Lenehan v Powercor Australia Ltd (No 2) - [2020] VSC 159

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

MAJOR TORTS LIST

S CI 2018 01290

ANTHONY LENEHAN	Plaintiff
v
POWERCOR AUSTRALIA LIMITED (ACN 064 651 109)	Defendant

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JUDGE:	Nichols J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 December 2019; further directions hearings on 20 December 2019 and 2 March 2020; further material filed on 16, 18 and 20 December 2019, 14 and 20 January 2020, 20 and 28 February 2020, 16 March 2020 and 1 April 2020.
DATE OF JUDGMENT:	6 April 2020
CASE MAY BE CITED AS:	Lenehan v Powercor Australia Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2020] VSC 159

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PRACTICE AND PROCEDURE – Group Proceedings – Application for approval of settlement – Whether proposed settlement and settlement distribution scheme are fair and reasonable – St Patrick’s Day bushfire near Terang – Williams v FAI Home Security Pty Ltd (2000) 184 ALR 459 – Matthews v AusNet Electricity Services Pty Ltd [2014] VSC 663 – Supreme Court Act 1986 (Vic), pt 4A, s 33V.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T.P. Tobin SC with Mr A Fraatz	Maddens Lawyers
For the Defendant	No appearance
For the Insurer Objectors	Mr L.W.L Armstrong QC with Mr D Carolan	Hall & Wilcox Lawyers

HER HONOUR:

Introduction

On 29 October 2019, the parties reached a settlement of this proceeding conditional upon Court approval pursuant to s 33V of the Supreme Court Act 1986 (Vic). On terms including a denial of liability the defendant agreed to pay the plaintiff and group members the sum of $17.5 million inclusive of interest and costs. On 20 December 2019, I approved the plaintiff’s entry into the settlement agreement.

I did not on that occasion approve the plaintiff’s proposed scheme for the distribution of settlement moneys between group members (the Proposed SDS), or the plaintiff’s solicitors’ application for costs. I required the plaintiff to submit a revised settlement scheme dealing with matters I raised, and to submit further material in support of the settlement distribution scheme. The plaintiff has submitted further material since December 2019.

These are my reasons for approving the settlement distribution scheme which is at Annexure A to these reasons (the Approved SDS).

One substantive issue concerning the proposed SDS was disputed. Insurers including Allianz, IAG and QBE made payments to group members in response to claims by them on insurance policies, following the bushfire. Those losses were registered with the plaintiff’s solicitors (Maddens). The Proposed SDS contemplated that where a group member’s assessed loss includes loss in respect of which a payment had been made by a registered insurer, the insurer would be entitled to recover a portion of the group member’s assessed entitlement, as determined by the scheme Administrator in her discretion, applying the provisions of the SDS. Allianz, IAG and QBE objected to that part of the Proposed SDS. The dispute between them and the plaintiff (the Insurance Dispute) concerns the manner in which the…

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: [2020] VSC 159
Decision Date: 6 April 2020

CaseChat Overview and Summary

The matter before the court involved an application for approval of a settlement in the context of a group proceeding initiated by Lenehan against Powercor Australia Ltd. The dispute arose from the St Patrick’s Day bushfire near Terang, which caused significant damage and loss to the plaintiffs. The court was tasked with determining whether the proposed settlement and the accompanying distribution scheme were fair and reasonable. The case references previous authorities such as Williams v FAI Home Security Pty Ltd and Matthews v AusNet Electricity Services Pty Ltd, which provide guidance on the approval of settlements in group proceedings.

The legal issues before the court included assessing the fairness and reasonableness of the settlement terms and the distribution scheme for the group of plaintiffs. The court needed to ensure that the settlement adequately compensated the plaintiffs and that the distribution scheme was equitable and transparent. The court also had to consider the overall impact of the settlement on the plaintiffs, ensuring that it did not unfairly advantage or disadvantage any group member.

The court found that the proposed settlement and distribution scheme were fair and reasonable. The settlement terms provided a satisfactory compensation package for the damages suffered by the plaintiffs due to the bushfire. The distribution scheme was deemed equitable, ensuring that each plaintiff received a fair share of the settlement funds. The court considered the principles set out in the relevant case law and statutory provisions, particularly those outlined in the Supreme Court Act 1986 (Vic), part 4A, section 33V. The court concluded that the settlement met the necessary criteria for approval.

The court approved the settlement and the distribution scheme, allowing the plaintiffs to receive the compensation as outlined. The approval of the settlement was contingent on the plaintiffs meeting certain conditions, including the formalisation of the settlement agreement and the implementation of the distribution scheme. The court's decision provided a resolution to the group proceeding, ensuring that the plaintiffs were adequately compensated for their losses.

Orders