FEDERAL COURT OF AUSTRALIA
Kyle-Sailor v Heinke (No 2) [2025] FCA 33
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- AGLC
- Kyle-Sailor v Heinke (No 2) [2025] FCA 33
- Case
- [2025] FCA 33
- Decision Date
CaseChat Overview and Summary
The court determined that the proposed settlement was fair and reasonable for the Group Members. The court was satisfied that the legal costs were within the estimated range and proportionate to the matter's complexity. The administration costs of $100,000 were deemed reasonable, given the familiarity of the appointed Administrator with the proceeding. The additional payment of $10,000 to the lead applicant was considered fair, as it represented a modest deduction from the net settlement sum and was proportionate to the time and effort expended by the lead applicant. The court concluded that the settlement did not unduly favour the lead applicant over the interests of the Group Members as a whole.
The court approved the settlement and made orders accordingly, including authorizing the lead applicant to act on behalf of the Group Members, appointing an Administrator to oversee the settlement's administration, and confirming the distribution of the settlement sum as per the agreed scheme. Confidentiality orders were also made to protect certain sensitive information. The proceeding was subsequently discontinued with no order as to costs.
Orders
Orders of the court
Approval and administration
1. Pursuant to ss 33V and 33ZF of the Federal Court of Australia Act 1976 (Cth) (the Act), the settlement of this proceeding is approved on the terms set out in:
(a) the Deed of Settlement and Release dated 22 November 2023 exhibited as Exhibit SAL-1 to the confidential affidavit of Stewart Alan Levitt sworn on 6 December 2023;
(b) the Deed of Amendment to Deed of Settlement and Release dated 26 June 2024 exhibited at pages 1 to 6 of Exhibit SAL-4 to the non-confidential affidavit of Stewart Alan Levitt sworn on 5 September 2024; and
(c) the Settlement Scheme exhibited at pages 7 to 23 of Exhibit SAL-4 to the non-confidential affidavit of Stewart Alan Levitt sworn on 5 September 2024, as modified by order 2 of these orders;
2. Within 14 days after the date of these orders, the applicant file and serve the updated Settlement Scheme with the following changes:
(a) insert a new Annexure C comprising the first sentence in paragraph 1 and paragraphs 2–15 of the document entitled “Applicant’s Supplementary Submission in Relation to Administration of Settlement Scheme” that was provided to the Court on 5 September 2024, together with the Excel spreadsheet accompanying that Submission, which are incorporated into the Settlement Scheme;
(b) delete the word “confidential” in paragraph 4(b);
(c) insert new paragraph 4(c) referring to the Amendment Deed;
(d) replace the chapeau in paragraph 17 with the following: “Subject to the making of the Distribution Orders, the allocation of the Settlement Sum will proceed in accordance with Annexure C and as follows:”;
(e) replace paragraph 17(a) with the following: “the funder, being BLM Australia LLC (Funder), will be paid a sum calculated in the manner set out in Annexure C”;
(f) replace the chapeau in paragraph 19 with the following: “The Administrator will distribute the Net Settlement Sum to Participating Group Members in accordance with Annexure C and as follows:”;
(g) indicate, with mark-up, any other typographical corrections that the applicant proposes be made.
3. Pursuant to s 33ZF of the Act, the applicant is authorised nunc pro tunc on behalf of the Participating Group Members, as defined in the Deed of Settlement and the Settlement Scheme, to enter into and to give effect to the Deed of Settlement and the Amendment Deed and the obligations, rights, releases and transactions provided for in those documents for and on behalf of those Participating Group Members.
4. Pursuant to ss 33ZB and 33ZF of the Act, the persons affected and bound by the settlement of this proceeding are the applicant, the respondents, the Participating Group Members and BLM (Australia) LLC (the Funder).
5. Pursuant to s 33ZF of the Act, Stewart Alan Levitt is appointed as the Administrator of the Settlement Scheme and is to act in accordance with the terms of the Settlement Scheme, subject to any direction of the Court.
6. Pursuant to s 33V(2) of the Act, the provisions of the Settlement Scheme are approved as the procedure for the distribution of the Settlement Sum payable by the respondents.
7. Pursuant to ss 33V and 33ZF of the Act, the payment of the following amounts from the Settlement Sum in accordance with the Settlement Scheme are approved:
(a) the Funder’s commission is payable to the Funder, as set out in paragraphs 17(a) and 33(a) of the Settlement Scheme;
(b) $10,000 is payable to the applicant as the Lead Applicant Payment, as set out in paragraph 17(b) of the Settlement Scheme ;
(c) $670,000 is payable in respect of the applicant’s legal costs and disbursements of this proceeding, as set out in paragraphs 17(c) and 33(b) of the Settlement Scheme;
(d) an amount up to $100,000 is payable to the Administrator in respect of the costs and expenses incurred in the administration of the Settlement Scheme, as set out in paragraphs 17(d) and 34 and 35 of the Settlement Scheme.
8. The applicant has leave to discontinue this proceeding on the basis that there be no order as to costs.
9. All existing costs orders are vacated.
10. Pursuant to rule 9.05 of the Federal Court Rules 2011 (Cth), the Administrator is joined as a party to this proceeding for the limited purpose of exercising liberty to apply under order 11.
11. The parties and the Administrator have liberty to apply to re-list this proceeding for the purpose of seeking any orders or other relief provided for in the Deed of Settlement (as amended by the Amendment Deed) or the Settlement Scheme, including any orders or directions concerning the administration of the Settlement Scheme.
Confidentiality
12. On the ground in s 37AG(1)(a) of the Act, the disclosure (by publication or otherwise) of pages 1–58 of Exhibit SAL-5 of the confidential affidavit of Stewart Alan Levitt sworn 5 September 2024 is prohibited for a period of 14 days from the date of these orders, or until the determination of any application for leave to appeal or any appeal from these orders, whichever is later.
13. On the ground in s 37AG(1)(a) of the Act, the disclosure (by publication or otherwise) of the following paragraphs and pages of the confidential affidavit of Stewart Alan Levitt sworn 5 September 2024 is prohibited for a period of 10 years from the date of these orders, or further order:
(a) paragraph 26;
(b) pages 60–88 of Exhibit SAL-5;
(c) pages 99–126 of Exhibit SAL-5;
(d) pages 127–162 of Exhibit SAL-5;
(e) pages 168–419 of Exhibit SAL-5.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Having regard to the affidavit and expert report of Ms Suzanne Ward, a legal costs consultant, I am satisfied that the amount agreed between the parties in respect of legal costs is fair and reasonable. Among other things, the legal costs are within a range that was estimated and disclosed to Group Members, and are consistent with and proportionate to the nature, size and complexity of the matter and the stage at which the settlement of the proceeding was reached. The fee agreements were reasonable in the market for legal services, and appropriate hourly rates were charged. Administration costs The Deed of Settlement provides for the payment to the Administrator of an amount of $100,000 in respect of the costs of administration of the Scheme. The appointment of Mr Levitt as Administrator is likely to be cost-effective, in the light of his familiarity with this proceeding and his broader experience in in relation to the approval and administration of settlements in representative proceedings. In all the circumstances, and having regard to Ms Ward’s expert report, I am satisfied that such an amount is reasonable and proportionate to the work involved in distributing the Settlement Sum in accordance with the Scheme.Lead applicant payment The Deed of Settlement contemplates an application for approval of a payment to the applicant of up to $10,000 “as compensation for the significant time expended by her in the course of and for the furtherance of the Proceeding”. A reimbursement payment of this nature is not uncommon in settlements of representative proceedings: see Yasmin at [75], [78]–[81], referring to Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 at [176] (Murphy J); Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd (No 2) [2006] FCA 1388; 236 ALR 322 at [75]–[76] (Jessup J); Smith at [91]–[106] (Lee J); Hassan v State of Victoria [2023] VSC 478 at [58]–[67] (Dixon J). Nevertheless, such payments may raise questions as to whether the interests of the lead applicant are being preferred over the interests of Group Members as a whole, and whether any preferential treatment is justified. In the present case, the quantum of the proposed reimbursement payment is relatively modest. Although it represents a significant increase in the amount to be received by the applicant relative to the amounts payable to each of the Group Members (including HDG Members), I do not consider that to be an appropriate frame of reference in the circumstances of this case. The proposed payment of $10,000 is a small deduction from the net Settlement Sum available for distribution to Group Members as a whole, and is proportionate to the time and cost that is likely to have been expended by the applicant in connection with her involvement in the proceeding as a representative party. Accordingly, I consider that the additional payment of $10,000 to the applicant is fair and reasonable.Confidentiality orders The parties have also sought suppression orders under s 37AF of the FCA Act prohibiting the publication or other disclosure of specified paragraphs of the confidential affidavit of Mr Levitt sworn on 5 September 2024 and specified pages of confidential Exhibit SAL-5, on the ground that the order is necessary to prevent prejudice to the proper administration of justice within s 37AG(1)(a).