Gibson v Malaysian Airline System Berhad (Settlement Approval)

[2019] FCA 1007

FEDERAL COURT OF AUSTRALIA

Gibson v Malaysian Airline System Berhad (Settlement Approval) [2019] FCA 1007

File number:

NSD 1067 of 2016

Judge:

PERRAM J

Date of judgment:

26 June 2019

Catchwords:

PRACTICE AND PROCEDURE – representative proceeding – application for settlement under s 33V of Federal Court of Australia Act 1976 (Cth) – where all class members represented

Legislation:

Federal Court of Australia Act 1976 (Cth) ss 33V, 33X

Cases cited:

Australian Securities and Investments Commission v Richards [2013] FCAFC 89

Parkes Shire Council v South West Helicopters Pty Limited [2019] HCA 14

Date of hearing:

26 June 2019

Registry:

New South Wales

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Commercial Contracts, Banking, Finance and Insurance

Category:

Catchwords

Number of paragraphs:

4

Counsel for the Applicant:

Mr J Rowe

Solicitor for the Applicant:

LHD Lawyers

Counsel for the Respondent:

Ms C Gleeson

Solicitor for the Respondent:

Clyde & Co

ORDERS

NSD 1067 of 2016

BETWEEN:

CASSANDRA JANE GIBSON

Applicant

AND:

MALAYSIAN AIRLINE SYSTEM BERHAD (ARBN 996 903)

Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	26 JUNE 2019

THE COURT ORDERS THAT:

1.Pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (FCAA), the Court approves the settlement and dismissal of these proceedings (Proceedings) on the terms set out in the Release between the parties dated 5 June 2019 (Release) appearing at Confidential Annexure MH12 to the affidavit of Michael Hyland affirmed on 13 June 2019.

2.Pursuant to ss 37AF and 37AG(1)(a) of the FCAA, until further order of the Court, in order to prevent prejudice to the proper administration of justice, the affidavit of Michael Hyland affirmed on 13 June 2019, together with its annexures, be treated as confidential, not be published or made available and not be disclosed to any person or entity except as permitted by the Release or by order of the Court.

3.The requirement in s 33X(4) of the FCAA that notice of the settlement be given to group members is taken to have been satisfied.

4.All previous costs orders in the proceedings be vacated.

5.There be no order as to the costs of the proceedings.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PERRAM J:

1. This morning I made orders approving the settlement and dismissal of this representative proceeding under s 33V of the Federal Court of Australia Act 1976 (Cth). Ordinarily, a grant of such leave requires a close consideration of the terms and context of the settlement. This is ordinarily necessary because the settlement affects the position of group members who are not before the Court. The interests of those parties may not necessarily coincide with the interests of an applicant or applicants in the proceeding. The applicants and respondents may, in a sense, be friends of the bargain. Consequently, in approving a settlement under s 33V it is accepted that the Court performs a protective function in relation to those parties who are not before the Court: Australian Securities and Investments Commission v Richards [2013] FCAFC 89 at [7]-[8] per Jacobson, Middleton and Gordon JJ.

2. This case is different, however.  The group has always been defined in a limited way and following the opt-out notices there were, so I was told, only at most 12 group members.  Each of those group members has now settled with the respondent on a group basis and is party to the deed of settlement.  Each is also represented by the same lawyers who represent Ms Gibson, the lead applicant.  In that circumstance, there is no role for the Court’s protective function.  In deciding whether leave should be granted in such a case, it is not necessary for the Court to assess the reasonableness of the settlement (leaving aside the position of infants and so on).

3. In any event, if it had been necessary I would have been satisfied that the settlement was a reasonable one.  The terms of the settlement are confidential.  Without setting out the detail, the respondent has paid the group members a sum which, whilst not especially large, is not small or trivial either.  It has done so in circumstances where the High Court’s recent decision in Parkes Shire Council v South West Helicopters Pty Limited [2019] HCA 14 meant that the largest claim made by each group member (that for nervous shock) was no longer maintainable. The costs charged by the group members’ lawyers are reasonable in my view. There is an issue between some of the group members as to how those costs are to be apportioned. However, that does not in my view impact on the reasonableness of the settlement in this case.

4. At the same time that I made the orders under s 33V, I also made orders suppressing the evidence relating to the reasonableness of the settlement (much of which was privileged). I also dispensed with the need to notify the group members of the settlement under s 33X(4).

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate: 

Dated:       26 June 2019