Spozac Pty Ltd as trustee for the LDB Family Trust t/as Not Just Cakes v Tyro Payments Ltd

The case before the court involves a representative proceeding brought by Spozac Pty Ltd as trustee for the LDB Family Trust against Tyro Payments Ltd. The dispute revolves around the approval of a proposed settlement under section 33V(1) of the Federal Court of Australia Act 1976. The primary legal issues were whether the proposed settlement was fair, reasonable, and in the interests of the group members, considering the challenges in proving the extent of loss or damage despite a strong case on liability. Additionally, the court examined the proposed distribution scheme, which entitled only a small number of group members with registered substantiated claims to recovery, and the funding costs that significantly reduced the funds available for distribution.

The court, after considering the confidential joint opinion and the arguments presented by senior counsel, found that the settlement represented a fair and reasonable compromise. The settlement was deemed the best outcome achievable under the circumstances, given the difficulties in quantifying losses and the potential risks from concurrent wrongdoer defenses. The court also addressed the issue of the litigation funder claiming both a funding fee and part of the after-the-event insurance costs, ultimately concluding that the after-the-event insurance should be considered an ordinary overhead and a commercially sensible reduction of both the funder's risk and the size of the funding reward.

The court approved the settlement under section 33V(1) of the Federal Court Act, ordering that the terms of the settlement deed be approved and that the proceeding be dismissed with no order as to costs. The court further ordered that the confidential joint opinion not be published and that its contents be suppressed indefinitely due to the applicant's right to legal professional privilege. The parties agreed that the dismissal would serve as a defense and absolute bar to any future claims against the respondent by the applicant or any group member who did not opt out of the proceeding.