FEDERAL COURT OF AUSTRALIA
Horsky v Mesoblast Limited [2024] FCA 1509
File number: VID 268 of 2022 Judgment of: BEACH J Date of judgment: 13 December 2024 Date of publication of reasons: 20 December 2024 Catchwords: CORPORATIONS — securities class action — settlement of the consolidated proceeding — approval of settlement under s 33V(1) of the Federal Court of Australia Act 1976 (Cth) — distribution orders under s 33V(2) Legislation: Federal Court of Australia Act 1976 (Cth) Part IVA, ss 33V, 33V(2) Cases cited: Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 68 Date of hearing: 13 December 2024 Counsel for the Joint Applicants: Mr W A D Edwards KC and Mr R Davies Solicitors for the Joint Applicants: Phi Finney McDonald and William Roberts Lawyers Counsel for the Respondent: Mr K A Loxley Solicitor for the Respondent: Minter Ellison ORDERS
VID 268 of 2022 BETWEEN: PAUL TIBOR HORSKY
First Applicant
OIL SURVEILLANCE AUSTRALIA PTY LTD ACN 092 979
Second Applicant
AND: MESOBLAST LIMITED (ACN 109 431 870)
Respondent
ORDER MADE BY:
BEACH J
DATE OF ORDER:
13 DECEMBER 2024
OTHER MATTERS:
A.In these orders:
“Act” means the Federal Court of Australia Act 1976 (Cth).
“Deed” means the Deed of Settlement at Confidential Exhibit DP-1 to the First Pan Affidavit.
"Fund Administrator” means WRL, or such other person as the Court may appoint, as a Court-appointed administrator of the settlement fund.
“Funders” means:
(a)Omni Bridgeway (Fund 5) Australian Invt. Pty Ltd (OBL); and
(b)ICP Funding Pty Ltd (ICP).
“Group Members” has the meaning given to it in paragraph 2 of the Amended Consolidated Statement of Claim filed on 22 December 2023 (save for any person or entity who has opted out of this proceeding).
“Joint Applicants” means the First Applicant and the Second Applicant.
“First Pan Affidavit” means the affidavit of Ding Pan affirmed on 29 August 2024.
“PFM” means Phi Finney McDonald Pty Ltd.
“Second Pan Affidavit” means the affidavit of Ding Pan affirmed on 15 November 2024.
“registered group member” has the meaning given to that term in order 3 of the orders made by this Court on 6 September 2024.
“SDS” means the SDS at pages 365 to 404 of Exhibit DP-3 to the Second Pan Affidavit.
“WRL” means William Roberts Pty Ltd.
B.The amounts in order 6 of these orders adopt the costs assessed as reasonable by the Court appointed costs referee, save for the amounts in order 6(a)ii and 6(c)ii which include, as applicable, the value of the “Disputed Reductions” as that term is defined in paragraph 19 of the affidavit of Timothy Michael Luke Finney affirmed on 15 November 2024.
THE COURT ORDERS THAT:
Approval of the settlement
1.Pursuant to s 33V of…
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- Case
- [2024] FCA 1509
- Decision Date
CaseChat Overview and Summary
The court found that the settlement was fair, reasonable, and in the best interests of the plaintiffs and other group members. The Chief Financial Officer's fee of 22% was considered appropriate, as it was a common rate for such actions. The court approved the settlement and the distribution of funds as per the settlement deed and settlement distribution schedule. The court appointed a fund administrator to oversee the distribution and granted confidentiality orders to protect sensitive information.
The court made several orders to implement the settlement. These included approving the settlement, authorizing the joint applicants to enter into the settlement deed, appointing the fund administrator, and approving the amounts to be deducted for various costs and fees. The court also made orders regarding the treatment of late registrants and post-mediation objectors, confidentiality, and the return of security deposits. The proceeding was dismissed upon the completion of the implementation of the settlement distribution schedule.
Orders
Orders of the court
Approval of the settlement
1. Pursuant to s 33V of the Act, the settlement of this proceeding on the terms set out in:
(a) the Deed; and
(b) the SDS,
be approved.
2. Pursuant to s 33ZF of the Act, the Joint Applicants are authorised, nunc pro tunc, to enter into and give effect to the Deed and all transactions contemplated by it for and on behalf of the Group Members.
3. Pursuant to s 33ZB of the Act, the persons affected and bound by the settlement of this proceeding are the Joint Applicants, the Respondent and Group Members.
Appointment of Fund Administrator
4. Pursuant to ss. 33ZF and 23 of the Act, WRL be appointed as the Fund Administrator and is to act in accordance with the SDS and is to have the powers and immunities conferred by the SDS, subject to any direction of this Court.
5. The Fund Administrator has liberty to apply in relation to any matter arising under the SDS including for the purposes of seeking orders consequential to or in connection with the Deed and/or the SDS.
Approval of amounts to be deducted pursuant to the SDS
6. Pursuant to s 33V of the Act, the following amounts are approved for the purposes of the SDS:
(a) the amount of $6,202,989.96 (incl. GST) in respect of Project Costs, being legal costs paid or agreed to be paid by the Funders (excluding the costs referee’s fees), to be paid to the Funders in the following proportions:
(i) the amount of $2,813,783.94 to be paid to ICP in respect of WRL’s professional fees and disbursements; and
(ii) the amount of $3,389,206.02 to be paid to OBL in respect of PFM’s professional fees and disbursements;
(b) the amount of $5,886,132.91 (incl. GST) in respect of funding commission to be shared equally by the Funders as follows:
(i) the amount of $2,943,066.45 to be paid to ICP; and
(ii) the amount of $2,943,066.46 to be paid to OBL;
(c) the amount of $2,000,327.31 (incl. GST) in respect of the Joint Applicants’ lawyers’ legal costs for work not funded by the Funders (including 25% uplift on deferred fees) to be paid to the lawyers in the following proportions:
(i) the amount of $832,120.75 to be paid to WRL; and
(ii) the amount of $1,168,206.56 to be paid to PFM;
(d) the amount of $11,000 to be paid to the costs referee, Mr Ian Ramsey-Stewart in respect of his fees as costs referee;
(e) the amount of $316,718.05 to be paid to the Fund Administrator for its role in administering the SDS;
(f) the amount of $35,000 to be paid to each of the Joint Applicants in the following proportions to reimburse them for their time in acting as a representative party in these proceedings:
(i) $17,500 to be paid to the First Applicant; and
(ii) $17,500 to be paid to the Second Applicant.
Late Registrants & Post-Mediation Objectors
7. The persons referred to at paragraph 70(a), (b) and (c) of the Second Pan Affidavit are to be treated as registered group members for the purposes of the SDS.
8. The persons referred to at paragraph 70(d) and (e) of the Second Pan Affidavit are not to be treated as registered group members for the purposes of the SDS.
9. Any Group Member who is not a registered group member or treated as such by the effect of these orders, will remain a Group Member for all purposes of this proceeding but shall not be permitted to seek any benefit pursuant to the settlement approved by this Court.
Confidentiality
10. Until further order, pursuant to ss. 37AF and 37AG(1)(a) of the Act, and in order to prevent prejudice to the proper administration of justice, the material referred to in Schedule A to these orders is:
(a) not to be published or disclosed without the prior express consent of the Joint Applicants and/or prior leave of this Honourable Court to any person or entity other than:
(i) this Court;
(ii) the Joint Applicants;
(iii) the Funders and their respective legal advisors; and
(b) not to be disclosed to the Respondent or its legal representatives, other than to the extent that the material identified in Schedule A has previously been disclosed to them during this proceeding.
11. Until 49 days from the date of any order approving the proposed settlement in these proceedings under s 33V of the Act, pursuant to ss. 37AF and 37AG(1)(a) of the Act, and in order to prevent prejudice to the proper administration of justice, the material referred to in Schedule B to these orders is:
(a) not to be published or disclosed without the prior express consent of the Joint Applicants and/or prior leave of this Honourable Court to any person or entity other than:
(i) this Court;
(ii) the Joint Applicants;
(iii) the Funders and their respective legal advisors; and
(b) not to be disclosed to the Respondent or its legal representatives, other than to the extent that the material identified in Schedule B has previously been disclosed to them during this proceeding.
Other Orders
12. All deeds of indemnity provided to the Respondent by the Funders in accordance with orders 3 and 4 of the orders made by this Court on 5 April 2023 be returned to the Joint Applicants’ solicitors or be destroyed within 14 days of the date of these orders.
13. Pursuant to r 2.43(1) of the Federal Court Rules 2011 (Cth), the AU$25,000 paid by ICP into Court on 6 April 2023 as security for the Respondent’s costs be returned by transferring it into WRL’s trust account.
14. All costs orders made to date in the proceeding be vacated.
15. No order as to costs.
16. The proceeding be dismissed upon notification by the Fund Administrator to this Court of the completion of the implementation of the SDS, on the basis that the dismissal is a defence and absolute bar to any claim (either direct or indirect) or proceeding by the Joint Applicants or any Group Member which is in respect of, or arises out of, the same, similar or related circumstances raised in this proceeding.
Note: Schedules A and B have not been reproduced here, but the authenticated order is available on the Commonwealth Courts Portal.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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