FEDERAL COURT OF AUSTRALIA
Schoneweiss v The Fourth Force Pty Ltd [2022] FCA 1236
File number: SAD 156 of 2020 Judgment of: CHARLESWORTH J Date of judgment: 6 October 2022 Date of publication of reasons: 18 October 2022 Catchwords: PRACTICE AND PROCEDURE– application for approval of settlement of a representative proceeding under s 33V of the Federal Court of Australia Act 1976 (Cth) – where applicant and Group Members allege contraventions of the Fair Work Act 2009 (Cth) – whether proposed settlement is fair and reasonable in the interests of Group Members to be bound to it – settlement having effect of Group Members sharing the liability to pay the lead applicant’s costs – whether legal costs proposed to be charged by lead applicant’s solicitors are reasonable – whether enduring suppression orders should be made over material relevant to proposed settlement – proposed settlement approved – assessment of costs deferred Legislation: Federal Court of Australia Act 1976 (Cth) s 33V
Fair Work Act 2009 (Cth) s 570
Legal Profession Act 2006 (ACT)
Cases cited: Australian Securities and Investments Commission v Richards [2013] FCAFC 89
Baker v Woolworths Group Limited (No 2) [2022] FCA 534
Blairgowrie Trading Ltd v Allco Finance Group Ltd (recs & mgrs apptd) (in liq) (No 3) [2017] FCA 330; 343 ALR 476
Caason Investments Pty Limited v Cao (No 2) [2018] FCA 527
Evans v Davantage Group Pty Ltd (No 3) [2021] FCA 70
Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323; 335 ALR 439
Prygodicz v Commonwealth of Australia (No 2) (2021) 173 ALD 277
Division: Fair Work Division Registry: South Australia National Practice Area: Employment and Industrial Relations Number of paragraphs: 20 Date of hearing: 14 June 2022 Counsel for the Applicant: Mr M Whitbread Solicitor for the Applicant: Adero Law Counsel for the Respondents: Ms K Eaton Solicitor for the Respondents: Lynch Meyer ORDERS
SAD 156 of 2020 BETWEEN: CRAIG SCHONEWEISS
Applicant
AND: THE FOURTH FORCE PTY LTD (ACN 084 438 773)
First Respondent
DRAMET PTY LTD (ACN 109 544 425)
Second Respondent
ORDER MADE BY:
CHARLESWORTH J
DATE OF ORDER:
6 OCTOBER 2022
THE COURT ORDERS THAT:
Approval of Settlement
1.Subject to these orders, pursuant to s 33V and s 33ZF of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the settlement recorded in the Deed of Settlement and Release and the Settlement Distribution Scheme forming annexures RMM1-1 and RMM1-2 to the affidavit of Mr Rory Michael Markham sworn on 8 March 2022 is approved.
2.Sub-clause 1.30.1 of the Deed is approved on the condition that the words “paragraph 5(b) of the Further Amended Statement of Claim filed in SAD 105/2020 proceedings on 26 October 2020” be substituted with the words “paragraph 5(b) of the Statement of Claim filed in SAD 156/2020 proceedings on 26 October 2020”.
3.Pursuant to s 33V and s 33ZF(1) of the FCA Act the Court authorises the applicant, nunc…
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- Case
- [2022] FCA 1236
- Decision Date
CaseChat Overview and Summary
The Court determined that the proposed settlement was fair and reasonable in the interests of the group members, as it provided for an equitable distribution of the settlement proceeds and effectively resolved the claims at issue. Regarding the lead applicant's costs, the Court held that the legal costs proposed to be charged were reasonable, taking into account the complexity of the case and the efforts made by the solicitors. The Court also approved the enduring suppression orders over certain materials, finding that they were necessary to prevent prejudice to the proper administration of justice. Consequently, the Court approved the settlement and directed the appointment of a Settlement Administrator to oversee the distribution of the settlement funds.
The final orders included the approval of the settlement on certain conditions, the appointment of a Settlement Administrator, and the fixing of administration costs with a cap on assessed Adero costs. The Court also ordered that the applicant's solicitor conduct a review of the time-keeping records and file an affidavit detailing the outcome of the review. Additionally, the Court imposed confidentiality orders on specific materials to prevent their publication and granted a further case management hearing to address the question of costs.
Orders
Orders of the court
Approval of Settlement
1. Subject to these orders, pursuant to s 33V and s 33ZF of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the settlement recorded in the Deed of Settlement and Release and the Settlement Distribution Scheme forming annexures RMM1-1 and RMM1-2 to the affidavit of Mr Rory Michael Markham sworn on 8 March 2022 is approved.
2. Sub-clause 1.30.1 of the Deed is approved on the condition that the words “paragraph 5(b) of the Further Amended Statement of Claim filed in SAD 105/2020 proceedings on 26 October 2020” be substituted with the words “paragraph 5(b) of the Statement of Claim filed in SAD 156/2020 proceedings on 26 October 2020”.
3. Pursuant to s 33V and s 33ZF(1) of the FCA Act the Court authorises the applicant, nunc pro tunc, to enter into and give effect to the Deed for and on behalf of all class members who did not file an opt out notice in accordance with s 33J of the FCA Act.
4. Pursuant to s 33ZB(a) of the FCA Act, the persons affected and bound by these orders are the applicant and all group members (whether registered or not) who have not opted out of the proceedings.
5. Pursuant to s 33ZF of the FCA Act, Adero Law be appointed as the Settlement Administrator of the Settlement Distribution Scheme and authorised to act in accordance with clause 3 of the Settlement Distribution Scheme, subject to any direction of the Court.
6. Adero Law as Settlement Administrator under the Settlement Distribution Scheme has liberty to apply in relation to any matter arising under the Settlement Distribution Scheme.
Costs
7. For the purposes of the Deed, the Administration Costs are fixed in the sum of $95,634.00 including GST.
8. For the purposes of sub-clause 1.10 of the Deed the amount of the “Assessed Adero Costs”:
(a) is to be determined in such a manner as the Court thinks fit, such determination to be made on or before 29 November 2022; and
(b) is not to exceed, in any event, the sum of $537,132.86 including GST.
9. The parties and Adero Law as an interested non-party have liberty to apply to vary the date in paragraph 8(a).
10. On or before 13 October 2022, the applicant’s solicitor (Adero Law) in its capacity as an interested non-party is to file and serve an affidavit deposing to the existence of any collateral agreement or arrangement affecting the operation or meaning of clause 7 of the costs agreement forming annexure RMM-3 to the affidavit of Mr Markham sworn on 31 May 2022.
11. On or before 13 October 2022, Adero Law is to:
(a) undertake a review of the time keeping records referred to in the reports of Ms Catherine Dealehr dated 30 May 2022 (First Dealehr Report) and 9 June 2022 (Second Dealehr Report), so as to ensure that they contain (and only contain) work that Adero Law asserts is properly chargeable to the applicant, and time entries Adero Law asserts are reasonably necessary for the performance of itemised activities; and
(b) file and serve on the applicant an affidavit:
i. disclosing the outcome of its review and annexing (in electronic form as appropriate) the revised time records;
ii. providing a description of the tasks undertaken prior to the entry into the costs agreement and an explanation as to why they are said to be chargeable to the applicant;
iii. discretely identifying the fees and disbursements said to be chargeable to the applicant for obtaining the opinion of any cost consultant;
iv. providing a detailed description of the work undertaken in the preparation of pleadings, including the provision of work product justifying the professional fees and disbursements claimed against the applicant, and explaining those charges in light of the hours referred to in Table 11 and Table 21 of the First Dealehr Report; and
v. disclosing the extent to which any drafting, analysis, case theory preparation, modelling or other work product is a duplication of work produced in relation to any other litigation and explaining why duplicated work (if any) is claimed against the applicant.
12. All outstanding costs orders otherwise be vacated.
Confidentiality
13. For the purposes of sub-clause 15.1 of the Deed:
(a) the sub-clause is approved only to the extent that it refers to the Calculation Principles and the Model, assumptions and calculations set out within the Model as defined in the Deed;
(b) clause 15 is not otherwise approved.
14. Nothing in paragraph 13 excuses non-compliance by any person with the order in paragraph 15.
15. Pursuant to s 37AF and s 37AG(1)(a) of the FCA Act, in order to prevent prejudice to the proper administration of justice, the following documentary material (suppressed material) is to remain confidential and its publication is prohibited:
(a) the opinion of Mr Michael Whitbread of Counsel, forming annexure RMM–5 to the affidavit of Mr Markham sworn on 31 May 2022;
(b) sub-clause 5.2 and sub-clause 5.3 of the Deed dated 7 March 2022 referred to in the Annexure marked RMM1-1 to the affidavit of Mr Markham sworn on 8 March 2022;
(c) the Calculation Principles set out in Schedule 1 to the Deed, forming pages 46 to 47 and 63 to 64 of the affidavit of Mr Markham sworn on 8 March 2022;
(d) the Calculation Principles set out in Schedule 1 to the Deed, forming pages 56 to 57 and 73 to 74 of the affidavit of Mr Markham sworn on 31 May 2022;
(e) sub-clause 5.2 and sub-clause 5.3 of the Deed dated 7 March 2022 referred to in the Annexure Marked RMM1-1 to the affidavit of Mr Markham affirmed on 31 May 2022; and
(f) each of exhibits RMM3-1, RMM3-2 and RMM3-7 to the affidavit of Mr Markham sworn on 28 September 2022.
16. Upon the entry of the order in paragraph 15, all previous suppression, non-publication and confidentiality orders are revoked.
17. On or before 13 October 2022 the applicant is to upload to the Court file the materials referred to in paragraph 15, with the supressed material redacted in accordance with the order.
18. A request by any non-party for access to a document on the Court file is, by this order, allowed to the extent that the document is not the subject of an order under paragraph 15 and, to that end, a person requesting a copy of a document referred to in paragraph 15 shall (upon payment of any applicable fee) be provided with a copy of the redacted version of the document filed in accordance with paragraph 17.
19. There be a further case management hearing dedicated to the question of costs at 9:00am (ACDT) on 17 October 2022.
20. The parties and Adero Law as an interested non-party have liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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