurrence of “to”
6.
142(i)
Whole sub-paragraph
7.
142(k)
Whole sub-paragraph
8.
Annexure KAR-2: 106
1st sentence
AFFIDAVIT OF LOUISE ANNE HIRD SWORN 12 OCTOBER 2023
#
PARAGRAPH
CONFIDENTIAL PART (INCLUSIVE)
9.
37
Partial: second line tenth word to end of paragraph.
10.
44
Partial: seventh line sixth to tenth words.
11.
58
Partial: first line tenth word.
12.
64
Partial:
a. second line, last five words;
b. third line, first four words;
c. fourth line, all but first two words;
d. fifth line, first four words;
e. sixth line, all but first word; and
f. seventh line, sixth word to end of paragraph.
13.
66
Partial:
a. (b) – last two words;
b. (c) – last four words;
c. (d) – last two words.
14.
71
Partial:
a. first line, ninth and tenth words;
b. third line, first word; and
c. fourth line, second word.
15.
75
Partial: fourth line, first and tenth words.
16.
97
Partial: second line, sixth word.
17.
98
Partial:
a. (a) - seventh word; and
b. (b) - eleventh to eighteenth words.
18.
100
Partial, third line, first word.
19.
102
Partial, third line, last word.
20.
105
Partial, third line, last word.
21.
108
Partial, third line, last word.
22.
111
Partial, second line, third word and ninth word.
23.
119
Partial:
a. whole of first line; and
b. second line, first to eleventh words.
24.
123
Partial:
a. fifth line last ten words; and
b. sixth line, first to thirteenth words.
ANNEXURES TO AFFIDAVIT OF LOUISE ANNE HIRD SWORN 12 OCTOBER 2023
#
ANNEXURE
CONFIDENTIAL PART (INCLUSIVE)
25.
LAH-6 - Bundle of documents being copies of invoices and certificates of currency related to ‘After the Event’ adverse cost risk insurance held by Therium Atlas AFP and deeds of indemnity
Page 64
Partial:
i. Under ‘Description’, the figure appearing in the first line in the box immediately thereunder
ii. Under ‘Amount’, the figure appearing in each of the three boxes
26.
Page 65
Partial:
i. All figures other than 0.00 appearing in the box below ‘Your Premium’
ii. The ‘TOTAL’ figure in the box below
iii. The figure in the ‘AMOUNT DUE’ box
27.
Page 67
Partial:
i. Each of the monetary figures appearing in the body of the page
28.
Page 68
Partial:
i. The figure appearing in the ‘Limit of Indemnity’ section;
29.
Page 69
Partial:
i. Under ‘Amount’, the figure appearing in each of the three boxes
30.
Page 70
Partial:
i. Under ‘Amount’, the figure appearing in each of the three boxes
31.
Page 71
Partial:
i. Under ‘Amount’, all figures appearing in the three boxes
32.
Page 72
Partial:
i. Under ‘Amount’, the figure appearing in each of the three boxes
33.
Page 73
Partial:
i. All figures other than 0.00 appearing in the box below ‘Your Premium’
ii. The ‘TOTAL’ figure in the box below
iii. The figure in the ‘AMOUNT DUE’ box
34.
Page 75
Partial:
i. Each of the monetary figures appearing in the body of the page
FUNDER’S OUTLINE OF SUBMISSIONS DATED 16 OCTOBER 2023
#
PARAGRAPH
CONFIDENTIAL PART (INCLUSIVE)
35.
12
Partial: fourth line, second to seventh words.
36.
15
Partial:
a. second line, last seven words;
b. third line, first and second words;
c. whole of fourth line;
d. fifth line, first and second words;
e. sixth line, all but last word; and
f. seventh line, last nine words.
37.
22
Partial:
a. (b) – eighth word;
b. (c) – last four words;
c. (d) – last two words.
38.
26
Partial:
a. first line, ninth and tenth words;
b. third line, first word; and
c. fourth line, second word.
39.
45
Partial:
a. fourth line, first and second words.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Due to an oversight by Slater & Gordon, a separate webpage which the firm had previously set up for persons to register their interest in the proceeding (Old Registration Platform) remained active after the Website Text was uploaded onto the main Slater & Gordon webpage for the proceeding. In the period from 17 July 2023 to 21 August 2023, 412 individuals registered via the Old Registration Platform, potentially in the mistaken belief that they were registering for the proposed settlement. An email was then sent to individuals who had not already registered via the correct link for the settlement. As at 11 September 2023, 193 of the 412 individuals had registered via the correct link for the settlement. In my view, it is appropriate to treat any group member who registered their interest via the Old Registration Platform as having sufficiently registered. I so direct the Settlement Administrator. In this case:(a)class closure will not come into effect until after settlement approval, and it is necessary in order to calculate the entitlement of each eligible group member to a share of the settlement sum and to distribute the settlement monies to them. The requirement for group members to register is not sought to be imposed at an early stage of the proceeding: Winterford v Pfizer Australia Pty Ltd [2012] FCA 1199 (Bromberg J);(b)class closure will only occur following a comprehensive notice regime to group members including by direct email and mail, on a website, direct SMS and by a social media campaign; (c)the Concise Notice and Website Text informed group members in clear terms that if they wished to ensure their eligibility to receive an entitlement under the proposed settlement, if approved, they must register by 4:00 pm (AEST) on 21 August 2023; (d)group members were also informed in clear terms that if they “wish to object to the Proposed Settlement or any aspect of it” they must notify that objection by 4:00 pm (AEST) on 21 August 2023; and(e)no group member objected to the requirement to register. In the circumstances, the requirement for group members to register if they are to be eligible to share in the settlement monies, and to bind group members who do not register into the settlement such that they lose their rights to sue the respondents and Westpac but are not eligible to share in the settlement monies, does not stand in the way of settlement approval.The Group Member Data verification dispute The evidence shows that BTFM has transferred the accounts of all members who had active accounts in BT Super for Life and BT Super to the Mercer Super Trust. Under the SDS, for those group members for whom Mercer has the relevant details, it will facilitate the payment of any entitlement they have under the SDS (Eligible Mercer Account Holders). Thus, the registration of, and distribution of settlement monies to, those approximately 15,000 group members is likely to be relatively straightforward. However, for the balance of the group members (approximately 62,000 persons), as at 11 September 2023 only 14,740 registration forms had been submitted by group members (excluding duplicate registrations where all information submitted by the registrant was the same). Of these Mr Rapaport identified: (a)12,199 as being “high confidence matches” where it is highly likely that the person who submitted the registration is the person listed in the de-identified Group Member Data provided by BTFM;(b)1,401 as being "possible matches” where at least one of the first name, surname or date of birth do not perfectly match BTFM’s records, where further checks may be required to verify that the registrant is entitled to participate in the settlement; and(c)1,157 as being “non-matches”, where further checks of any unique single data points may be required.