Kyle-Sailor v Heinke
[2024] FCA 431
•29 April 2024
FEDERAL COURT OF AUSTRALIA
Kyle-Sailor v Heinke [2024] FCA 431
File number(s): VID 698 of 2021 Judgment of: HORAN J Date of judgment: 29 April 2024 Catchwords: PRACTICE AND PROCEDURE – representative proceeding – notice of settlement pursuant to s 33X of the Federal Court of Australia Act1976 (Cth) – interlocutory application seeking non-publication order in respect of quantum of settlement sum – where parties agree that the quantum of the settlement sum should remain confidential –group members to be informed orally of settlement sum – whether non-publication order is necessary to prevent prejudice to the proper administration of justice and/or to protect the safety of any person – application dismissed Legislation: Federal Court of Australia Act 1976 (Cth) Part IVA
Racial Discrimination Act 1975 (Cth)
Cases cited: AB (a pseudonym) v CD (a pseudonym) [2019] HCA 6; 364 ALR 202
Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527
Clark v National Australia Bank Limited (No 2) [2020] FCA 652
Coatman v Colonial First State Investments Limited [2022] FCA 1611
Foley v Gay [2016] FCA 273
Giddings v Australian Information Commissioner [2017] FCAFC 225
Hogan v Australian Crime Commission (2010) 240 CLR 651
Inabu Pty Ltd as trustee for the Alidas Superannuation Fund v CIMIC Group Limited [2020] FCA 510
Jenkings v Northern Territory of Australia (No 4) [2021] FCA 839
John Fairfax & Sons Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465
John Fairfax Publications Pty Ltd v District Court of New South Wales (2004) 61 NSWLR 344
Liverpool City Council v McGraw‐Hill Financial Inc(now known as S&P Global Inc) [2018] FCA 1289
Madgwick v Kelly (2013) 212 FCR 1
Petersen Superannuation Fund Pty Ltd v Bank of Queensland Ltd (No 3) [2018] FCA 1842; 132 ACSR 258
Pigozzo v Mineral Resources Ltd [2022] FCA 1166
Porter v Australian Broadcasting Corporation [2021] FCA 863
Russell v Russell (1976) 134 CLR 495
Santa Trade Concerns Pty Limited v Robinson (No 2) [2018] FCA 1491
The Country Care Group Pty Ltd v Director of Public Prosecutions (Cth) (No 2) (2020) 275 FCR 377
Wotton v State of Queensland (No 10) [2018] FCA 915
J Jagot, B Murphy and A Moss, “Open Justice and Class Actions: including a Judicial Perspective” in M Legg and J Metzger (eds), The Australian Class Action: A 30-Year Perspective (Federation Press, 2023)
Division: General Division Registry: Victoria National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 63 Date of hearing: 15 March 2024 Counsel for the Applicant: Mr R Merkel SC Solicitor for the Applicant: Levitt Robinson Solicitors Counsel for the Respondents: Mr A Anderson Solicitor for the Respondents: Thomson Geer Lawyers ORDERS
VID 698 of 2021 BETWEEN: ANDREA KYLE-SAILOR
Applicant
AND: ALEX HEINKE
First Respondent
NINE ENTERTAINMENT CO. PTY LTD
Second Respondent
NINE DIGITAL PTY LIMITED (ACN 077 753 461)
Third Respondent
NINE NETWORK AUSTRALIA PTY LTD (ACN 008 685 407)
Fourth Respondent
ORDER MADE BY:
HORAN J
DATE OF ORDER:
29 APRIL 2024
THE COURT ORDERS THAT:
1.The application for a non-publication order under s 37AF of the FCA Act in relation to the quantum of the Settlement Sum be dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
HORAN J:
INTRODUCTION
This representative proceeding was commenced on 26 November 2021 under Part IVA of the Federal Court of Australia Act 1976 (Cth) (FCA Act). The parties have reached an agreement to settle the proceeding, without admission of liability by the respondents, on the terms set out in a Deed of Settlement and Release dated 22 November 2023, subject to approval by this Court under s 33V of the FCA Act.
By an amended interlocutory application filed on 1 March 2024, the applicant seeks orders pursuant to ss 33J, 33V, 33X, 33Y and 33ZF of the FCA Act for the approval of the form and content of a proposed settlement notice and opt-out notice to be given to Group Members (as defined in the Deed of Settlement); the specification of the way in which such notices are to be given; the fixing of a date by which Group Members may opt out of the proceeding; the filing of objections to the proposed settlement; and the approval of the proposed settlement on the terms set out in the Deed of Settlement and the proposed Settlement Scheme (which sets out the proposed scheme for the allocation and distribution of the Settlement Sum as defined in the Deed of Settlement).
The interlocutory application also seeks a non-publication order pursuant to s 37AF of the FCA Act in order to restrict the publication of the “Settlement Sum” as defined in the Deed of Settlement. The terms of the non-publication order sought are as follows:
Pursuant to section 37AF of the FCA Act, the publication of the Settlement Sum (as defined in the Class Action Settlement Deed exhibited to the Confidential Affidavit of Stewart Alan Levitt sworn 6 December 2023 (Class Action Settlement Deed) is prohibited, except that the Settlement Sum may only be published or otherwise disclosed to:
(a) the Parties;
(b) any Group Member (who has the right to be informed of the quantum of the Settlement Sum orally by Levitt Robinson Solicitors);
(c) the lawyers of or professional advisers to any of the foregoing; and
(d) any other person as required by law.
The Deed of Settlement expressly contemplates that the applicant and the respondents will jointly apply for a non-publication order in such terms. Accordingly, the applicant’s application for the non-publication order is supported by the respondents, who adopt the applicant’s submissions in support of the application.
It is convenient to determine the application for a non-publication order separately and in advance of the application for approval of the proposed settlement and associated procedural orders.
For the reasons set out below, I am not satisfied that the proposed non-publication order in relation to the quantum of the Settlement Sum is necessary to prevent prejudice to the proper administration of justice or to protect the safety of any person within the meaning of s 37AG(1)(a) and (c) of the FCA Act. Accordingly, I decline to make the non-publication order sought and the application for such an order will be dismissed.
BACKGROUND
The claims advanced in this proceeding arise from certain publications made by the respondents comprising a segment broadcast on Nine News Queensland on 18 May 2021, together with an associated promotional video and online article published on 17 and 18 May 2021 respectively, concerning the spending of monies received under a settlement scheme approved by this Court in earlier representative proceedings (Wotton v State of Queensland (No 10) [2018] FCA 915) (the Wotton class action).
The Wotton class action arose from events arising after the death of an Aboriginal man, Cameron Doomadgee, known posthumously as Mulrunji, while he was in police custody on Palm Island on 19 November 2004. The claims in the Wotton class action “broadly concern[ed] the role that race played in the investigation by [Queensland Police Service] officers into Mulrunji’s death in custody, and the QPS’s management of community concerns and protests, tensions and anger in the weeks after Mulrunji’s death and in the police responses to the protests and fires that occurred on Palm Island on 26 November 2004”: Wotton v State of Queensland (No 10) [2018] FCA 915 at [4]-[5] (Murphy J).
The Wotton class action settlement involved the payment by the State of Queensland of a settlement sum of $30 million which, after payment of various amounts for legal costs and disbursements and settlement administration costs, was distributed among 447 registered group members (of whom 441 group members were entitled to recover compensation).
In the present proceeding, the applicant claims on her own behalf and on behalf of the Group Members that the publications gave rise to contraventions of s 18C of the Racial Discrimination Act 1975 (Cth). The Group Members in the present proceeding are defined in the applicant’s amended Concise Statement dated 26 November 2021 as Aboriginal and Torres Strait Islander people who, as at 17 May 2020, had received or were entitled to receive compensation pursuant to the Wotton class action settlement scheme. There are 437 Group Members who were not deceased at the time of the respondents’ publications, 401 of whom have signed a funding agreement with a litigation funder under which the funder is entitled to a commission of 28% of any sum received by those Group Members from the proposed settlement, net of any sum received pursuant to an order for costs.
In very broad terms, it is alleged that the publications gave rise to a number of imputations, including that the Group Members, or a significant number of them, were improper or unworthy recipients of compensation under the Wotton class action settlement, or were wasteful or irresponsible in relation to the manner in which they were spending such compensation monies. The heads of damage claimed include general damages for offence, insult, humiliation or intimidation, as well as shame, embarrassment or distress caused by the publications, together with special damages in respect of past and future medical expenses, out-of-pocket expenses and past economic loss. Additional damages are claimed in respect of those Group Members who were publicly vilified or insulted after and because of the publications. The applicant also sought an injunction to restrain the respondents from publishing or causing to be published statements to the effect of the alleged imputations and orders requiring the respondents to publish an apology and correction.
The parties to the Deed of Settlement are the applicant, the respondents, the litigation funder and the applicant’s solicitors. Among other things, the Deed of Settlement provides for the respondents to pay a specified “Settlement Sum”, which is inclusive of any and all legal costs, expenses, disbursements and interest, into a settlement account to be held on trust by the Administrator until its distribution pursuant to the Settlement Scheme. On the receipt of the Settlement Sum and final approval of the settlement, the applicant and the Group Members will release and discharge the respondents from the claims in the proceeding or arising out its subject matter. The Deed of Settlement also provides that the respondents will take down the publications, publish an apology and correction in agreed terms, and undertake not to republish the publications or make any future publications that convey the alleged imputations.
The Deed of Settlement and proposed Settlement Scheme contemplate applications for payment of a funding commission to the litigation funder; a sum of $10,000 to the applicant as compensation or reimbursement for the time expended by her in connection with the proceeding; an agreed sum of $670,000 by way of reimbursement of the applicant’s legal costs and disbursements; and a sum of $100,000 in respect of settlement administration costs.
The Deed of Settlement contains a clause under which the parties agree to keep the terms of the Deed confidential, except as required for the purposes of obtaining settlement approval or non-publication orders, or otherwise to enforce or to give effect to the transactions contemplated by the Deed. The clause provides that the parties are at liberty to disclose the fact of the existence of the Deed of Settlement, including that the proceeding has been settled or resolved, subject to final approval by this Court, and to disclose the quantum of the Settlement Sum orally to Group Members.
Under the Deed of Settlement, the applicant and the respondents are obliged jointly to apply for “Non-Publication Orders” in the form set out in paragraph 4 above, namely orders under s 37AF of the FCA Act restricting publication of the quantum of the Settlement Sum. Nevertheless, while the Deed of Settlement will terminate if the Court “finally declines” to approve the proposed settlement, clause 3.2 expressly provides that the Deed continues in force if the Court does not make the non-publication orders.
The proposed Settlement Scheme provides for the allocation and distribution of the Settlement Sum. The net amount after deductions for the payments referred to above (the funder’s commission, the lead applicant payment, the applicant’s legal costs and disbursements, and the Administrator’s costs) is to be distributed among participating Group Members. Some participating Group Members (referred to as the “Higher Damages Group”) will be entitled to a higher compensation payment on the basis that the Administrator is satisfied that they were vilified or insulted by a member or members of the public, and are therefore likely to have suffered a higher degree of loss and damage, as a result of any of the publications. Each member of the Higher Damages Group will receive a higher payment, and the balance will be divided equally between each remaining participating Group Member.
The calculation of the precise entitlements under the Settlement Scheme of each Group Member will ultimately turn on the number of Group Members who are determined to belong to the Higher Damages Group. However, estimates of those entitlements are set out in the proposed Settlement Scheme and the draft settlement notice to be given to Group Members. Thus, the draft settlement notice states that each participating Group Member will receive an estimated minimum payment of $2,000 to $3,000, and each member of the Higher Payments Group will receive an estimated higher payment of about $4,700 to $5,200. The draft settlement notice also discloses that there are 437 Group Members who were not deceased at the time of the publications.
Clause 2A of the proposed Settlement Scheme provides:
Whether or not the Court makes a Non-publication order, any group member wishing to know the amount of monetary compensation to be paid in the settlement should contact Levitt Robinson Solicitors and ask to be told the amount orally. If the Court makes a Non-publication Order, Levitt Robinson will not be able to provide any group member with the amount in writing and group members should not tell anyone else the amount unless required to do so by law or for the purpose of getting their own advice.
CONSIDERATION
General principles
As is recognised in s 17(1) of the FCA Act, this Court’s jurisdiction is ordinarily to be exercised in open court. This reflects the principle of open justice which is a fundamental rule of the common law and an essential characteristic of a court: Russell v Russell (1976) 134 CLR 495 at 520 (Gibbs J) and 532 (Stephen J); John Fairfax & Sons Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465 at 476-477 (McHugh JA, with whom Glass JA agreed); John Fairfax Publications Pty Ltd v District Court of New South Wales (2004) 61 NSWLR 344 at [18] (Spigelman CJ).
There are limited exceptions to the rule that the administration of justice must take place in open court, including “where its observance would frustrate the administration of justice or some other public interest for whose protection Parliament has modified the open justice rule”: John Fairfax & Sons Ltd at 476.
Part VAA of the FCA Act confers powers on the Court to make suppression and non-publication orders. A suppression order is defined in s 37AA to mean “an order that prohibits or restricts the disclosure of information (by publication or otherwise)”, and a non-publication order is defined to mean “an order that prohibits or restricts the publication of information (but that does not otherwise prohibit or restrict the disclosure of information)”. Thus, a suppression order is broader than a non-publication order, in that the former restricts both publication and any other manner of disclosure of the information. For such purposes, “publish” is defined in s 37AA to mean “disseminate or provide access to the public or a section of the public by any means”, with an inclusive list of examples of various forms of publication or public broadcast or exhibition.
The Court may make a suppression order or non‑publication order on its own initiative, or on the application of a party or any other person considered by the Court to have a sufficient interest in the making of the order: s 37AH(1). In addition to the applicant for the order and the parties to the proceeding, the persons who are entitled to appear and be heard on any such application include news publishers, the Government of the Commonwealth or a State or Territory, and any other person who in the Court’s opinion has a sufficient interest in the question whether a suppression order or non‑publication order should be made: s 37AH(2).
Section 37AE provides that, in deciding whether to make a suppression order or non‑publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice: see generally The Country Care Group Pty Ltd v Director of Public Prosecutions (Cth) (No 2) (2020) 275 FCR 377 at [29] (Allsop CJ, Wigney and Abraham JJ).
Sections 37AF and 37AG provide as follows:
37AFPower to make orders
(1)The Court may, by making a suppression order or non‑publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:
(a)information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or
(b)information that relates to a proceeding before the Court and is:
(i)information that comprises evidence or information about evidence; or
(ii)information obtained by the process of discovery; or
(iii)information produced under a subpoena; or
(iv)information lodged with or filed in the Court.
(2)The Court may make such orders as it thinks appropriate to give effect to an order under subsection (1).
37AGGrounds for making an order
(1)The Court may make a suppression order or non‑publication order on one or more of the following grounds:
(a)the order is necessary to prevent prejudice to the proper administration of justice;
(b)the order is necessary to prevent prejudice to the interests of the Commonwealth or a State or Territory in relation to national or international security;
(c)the order is necessary to protect the safety of any person;
(d)the order is necessary to avoid causing undue distress or embarrassment to a party to or witness in a criminal proceeding involving an offence of a sexual nature (including an act of indecency).
(2)A suppression order or non‑publication order must specify the ground or grounds on which the order is made.
As has been repeatedly emphasised, the grounds in s 37AG(1) require that the suppression order or non-publication order must be necessary to the identified purpose, which is a “strong word”: see Hogan v Australian Crime Commission (2010) 240 CLR 651 at [30] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ); Giddings v Australian Information Commissioner [2017] FCAFC 225 at [25] (Collier, Flick and Charlesworth JJ); Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 at [8] (Murphy J); Country Care Group at [8]-[9]. It is not met by showing merely that the order restricting publication or disclosure would be desirable to or convenient for one or more of the parties. Nor is it sufficient that the making of the order appears to the Court “to be convenient, reasonable or sensible, or to serve some notion of the public interest, still less that, as the result of some ‘balancing exercise’, the order appears to have one or more of those characteristics”: Hogan at [31]. On the other hand, once the requisite necessity for making a suppression order or non-publication order on one of the grounds in s 37AG(1) has been demonstrated to the Court’s satisfaction, the Court should implement that conclusion by making the order without any further balancing of interests: Hogan at [32].
The parties’ submissions
In the present case, the parties seek a non-publication order in relation to the quantum of the Settlement Sum as defined in the Deed of Settlement, being information that relates to the proceeding and that comprises or is about evidence or information lodged with or filed in the Court. The parties contend that the order is necessary to prevent prejudice to the proper administration of justice, or that the order is necessary to protect the safety of any person within the meaning of ss 37AG(1)(a) and 37AG(1)(c).
In support of their submission that the non-publication order is necessary to prevent prejudice to the proper administration of justice, the parties rely on their agreement under the Deed of Settlement to keep the terms of the Deed confidential and to seek a non-publication order in respect of the Settlement Sum. The parties submit that, in such circumstances, the Court may infer that confidentiality was a significant factor in the parties reaching an agreement. The parties submit that the inability give effect to that agreement would have a tendency to reduce opportunities for settlement of class action litigation more generally.
The parties also submit that the non-publication order is necessary to protect the safety of Group Members in that, if the Settlement Sum is disclosed, there will be a risk of repetition of the racial insults, abuse or intimidation that occurred as a result of the publications relating to the settlement in the Wotton class action. In this regard, the applicant’s solicitor deposes that he has obtained instructions from some of the Group Members who had suffered specific instances of abuse or intimidation, in some cases involving a degree of physical intimidation or violence, which they said was attributable at least in part to the publications.
In relation to the effect of the proposed non-publication order on Group Members’ rights, the parties submit that Group Members would still be informed in writing by way of the draft settlement notice of the estimated amount likely to be distributed to each Group Member individually, and would be entitled to be informed orally by Levitt Robinson Solicitors of the quantum of the Settlement Sum. The parties submit that the non-publication order would therefore not have the tendency to inhibit Group Members in obtaining all the information and advice that they require in order to decide whether or not to opt-out of the proceeding and whether or not to object to the proposed settlement.
The applicant’s solicitor has deposed that he does not consider that the proposed limitation on the disclosure of the Settlement Sum would impede him in the discharge of his professional responsibilities in relation to the Group Members, noting that Levitt Robinson Solicitors knows the name and contact details of each Group Member who was not deceased at the time of the publications, most of whom have signed a funding agreement with the litigation funder and are aware of the proceeding.
While the question for immediate determination concerns whether to make the proposed non-publication order, senior counsel for the applicant submitted that it may be convenient also to address the orders sought by the amended interlocutory application in relation to the approval of the proposed opt-out notice and draft settlement notice. If the Court were to find, contrary to the parties’ submissions, that the quantum of the Settlement Sum should be disclosed to Group Members as information that is necessarily relevant to a decision whether to opt-out or whether to accept the proposed settlement, that would affect the content of the opt-out notice and draft settlement notice and would in practical terms be fatal to the application for the non-publication order.
However, senior counsel for the applicant submitted that because each of the Group Members has their own individual claim for damages for the alleged contravention of the Racial Discrimination Act, their knowledge of the total Settlement Sum is not relevant to their decision whether or not to opt out or accept the proposed settlement. Rather, the parties submit that it is sufficient that each individual Group Member be informed of the estimated amount that he or she might receive from the settlement, together with the deductions from the Settlement Sum that give rise to that entitlement. In any event, each of the Group Members could on request be advised orally of the amount of the Settlement Sum, and would be permitted to disclose that information to his or her lawyers or professional advisers.
Previous decisions
There are a number of previous decisions of this Court that have considered applications for a suppression order in relation to the terms of settlement or the settlement sum in a representative proceeding.
In Inabu Pty Ltd as trustee for the Alidas Superannuation Fund v CIMIC Group Limited [2020] FCA 510, Jagot J made suppression orders in relation to various categories of documents, which relevantly included the settlement deed. Her Honour stated at [19]:
… as to the settlement deed, I note that there is an obligation on the parties to keep the settlement deed confidential, save for certain permitted disclosures which include the settlement notice which discloses the quantum of the settlement sum, which is not, in itself, confidential. In circumstances where it is not necessary for the settlement deed to be disclosed in order to explain why the settlement is fair and reasonable, I am content that the order for confidentiality should also be made over the remaining confidential components of the settlement deed.
It may be noted that the suppression orders made in Inabu were directed to the publication of the terms of the settlement deed other than the quantum of the settlement sum.
In Jenkings v Northern Territory of Australia (No 4) [2021] FCA 839, Mortimer J (as her Honour then was) refused an application by the Northern Territory for an order prohibiting disclosure of the settlement sum. The proceeding involved a claim for damages and compensation brought by the applicants on behalf of persons who had suffered false imprisonment, assault, battery or other forms of adverse action, or conduct involving racial discrimination, while detained in a youth detention centre. While the Territory also sought (in the alternative) a suppression order over the whole of the settlement deed, the real issue in dispute was the suppression of the settlement sum: Jenkings at [52]-[53]. Further, in the course of oral argument, counsel for the Territory accepted that any suppression order would need to include an exception or carve out to enable disclosure of the settlement sum to group members: Jenkings at [9].
Justice Mortimer referred to some examples of previous cases in which suppression orders had been made in relation to the settlement of representative proceedings under Part IVA of the FCA Act: Jenkings at [30]-[38]. In most of those cases, the suppression order was agreed or unopposed, and was not the subject of specific or detailed reasons. In some cases, the suppression order was made in relation to confidential advice from counsel on the fairness and reasonableness of the settlement. In other cases, details of the settlement including the settlement sum were not disclosed. In particular, in Fowler v Airservices Australia [2009] FCA 1189 at [36]-[38], Bennett J made a suppression order restricting publication of the global settlement sum and a distribution schedule of individual payments to group members, in circumstances where such publication would “put at naught” a clause in the settlement deed preventing disclosure of the content of the deed and where “[t]he requirement of confidentiality form[ed] part of the settlement of the proceeding”.
In Jenkings, Mortimer J recognised that the agreement of the parties to the making of suppression orders under s 37AF, on one of the grounds set out in s 37AG(1), is a material factor in the exercise of the power conferred by s 37AF. Her Honour said at [39]:
[I]f the parties join in or agree to the making of such orders, then this may well be an important factor in the Court’s consideration, in the context of adversarial litigation, about what is necessary to prevent prejudice to the proper administration of justice. The latter concept includes the administration of justice in the particular proceeding before the Court, although the concept is not confined to that matter. However, giving effect to agreements reached to resolve a proceeding, especially a resource-intensive proceeding, may generally be seen as an important aspect of the proper administration of justice. Thus while the parties’ agreement by no means compels or authorises the exercise of the power in s 37AF, it is a material factor.
On the other hand, an agreement between the parties to the making of suppression orders can also be seen in some particular contexts as “positively contrary to the proper administration of justice”, and “the parties cannot by their contractual agreement to confidentiality necessarily negate or frustrate the public and open process of settlement approval for which Part IVA provides”: Jenkings at [40], [42].
Justice Mortimer regarded the decision in Fowler as “an example of a situation where, because of the contractual nature of the claims made in the proceeding, the small number of group members, the particular terms of the Deed and the parties’ united position put to the Court, the Court was persuaded to the requisite standard that the making of suppression orders was “‘necessary’”: Jenkings at [43]. However, her Honour distinguished the circumstances of the proceeding in Jenkings, which concerned a subject matter in which there was an “inherent public interest”: at [41], [44]. More generally, Mortimer J referred to the features of representative proceedings under Part IVA of the FCA Act, and the importance of transparency both in the process leading to the determination whether to approve a settlement and in the Court’s deliberations on that question: Jenkings at [49]; see also Liverpool City Council v McGraw‐Hill Financial Inc (now known as S&P Global Inc) [2018] FCA 1289 at [101]-[111] (Lee J); Clark v National Australia Bank Limited (No 2) [2020] FCA 652 at [13]-[15] (Lee J).
In Jenkings, Mortimer J did not accept an argument advanced by the Territory that the suppression orders would preserve the confidentiality of the settlement “in circumstances where the Territory is a respondent or defendant to other litigation by people who have been held in juvenile detention, and where confidentiality was an important component of the Territory’s agreement to settle the proceeding”: Jenkings at [54(a)], [55].
(a)The terms of the settlement deed considered in Jenkings did not impose an absolute obligation to keep the settlement sum confidential, but were “more nuanced”, reflecting “the parties’ mutual recognition of the role of the Court in approving Part IVA settlements, and the exceptional requirements for suppression orders under the [FCA Act]”: Jenkings at [57]. Accordingly, the deed preserved the ability of the parties to apply for confidentiality in respect of the whole or part of the deed: Jenkings at [60]
(b)The expressed obligations to keep the settlement deed confidential were subject to permitted disclosures which encompassed “what might be necessary and appropriate in the course of the settlement approval process, including to ensure group members (and those supporting or advising them, including their families) are aware of, and understand the settlement”: Jenkings at [62]. The Territory had accepted that many key provisions of the settlement deed should be disclosed in the settlement notice and accompanying information, recognising that “maintaining operative confidentiality over key aspects of the Deed is incompatible with the settlement approval process under Part IVA, especially in relation to a cohort of group members such as the cohort in the present proceeding, and taking into account the subject matter of the proceeding”: Jenkings at [63].
(c)Justice Mortimer considered that, even if the parties had made a positive agreement about the confidentiality of the settlement sum, that agreement was no more than a factor in the Court’s consideration whether a suppression order was necessary to prevent prejudice to the proper administration of justice within the meaning of s 37AG(1)(a): Jenkings at [61]. At the risk of stating the obvious, any such agreement does not bind the Court, as her Honour noted at [65]:
[T]he parties to a Part IVA settlement cannot bind the Court’s hands to make suppression orders by the way they express the terms of settlement in a Deed, in particular the terms as to confidentiality. Suppression, and compromise of the open justice principle, will always be a matter for the Court to determine.
(d)While Mortimer J accepted that the proper administration of justice comprehends the general public interest in the settlement of litigation, her Honour observed that any agreement to settle a representative proceeding under Part IVA of the FCA Act “is reached on the premise, and with the knowledge, that the Court – which performs its functions in public – must approve the settlement”: Jenkings at [64]. Accordingly, “more would generally be required to make suppression orders in relation to settlement sums (or like terms) ‘necessary’ in the interests of the proper administration of justice than the general interest in encouraging settlement of litigation without trial”, or the generalised and qualified confidentiality terms that were contained in the settlement deed: Jenkings at [64].
Justice Mortimer also rejected the Territory’s argument that “there was a real prospect that if the settlement sum were publicly available, it would be reported in a way which was sensational and out of context”: Jenkings at [54(b)], [55]. In particular, Mortimer J considered that the media interest in youth crime and justice tended against the making of suppression orders over the settlement sum, and noted that it was “no part of the Court’s role to use suppression orders to police the reporting of Court proceedings by the media”: Jenkings at [67], [70]. It was emphasised that the proceeding concerned a subject matter of considerable public importance, and that it was appropriate that the proceeding be fully reported: Jenkings at [71].
Finally, Mortimer J rejected the Territory’s argument that the inclusion of the settlement sum in the settlement notice and accompanying information did not “provide sufficient context for group members to understand the role of the settlement sum, and is likely to mislead or confuse group members”: Jenkings at [54(c)], [55]. Her Honour considered that the settlement sum was required to be included in the settlement notice and accompanying information in order to enable group members to understand and to make an informed decision about the proposed settlement, including (but not limited to) whether they wished to object to the settlement: Jenkings at [56], [73]. Justice Mortimer did not accept the Territory’s submission that such an obligation could be “discharged in a substitute way by one-to-one conversations between Maurice Blackburn lawyers and individual group members pursuant to the Territory’s proposed carve-out to the suppression orders”: Jenkings at [59], and see also at [85].
It is clear that the subject matter of the proceeding was regarded by Mortimer J as an important consideration against the making of suppression orders in relation to details of the settlement in Jenkings, including the settlement sum. In reaching the conclusion that the interests of the administration of justice clearly favoured disclosure of the settlement sum, Mortimer J noted that the proceeding concerned the exercise of public powers in respect of minors in juvenile detention and stated that it was “difficult to conceive of a piece of litigation which is more centrally concerned with the administration of justice than this one”: Jenkings at [91]-[92]. Her Honour continued at [93]:
Putting to one side the disclosure of the settlement sum in the settlement notices as being in the interests of group members, it is also the case, in my opinion, that members of the Australian community are entitled to know and understand the core components of the settlement reached by the parties, including the amount the Territory has agreed (with a denial of liability) to pay for compensation and legal costs. The Territory is expending public funds on making that payment, and in defending this proceeding. The Court expends public funds in approving the settlement, and performs a supervisory role given to it by Parliament, because the settlement of a Part IVA proceeding affects the rights and interests of all those within the class as defined. Here, those individuals were mostly Aboriginal, were minors, and were deprived of their liberty, when the impugned conduct occurred. In a civil society governed by the rule of law, those are additional reasons for a high level of transparency about how such a proceeding is proposed to be resolved. There should be informed public scrutiny of what has occurred, so that there may be informed public discussion of it – these are some of the proper consequences of open justice.
These concluding observations made by Mortimer J in Jenkings are consistent with the broader recognition that representative proceedings have a “public dimension” and are “not just disputes between private parties about private rights”: see Coatman v Colonial First State Investments Limited [2022] FCA 1611 at [8] (Murphy J), referring to Madgwick v Kelly (2013) 212 FCR 1 at [91] (Allsop CJ and Middleton J); see also J Jagot, B Murphy and A Moss, “Open Justice and Class Actions: including a Judicial Perspective” in M Legg and J Metzger (eds), The Australian Class Action: A 30-Year Perspective (Federation Press, 2023) (Open Justice and Class Actions) at pp 89-90, 93, 111-112. Similarly, agreements to settle representative proceedings are “not just private bargains between parties resolving the disputes between them”: Liverpool City Council at [107] (Lee J). It is therefore often appropriate for the details of the settlement to be made public as part of the approval process, not only in the interests of group members, but also having regard to the broader public interest in open justice.
In this regard, the position in relation to the settlement of representative proceedings may be distinguished from ordinary proceedings between private parties, which can generally be settled without court approval or supervision and often without the need for any order other than the dismissal or discontinuance of the proceeding: see Open Justice and Class Actions (2023) at pp 102-103. In such circumstances, the parties are free to enter into terms of settlement that impose contractual obligations of confidentiality, including in relation to the settlement sum. In contrast, a settlement of a representative proceeding is subject to approval by the Court and requires consideration of interests beyond those of the immediate parties, including in particular the interests of group members. The judicial approval of such a settlement usually requires publication of a fully reasoned judgment which addresses and explains why the settlement is fair and reasonable and in the interests of group members as a whole. There may be a public interest either in the subject matter of the proceedings or in the operation of Part IVA of the FCA Act.
This is not to diminish the public interest in encouraging the settlement of potentially complex litigation, including where necessary by protecting the confidentiality of aspects of the settlement in accordance with the agreement reached between the parties. The parties might have genuinely made the settlement conditional on the making of suppression or non-publication orders. Further, there may be situations in which the disclosure of information about a settlement of a representative proceeding on an open basis might disadvantage one of the parties in other pending or potential future litigation and settlement discussions: compare Liverpool City Council at [117]-[118]; Foley v Gay [2016] FCA 273 at [29] (Beach J).
Accordingly, there may be circumstances in which it is necessary to restrict publication or disclosure of some details of a settlement, including potentially the settlement sum, in order to achieve one of the purposes identified in s 37AG(1) of the FCA Act.
Disposition of the present application
For the following reasons, I am not satisfied that it is necessary to make a non-publication order in relation to the Settlement Sum either to prevent prejudice to the proper administration of justice within the meaning of s 37AG(1)(a), or to protect the safety of any person within the meaning of s 37AG(1)(c).
While the parties to the Deed of Settlement have agreed to keep the terms of the Deed confidential, this is expressed to be subject to the requirements of obtaining approval of the settlement and associated steps such as the form and content of notices to Group Members. Although the Deed of Settlement contemplates a joint application by the parties for an order under s 37AF restricting publication of the quantum of the Settlement Sum, the settlement is not made conditional on the making of such an order. In other words, the parties have implicitly recognised in the Deed of Settlement that it is a matter for the Court to determine whether or not to make a non-publication order in accordance with the limited grounds available under s37AG.
Nevertheless, even if it is not an essential condition of the settlement, the parties’ agreement to seek a suppression or non-publication order remains relevant to the administration of justice so far as it concerns the encouragement of settlement of disputes: compare Porter v Australian Broadcasting Corporation [2021] FCA 863 at [44], [99]-[105] (Jagot J) which, although arising in the different context of an application to remove documents from the Court file, was determined by reference to the same grounds as those under s 37AG(1) for making a suppression or non-publication order; see also Pigozzo v Mineral Resources Ltd [2022] FCA 1166 at [145] (Feutrill J). It should be noted, however, that Porter was an ‘ordinary’ proceeding for defamation and not a representative proceeding under Part IVA of the FCA Act, and some of the broader statements made by Jagot J in relation to giving effect to settlement agreements should be understood in that context.
I have taken into account the public interest in encouraging the settlement of representative proceedings, both in relation to this proceeding and more generally. However, this must be weighed against other aspects of the proper administration of justice. In the present case, I do not consider that the parties’ agreement to seek a non-publication order in relation to the Settlement Sum is sufficient of itself to establish that such an order is necessary to prevent prejudice to the proper administration of justice for the purposes of s 37AG(1)(a).
In my view, there is a broader public interest in the publication of the core details of the settlement of the proceeding, and in particular the total amount of the Settlement Sum that is to be distributed among Group Members after the deduction of funding charges, legal costs and administration costs. The Settlement Sum, and the proportionate amount of each of those deductions, is relevant to the making of an informed decision by Group Members whether to opt-out and whether to object to the proposed settlement, and will be relevant to the reasoned consideration whether to approve the proposed settlement under s 33V. More generally, the proportionality of legal or administration costs and funding charges in representative proceedings is a matter of public interest: see Petersen Superannuation Fund Pty Ltd v Bank of Queensland Ltd (No 3) [2018] FCA 1842; 132 ACSR 258 at [20] (Murphy J); Santa Trade Concerns Pty Limited v Robinson (No 2) [2018] FCA 1491 at [26] (Lee J).
The parties submitted that the present case could be distinguished from other cases in which this Court has refused to make suppression orders or non-publication orders over the settlement deed or settlement sum, on the basis that those cases often involved claims against public bodies and involved the expenditure of public funds. In Jenkings, for example, Mortimer J emphasised at [91] that the proceeding was “itself about the administration of justice” and concerned the exercise of public powers by the Territory, and noted at [93] that the proceedings involved the expenditure by the Territory of public funds in defending the proceeding and paying compensation and legal costs. The parties also noted that the application for suppression orders in Jenkings was opposed. Nevertheless, I consider that the subject matter of the current proceeding does involve some public interest considerations, notwithstanding that the claims are made by and against private individuals and companies. The proceeding is brought as representative proceeding under Part IVA of the FCA Act and relies on a cause of action arising under provisions of the Racial Discrimination Act, and there is a public interest in the administration of each of those laws. Further, the circumstances giving rise to both the Wotton class action and the present proceeding have attracted attention in the news media, although in the present case this must be balanced against the considerations addressed below (at [57]-[59]).
In this regard, I do not accept the argument that the proposed settlement of this proceeding is properly characterised as involving merely the compromise by each individual Group Member of his or her private rights to compensation, such that each Group Member is only interested in comparing the estimated amount that he or she might be paid under the proposed settlement with the amount that he or she might otherwise be able to recover if he or she were to bring an individual claim in a separate proceeding. Among other things, the quantum of the Settlement Sum may be relevant to the acceptability or appropriateness of the various fixed deductions to be made under the Deed of Settlement in respect of legal costs (up to $670,000) and administration costs (up to $100,000). Indeed, it is not in dispute that Group Members are entitled to be informed of the Settlement Sum, and the Deed of Settlement expressly contemplates that they have a right to be informed orally of that amount.
I note that it would in any event be possible to calculate a rough approximation of the Settlement Sum from the information disclosed in the draft settlement notice about the estimated payments to each Group Member. Given that there are known to be 437 Group Members eligible to participate in the settlement, the estimated payment ranges (namely, $2,000 to $3,000 for ordinary Group Members and $4,700 to $5,200 for members of the Higher Payments Group) can be multiplied by the total number of Group Members so as to produce a range within which the Settlement Sum is likely to fall, allowing for the addition of funding commission, legal costs, administration costs and the applicant’s reimbursement payment. For example, assuming an average payment of $3,000 to each Group Member, the total settlement amount could be calculated as approximately $2.45 million. An average payment of $4,000 would produce a total settlement amount of just over $3 million. Although it will not be possible to derive the precise settlement amount in the absence of information about the size of the Higher Payments Group and the precise payment amounts, a “ballpark” figure for the Settlement Sum can be ascertained with reasonable confidence by such a process of reverse engineering from the estimated payment ranges. In such circumstances, it is difficult to conclude that the disclosure of the quantum of the Settlement Sum itself would result in prejudice to the proper administration of justice.
Nevertheless, the parties submitted that there is a material difference between an indirect calculation as to the likely magnitude of the total settlement amount on the one hand, and the publication of the exact quantum of the Settlement Sum on the other. The latter was referred to as a “headline” figure which, in contrast to the relatively modest amounts that will be received by each Group Member, might attract a similar risk of publicity and possible resulting prejudice as arose from the publications that are the subject of the present proceeding. In other words, it is feared that the publication of the quantum of the Settlement Sum might increase the risk that Group Members will be subjected to further racial insults, abuse or intimidation resulting in physical or psychological harm. This is particularly relevant to whether the non-publication order is necessary to protect the safety of Group Members within the meaning of s 37AG(1)(c).
The particular concerns raised in the present case regarding the publication of the total settlement sum are somewhat unique, given that the subject matter of the proceeding itself relates to the consequences arising from the publication of the settlement amount in an earlier representative proceeding. I accept that there might be a greater tendency for such consequences to arise from media reporting that places emphasis on the global settlement amount as opposed to the smaller individual entitlements of each Group Member. On the other hand, the quantum of the Settlement Sum in the present case is significantly smaller than the previous settlement amount in the Wotton class action. The claims made in the current proceeding, and the provisions of the Racial Discrimination Act on which those claims are based, should serve as some deterrent to any repetition of the conduct that gave rise to the previous proceeding, both in relation to media reporting and the actions of individuals or groups in response to the settlement. Further, as noted above, the broad magnitude of the Settlement Sum will in any event be readily susceptible to calculation from other information that is publicly disclosed in relation to the proposed settlement.
On balance, having regard to the nature and degree of the risk that Group Members might be exposed to a risk of repetition of the conduct that gave rise to the present proceeding, I am not satisfied that the non-publication of the Settlement Sum is necessary to protect the safety of the Group Members. To the extent that the publication of the Settlement Sum involves any such risk to the safety of Group Members, I do not consider that risk to be unacceptable in the circumstances: cf AB (a pseudonym) v CD (a pseudonym) [2019] HCA 6; 364 ALR 202 at [14]- [15] (Nettle J).
The proposed non-publication order sought by the parties may also give rise to some practical difficulties, in so far as it contemplates that Group Members may be informed orally of the Settlement Sum by the applicant’s solicitors. While a Group Member who is orally informed of the Settlement Sum would not be prevented from publishing or disclosing that information to other Group Members and to their lawyers or professional advisers, they would be bound by the terms of the non-publication order not to “publish” the Settlement Sum (within the meaning of s 37AA of the FCA Act). However, it is unclear whether or how Group Members who are told of the quantum of the Settlement Sum by the applicant’s solicitors would be informed or provided with advice about their obligations in relation to the restrictions on publication of that information.
Taking all of these matters into account, I am not satisfied that the parties have established any grounds for making the non-publication order in relation to the Settlement Sum under ss 37AF and 37AG of the FCA Act. Accordingly, the application for such an order is dismissed.
For completeness, I note that I did not receive any submissions from a news publisher (other than the respondents to the proceeding) or any other person interested in opposing the non-publication order sought by the parties: cf. s 37AH(2) of the FCA Act, and see Jenkings at [18]. If I had been minded to make the non-publication order, it may have been necessary to consider whether any such persons should be given notice and an opportunity to be heard in opposition to the application.
The other aspects of the amended interlocutory application remain to be determined, including the approval of the proposed opt-out notices and draft settlement notices to be given to Group Members. In the light of the reasons set out above, it may be necessary or appropriate for one or both of those notices to contain information in relation to the quantum of the Settlement Sum. However, that is a matter that can be addressed in the context of the approval of the notices pursuant to ss 33X and 33Y of the FCA Act.
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Horan. Associate:
Dated: 29 April 2024
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