Thomas v Powercor Australia Limited (Ruling No 8)
[2012] VSC 130
•4 April 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 9166 of 2009
| LAURENCE PETER THOMAS | Plaintiff |
| V | |
| POWERCOR AUSTRALIA LIMITED (ACN 064 651 109) | Defendant |
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JUDGE: | J FORREST J | |
WHERE HELD: | Melbourne | |
DATES OF HEARING: | 30 March 2012 | |
DATE OF RULING: | 4 April 2012 | |
CASE MAY BE CITED AS: | Thomas v Powercor Australia Limited (Ruling No 8) | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 130 | |
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SETTLEMENT AGREEMENT – Interpretation – Representative proceeding - Dispute as to the manner in which claimants’ source documents should be provided – Party requesting documents was entitled to those documents from the outset.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T Tobin SC with Mr L Armstrong and Mr A Fraatz | Maddens |
| For the Defendant | Mr T Schlicht and Mr R Shute | Wotton + Kearney |
HIS HONOUR:
Introduction
On 5 December 2011, Beach J approved the settlement of this class action. The class was closed on 28 February 2012 and the assessment of individual claimants’ damages is now underway.
Issues have arisen as to the production of documents by the claimants as required by the settlement agreement. In particular, the parties are in dispute as to the manner in which source documents should be provided as required by the agreement.
I think that the provision of documentation by the claimants’ solicitors has been unsatisfactory and, in the main, their approach to this process is both incomprehensible and obdurate. My reasons and consequential orders are now set out.
The settlement agreement
In general terms, the settlement agreement provides as follows:
(a)that group members who registered prior to 28 February would receive 55% of the value of the claim plus interest;[1]
(b)that documentation and calculations of the loss of each group member would be provided by the claimants to Powercor’s solicitors in the form of a “claim book” – this is the central issue for determination;[2]
(c)that after receipt of the claim book, Powercor is able to make a confidential offer which is open for acceptance for 14 days, with further negotiation permitted as desired.[3] As I understand the position, it is anticipated that prior to offers being made the loss assessors for the parties will meet and endeavour to sort out those matters in which they are in agreement and those that are in issue;[4]
(d)that in the event of a claim remaining in dispute, then independent assessors, being members of the Victorian Bar, will determine the amount of the disputed claim; and
(e)that the Court will supervise the administration of the agreement.
[1]Clause 2.1.
[2]Clause 4.1.
[3]Clause 6.3.
[4]Clause 6.3.
It is necessary to set out in detail a few of the relevant clauses of the agreement:
4.1As soon as practicable after the Registration Date Maddens will deliver to Wotton + Kearney:
(a)a list of the group members who have registered with Maddens by the Registration Date (“Participating Group Members” or “PGMs”); and
(b)in tranches if practicable:
(i)the documentary or other material upon which each PGM relies to establish the quantum of the PGM’s claim for compensation; and
(ii)a notice setting out the calculation of the PGM’s losses, prepared in accordance with the principles set out in Section 5;
(those documents being together the PGM’s “Claim Book”).
…
6.1Subject to clause 6.2, within 35 days after receipt of any PGM’s Claim Book Powercor shall deliver to Maddens on a confidential basis a written “Individual Offer” calculated in accordance with the Assessment Principles.
6.2In the event that further information by way of particulars or documentary evidence or access to the property of the PGM is reasonably required by Wotton + Kearney then:
(a)Wotton + Kearney or its nominated representatives shall with 28 days after receipt of the Claim Book advise Maddens of the requirement and the PGM shall take reasonable steps to supply the particulars, documents or access; and
(b)the time for Powercor to make the Individual Offer be extended by a period of 28 days from supply of the particulars, documentary evidence or access, as the case may be.
…
10.1Maddens or Powercor may refer any issues arising in relation to the administration of this agreement to the Court for determination, and for the purposes of administration of this agreement Maddens shall act in the interests of the fair administration of the settlement for the group as a whole and not as the representative of any individual group member.
On 15 March 2012, claim books were provided to Powercor’s solicitors by Maddens on behalf of five claimants.
One case illustrates the patent insufficiency of the material supplied by Maddens. Mark Windsor and Karen Morris were the joint owners of a farm situated on the Henty Highway at Haven. Sadly, their house was destroyed in the fire. A loss assessor’s report was completed by Mr Ian Aberdeen, an experienced loss assessor, in March 2012 as part of the claim book. In the report, Mr Aberdeen states:
A quote for $429,895 was received to rebuild the house, but it soon became clear the original quote did not adequately cover the new building requirements to achieve the minimum bushfire attack level (BAL) of 12.5, nor a number of other associated costs as listed below.[5]
Mr Aberdeen assessed the associated costs and went on to enumerate an additional $42,566 in losses over and above the quote.
[5]Page 6 of the claim book of March 2012.
On 20 March 2012, Mr Shute, the responsible partner of Wotton + Kearney acting for Powercor, wrote to Maddens identifying a number of defects in the documentation supplied including that of the omission of the quote. Other defects included:
(a) documents referred to in the claim books which had not been provided;
(b) estimates or receipts not supplied; and
(c) no commitment to provide “insurance documents”.
The reply of Mr Prendergast, the responsible partner at Maddens, in relation to the omission of the quote was to the effect that the document was with “our clients’ insurer” and that “we are presently seeking delivery of the relevant insurance file to us”.
For my part, I find this explanation confounding. The quote is the starting point for the claim for the loss of the house. Mr Aberdeen’s calculations were based upon it and it must have been included in the materials provided to him. When I asked in court whether the quote was in the possession of Maddens, I was told that it was but it was still not produced.
At the hearing, senior counsel for the claimants pointed to clause 6.2 which provides, in effect, for further particulars to be provided by the claimants upon Powercor’s request. He argued that this was the appropriate way in which to seek this information and that the quote would be supplied in due course.
I disagree entirely with this approach. The quote, as I apprehend it, and the other documents asked for by Powercor,[6] are fundamental to the claim and it was entitled to this material from the outset. Clause 4.1(b)(i) of the agreement requires the claim book to include “the documentary other material upon which each PGM relies to establish the quantum” of the claim (emphasis added). The provision of the quote and the other associated material fell squarely within this obligation. Powercor’s solicitors should not have been put to the trouble of requesting the information and, when they did so, the material should have been provided forthwith. I remain bewildered as to why this material was not provided. I cannot understand how it was “overlooked” or “unavailable” given the contents of Mr Aberdeen’s report.
[6]Such as quotes or invoices substantiating the loss of house contents.
The claimants’ solicitors were obliged to provide within the claim book all documentary material reasonably available to the claimants which supported the claim contained in the book. I propose to make a declaration to this effect so as to make it abundantly clear what should have been apparent to the solicitors; I will also make consequential orders for the delivery of the relevant source material.
Provision of material for insurers files
A number of the claimants seek losses which are subrogated to their insurers (or at least part of those losses).[7] To expedite the assessment process, Powercor’s solicitors have sought direct access to the insurer’s files – the suggestion being that the insurers would provide the files for inspection by Powercor’s solicitors in Melbourne. For reasons which I cannot comprehend, Maddens object to this course, insisting, as I follow it, that the files be provided to Maddens who will in turn provide it (who knows when) to Powercor.
[7]At least 13 insurers have an interest in claims arising out of the fire.
There has to be an easier way. In my opinion, Powercor’s request that it has direct access to the insurer’s file directly is both a reasonable and an efficient use of resources. Absent Maddens’ agreement, I propose to give leave to Powercor’s solicitors to issue, on short notice, subpoenas directed to any insurer with a subrogated claim requiring it to produce to the Court all relevant documentation relevant to a claim and associated losses. The claimants and any other persons will then have five days in which to inspect the file and determine whether any documents are subject to a claim of privilege. After that point of time the documents can be inspected and copied by Powercor’s solicitors.
The Horsham Golf Club
The claim by the Horsham Golf Club falls into a different category to those of the individual claimants. It is carved out of the settlement and may, if not resolved (there is provision for ADR in the agreement), be the subject of judicial determination.
A claim book was provided on 27 April claiming a loss of $27,743,784.00. Some source documents were provided but many others have not yet been produced. However, I think this deficiency is understandable. The claim is one of considerable complexity and requires a large number of documents – particularly those relating to consequential losses. A number of source documents were lost in the fire. The solicitors should be allowed to progress this claim as rapidly as is practicable. As discussed at the hearing I will order that further source documents be provided by the end of April.
Orders
I propose to make the following orders:
·Declare that clause 4.1(b)(i) of the settlement agreement requires the claimants to provide within the claim book all source material (documentary or otherwise) reasonably available to them and upon which the estimate of a claimant’s loss is based.
·By 13 April 2012 the claimants’ solicitors provide to the solicitors for Powercor all source material (documentary or otherwise) reasonably available to them in relation to the five claims delivered on 15 March 2012.
·By 27 April 2012 the claimants’ solicitors provide to the solicitors for Powercor all source material (documentary or otherwise) reasonably available to them in relation to the claim of the Horsham Golf Club.
·Powercor be given leave to issue a subpoena pursuant to r 42.02(1)(b) of the Supreme Court (General Civil Procedure)Rules 2005 to the insurer of any claimant whose claim includes losses subrogated to that insurer.
·Subject to the following orders, the inspection of documents pursuant to such subpoena take place in accordance with r 42.09 of the Supreme Court Rules (General Civil Procedure).
·Documents the subject of such subpoena be produced to the Prothonotary in accordance with r 42.06(4)(b) of the Supreme Court (General Civil Procedure) Rules within seven days of service of the subpoena.
·Any objection by a claimant or other person in relation to the inspection of the documents the subject of such subpoena be made within five days of the date upon which the documents are produced to the Prothonotary. Such objection is to be heard within seven days by the trial judge.
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