Hodges v Waters (No 6) - [2014] FCA 1343

FEDERAL COURT OF AUSTRALIA
Hodges v Waters (No 6) [2014] FCA 1343

Citation: Hodges v Waters (No 6) [2014] FCA 1343

Parties:
CHARLES HODGES & MARK HODGES AS TRUSTEES OF THE CHARLES HODGES SUPERANNUATION FUND v ANDREA JANE WATERS, KPMG, WELLINGTON INVESTMENT MANAGEMENT LIMITED, OCTAVIAR LIMITED (ADMINISTRATOR APPOINTED), GUY HUTCHINGS, JOHN ARTHUR WHATELEY, JACK SIMON DIAMOND, CRAIG ROBERT WHITE, DEBORAH BEALE, STEVEN KRIS KYLING, STUART ROBERTSON PRICE, MICHAEL GORDON HISCOCK, MICHAEL CHRISTODOULOU KING, PAUL JOSEPH MANKA, FERNANDO ESTEBAN, RAYMOND KELLERMAN, DAVID MARK ANDERSON, OCTAVIAR LIMITED (IN LIQUIDATION) ACN 107 863 390 and OCTAVIAR ADMINISTRATION PTY LTD (IN LIQUIDATION) ACN 101 069 390

File number: NSD 324 of 2009

Judge: PERRAM J

Date of judgment: 8 December 2014

Legislation: Federal Court of Australia Act 1976 (Cth) s 33V

Date of hearing: 8 December 2014

Place: Sydney

Division: GENERAL DIVISION

Category: No catchwords

Number of paragraphs: 2

Counsel for the Applicants: Mr MBJ Lee SC and Mr WAD Edwards

Solicitor for the Applicants: Johnson Winter & Slattery Lawyers

Counsel for the First and Second Respondents:
Mr J Lockhart SC and Mr JA Arnott

Solicitor for the First and Second Respondents:
Allens

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 324 of 2009

BETWEEN:
CHARLES HODGES & MARK HODGES AS TRUSTEES OF THE CHARLES HODGES SUPERANNUATION FUND
Applicant

AND:
ANDREA JANE WATERS
First Respondent

KPMG
Second Respondent

WELLINGTON INVESTMENT MANAGEMENT LIMITED
Third Respondent

OCTAVIAR LIMITED (ADMINISTRATOR APPOINTED)
Fourth Respondent

GUY HUTCHINGS
Fifth Respondent

JOHN ARTHUR WHATELEY
Sixth Respondent

JACK SIMON DIAMOND
Seventh Respondent

CRAIG ROBERT WHITE
Eighth Respondent

DEBORAH BEALE
Ninth Respondent

STEVEN KRIS KYLING
Tenth Respondent

STUART ROBERTSON PRICE
Eleventh Respondent

MICHAEL GORDON HISCOCK
Twelfth Respondent

MICHAEL CHRISTODOULOU KING
Thirteenth Respondent

PAUL JOSEPH MANKA
Fourteenth Respondent

FERNANDO ESTEBAN
Sixteenth Respondent

RAYMOND KELLERMAN
Seventeenth Respondent

DAVID MARK ANDERSON
Eighteenth Respondent

OCTAVIAR LIMITED (IN LIQUIDATION) ACN 107 863 390
Nineteenth Respondent

OCTAVIAR ADMINISTRATION PTY LTD (IN LIQUIDATION) ACN 101 069 390
Twentieth Respondent

JUDGE:

PERRAM J

DATE OF ORDER:

8 DECEMBER 2014

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to sections 33V and 33ZF of the Federal Court of Australia Act 1976 (Cth) (the Act), the Court approves the settlement of the proceedings against the first and second respondents (KPMG Parties) on the terms:
a.set out in the confidential Deed of Settlement executed by the Applicants, the Respondents, Wellington Capital Limited, and IMF Bentham Limited on 18 August 2014 (Deed of Settlement), being Confidential Exhibit RGJ-5 to the affidavit of Robert Guy Johnston sworn on 21 August 2014; and
b.set out in the Settlement Distribution Scheme contained in Confidential Exhibit RGJ-8 to the affidavit of Robert Guy Johnston sworn on 4 December 2014.

2.Pursuant to section 33ZF of the Act, the Group Members in the schedule annexed to these orders are:
a.deemed to have registered a claim in this proceeding and to be entitled to receive a distribution from any amount agreed in settlement of the proceeding; and
b.to be included…

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 Hodges v Waters (No 6)

Details

AGLC: Hodges v Waters (No 6) [2014] FCA 1343
Case: [2014] FCA 1343
Decision Date: 8 December 2014

CaseChat Overview and Summary

The Federal Court approved the settlement of proceedings between Charles Hodges and KPMG in Hodges v Waters (No 6). The settlement was executed through a Deed of Settlement dated 18 August 2014 and a Settlement Distribution Scheme. The court also deemed certain group members to have registered claims and entitled them to receive distributions from the settlement. The Administrators of the Settlement Distribution Scheme were appointed to oversee the distribution process. Additionally, the court authorised the applicants to act on behalf of the group members in entering into the settlement and the related transactions. The settlement distribution scheme and the documents related to it were ordered to remain confidential and restricted from public disclosure.

The primary legal issues the court had to decide involved the approval of the settlement terms, the distribution of settlement amounts among the group members, the appointment of administrators, and the confidentiality and disclosure restrictions of the settlement documents. The court had to ensure that the settlement was fair and just for all parties involved, that the group members' claims were properly registered, and that the distribution scheme was implemented effectively. The court also needed to consider the implications of the confidentiality orders on the settlement process and the protection of sensitive information.

The court reasoned that the settlement terms were fair and just, and that the distribution scheme was appropriately structured to ensure the equitable distribution of settlement amounts among the group members. The court found that the appointment of the administrators was necessary for the effective administration of the settlement distribution scheme. Furthermore, the court determined that the confidentiality orders were necessary to protect sensitive information and to prevent prejudice to the proper administration of justice. The court's approval of the settlement, the distribution scheme, and the confidentiality orders was based on the principle of achieving a fair and efficient resolution of the proceedings while protecting the interests of all parties involved.

Orders

Orders of the court

1. Pursuant to sections 33V and 33ZF of the Federal Court of Australia Act 1976 (Cth) (the Act), the Court approves the settlement of the proceedings against the first and second respondents (KPMG Parties) on the terms:

a. set out in the confidential Deed of Settlement executed by the Applicants, the Respondents, Wellington Capital Limited, and IMF Bentham Limited on 18 August 2014 (Deed of Settlement), being Confidential Exhibit RGJ-5 to the affidavit of Robert Guy Johnston sworn on 21 August 2014; and

b. set out in the Settlement Distribution Scheme contained in Confidential Exhibit RGJ-8 to the affidavit of Robert Guy Johnston sworn on 4 December 2014.

2. Pursuant to section 33ZF of the Act, the Group Members in the schedule annexed to these orders are:

a. deemed to have registered a claim in this proceeding and to be entitled to receive a distribution from any amount agreed in settlement of the proceeding; and

b. to be included in a Final List of Registered Group Members which is to be filed in the Court by 9 December 2014, in an envelope marked “Confidential Final List of Registered Group Members – Not to be opened without leave of the Court or a Judge” with that list to supersede the List of Registered Group Members filed with the Court on 22 October 2014.

3. Pursuant to section 33ZF of the Act, or otherwise, Robert Johnston and Robert Wyld of Johnson Winter & Slattery be appointed as Administrators of the Settlement Distribution Scheme to act in accordance with the rules of the Settlement Distribution Scheme.

4. Pursuant to section 33ZF of the Act, the amount of $23,600 to be paid from the Settlement Sum to the Applicant, Charles Hodges, in his personal capacity, by the Administrators of the Settlement Distribution Scheme, in addition to any payment to be made to Charles Hodges as trustee of the Charles Hodges Superannuation Fund in accordance with the terms of the Settlement Deed and the Settlement Distribution Scheme.

5. Pursuant to section 33ZF of the Act, or otherwise, the Court authorises the Applicants nunc pro tunc on behalf of the Group Members as defined in paragraph 12 of the Further Amended Statement of Claim filed in the proceeding and dated 24 June 2013, other than those who have opted out of the proceeding pursuant to section 33J of the Act as of 4pm on 7 May 2014 (Group Members) to enter into and give effect to the Deed of Settlement and the transactions contemplated thereby for and on behalf of those Group Members.

6. Pursuant to section 33ZB and section 33ZF of the Act, the persons affected and bound by orders 1 to 4 are the Applicants, the KPMG Parties and the Group Members.

7. Robert Johnston and Robert Wyld of Johnson Winter & Slattery have liberty to apply for directions in connection with the Settlement Distribution Scheme.

8. Until further order, on the grounds that it is necessary to prevent prejudice to the proper administration of justice, the following affidavits, exhibits and annexures and the contents therefore be ordered confidential within the meaning of regulation 2.32(1)(b) of the Federal Court Rules 2011 and their publication and disclosure be restricted within the meaning of section 37AF(1)(b)(i) of the Act in accordance with order 9 herein:

a. the documents which comprise Confidential Exhibit RGJ-8 to the affidavit of Robert Guy Johnston sworn 4 December 2014,

and not be disclosed to any person other than by order of a Judge of the Court.

9. To give effect to order 8, the affidavits, exhibits and annexures referred to in that order are to remain on the Court file in sealed envelope(s) marked “Confidential Affidavit – Not to be Opened Except by Direction of a Judge of the Court”.

10. There be no order as to costs in respect of the application under section 33V of the Act on 8 December 2014.

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

SCHEDULE OF ADDITIONAL

REGISTRANTS

NAME

UNITS

OMITTED REGISTRANTS

MARGARET MARY PROUTING

20,000

LEONARD A COLE & ESTHER FROSTT

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

MR J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: MR J

Full text does not contain this section.

Citation:		Hodges v Waters (No 6) [2014] FCA 1343
Parties:		CHARLES HODGES & MARK HODGES AS TRUSTEES OF THE CHARLES HODGES SUPERANNUATION FUND v ANDREA JANE WATERS, KPMG, WELLINGTON INVESTMENT MANAGEMENT LIMITED, OCTAVIAR LIMITED (ADMINISTRATOR APPOINTED), GUY HUTCHINGS, JOHN ARTHUR WHATELEY, JACK SIMON DIAMOND, CRAIG ROBERT WHITE, DEBORAH BEALE, STEVEN KRIS KYLING, STUART ROBERTSON PRICE, MICHAEL GORDON HISCOCK, MICHAEL CHRISTODOULOU KING, PAUL JOSEPH MANKA, FERNANDO ESTEBAN, RAYMOND KELLERMAN, DAVID MARK ANDERSON, OCTAVIAR LIMITED (IN LIQUIDATION) ACN 107 863 390 and OCTAVIAR ADMINISTRATION PTY LTD (IN LIQUIDATION) ACN 101 069 390
File number:		NSD 324 of 2009
Judge:		PERRAM J
Date of judgment:		8 December 2014
Legislation:		Federal Court of Australia Act 1976 (Cth) s 33V
Date of hearing:	8 December 2014
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	2
Counsel for the Applicants:		Mr MBJ Lee SC and Mr WAD Edwards
Solicitor for the Applicants:		Johnson Winter & Slattery Lawyers
Counsel for the First and Second Respondents:		Mr J Lockhart SC and Mr JA Arnott
Solicitor for the First and Second Respondents:		Allens

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 324 of 2009

JUDGE:	PERRAM J
DATE OF ORDER:	8 DECEMBER 2014
WHERE MADE:	SYDNEY