Guglielmin v Trescowthick (No 5)

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FEDERAL COURT OF AUSTRALIA

Guglielmin v Trescowthick (No 5) [2006] FCA 1385

ELEANOR GUGLIELMIN v ADAM JOHN TRESCOWTHICK, JOHN MAURICE PATTEN, ROSS GRAHAM OAKLEY, ROBERT DAVID MATTINGLY, ROGER ANDREW CURTIS AND MARK CHARLES TRESCOWTHICK

SAD 153 OF 2002

MANSFIELD J
12 OCTOBER 2006
ADELAIDE


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 153 OF 2002

BETWEEN:

ELEANOR GUGLIELMIN
Applicant

AND:

ADAM JOHN TRESCOWTHICK
First Respondent

JOHN MAURICE PATTEN
Second Respondent

ROSS GRAHAM OAKLEY
Third Respondent

ROBERT DAVID MATTINGLY
Fourth Respondent

ROGER ANDREW CURTIS
Fifth Respondent

MARK CHARLES TRESCOWTHICK
Sixth Respondent

JUDGE:

MANSFIELD  J

DATE OF ORDER:

12 OCTOBER 2006

WHERE MADE:

ADELAIDE

THE COURT NOTES THAT:
The following undertakings have been given by senior counsel for the applicant on behalf of the applicant:

1.        That the applicant will file and serve a further affidavit of Peter John Humphries:

(a)confirming the explanation for the apparent discrepancy in the figure for file administration fees in the letter of T N Cogan and Co dated 19 September 2006 and which is Exhibit PJH-13 to his affidavit, and as to the proper foundation for the administration fee;

(b)listing the persons who have opted out of the proceeding, and separately the 26 persons correspondence to whom has been returned unclaimed and who, it is agreed by the parties, should be treated in that circumstance as having opted out of the proposed settlement;

2.That the solicitors for the applicant will write within 7 days of the entry of this order to Stella Stitz and to Graeme Manfred Hall at the addresses given in their respective notices of opting out dated 6 October 2006 and 4 October 2006, enclosing a copy of the orders made today and indicating that subject to any further application by them in accordance with Order 10 hereof they will each be regarded as Participating Group Members under the terms of the Deed of Settlement.

Upon those undertakings:
THE COURT ORDERS THAT:

3.Pursuant to Section 33V of the Federal Court of Australia Act 1976 (Cth) (‘the Act’) the Court approves the terms of the Deed of Settlement marked PJH15 exhibited to the affidavit of Peter John Humphries sworn 10 October 2006, but as amended by deleting from clause 10.3 the words ‘Upon approval of the settlement’ and by substituting in their place the words ‘Upon transfer of the Settlement Payment as provided for in clause 4.4 of this Deed’ (‘the Deed of Settlement’).

4.Upon the execution for and on behalf of the Applicant, the Deed of Settlement shall bind the Group Members.

5.        For the purpose of this order:

5.1The group members who will be affected by this order are those persons who fall within the description of group members as described in paragraph 2 of the Second Amended Application filed on 15 July 2005, other than the persons who are named in the further affidavit of Peter John Humphries to be filed in accordance with the undertaking given today and who have, or are to be treated as having,…

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Details
Case
[2006] FCA 1385
Decision Date

CaseChat Overview and Summary

In the case of Guglielmin v Trescowthick (No 5), the dispute arose from a proposed settlement of class action proceedings. The case was heard in the Federal Court of Australia. The plaintiffs, who were shareholders in Harris Scarfe Holdings Ltd, had initiated class action proceedings against the defendants, including the directors of the company, over alleged breaches of fiduciary duties and misleading or deceptive conduct. The legal issues the court had to address included whether to approve the terms of a Deed of Settlement that had been proposed to resolve the class action, and if so, how it should be executed and enforced.

The court carefully reviewed the Deed of Settlement, considering the implications of binding all group members except those who opted out, and ensuring that the settlement was fair and equitable. The court was also required to determine the distribution of the settlement fund, ensuring that it complied with the terms of the Deed of Settlement and the relevant provisions of the Federal Court of Australia Act 1976 (Cth). The court concluded that the Deed of Settlement should be approved, subject to specific amendments to ensure clarity and fairness in its execution. The court also addressed the distribution of the settlement fund, directing that it be used to reimburse certain fees and costs, and then divided among the participating group members.

Following its analysis, the court approved the terms of the Deed of Settlement as amended, and ordered its execution and binding effect on the group members. It further directed the distribution of the settlement fund according to the terms outlined in the Deed of Settlement, including specific reimbursements and costs. The court also vacated all previous costs orders and granted certain parties the right to apply for specific orders regarding their participation in the settlement. The court also imposed restrictions on the publication of certain documents related to the settlement to protect sensitive information. The final orders ensured that the settlement was carried out in a manner that was transparent, fair, and in compliance with the legal requirements.

Orders

Orders of the court

3. Pursuant to Section 33V of the Federal Court of Australia Act 1976 (Cth) (‘the Act’) the Court approves the terms of the Deed of Settlement marked PJH15 exhibited to the affidavit of Peter John Humphries sworn 10 October 2006, but as amended by deleting from clause 10.3 the words ‘Upon approval of the settlement’ and by substituting in their place the words ‘Upon transfer of the Settlement Payment as provided for in clause 4.4 of this Deed’ (‘the Deed of Settlement’).

4. Upon the execution for and on behalf of the Applicant, the Deed of Settlement shall bind the Group Members.

5. For the purpose of this order:

5.1 The group members who will be affected by this order are those persons who fall within the description of group members as described in paragraph 2 of the Second Amended Application filed on 15 July 2005, other than the persons who are named in the further affidavit of Peter John Humphries to be filed in accordance with the undertaking given today and who have, or are to be treated as having, opted out of the proceeding, and subject to any order made pursuant to Order 10 hereof in respect of the two persons referred to therein; and

5.2 This order binds all such persons as Group Members.

6. The Settlement Fund be distributed as follows:

6.1 $437,028.32 to reimburse the group members who paid a file administration fee to Duncan Basheer Hannon;

6.2 $1,298,000.00 inclusive of GST for costs exclusive of disbursements to Duncan Basheer Hannon;

6.3 disbursements of $255,361.47 to be paid to Duncan Basheer Hannon in respect of disbursements incurred by them;

6.4 the balance of the Settlement Fund be divided between Participating Group Members in proportion to the number of securities they each held in Harris Scarfe Holdings Ltd at 3 April 2001 as a return per share or convertible note;

7. The settlement fund be distributed by no later than 1 December 2006.

8. Upon transfer of the Settlement Payment as provided in clause 4.4 of the Deed of Settlement, judgment be entered in favour of the respondents with no order as to costs.

9. All costs orders made to the date hereof in the proceedings be vacated.

10. Stella Stitz and Graeme Manfred Hall have liberty to apply within 28 days of the date of entry of this order (by letter addressed to the Registrar and copied to the solicitors for the applicant) for an order that they be treated as having opted out of the proposed settlement, and to file and to serve on solicitors for the applicant such affidavit as they may be advised in support of any such application within the said period of 28 days, to the intent that in the event that there is no such application they will be treated as Participating Group Members.

11. The affidavit of Peter John Humphries sworn on 10 October 2006 comprising 4 paragraphs and the Exhibit PJH16 thereto and the exhibits to that exhibit numbered PJH17 to PJH23 not be published to any person without the leave of the Court.

12. Liberty to any respondent and any other person having a proper interest to apply on 7 days notice to the Court and to the solicitors for the applicant to vary or discharge Order 11 hereof.

13. Liberty to apply.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

MANSFIELD J

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Ratio Decidendi

Legal Principle Established

Established by: MANSFIELD J

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