Hegemann v Tannous & Ors - [2024] NSWSC 39

Supreme Court

New South Wales

Medium Neutral Citation: Hegemann v Tannous & Ors [2024] NSWSC 39
Hearing dates: 11 December 2023; further submissions (and evidence) filed 15 December 2023
Date of orders: 2 February 2024
Decision date: 02 February 2024
Jurisdiction: Common Law
Before: Chen J
Decision:
See [77]

Catchwords:
CIVIL PROCEDURE – representative proceedings – settlement or discontinuance – court approval – whether the proposed settlement is fair and reasonable in the interests of group members as a whole – where approval turns on defendant’s inability to satisfy judgment debt – assessment of settlement distribution scheme – where settlement figure modest compared to amounts claimed to cover legal costs and settlement administration expenses

Legislation Cited:
Civil Liability Act 2002 (NSW)
Civil Procedure Act 2005 (NSW)
Coroners Act 2009 (NSW)
Corporations Act 2001 (Cth)
Court Suppression and Non-publication Orders Act 2010 (NSW)
Rural Fire Regulations 2013 (NSW)

Cases Cited:
Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd(No 2) (2006) 236 ALR 322; [2006] FCA 1388
Ellis v Commonwealth of Australia (2023) 411 ALR 578; [2023] NSWSC 550
Findlay v DSHE Holdings Ltd; Mastoris v DSHE Holdings Ltd; Mastoris v Allianz Australia Insurance Ltd (2021) 150 ACSR 535; [2021] NSWSC 249
Johnston v Endeavour Energy [2016] NSWSC 1132
Ritchie v Advanced Plumbing and Drains Pty Ltd [2022] NSWSC 330
Ritchie v Insurance Australia Ltd [2022] NSWCA 278
Smith v Australian Executor Trustees Limited; Creighton v Australian Executor Trustees Limited (No. 4) [2018] NSWSC 1584
Williams v AusNet Electricity Services Pty Ltd [2017] VSC 474

Category: Principal judgment
Parties: Jason Hegemann (plaintiff)
Joseph Tannous (first defendant)
Moussa Tannous (second defendant)
Charbel Tannous (third defendant)
Kwik Flo Pty Ltd (fourth defendant)
Representation:
Counsel:
A H Edwards (plaintiff)
P Wiggins (defendants)
Solicitors:
Maddens Lawyers (plaintiff)
Paramonte Legal (defendants)

File Number(s): 2021/358501
Publication restriction: Nil

JUDGMENT

Introduction

The Palmers Oaky Fire Class Action relates to a fire that started in consequence of welding work being conducted on a property at Palmers Oaky, NSW on 4 December 2019 – a fire that continued to burn for a period of around three weeks, and extended over an area of approximately 17,400 hectares, before it was brought under control (‘the Palmers Oaky Fire’). The damages sought are for economic loss/property damage, and for personal (specifically, psychiatric) injury.
By notice of motion filed 20 October 2023, the plaintiff seeks a range of orders, including an order pursuant to s 173 of the Civil Procedure Act 2005 (NSW) (‘the CPA’) for the approval of the settlement reached in the proceedings. These reasons deal with the application for approval, and the other orders that are sought.

Background facts

I will deal with the background facts across four parts: first, the circumstances giving rise to the fire; secondly, a short description of the representative proceedings in this Court; thirdly, the nature of the claims; and, fourthly, an explanation of the settlement reached, and the orders made once the Court was notified of that settlement.

The fire…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hegemann v Tannous & Ors

Details

AGLC: Hegemann v Tannous & Ors [2024] NSWSC 39
Case: [2024] NSWSC 39
Decision Date: 02 February 2024

CaseChat Overview and Summary

In the case of Hegemann v Tannous & Ors, the plaintiff, Hegemann, sought to initiate a representative proceeding on behalf of a group of plaintiffs against the defendants, Tannous and others. The dispute centred on the approval of a settlement and discontinuance of the proceedings, which required the court's approval due to the representative nature of the litigation. The court was required to determine whether the proposed settlement was fair and reasonable for the group members as a whole, particularly in light of the defendants' apparent inability to satisfy a judgment debt.

The primary legal issue was whether the proposed settlement, which was modest compared to the amounts claimed, was fair and reasonable in the interests of the group. The court had to consider whether the settlement figure adequately covered the legal costs and expenses of administering the settlement, and whether the distribution scheme was equitable. The court's analysis involved assessing the merits of the claims, the financial situation of the defendants, and the potential recovery for the group members.

The court found that the proposed settlement was fair and reasonable. It held that the modest settlement figure, while lower than the amounts initially claimed, was justified given the defendants' financial situation and the costs associated with the litigation. The court approved the discontinuance of the proceedings on the basis that the settlement was in the best interests of the group members as a whole. The court also approved the distribution scheme, which provided for the payment of legal costs and administration expenses before any distribution to the group members.

The final orders of the court approved the settlement and the discontinuance of the proceedings, and directed the distribution of the settlement funds in accordance with the approved scheme. The court's decision underscored the importance of considering the financial realities and the interests of the group members in the approval of settlements in representative proceedings.

Orders