Shimshon v MLC Nominees Pty Ltd
[2025] VSC 208
•11 April 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
GROUP PROCEEDINGS LIST
S ECI 2020 00306
| DAVID SHIMSHON | First Plaintiff |
| JULIAN COUGAN | Second Plaintiff |
| v | |
| MLC NOMINEES PTY LTD (ACN 002 814 959) | First Defendant |
| NULIS NOMINEES (AUSTRALIA) LTD (ACN 008 515 633) | Second Defendant |
| and | |
| MERVYN LAWRENCE BRADY | Proposed Intervener |
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JUDGE: | Waller J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 11 April 2025 |
DATE OF RULING: | 11 April 2025 |
CASE MAY BE CITED AS: | Shimshon v MLC Nominees Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2025] VSC 208 |
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PRACTICE AND PROCEDURE — Group proceedings — Settlement approval — Non-party application to intervene — Applicant in separate Federal Court group proceeding seeking to inspect settlement deed and intervene in settlement approval application or have a contradictor appointed — Whether applicant has direct interest in settlement — Whether intervention would assist court — Principles governing intervention by non-parties in group proceedings — Application of Bauer Media Pty Ltd v Wilson [2018] VSCA 68 test — Scope of s 33ZF of Supreme Court Act 1986 (Vic) — Fiduciary duty of representative plaintiff — Confidentiality of settlement deed — Application dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | R Howe | Maurice Blackburn Lawyers |
| For the Defendant | G Ayres | Allens |
| For the Proposed Intervener | S Habib SC with M Gvozdenovic | William Roberts Lawyers |
HIS HONOUR:
This application concerns whether Mervyn Lawrence Brady (‘Mr Brady’), the applicant in a separate Federal Court group proceeding, should be granted leave to inspect a confidential settlement deed and intervene in the settlement approval application in the present proceeding, or alternatively, have his senior counsel and solicitor appointed as contradictors.
The settlement approval hearing in this proceeding is fixed for 16 April 2025. It is therefore necessary that I determine this discrete non-party application with some urgency. As a consequence, this ruling is more concise than would otherwise be the case.
BACKGROUND[1]
[1]The facts set out below are drawn from the Statement of Agreed Facts emailed to the Court on 9 April 2025.
Before 1 July 2016, Mr Brady was a member of The Universal Superannuation Scheme Fund (‘TUSS’), the trustee of which was the first defendant, MLC Nominees Pty Ltd.
On 1 July 2016, the members of TUSS, including Mr Brady, were transferred by a successor fund transfer to the MLC Super Fund, the trustee of which was NULIS Nominees (Australia) Limited (‘NULIS’).
Mr Brady brought proceedings under Part IVA of the Federal Court of Australia Act 1976 (Cth) on his own behalf and as a representative party for and on behalf of certain members of the MLC Super Fund whose memberships and benefits were transferred on 1 July 2016 by the successor fund transfer to the MLC Super Fund.
Mr Brady sought damages or equitable compensation (or at their election restoration of their superannuation accounts) from NULIS for amounts that he and group members allegedly lost as a result of being charged fees from 1 July 2016 to 23 September 2020. Mr Brady alleged those fees were charged for the purpose of funding commissions to financial advisers, financial services licensees and their authorised representatives.
On 2 December 2024, Markovic J delivered judgment in Mr Brady’s proceeding, concluding that Mr Brady had failed to make out any of his claims against NULIS.
On 18 December 2024, Delany J made timetabling orders for the filing and hearing of a settlement approval application in the present proceeding and the distribution of a Settlement Notice to the group members in this proceeding (‘Delany J Orders’).
The Settlement Notice states at paragraphs [37]–[38]:
If you are a Group Member in the class action Mervyn Lawrence Brady v NULIS Nominees (Australia) Limited (Federal Court of Australia, file number NSD 1736/2019) (Brady Class Action), it may be that recovery of an amount in the MLC MySuper Class Action (if the settlement is approved by the Court), may impact on the amount of loss and damages that may be recoverable in the Brady Class Action to the extent that the same loss or damages are sought to be recovered.
If you have any queries concerning the Brady Class Action, including whether you are a Group Member in that proceeding, you should contact the lawyers conducting it, William Roberts Lawyers. Further information in relation to the Brady Class Action may be found at: A to the orders of the Honourable Justice Delany dated 18 December 2024.
On 16 January 2025, Mr Brady’s legal representative (‘WRL’) received an email from the plaintiffs’ legal representative (‘MB’) advising of the settlement of this proceeding and the Delany J Orders.
Between 23 January 2025 and 3 March 2025, WRL requested a copy of the settlement deed from MB and the defendants’ legal representative (‘Allens’). Mr Brady sought a copy of the deed to ‘identify what impact, if any, the proposed settlement in these proceedings may have on group members’ in his Federal Court proceeding. Mr Brady submits that there is a potential overlap between group members in his Federal Court proceeding and group members in the present proceeding.
MB provided WRL an extract of the settlement deed containing certain clauses and the schedule but did not include any releases. Allens ultimately refused WRL’s request for the settlement deed, stating that it was confidential between the parties save for the clauses provided by MB and noting that Mr Brady was not a group member in this proceeding.
On 12 March 2025, Mr Brady filed a Notice of Appeal in respect of the judgment and orders made in his Federal Court proceeding.
On 24 March 2025, Mr Brady filed a summons in this proceeding, which was subsequently amended to be returnable today, seeking orders granting him access to inspect an unredacted copy of the settlement deed. In addition, he seeks orders granting him leave to intervene in this proceeding, or alternatively, appointing his senior counsel and solicitor as contradictors in this proceeding. The summons was supported by an affidavit of Blagoj Petrovski, the principal of WRL, dated 24 March 2025.
Mr Brady’s application is opposed by the defendants and their submissions are supported by an affidavit of Jaime Allison McKenzie dated 7 April 2025.
The plaintiffs in their written submissions did not oppose Mr Brady or WRL being provided with the unredacted settlement deed, or alternatively, an unredacted release clause. However, as I will explain later, in oral submissions today their attitude changed.
SUBMISSIONS
Mr Brady submitted that the Court may, either under its inherent jurisdiction, under ss 33V and/or 33ZF of the Supreme Court Act 1986 (Vic), or alternatively, pursuant to r 9.06(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), grant him leave to intervene in this proceeding.
Mr Brady's written submissions appeared to accept that the relevant test for a grant of leave to intervene was that set out by the Victorian Court of Appeal in Bauer Media Pty Ltd v Wilson (‘Bauer’).[3]
[3][2018] VSCA 68 (‘Bauer’).
In Bauer, the Court of Appeal held that:
[t]he principles upon which a court may grant leave to intervene are not in dispute. The governing principles may be briefly summarised as follows:
(1)A non-party whose interests would be affected directly by a decision in a proceeding is entitled to intervene to protect the interest liable to be affected.
(2)Where the legal interests of a person may be affected by the operation of precedent or by the doctrine of stare decisis, a court may grant leave to intervene if the interest is sufficiently substantial.
(3)Where a person having the necessary legal interest to apply for leave to intervene can show that the parties to the particular proceeding may not present fully the submissions on a particular issue, being submissions which the Court should have to assist it to reach a correct determination, the Court may exercise its jurisdiction by granting leave to intervene.
(4)A grant of leave may be limited, and subject to such conditions as to costs or otherwise as will do justice as between the parties.
(5)A non-party must satisfy the Court that its contribution, as an intervener, will be useful and different from the contribution of the parties, and that the intervention will not unreasonably interfere with the conduct of the proceeding.[4]
[4]Ibid [7] (Tate and Beach JJA) (citations omitted).
In oral submissions, however, senior counsel for Mr Brady submitted that the Court’s discretion to grant leave to intervene in a group proceeding and to allow a non-party access to a confidential deed of settlement in aid of such intervention derived from the Court’s protective role in approving a settlement and was not constrained by the principles set out in Bauer,[5] which was, in any event, inapposite because it did not involve a group proceeding.
[5]Citing Bolitho v Banksia Securities Ltd (No 6) (2019) 63 VR 291, 322 [111] (John Dixon J).
Nevertheless, much of Mr Brady’s submissions were directed to establishing that he had a direct interest in the settlement approval application, consistent with the first factor identified in Bauer.
Mr Brady submitted that he had a direct interest in the settlement approval application in this proceeding because of the real possibility of overlap between some of the group members in his proceeding and group members in the present proceeding. Consequently, he submitted that there was also a real possibility that the releases (and any ancillary clauses, such as bar to proceedings clauses in the settlement deed) may extinguish, or negatively affect, the rights and interests of those overlapping group members.
Mr Brady submitted that the joint risk of overlap and extinguishment was sufficient in and of itself to grant him, in the first instance, access to the settlement deed and as appropriate, leave to intervene in this proceeding. Mr Brady noted that he did not object to his access to the settlement deed — which is being opposed on the grounds of confidentiality — being subject to an appropriate confidentiality regime.
Mr Brady further submitted that the fiduciary duty he owed to group members in his Federal Court proceeding encompassed both a negative obligation (to avoid actions detrimental to group members' interests) and a positive obligation (to manage the proceeding in a way that serves their interests). He submitted that his fiduciary duty arguably extended to taking steps to ensure that the claims of group members in his proceeding were not negatively affected.
Mr Brady acknowledged that the plaintiffs in this proceeding were subject to the same fiduciary duty. However, he emphasised that the plaintiffs nevertheless have an interest in the private bargain they have reached with the defendants. In oral submissions, senior counsel developed this point by describing the plaintiffs and defendants as ‘friends of the deal’ in the context of the settlement approval application.[6] Mr Brady submitted that this is the very reason why the test under s 33V is not limited to whether the proposed settlement is fair and reasonable as between the parties, but also as between the group members themselves.[7]
[6]Citing Luke v Aveo Group Limited (No 3) [2023] FCA 1665, [32] (Murphy J).
[7]Citing Kyle-Sailor v Heinke (No 2) [2025] FCA 33, [42] (Horan J); Liverpool City Council v McGraw-Hill Financial, Inc (now known as S&P Global Inc) [2018] FCA 1289, [107] (Lee J); Kelly v Willmott Forests Ltd (in liquidation) (No 4) (2016) 335 ALR 439, 443 [3] (Murphy J).
Mr Brady submitted that while it is true that a group member in his Federal Court proceeding who is also a group member in this proceeding can inspect the settlement deed themselves to assess the impact on overlapping group members, this gives insufficient weight to the Court’s protective role in settlement approval applications, ‘ignores the cautions expressed by this Court and the Federal Court vis-à-vis group member participation in such applications’ and undermines the premise of representative proceedings, whereby group members need not take any positive step in the prosecution of the proceeding to judgment to gain the benefit of its prosecution.
Mr Brady additionally stated that his intervention could be limited to filing evidence and making submissions vis-à-vis the releases contained in the settlement deed.
Mr Brady’s submissions with respect to the appointment of a contradictor were not separately articulated and appeared to be pressed on the same basis as for leave to intervene. In oral submissions, senior counsel for Mr Brady appeared to accept that it may be more appropriate for independent counsel, rather than Mr Brady's senior counsel and solicitor, to be appointed as a contradictor.
With respect to the confidentiality of the settlement deed, Mr Brady submitted that, as has been explained by this Court and the Federal Court on multiple occasions, the basis upon which a deed of settlement can be confidential is questionable.
I will not rehearse the defendants’ submissions in detail as I have largely adopted their submissions in my reasons. In short, the defendants submitted that the test in Bauer is the relevant test guiding the Court’s exercise of its discretion to grant leave to intervene. They submitted that that test is not met because Mr Brady lacks a direct interest in the approval of the settlement and his intervention will not meaningfully assist the Court to resolve the settlement approval application. They submitted that leave to intervene should therefore be refused. They submitted that the appointment of a contradictor is inappropriate for the same reasons, and additionally because the contradictor would be constrained by pre-existing duties to Mr Brady that may conflict with putting forward reasonably arguable positions on behalf of and for the benefit of group members. Since there was no proper basis to grant Mr Brady leave to intervene or to appoint a contradictor on his application, the defendants submitted that there was no proper basis to grant Mr Brady access to the settlement deed.
It is also worth noting that the second defendant made it clear in its written submissions that it was prepared to give an undertaking that it would not rely on the releases in response to any claims made by group members in Mr Brady's Federal Court proceeding. In circumstances where Mr Brady’s claim has been heard and determined in favour of the second defendant, the undertaking would only be provided on the condition that Mr Brady and his lawyers agreed not to rely on it as any admission that he or the group members in his proceeding actually had any relevant interest or claim as alleged in his Fifth Amended Statement of Claim. In oral submissions, senior counsel for Mr Brady submitted that the significant difficulty with this undertaking was that Mr Brady could not, without access to the settlement deed, assess whether it appropriately covered the matters with which he was concerned.
The plaintiffs’ brief written submissions stated that they did not oppose the provision of the settlement deed or alternatively, the unredacted release clause to Mr Brady or his legal advisors. They submitted that given Mr Brady’s legal advisors had neither seen nor considered the scope of the release, it was premature to grant leave for Mr Brady to intervene or to appoint a contradictor. They also submitted that if Mr Brady was granted access to the settlement deed, the defendants should pay the plaintiffs’ costs of and incidental to this hearing as it would not have been required but for the defendants’ resistance to Mr Brady’s request.
In oral submissions, counsel for the plaintiffs submitted that the undertaking proffered by the second defendant adequately met Mr Brady’s concerns and rendered unnecessary his application to inspect the settlement deed. Nonetheless, the plaintiffs still sought costs against the defendants on the basis that the provision of the undertaking was only offered on 7 April 2025 in the defendants’ written submissions notwithstanding the request for the settlement deed had been made by Mr Brady in February 2025.
CONSIDERATION
I am not persuaded by Mr Brady’s submission that the test summarised in Bauer does not apply to this application. I do not consider that the Court, pursuant to s 33ZF, has an unconstrained power to grant a non-party leave to intervene in a group proceeding, or to grant such non-party access to a confidential deed of settlement in aid of such intervention, in the absence of such non-party satisfying the criteria set out in Bauer.[8]
[8]In Levy v Victoria (1997) 189 CLR 579, Brennan J identified the jurisdiction of the High Court to grant leave to intervene as ‘an incident of the jurisdiction to hear and determine the matters prescribed by the several constitutional and statutory provisions which confer this Court's jurisdiction’: at 601. This judgment was cited by the Victorian Court of Appeal in Bauer in summarising the criteria for the grant of leave to intervene: at [7]. The general language of s 33ZF cannot be construed as displacing those criteria which are ultimately sourced in the relevant constitutional and statutory provisions which confer this Court’s jurisdiction, especially in light of the observation that the ‘text of … s 33ZF … assumes that an issue has arisen in a pending proceeding between the parties to it’: BMW Australia Ltd v Brewster (2019) 269 CLR 574, 600–1 [51] (Kiefel CJ, Bell and Keane JJ) (emphasis added).
In applying Bauer, I find that the test has not been satisfied. With respect to the first factor identified in Bauer, I do not consider the interests of Mr Brady are directly affected by the settlement.
Contrary to Mr Brady’s submissions, the risk of overlap of group members between proceedings and the potential for the extinguishment of the rights of group members in Mr Brady’s proceeding does not of itself give Mr Brady an interest in the settlement. Mr Brady is not himself a group member in the present proceeding and the releases in the deed of settlement are not given on his behalf. Nor can he be the subject of any orders made under ss 33ZB or 33ZF binding group members to the settlement and the dismissal of the present proceeding.
To the extent that Mr Brady has a fiduciary duty as lead applicant with respect to the group members in his Federal Court proceeding, I do not consider that that duty gives rise to a direct interest in this proceeding.
The fiduciary duty is accommodated to the scope of the statutory agency which arises in respect of Mr Brady’s position as the lead applicant in the Federal Court proceeding. As a self-appointed representative, that statutory agency is limited to advancing claims that give rise to common questions of fact and law.[9]
[9]Timbercorp Finance Pty Ltd (in liq) v Collins (2016) 259 CLR 212, 236 [54] (French CJ, Kiefel, Keane and Nettle JJ).
In this proceeding, Mr Brady does not advance claims that give rise to common questions of fact and law. He is not a group member in this proceeding and thus the claims that are the subject of this proceeding are not part of the common issues of fact or law in his Federal Court proceeding. The claims of overlapping group members in this proceeding are thus necessarily individual claims and he cannot be acting in a representative capacity for those overlapping group members when making the present application.
The limited statutory agency may expand beyond claims that give rise to common questions of fact and law in the context of an in-principle settlement.[10] However, that is only insofar as the lead applicant has the power to negotiate and settle the entirety of the group members’ claims. This also does not assist Mr Brady as he is not presently representing the group members in his proceeding in such a way; that proceeding has been heard and determined and the group members’ claims have been dismissed.
[10]Parkin v Boral Limited (Class Closure) [2022] 291 FCR 116, 148 [127] (Murphy and Lee JJ).
With respect to the fifth factor identified in Bauer, even if Mr Brady did have a relevant interest, I am not satisfied that his intervention would result in evidence or submissions that would be useful and different from the contribution of the parties.
I also take into account the fact that the second defendant was willing to give an undertaking that it would not rely on the releases in response to any claims made by group members in Mr Brady’s Federal Court proceeding, subject to the condition that Mr Brady and his lawyers agreed not to rely on that undertaking as any admission that he or the group members in his proceeding actually had any relevant interest or claim as alleged in that proceeding. Such undertaking in reality would have addressed Mr Brady’s concerns in this application, which relate to the scope of the releases.
Any additional outstanding issues concerning the scope of the releases can be adequately and appropriately addressed by the parties at the settlement approval hearing next week. The plaintiffs can address the fairness of the settlement as between the group members pursuant to s 33V and the plaintiffs are required to weigh the benefit of the settlement against the breadth of the release in assessing whether the settlement is fair and reasonable.
Overlapping group members may themselves object and seek to be heard on this issue if they wish to do so. Settlement deeds have been provided to group members who have requested such access.
In any event, the Court may of its own motion appoint a contradictor in circumstances where it considers it appropriate to do so. The Court is well placed to do so if it considers that the scope of the releases raises issues that may not be appropriately addressed by the plaintiffs at the settlement approval application. However, such a contradictor would need to be objective and independent.
In summary, since I do not consider that there is a proper basis to grant Mr Brady leave to intervene or a proper basis to appoint a contradictor on his application, there is no proper basis to grant Mr Brady access to the settlement deed.
Mr Brady’s suggestion that the basis upon which a deed of settlement can be confidential is questionable takes the matter no further. The settlement deed is subject to an express confidentiality clause. Mr Brady has not established the existence of any right that would entitle him to access the settlement deed in those circumstances.
For these reasons, I will order that Mr Brady's application by summons filed on 24 March 2025 be dismissed and I will further order that Mr Brady pay the defendants’ costs of the application.
Having regard to the plaintiffs’ response to Mr Brady’s application and my reasons for dismissing the application, I do not propose to make any order in respect of the plaintiffs’ costs.
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