Somers v Box Hill Institute - [2022] VSC 730

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

GROUP PROCEEDINGS LIST

S ECI 2020 01535

NERITA SOMERS & ORS (according to attached schedule)	Plaintiffs
v
BOX HILL INSTITUTE & ANOR (according to attached schedule)	Defendants

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JUDGE:	John Dixon J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 November 2022
DATE OF JUDGMENT:	29 November 2022
CASE MAY BE CITED AS:	Somers & Ors v Box Hill Institute
MEDIUM NEUTRAL CITATION:	[2022] VSC 730

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REPRESENTATIVE PROCEEDINGS – Part 4A Group proceeding – Application for approval of settlement – Whether proposed settlement is fair and reasonable – Relevant considerations – Approval for payment of legal costs from settlement sum – Whether loading permitted by r 63.48 should be applied and at what rate – Approval of costs of settlement administration – Appointment of Scheme Administrator – Supreme Court Act 1986 (Vic) pt 4A, s 33V; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.48.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	J T Rush KC with M W Guo	Gordon Legal
For the First Defendant	B Quinn KC and M Hooper	Lander & Rogers
For the Second Defendant	R Zambelli	Maddocks

TABLE OF CONTENTS

The application................................................................................................................................... 1

The settlements................................................................................................................................... 1

The evidence....................................................................................................................................... 5

The applicable principles................................................................................................................. 6

Confidentiality............................................................................................................................. 10

Assessment of the settlement........................................................................................................ 12

Approval of deductions from the Resolution Sum................................................................... 16

Soar. 16
Costs of special referee............................................................................................................... 17
Reimbursement Payments......................................................................................................... 17
Plaintiffs’ legal costs of the proceeding................................................................................... 18
The plaintiffs’ claim........................................................................................................... 18
The special referee............................................................................................................. 20
Charge-out rate for paralegals......................................................................................... 22
Other deductions............................................................................................................... 23
Loading for skill, care and responsibility...................................................................... 23
Conclusion on legal fees and disbursements to approval........................................... 31

Appointment of scheme administrator........................................................................................ 31

Conclusions....................................................................................................................................... 34

HIS HONOUR:

The application

The plaintiffs in this group proceeding applied for approval of settlements of the proceeding pursuant to s 33V of the Supreme Court Act 1986 (Vic). There are two settlements to be considered.

(a) The settlement between the plaintiffs and Box Hill Institute (BHI) under which BHI will pay $33 million in satisfaction of the claims of the plaintiffs and group members, inclusive of both the legal costs incurred by the plaintiffs and group members in the conduct of the proceeding and scheme administration costs;

(b) The settlement between the plaintiffs and Gobel Aviation (Soar) under which the plaintiffs’ proceeding as against Soar will be discontinued, with the plaintiffs to pay $15,000 to Soar in full satisfaction of a previous costs order in Soar’s favour.

The settlements

A settlement deed (Deed) was executed between the parties and is dated 8 September 2022. BHI’s payment of $33 million comprises the Resolution Sum. Subject to court approval, certain amounts are to be deducted from the Resolution Sum to constitute the Compensation Sum to be distributed to group members. The deductions sought were:

(a) The plaintiffs’ legal costs up to the date of settlement approval in the sum of $5,455,000;

(b) The costs of administration and distribution of the Resolution…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] VSC 730
Decision Date: 29 November 2022

CaseChat Overview and Summary

Somers v Box Hill Institute was a legal dispute that came before the Supreme Court of Victoria. The plaintiff, Somers, sought approval for a proposed settlement with the defendant, Box Hill Institute, in relation to a group proceeding under Part 4A of the Supreme Court Act 1986 (Vic). The nature of the dispute centred around whether the proposed settlement was fair and reasonable for the group of plaintiffs, and if the legal costs and expenses could be paid from the settlement sum. The court was also required to decide whether a loading under r 63.48 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) should be applied, and if so, at what rate. Additionally, the court needed to consider the appointment of a Scheme Administrator to oversee the distribution of the settlement funds.

The court examined the relevant considerations under the Supreme Court Act and Rules to determine the fairness and reasonableness of the settlement. The primary concern was ensuring that the settlement was in the best interest of the plaintiffs, particularly those who had suffered loss or damage as a result of the actions of Box Hill Institute. The court also considered the loading provision under r 63.48 and whether it should be applied in this case, and if so, at what rate. Furthermore, the court assessed the appropriateness of paying legal costs from the settlement sum and the costs of settlement administration.

In its judgment, the court found the proposed settlement to be fair and reasonable for the plaintiffs. The court approved the payment of legal costs from the settlement sum, as it was deemed necessary to cover the expenses incurred during the proceedings. The court also determined that the loading under r 63.48 should be applied, but at a reduced rate due to the unique circumstances of the case. The court appointed a Scheme Administrator to oversee the distribution of the settlement funds to ensure transparency and fairness for all parties involved. The court's decision provided clarity and guidance for both the plaintiffs and defendants, facilitating the resolution of the group proceeding.

Orders