Money Max Int Pty Limited (Trustee) v QBE Insurance Group Limited (No 4)
[2018] FCA 2107
•21 December 2018
FEDERAL COURT OF AUSTRALIA
Money Max Int Pty Limited (Trustee) v QBE Insurance Group Limited (No 4) [2018] FCA 2107
File number: VID 513 of 2015 Judge: MURPHY J Date of judgment: 21 December 2018 Catchwords: PRACTICE AND PROCEDURE – costs – approval of settlement administration costs to be deducted from settlement sum – costs sought approximately half the amount of costs actually incurred – costs found to be fair and reasonable by Referee Date of hearing: Heard on the papers Date of last submissions: 20 December 2018 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 13 Solicitor for the Applicant: Maurice Blackburn Solicitor for the Respondent: Allens ORDERS
VID 513 of 2015 BETWEEN: MONEY MAX INT PTY LIMITED, AS TRUSTEE FOR THE GOLDIE SUPERANNUATION FUND
Applicant
AND: QBE INSURANCE GROUP LIMITED
Respondent
JUDGE:
MURPHY J
DATE OF ORDER:
21 DECEMBER 2018
THE COURT ORDERS THAT:
1.Pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) the amount of $272,361.16 be approved as the reasonable costs of settlement administration, some further disbursements and the Referee’s charges for her report dated 19 December 2018.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MURPHY J:
These reasons concern the reasonableness of costs proposed to be charged to the applicant and class members in respect of administration of the Settlement Distribution Scheme (SDS) by Maurice Blackburn. Maurice Blackburn seeks orders that costs of $272,361.16 be approved to be deducted from the settlement sum, for its costs of administering the SDS (Administration Costs) and for some further disbursements and the charges of the Court-appointed referee for her latest report.
For the reasons I briefly explain, I am satisfied that that it is appropriate to approve costs of $272,361.16 and allow them to be deducted from the settlement sum. I have made an order accordingly.
Appointment of SDS Administrator and costs reference
I will not reprise the details in previous judgments in this matter, particularly the primary settlement approval judgment in Money Max Int Pty Limited (Trustee) v QBE Insurance Group Limited [2018] FCA 1030. It is however necessary to provide some limited context.
As part of the settlement approval application in the proceeding the solicitors for the applicant, Maurice Blackburn, sought appointment as Administrator of the Settlement Distribution Scheme (SDS or the Scheme). Before deciding to appoint the firm as Administrator I directed that it provide a quote for settlement administration costs, in order to decide whether it was necessary to conduct a limited tender process for that work. Ms Brooke Dellavedova, a Principal in Maurice Blackburn, made an affidavit on 11 May 2018 in which she provided an estimate of $251,202.50 for the costs of administering the Scheme. I was satisfied this was at the low end of the range and considered there were advantages to having the SDS administered by a law firm experienced in the conduct of settlement administrations, and that was familiar with the matter. I made orders appointing Maurice Blackburn as Administrator of the SDS on 29 May 2018.
By orders dated 4 May 2018, the Court appointed Ms Elizabeth Harris as referee (Referee) pursuant to s 54A of the Federal Court of Australia Act 1976 (Cth) to inquire and report to the Court in relation to the reasonableness of various costs charged to the applicant and class members.
The Referee provided a report dated 19 December 2018 as to the reasonableness of the settlement administration costs (Administration Costs). As part of her review of Administration Costs the Referee undertook a high-level review of spreadsheets of the time recorded by Maurice Blackburn fee earners on the SDS administration file, reviewed spreadsheets of disbursements and supporting invoices, and reviewed relevant invoices and court documents.
Costs sought to be approved
The actual Administration Costs incurred by Maurice Blackburn total $558,873.97 which is 234% higher than the estimate provided by Ms Dellavedova and the overrun comprises almost entirely professional fees. However, and importantly, Maurice Blackburn has advised that the firm limits its claim for Administration Costs to the amount it originally budgeted for and estimated to the Court. That is, the firm seeks Administration Costs of $251,202.50.
Maurice Blackburn also seeks recovery of some further disbursements that relate to the application for settlement approval (further disbursements). The invoices for these disbursements were received after the Referee’s report on Further Proceeding Costs and were therefore not included in that reference. The total of these disbursements is $19,398.66, which include counsel’s fees, consulting fees and the costs of photocopying by Law in Order.
The Referee’s charges for preparing her latest report are $1,760, which amount is also sought to be deducted from the settlement sum.
The total amount sought to be approved is therefore $272,361.16.
Consideration
The Referee found that the Administration Costs sought to be approved are fair and reasonable. The Referee identified some duplicated work and discrepancies relating to hourly rates charged and how time was recorded by Maurice Blackburn, but said that that any reductions she could recommend resulting from such discrepancies and other issues would be far less than the reduction Maurice Blackburn has voluntarily agreed to. The amount Maurice Blackburn seeks be approved is approximately 45% of the costs the firm actually incurred. I thank the firm for the sensible approach it has taken on this question.
The Referee also concluded that the further disbursements were reasonably incurred and are reasonable in amount. I accept the Referee’s conclusion that regard. It is appropriate too that the Referee’s modest fee for her latest report be deducted from the settlement fund. The Referee’s fee is minimal the circumstances and it and reflects the proportionate approach the Referee correctly took in light of Maurice Blackburn’s voluntary agreement to reduce its costs.
I approve the Administration Costs, further disbursements and Referee’s fee in the amount sought.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Murphy. Associate:
Dated: 21 December 2018
0
1
0