Richards v Macquarie Bank Limited (No 5)

The Federal Court of Australia, in Richards v Macquarie Bank Limited (No 5), considered an application for the approval of a revised settlement scheme in a representative proceeding. The case involved Tracey Richards as the lead plaintiff against Macquarie Bank Limited and Storm Financial Limited, with the Australian Securities and Investments Commission (ASIC) also participating. The Court had previously approved a settlement scheme which was later overturned by the Full Court, necessitating a revised scheme. The current application sought approval for this revised scheme under s 33V of the Federal Court of Australia Act 1976 (Cth).

The legal issues before the Court included whether the revised scheme was fair and reasonable, and whether certain conditions should be imposed upon its approval. The Court needed to determine whether the revised scheme adequately addressed the concerns raised by the Full Court, particularly regarding the absence of prior notice about certain features of the original settlement, such as the funders' premium and the discrimination against certain claimants. The Court also considered whether the revised scheme provided sufficient scope for review and whether it adequately addressed concerns about the notification process and the scrutiny of legal costs.

Justice Logan held that the revised settlement scheme was fair and reasonable subject to certain conditions. The Court approved the scheme with modifications to ensure that interest was paid at a rate consistent with practice note CM 16, and that there be no discrimination against certain claimants. The Court rejected the need for an extended opt-out period and additional review provisions, finding the current scheme sufficient. The Court also approved the costs associated with the settlement, subject to independent scrutiny. The Court found that the notice process was adequate, despite some returns of undelivered communications. The Court emphasised the importance of finality in litigation and the benefits of the settlement to the wider class, motivating its approval subject to the conditions outlined.