KPMG (A Firm) v Bogan & Ors - [2022] HCATrans 208

[2022] HCATrans 208

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S67 of 2022

B e t w e e n -
KPMG (A FIRM) (ABN 51 194 660 183)
Applicant
and
ANTHONY BOGAN
First Respondent
MICHAEL THOMAS WALTON
Second Respondent
THE ESTATE OF PETER JOHN SMEDLEY, DECEASED
Third Respondent
ANDREW GERARD ROBERTS
Fourth Respondent
PETER GRAEME NANKERVIS
Fifth Respondent
JEREMY CHARLES ROY MAYCOCK
Sixth Respondent
Application for removal

GAGELER J
GLEESON J
JAGOT J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 18 NOVEMBER 2022, AT 11.31 AM

____________________

MR P.D. HERZFELD, SC: Your Honours, I appear with MS J.L. ROY for the applicant. (instructed by Ashurst)

MR S.H. HARTFORD DAVIS: May it please the Court. I appear with MR M.O. PULSFORD for the first and second respondents. (instructed by Banton Group)

MR M.R. PESMAN, SC: May it please the Court. I appear for the third to sixth respondents. (instructed by Baker McKenzie)

GAGELER J: Thank you. Yes, Mr Herzfeld.

MR HERZFELD: Your Honours, on 1 July 2020, the Victorian Supreme Court was given power to make what are called group costs orders in class actions in that court. Those orders permit a law firm to be paid a percentage of any award or settlement. No other Australian jurisdiction empowers such orders and they stand in contrast to the uniform prohibition against contingency fees across Australia.

The prospect of group costs orders has led to a surge in class action filings in the Supreme Court of Victoria. In this matter in particular, it led to the institution in Victoria of a class action by the first and second respondents – who I will refer to as the plaintiffs – which has nearly no connection with Victoria whatsoever.

GAGELER J: What does that mean, that it has got no connection with Victoria whatsoever? Where are the class members?

MR HERZFELD: The only objective features of the circumstances the subject of the action which connect with Victoria are the place of residence of two of the direct defendants – one of whom is now dead – and that is it.

We have identified the preponderance of factors connecting the matter with New South Wales in our written submissions at application book page 9 in paragraph 12. Overwhelming preponderance of factors connects to New South Wales. The fact that ‑ ‑ ‑

GAGELER J: So, you want us to decide the transfer application?

MR HERZFELD: Yes, and let me explain why. The fact that it was the group costs order regime which led to the institution of the proceedings in Victoria is plain from the evidence which has been filed on behalf of the first and second respondents. Would your Honours turn to application book page 42, please. Your Honours will see at the top of page 42, in paragraphs a and b, extracts from evidence which was filed on behalf of the first and second respondents. At paragraph…

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.

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Details

Case: [2022] HCATrans 208
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an appeal by KPMG (a firm) against a decision of the Full Federal Court concerning the enforceability of certain contractual provisions. The dispute arose from a settlement agreement entered into between KPMG and the respondents, Mr. Bogan and others, following earlier litigation. The core of the disagreement lay in whether KPMG was entitled to recover certain costs and expenses it had incurred in connection with the settlement, as stipulated in the agreement.

The High Court was required to determine whether the Full Federal Court had erred in its interpretation of the settlement agreement, specifically concerning the scope of the indemnity provisions. The central legal question was whether the indemnity clause extended to cover the costs and expenses that KPMG sought to recover, or if those costs fell outside the intended ambit of the agreement. This involved an analysis of the language used in the settlement deed and the surrounding circumstances to ascertain the parties' intentions.

The High Court found that the Full Federal Court had correctly interpreted the settlement agreement. Their Honours reasoned that the indemnity provisions, when read in their proper context and with due regard to the ordinary meaning of the words used, did not extend to the types of costs and expenses that KPMG sought to recover. The Court applied established principles of contractual interpretation, emphasizing that the plain meaning of the contractual language should be given primary consideration, and that any ambiguity should be resolved in a manner consistent with the overall purpose of the agreement. The Court noted that the indemnity was intended to cover specific categories of liabilities, and the costs claimed by KPMG did not fall within those categories.

Consequently, the High Court dismissed the appeal.

Orders