Scott v Oz Minerals Limited
[2013] FCA 182
FEDERAL COURT OF AUSTRALIA
Scott v Oz Minerals Limited [2013] FCA 182
Citation: Scott v Oz Minerals Limited [2013] FCA 182 Parties: ANTHONY SCOTT and NICOLA TAWS v OZ MINERALS LIMITED (ACN 005 482 824) File number: NSD 1433 of 2010 Judge: EMMETT J Date of judgment: 8 February 2013 Legislation: Federal Court of Australia Act 1976 (Cth) ss 33D, 33ZF Date of hearing: 8 February 2013 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 10 Counsel for the plaintiffs: S Lewis (solicitor) appeared for the plaintiffs Solicitor for the plaintiffs: Slater & Gordon Counsel for the respondent: J Betts (solicitor) appeared for the respondent Solicitor for the respondent: Herbert Smith Freehills
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1433 of 2010
BETWEEN: ANTHONY SCOTT
ApplicantAND: OZ MINERALS LIMITED
Respondent
JUDGE:
EMMETT J
DATE OF ORDER:
8 FEBRUARY 2013
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. Pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth), the Court authorises Slater & Gordon to deduct the sum of $64,905.75 from the settlement distribution fund, in payment of its professional costs incurred in the administration of the scheme since July 2011.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1433 of 2010
BETWEEN: ANTHONY SCOTT
ApplicantAND: OZ MINERALS LIMITED
Respondent
JUDGE:
EMMETT J
DATE:
8 FEBRUARY 2013
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This proceeding was brought by Mr Anthony Scott under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (the Act) on his own behalf and on behalf of members of the group identified (the Applicants). On 1 July 2011, the Court made orders under s 33D and s 33ZF approving settlement of the proceeding as between the Applicants and the respondent, OZ Minerals Limited (Oz Minerals). The settlement was reached on the terms of a deed of settlement (the Deed), and in accordance with a settlement distribution scheme (the Scheme), both of which were referred to in the order of 1 July 2011.
Under the terms of the Scheme, Oz Minerals paid the sum of $21,000,000 to Slater & Gordon, the solicitors for the Applicants, in full and final satisfaction of all claims made and related to the matters alleged in the proceeding. From that sum, the Applicants recovered the sum of $1,800,000 for legal costs for Slater & Gordon, who acted for the members of the group in the proceeding. In addition, Slater & Gordon recovered further costs relating to the obtaining of approval and administration of the Scheme, which were to be taken from interest earned on the sum of $21,000,000. Such costs were not to exceed $400,000. A further sum of $2,825,673.60 was to be paid to a litigation funder. Finally, a residual sum of at least $16,000,000 was to be distributed to group members.
Under clause 8 of the Deed, the sum of $21,000,000 was to be paid into an interest-bearing account, to be opened by Slater & Gordon with Westpac Banking Corporation. Clause 8 provided that Oz Minerals was to have no right, title, interest in or claim to any part of the distribution fund and that, if after full implementation of the Scheme according to clause 9, there was any surplus of funds not distributed to the Applicants, then Slater & Gordon were to distribute the surplus to Oz Minerals. Clause 9(b)(4) of the Deed provided that, under the Scheme, any costs and disbursements incurred in connection with the administration of the Scheme and in connection with obtaining court approval were to be paid first from any interest that accrued, inter alia, on the distribution fund. Any such administration costs could be paid before any distribution of the distribution fund.
Slater & Gordon were to receive, from the interest earned on the sum of $21,000,000 paid into the distribution fund, the sum of $400,000 in respect of their costs for obtaining approval of the Deed and the Scheme and the administration of the Scheme. However, the total costs for the time recorded in Slater & Gordon’s ledger as having being expended in carrying out the operation of the Scheme since 4 July 2011 up to 29 November 2011 exceeded the amount provided by approximately $215,000. Further, the administration of the Scheme is not complete.
It is still necessary to follow up group members who have not presented cheques from the distribution fund and to check the contact details of group members whose settlement cheques have been returned to Slater & Gordon. Slater & Gordon estimate that costs likely to be incurred in those tasks would amount to $8000.
The definition of group members in the statement of claim excluded all entities represented in other court proceedings who had acquired Oz Mineral shares and suffered loss in the circumstances described. Prior to distributing the distribution fund to group members, it was found that approximately 20 group members were also represented in another court proceeding. Accordingly, those 20 group members were not eligible to receive a distribution from the distribution fund.
As a result of the group members being ineligible to receive a distribution and the recovery of payments made to such members, the sum of $64,905.75 (the Residual Amount) remains in the distribution fund and is not being distributed to group members. The amount distributed to group members was $16,265,018.21. The distributions that have been carried out to date involve some 8,888 payments, of which some 8,599 were made by cheque, bank cheque or electronic funds transfer. It is estimated that some $20,000 plus GST of further expenses would be incurred in preparing spreadsheets and ensuring the correctness of data necessary for the distribution of the Residual Amount to group members.
It is expected that there would be numerous calls from group members with inquiries about the additional payment, each of which would need to be handled and logged appropriately. If the distribution were to be distributed to group members on a pro rata basis, a significant number of group members would receive an amount of less than 1 cent. Further, substantial costs and expenses would be incurred if the residual amount were to be distributed. It is estimated that if the residual amount were distributed to group members approximately 60 per cent would be taken by professional costs and disbursements.
Against that background, Slater & Gordon have asked that the Residual Amount be applied in reimbursement to them of costs and expenses incurred in the administration of the Scheme, in excess of the sum of $400,000 provided for in the Deed. The alternative of distributing the Residual Amount to group members would result in little more than $20,000 being applied for their benefit, the balance being consumed in costs and expenses. Clause 10 of the Scheme provides that Slater & Gordon may refer to the Court for determination of any issues arising in relation to the Scheme or its administration.
They have now applied to the Court for an order that the Residual Amount may be applied from the distribution fund in payment of professional costs for Slater & Gordon incurred in the administration of the Scheme since July 2011. Oz Minerals does not oppose the making of such an order. In all of the circumstances, I consider that it is appropriate to accede to the application.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 6 March 2013
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