FEDERAL COURT OF AUSTRALIA
Miciulis v Cimic Group Limited [2025] FCA 307
File number(s): VID 564 of 2020 Judgment of: NESKOVCIN J Date of judgment: 4 April 2025 Catchwords: REPRESENTATIVE PROCEEDINGS – settlement approval – whether the proposed settlement is fair and reasonable in the interests of group members – deductions for legal costs and expenses, funding commission, scheme administration costs and applicant’s reimbursement amount – proposed settlement fair and reasonable – proposed settlement approved Legislation: Federal Court of Australia Act 1976 (Cth) ss 33V, 37AF, 37AG, 33ZF Cases cited: Bellamy’s Australia Ltd v Basil (2019) 372 ALR 638; [2019] FCAFC 147
Blairgowrie Trading Ltd v Allco Finance Group Ltd (No 3) (2017) 343 ALR 476; [2017] FCA 330
Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527
Camilleri v The Trust Company (Nominees) Limited [2015] FCA 1468
Darwalla Milling Co Pty Limited v F Hoffman-La Roche Ltd (No 2) (2006) 236 ALR 322; [2006] FCA 1388
Davaria Pty Ltd v 7-Eleven Stores Pty Ltd (2020) 281 FCR 501; [2020] FCAFC 183
Elliott-Carde v McDonald’s Australia Limited (2023) 301 FCR 1; [2023] FCAFC 162
Ewok Pty Ltd as trustee for the E & E Magee Superannuation Fund v Wellard Limited [2024] FCA 296
Galactic Seven Eleven Litigation Holdings LLC v Davaria (2024) 302 FCR 493; [2024] FCAFC 54
Haswell v Commonwealth of Australia (No 3) [2023] FCA 1093
Kelly v Willmott Forests Ltd (in liquidation) (No 4) (2016) 335 ALR 439; [2016] FCA 323
Money Max Int Pty Ltd (Trustee) v QBE Insurance Ltd (2016) 245 FCR 191; [2016] FCAFC 148
Smith v Commonwealth of Australia (No 2) [2020] FCA 837
Street v State of Western Australia [2024] FCA 1368
Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 459; [2000] FCA 1925
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 115 Date of hearing: 24 March 2025 Counsel for the Applicant: A M Folie and J L Page Solicitor for the Applicant: Phi Finney McDonald Counsel for the Respondent: J Stoljar SC and B C Ryde Solicitor for the Respondent: Allens Counsel for the Intervener: A Hochroth Solicitor for the Intervener: Piper Alderman ORDERS
VID 564 of 2020 BETWEEN: MICIULIS SUPERANNUATION PTY LTD
Applicant
AND: CIMIC GROUP LIMITED
Respondent
ORDER MADE BY:
NESKOVCIN J
DATE OF ORDER:
4 APRIL 2025
THE COURT ORDERS THAT:
Application to Intervene
1.Pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth) (the Act), Omni Bridgeway (Fund 5) Australia Invt. Limited (ACN 635 083 984) (the Funder) is granted leave to intervene in the proceeding for the purposes of the application for settlement approval filed on 18 December 2024.
Settlement approval
2.Pursuant to ss 33V and 33ZF of the Act:
(a)settlement of the proceeding on the terms set out in the Deed of Settlement entered into…
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CaseChat Overview and Summary
The Court examined the fairness and reasonableness of the settlement by considering the benefits and drawbacks of the settlement for the group members. The Court concluded that the settlement was fair and reasonable, taking into account the potential costs and benefits, the risks of litigation, and the likelihood of success if the matter proceeded to trial. The Court noted that the settlement provided a pragmatic resolution of the proceeding and offered group members an opportunity to receive compensation without the uncertainties and costs associated with continuing the litigation. The Court approved the settlement and made orders accordingly, including the appointment of an Administrator to oversee the distribution of the settlement funds. Additionally, the Court addressed the costs and expenses associated with the proceeding, ensuring that the settlement sum was appropriately allocated among the parties involved.
Orders
Orders of the court
Application to Intervene
1. Pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth) (the Act), Omni Bridgeway (Fund 5) Australia Invt. Limited (ACN 635 083 984) (the Funder) is granted leave to intervene in the proceeding for the purposes of the application for settlement approval filed on 18 December 2024.
Settlement approval
2. Pursuant to ss 33V and 33ZF of the Act:
(a) settlement of the proceeding on the terms set out in the Deed of Settlement entered into between the Applicant, the Respondent, the Funder and Phi Finney McDonald Pty Ltd (ACN 618 727 905) executed on 27 November 2024 (Settlement Deed); and
(b) the scheme for distribution of the settlement sum pursuant to the Settlement Distribution Scheme in the form provided to the Chambers of Justice Neskovcin on 25 March 2025,
is approved.
3. Pursuant to ss 33ZB and 33ZF of the Act, the persons affected and bound by these orders are:
(a) the Applicant;
(b) the Respondent;
(c) all group members who did not file an opt out notice in accordance with the orders dated 26 April 2023 (April Orders);
(d) Phi Finney McDonald Pty Ltd; and
(e) the Funder and Omni Bridgeway Limited (ABN 45 067 298 088).
Appointment of Administrator of the Settlement
4. Pursuant to s 33ZF of the Act, Mr Jeremy Zimet of Phi Finney McDonald is appointed Administrator of the Settlement Distribution Scheme (Administrator) and is to act in accordance with the rules of the Settlement Distribution Scheme, subject to any direction of the Court.
Participating Group Members
5. Pursuant to ss 33V and 33ZF of the Act, only Registered Group Members (as defined in the April Orders) are entitled to receive any distribution per the Settlement Distribution Scheme as Participating Group Members (as defined in the Settlement Distribution Scheme).
6. Pursuant to ss 33V and 33ZF of the Act, the following group members are deemed to be Registered Group Members and are entitled to receive any distribution per the Settlement Distribution Scheme as Participating Group Members:
(a) the group members listed in Annexure A as Late Registered Group Members, being persons who unsuccessfully attempted to register their claim in accordance with the April Orders and before 20 December 2024 and did not opt out of the proceeding in accordance with the April Orders; and
(b) the group members listed in Annexure B as Further Late Registered Group Members, being persons who did not register or opt out of the proceeding in accordance with the April Orders and sought to register their claim to participate in the proceeding on or after 20 December 2024.
Applicant’s Costs and Expenses
7. Pursuant to s 54A(3) of the Act, the Court adopts the report of the Costs Referee appointed pursuant to the orders dated 20 December 2024 (December Orders), being the report of Mr Roland Matters dated 21 February 2025.
8. Pursuant to ss 33V and 33ZF of the Act, for the purposes of the Settlement Distribution Scheme:
(a) the “Applicant’s Reimbursement Payment”, being reasonable compensation for the time and expenses incurred on behalf of the Applicant in the interests of prosecuting the proceeding on behalf of group members as a whole, is approved in the amount of $25,375.00 (incl GST);
(b) the “Remaining Costs”, being costs incurred in connection with the proceeding on the Applicant’s own behalf and on behalf of all group members in the proceeding but not paid by the Funder or reimbursed, credited or discounted by Phi Finney McDonald to the Funder, and carried on a conditional basis by Phi Finney McDonald, is approved in the amount of $2,965,149.61 (incl GST);
(c) the “Uplift Fee”, being a percentage of the Remaining Costs, is approved in the amount of $741,287.21 (incl GST);
(d) the “Applicant’s Costs and Disbursements”, being costs and disbursements incurred in connection with the proceeding on the Applicant’s own behalf and on behalf of all group members in the proceeding (which includes each of items (b) and (c) above), is approved in the amount of $15,949,623.52 (incl GST);
(e) the “Administration Costs”, being costs and disbursements estimated to be incurred by the Administrator in connection with the administration of the Settlement Distribution Scheme, is approved in the amount of $146,850.00 (incl GST);
(f) the “Funder Costs”, being costs and expenses incurred directly by the Funder, is approved in the amount of $22,248.64 (incl GST); and
(g) the “Funding Commission” in connection with the financing of the Proceeding by the Funder is approved in an amount which is the balance of the Second Priority Settlement Sum as defined in the Settlement Distribution Scheme after deducting the amounts referred to in paragraphs 8(d) to (f) of these orders.
Common Fund Order
9. Pursuant to s 33V of the Act, all Participating Group Members (as defined in the Settlement Distribution Scheme) are to pay to the Funder a pro-rata percentage of the Funding Commission from any distribution received from the Settlement.
Deed Poll
10. From the date that is 7 business days after the appeal period in relation to orders 1 and 2 has expired (pursuant to r 36.03 of the Federal Court Rules 2011 (Cth)), the deed poll dated 5 October 2020, given by Omni Bridgeway Limited in favour of the Respondent as security for the Respondent’s costs in the proceeding, will be void and deemed to have no effect.
Final Orders
11. Within 14 days from the date of the completion of the administration of the Settlement Distribution Scheme, being the date on which the final distribution from the Settlement Distribution Fund (as defined in the Settlement Distribution Scheme) is confirmed by the Administrator, the Applicant and Respondent shall apply jointly for orders to the effect that:
(a) pursuant to ss 22, 23 or 33ZF of the Act or r 1.32 of the Rules, the claims in the proceeding as between the Applicant and Respondent be dismissed with no order as to costs, on the basis that the dismissal is a defence and absolute bar to any claim (either direct or indirect) or proceeding by the Applicant or group members who have not opted out of the proceeding as against the Respondent (and its Related Entities as defined in the Settlement Deed) from:
(i) the Applicant Released Claims (as defined in the Settlement Deed);
(ii) losses allegedly suffered by the Applicant or any group member who has not opted out of the proceeding arising or resulting from or connected with the Applicant Released Claims; and
(iii) the Applicant’s and/or any group member’s costs of, or incidental to, the Proceeding, provided that the group member has not opted out of the proceeding.
(b) pursuant to s 33ZF of the Act, the releases and pleas in bar in the Settlement Deed and paragraph 11(a) of these orders, operate without prejudice to:
(i) the right of any party to the Settlement Deed (including any Participating Group Member as defined in the Settlement Distribution Scheme) to make an application to enforce the Settlement Deed in a new proceeding; or
(ii) the right of the Administrator (as defined in paragraph 4 of these orders) of the Settlement to refer any issues relating to the Settlement Distribution Scheme to the Court for direction or determination in accordance with the terms of the Settlement Distribution Scheme; and
(c) all costs orders previously made in the proceeding be vacated.
Confidentiality
12. Pursuant to s 37AF of the Act, on the grounds referred to in s 37AG(1)(a) of the Act to prevent prejudice to the proper administration of justice:
(a) paragraphs [1] to [22], [47] to [444] (inclusive) and the schedules to the confidential opinion of counsel (Counsel Opinion) annexed to the affidavit of Mr Zimet made 12 March 2025 (Second Zimet Affidavit);
(b) the following parts of the affidavit of Mr Zimet made 17 March 2025 (Third Zimet Affidavit):
(i) all values in the Distribution Estimate column of annexure JAZ-13:158 save for the total;
(ii) all personal identifying information in annexure JAZ-13:159-207 (inclusive);
(iii) all personal identifying information in annexure JAZ-13:208-215 (inclusive);
(iv) all personal identifying information in annexure JAZ-13:216-219 (inclusive);
(c) all personal identifying information in annexure JAZ-14:65-278 of the affidavit of Mr Zimet made on 23 March 2025 (Fourth Zimet Affidavit); and
(d) all personal identifying information in annexure MDG-1:15-18 of the affidavit of Martin del Gallego (del Gallego Affidavit) made on 17 March 2025,
(collectively, Confidential Materials),
the Confidential Materials are confidential for the purpose of rr 2.32(1)(b) and 2.32(3)(a) of the Rules and are prohibited from publication other than to the Funder, Omni Bridgeway Limited (collectively, Omni Bridgeway), the Court, the Applicant, the Applicant’s legal representatives and Omni Bridgeway’s legal representatives until further order.
13. Pursuant to s 37AF of the Act, on the grounds referred to in s 37AG(1)(a) of the Act to prevent prejudice to the proper administration of justice:
(a) the parts of the Third Zimet Affidavit marked with green highlighting;
(b) the information contained in annexure JAZ-13 identified with green highlighting in the table of contents to the Third Zimet Affidavit except in respect of:
(i) annexure JAZ-13:355;
(ii) annexure JAZ-13:437-439 (inclusive);
(c) annexure JAZ-14:65-278 to the Fourth Zimet Affidavit; and
(d) the parts of the del Gallego Affidavit 17 March 2025 marked with grey highlighting;
filed by the Applicant or Omni Bridgeway confidentially pursuant to paragraph 24 of the December Orders (Interim Confidential Materials) are confidential for the purpose of rr 2.32(1)(b) and 2.32(3)(a) of the Rules and are prohibited from publication other than to the Court, the Applicant, the Applicant’s legal representatives, Omni Bridgeway and Omni Bridgeway’s legal representatives until:
(i) forty-nine days after the date on which an order approving the settlement of this proceeding under s 33V of the Act is made (Settlement Approval Orders) if no appeal of the Settlement Approval Orders is commenced; or
(ii) if an appeal of the Settlement Approval Orders is commenced, then until further order.
14. Within 7 days of this order, the Applicant shall file:
(a) a copy of the Third Zimet Affidavit redacting the Interim Confidential Materials and the Confidential Materials;
(b) a copy of the Fourth Zimet Affidavit redacting the Interim Confidential Materials and the Confidential Materials; and
(c) a copy of the Second Zimet Affidavit redacting only the Counsel Opinion in accordance with paragraph 12(a)) of these orders.
15. Within 7 days of the expiry of the time provided for in paragraph 13(i) and (ii) of these orders, as applicable, the Applicant shall file:
(a) a copy of the Third Zimet Affidavit redacting only the Confidential Materials in paragraph 12(b)) of these orders; and
(b) a copy of the Fourth Zimet Affidavit redacting only the Confidential Materials in paragraph 12(c)) of these orders.
16. Within 7 days of this order, Omni Bridgeway shall file a copy of the del Gallego Affidavit redacting the Interim Confidential Materials and the Confidential Materials.
17. Within 7 days of the expiry of the time provided for in paragraph 11(i) and (ii), as applicable, Omni Bridgeway shall file a copy of the del Gallego Affidavit redacting the Confidential Materials in paragraph 12(d)).
Liberty to apply
18. Any party affected by these orders, including for the avoidance of doubt the Administrator, has liberty to apply in relation to the Settlement Distribution Scheme.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
Late Registered Group Members
[The Order entered is available on the Commonwealth Courts Portal, which attaches the Late Registered Group Members.]
Annexure B
Further Late Registered Group Members
[The Order entered is available on the Commonwealth Courts Portal, which attaches the Further Late Registered Group Members.]
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
On 26 April 2023, the Court made orders for opt out and registration (Opt Out and Registration Orders), including for the distribution of a notice to all potential group members (the Opt Out and Registration Notice). The Court fixed 22 June 2023 as the date by which potential group members may opt out of the proceeding (the Class Deadline) and ordered, pursuant to s 33J of the FCA Act, that any group member who wished to opt out of the proceeding must, before that date, deliver to the Court a duly completed opt out notice. The Court also ordered, pursuant to s 33ZF of the FCA Act, that any group member who wished to register their claim may, by the Class Deadline, complete and return a registration form or execute a litigation funding agreement (LFA) with the Funder. The Opt Out and Registration Notice explained that if group members did nothing in response to the notice, they would remain a group member, but may not be permitted to participate in any settlement later reached between the applicant and CIMIC before final judgment. It explained that, if such a settlement was reached, the applicant intended to apply to the Court as part of the settlement approval process for an order which would mean that only registered group members would be permitted to seek any benefit under the settlement, subject to Court approval. The Opt Out and Registration Notice further stated that a group member who neither opted out nor registered would be bound by the settlement, but not be able to seek any benefit under the settlement. The parties attended a Court ordered mediation on 10 and 11 September 2024. On 20 September 2024, the mediation was reconvened by agreement of the parties and, on that date, the parties reached an in-principle agreement to settle the proceeding. On 27 November 2024, the parties, PFM (the applicant’s solicitors) and the Funder signed the Deed of Settlement. Among other things, the Deed of Settlement provides for payment by CIMIC of the Settlement Sum in full and final settlement of the proceeding, in exchange for releases in favour of CIMIC and its related entities from the claims which have been or could have been pleaded in the proceeding. On 20 December 2024, the Court vacated the trial date, which was scheduled to commence on 3 March 2025, to enable the present application to be made. The Court also made procedural orders to facilitate the hearing of the settlement approval application. The orders included approval of the form and content of a Notice of Proposed Settlement, which was ordered to be provided to group members from 20 January 2025, and other ancillary orders regarding the procedure for distribution of the Notice of Proposed Settlement, and the filing of notices of objection to the proposed settlement, by 4:00pm on 3 March 2025.Notification of group members and objections Pursuant to orders made on 20 December 2024 the Notice of Proposed Settlement was distributed to group members, by mail and email, from 20 January 2025 and various notices of objection to the proposed settlement were filed or sent to PFM.