FEDERAL COURT OF AUSTRALIA
Hodges v Sandhurst Trustees Limited [2018] FCA 1346
File number(s): NSD 453 of 2014
NSD 1488 of 2017Judge(s): LEE J Date of judgment: 26 July 2018 Catchwords: PRACTICE AND PROCEDURE – s 33V application – settlement approved – where claims of group members advanced in three representative proceedings could have been advanced in one proceeding – discussion as to the need to have regard to the width of s 33C in bringing representative proceedings and paying sufficient regard to the case management dictates of Part VB Legislation: Corporations Act 2001 (Cth) s 283DA(b)(ii)
Federal Court of Australia Act 1976 (Cth) ss 33C, 33N(2), s 33V, 33ZF
Cases cited: Caason Investments Proprietary Limited v Cao (No 2) [2018] FCA 527
Clarke v Sandhurst Trustees Limited (No 2) [2018] FCA 511
Dillon v RBS Group (Australia) Pty Ltd [2017] FCA 896; (2017) 252 FCR 150
Money Max Int Pty Ltd v QBE Insurance Group Limited [2016] FCAFC 148; (2016) 245 FCR 191
Date of hearing: 26 July 2018 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 25 Counsel for the Plaintiffs: Mr A S Martin SC; Mr G M Drew Solicitor for the Plaintiffs: Meridian Lawyers Counsel for the Defendant (NSD453/2014): Mr I Pike SC; Mr J Dooley Counsel for the Defendant (NSD1488/2018): Mr M C Hoffman QC; Mr J Hynes Solicitor for Defendants: Clyde & Co Counsel for the Intervener: Mr D Sulan; Ms L Rich Solicitor for the Intervener: Roberts & Partners Lawyers ORDERS
NSD 453 of 2014
BETWEEN: CHARLES ROBERT HODGES IN HIS CAPACITY AS TRUSTEE OF THE CHARLES HODGES SUPERANNUATION FUND
Plaintiff
AND: SANDHURST TRUSTEES LIMITED ACN 004 030 737
Defendant
JUSTKAPITAL PORTFOLIO PTY LTD ACN 612 224 521
First Intervener
JUSTKAPITAL LITIGATION PTY LTD
Second Intervener
JUSTKAPITAL LIMITED
Third Intervener
ACN 133 560 068 PTY LTD
Fourth Intervener
JUDGE:
LEE J
DATE OF ORDER:
26 JULY 2018
THE COURT ORDERS THAT:
In these Orders:
Administration Costs has the same meaning as it does in the Settlement Deed.
Amended Settlement Scheme means the Amended Settlement Scheme which is behind tab 3 of “Confidential Exhibit DER-2” to the affidavit of Douglas Edmund Raftesath sworn 13 July 2018.
Funder Payment has the same meaning as it does in the Settlement Deed.
Group Members has the same meaning as it does in the Settlement Deed.
Indemnity Fee has the same meaning as it does in the Settlement Deed.
Plaintiff’s Costs has the same meaning as it does in the Settlement Deed.
Plaintiff’s Reimbursement Costs means the reasonable representative reimbursement costs payable from the Settlement Sum.
Settlement Deed means the Settlement Deed dated 31 May 2018 which is “Confidential Exbibit DER-1” to the affidavit of Douglas Edmund Raftesath sworn 31 May 2018.
Settlement Sum means the amount of $28,158,500.1.Pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (Act) the settlement of the…
Keep reading for free
Create a free CaseChat account to read Hodges v Sandhurst Trustees Limited and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2018] FCA 1346
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether the settlement was fair and reasonable, and whether the representative proceeding should have been consolidated with other related proceedings. The court also needed to consider the appropriate distribution of the settlement sum among the group members, the costs and fees to be paid, and the implications of the settlement on the group members who had not opted out. Additionally, the court had to determine whether the settlement complied with the relevant provisions of the Federal Court of Australia Act 1976.
The court approved the settlement, finding it to be fair and reasonable. It held that while it might have been preferable for the claims of all group members to be advanced in a single proceeding, the representative proceeding could proceed as it was. The court noted that the settlement provided adequate compensation to the group members and was in line with the case management dictates of Part VB of the Federal Court of Australia Act 1976. The court also confirmed that the group members who had not opted out would be bound by the settlement terms, subject to their right to seek leave of the court to claim benefits. The court made orders approving the settlement, appointing an administrator, and setting out the terms of the common fund order and the distribution of the settlement sum.
Orders
Orders of the court
In these Orders:
Administration Costs has the same meaning as it does in the Settlement Deed.
Funded Group Member has the same meaning as it does in paragraph 12 of the Notice of Settlement.
Funder Payment has the same meaning as it does in the Settlement Deed.
Funding Agreements has the same meaning as it does in the Settlement Deed.
Group Members has the same meaning as it does in the Settlement Deed.
Litigation Funders means Litman Holdings Pty Ltd, JustKapital Portfolio Pty Ltd and JustKapital Limited.
Management Fee means the amount that would be payable under clause 3.1(b)(iv) of the Funding Agreements.
Notice of Settlement means the Notice of Settlement which is behind tab 1 of “Confidential Exhibit DER-2” to the affidavit of Douglas Edmund Raftesath sworn 13 July 2018.
Participating Group Member has the same meaning as it does in the Settlement Scheme.
Plaintiffs’ Costs has the same meaning as it does in the Settlement Deed.
Settlement Deed means the Settlement Deed dated 31 May 2018 which is “Confidential Exbibit DER-1” to the affidavit of Douglas Edmund Raftesath sworn 31 May 2018.
Settlement Scheme means the Amended Settlement Scheme which is behind tab 2 of “Confidential Exhibit DER-2” to the affidavit of Douglas Edmund Raftesath sworn 13 July 2018.
Settlement Sum means the amount of $11,000,000.
1. Pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (Act) the settlement of the representative proceeding and the claims of the plaintiff and each Group Member be approved on the terms set out in the Settlement Deed and the Settlement Scheme including payment in accordance with the Settlement Scheme of:
(a) the Funder Payment in the amount of $2,750,000;
(b) the Plaintiffs’ Costs in the amount of $1,805,995;
(c) the Administration Costs in the amount of $250,000 (subject to further order).
2. Meridian Lawyers be appointed the Administrator of the Settlement Scheme.
3. The Originating Application and the Statement of Claim be dismissed.
4. Pursuant to s 33ZF of the Act, any Group Member, who has registered an intention to participate in the settlement of the representative proceeding by completing and submitting the GR Finance Class Action Registration Form to the plaintiffs’ lawyers, Meridian Lawyers, by 4.00pm on 25 July 2018 and who has not opted out of the proceeding, be deemed to be a Registered Group Member (Registered Group Member).
5. Subject to any further order of the Court, pursuant to s 33ZF of the Act, any Group Member who is not a Registered Group Member or a Funded Group Member shall not, without leave of the Court, be permitted to claim any benefit pursuant to the Settlement Deed, the Settlement Scheme or these Orders.
6. Pursuant to s 33V and s 33ZF of the Act the Court makes a common fund order in respect of the Participating Group Members such that:
(a) each Participating Group Member shall have such rights and obligations in respect of the Litigation Funders as if the Participating Group Member had executed a Funding Agreement with the Litigation Funders in the form entered into by the Funded Group Members except, the Funding Agreement shall be modified such that:
(i) clause 3.1(b)(i) of the Funding Agreement shall be amended by deleting “35%” and inserting “25%” in its place; and
(ii) no Management Fee shall be payable.
(b) the Administrator is authorised to deduct from any amount otherwise payable to a Participating Group Member such amounts in respect of the approved Funder Payment and the approved Plaintiffs’ Costs as may be calculated in accordance with (a) above and pay the same in accordance with the Funding Agreements prior to any distribution of any settlement sums to the Participating Group Members.
7. Forthwith upon the conclusion of the administration of the Settlement Scheme, the Administrator is to file a report which includes confirmation of the amount that has been charged in relation to the administration of the Settlement Scheme which will be considered by the Court on the determination of any variation to Order 1(c).
8. All previous unsatisfied costs orders in the proceeding be vacated.
9. There be no order as to the costs of the proceeding.
10. Pursuant to s 37AF and s 37AG(1)(a) of the Act, until further order of the Court, in order to prevent prejudice to the proper administration of justice, “Confidential Exhibit DER-1” to the affidavit of Douglas Edmund Raftesath sworn 31 May 2018 and “Confidential Exhibit DER-3” to the affidavit of Douglas Edmund Raftesath sworn 11 July 2018 are not to be published or made available and not to be disclosed to any persons or entity.
11. Other than Order 11 (which applies generally), pursuant to s 33ZB of the Act, the persons and entities affected and bound by the balance of these orders, including the s 33V order, are the plaintiffs, the defendant and each Group Member who has not opted-out of the proceeding.
12. The hearing commencing on 29 October 2018 be vacated.
The Court Notes that:
13. The Litigation Funders have given an undertaking to the Court and the plaintiffs not to enforce the Funding Agreements with Funded Group Members in order to recover amounts over and above what is to be paid to them pursuant to these orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.