Smith v Commonwealth of Australia (No 2)

The case involved three class actions brought against the Commonwealth by individuals who alleged damage to their property and businesses due to the use of firefighting foam containing per- and poly-fluoroalkyl substances at Royal Australian Air Force bases. The applicants sought approval for the settlements of these class actions under section 33V of the Federal Court of Australia Act 1976 (Cth). The primary issues the court had to decide were whether the settlements were fair and reasonable and whether the proposed deductions from the settlement sums were justified.

The court first considered the objections raised by some group members, noting that while there was significant opposition, the majority of the group members were content with the settlements. The court also examined the proposed deductions from the settlement sums, including those for litigation funding costs, legal costs, and payments to representative applicants. The court found that the proposed deductions for litigation funding costs were justified as they were lower than what the funder was entitled to under the funding agreements. The court also approved the expense sharing order to distribute legal costs across two class actions commenced by the same solicitors. The court allowed a payment to one representative applicant who had faced harassment, but reduced the amount to exceed only the recompense for time spent in the representative capacity.

The court approved the settlements, noting that the net recovery for group members was fair and reasonable. The settlements would release and quell the claims of group members, except for any future claims for personal injury. The court also noted that the settlements would be binding on group members who registered late, subject to certain conditions. The court appointed Administrators and Independent Counsel to oversee the settlements and directed that the proceedings be dismissed with no order as to costs once the administration was complete. The court vacated all previous costs orders and extended the time for any appeal.

The settlements were approved on the terms set out in the Settlement Deed and the Settlement Distribution Scheme, with amendments to the group member definition. The court allowed specific deductions from the settlement sums for legal costs, funding costs, and other expenses. The court also addressed consequential matters, including the dismissal of the proceedings and the extension of the time for any appeal. The final orders were to be entered in accordance with Rule 39.32 of the Federal Court Rules 2011.