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Lynden Iddles v Fonterra Aust Pty Ltd

Lynden Iddles v Fonterra Aust Pty Ltd

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Case Copied 20 September 2023 79 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2020 02588

LYNDEN IDDLES & ANOR	Plaintiffs
v
FONTERRA AUSTRALIA PTY LTD & ORS	Defendants

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JUDGE:	DELANY J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 February 2023 and 23 June 2023
DATE OF JUDGMENT:	20 September 2023
CASE MAY BE CITED AS:	Lynden Iddles & Anor v Fonterra Aust Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2023] VSC 566

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GROUP PROCEEDING — Settlement of group proceeding — Approval of settlement under s 33V of the Supreme Court Act 1986 (Vic) — Settlement fair and reasonable — Group proceeding funded by litigation funder — Common fund order sought — Appropriate to make common fund order — Funding commission of 27.5% allowed — Cost of after the event insurance disallowed — Reimbursement of fair, reasonable and proportionate legal costs allowed — Allow $30,000 in favour of lead plaintiffs.

GROUP PROCEEDING — Common fund order — Whether power to make common fund order — Botsman confirms power in s 33V(2) of the Supreme Court Act 1986 (Vic) to make common fund order at point of settlement — Botsman v Bolitho (2018) 57 VR 68 applied.

PRACTICE AND PROCEDURE — Special referee — Costs — Adoption of report — Report of the special referee adopted except in relation to the period after 21 February 2023 with the assessment of costs for that period to be referred back to the special referee for further report — Supreme Court (General Civil Procedure) Rules 2015 (Vic), rr 50.03 and 50.04 — Wenco Industrial Pty Ltd v W W Industries Pty Ltd (2009) 25 VR 119 applied, Rowe v Ausnet Electricity Services Pty Ltd (No 9) [2016] VSC 731 referred to.

COSTS — Conditional costs agreement — Agreement not in plain language — Does not identify basis on which uplift fee is to be calculated — Costs agreement void — Uplift fee not recoverable — Legal Profession Uniform Law, ss 181(2)(a), 182(3)(a), 185(1) and (3) — Russells v McCardel [2014] VSC 287; Wills v Woolworths Group Pty Ltd [2022] FCA 1545, considered.

COSTS — Costs of approval hearing allowed out of settlement sum — Costs of further hearing relating to adoption of costs referee’s reports not allowed out of settlement sum — Costs of that hearing incurred for benefit of law practice — Reiter Brothers Exploratory Drilling Pty Ltd (1994) 12 ACLC 430; Thackray v Gunns Plantations Ltd (No 2) [2011] VSC 417; Re PPI Corporation Pty Ltd [2014] VSC 366; Re Custometal Engineering Pty Ltd [2018] VSC 726; Sons of Gwalia Ltd v Margaretic (2006) 232 ALR 119; Shao v One Funds Management Limited [2023] VSC 251, distinguished.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	First hearing: Mr L Armstrong KC with Mr M Guo and Ms P Kelly	Adley Burstyner
Second hearing: Dr O Bigos KC with Ms N Lenga
For the Defendants	First hearing: Mr R Heath KC with Ms…

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: [2023] VSC 566
Decision Date: 20 September 2023

CaseChat Overview and Summary

Lynden Iddles, a member of a class of consumers, filed a class action against Fonterra Aust Pty Ltd, alleging breaches of consumer law. The dispute centred on the approval of a settlement of the class action under section 33V of the Supreme Court Act 1986 (Vic). The class action was funded by a litigation funder, which sought a common fund order to cover the costs of the proceeding. The court was tasked with determining whether the settlement was fair and reasonable, whether a common fund order should be made, the appropriate amount of the litigation funder's commission, and the reimbursement of legal costs. Additionally, the court had to decide on the costs of the approval hearing and any further hearings relating to the adoption of the costs referee’s reports.

The legal issues included whether the settlement was fair and reasonable, whether the court had the power to make a common fund order at the point of settlement, and the appropriateness of the litigation funder's commission and the legal costs. The court examined whether the conditional costs agreement was in plain language and identified the basis for the uplift fee, which was crucial for determining whether the uplift fee was recoverable. The court also considered whether the costs of the approval hearing and any further hearings should be allowed out of the settlement sum.

The court concluded that the settlement was fair and reasonable and that it had the power to make a common fund order at the point of settlement, as confirmed in Botsman v Bolitho. The court allowed a funding commission of 27.5% but disallowed the cost of after-the-event insurance. It also allowed the reimbursement of fair, reasonable, and proportionate legal costs, including $30,000 in favour of the lead plaintiffs. The costs of the approval hearing were allowed out of the settlement sum, but the costs of further hearings were not, as they were incurred for the benefit of the law practice. The report of the special referee was adopted except for the period after 21 February 2023, with the assessment of costs for that period to be referred back to the special referee for further report.

The court ordered the approval of the settlement, subject to the conditions outlined in the judgment, including the common fund order, the litigation funder's commission, and the reimbursement of legal costs. The costs of the approval hearing were to be paid out of the settlement sum, while the costs of further hearings were not. The assessment of costs for the period after 21 February 2023 was to be referred back to the special referee for further report.

Orders