Thomas v Romeo Lockleys Asset Partnership

Link copied
Case Copied 74 min read

FEDERAL COURT OF AUSTRALIA

Thomas v Romeo Lockleys Asset Partnership [2022] FCA 1106

File numbers: SAD 105 of 2020
SAD 169 of 2020
Judgment of: CHARLESWORTH J
Date of judgment: 19 September 2022
Catchwords: PRACTICE AND PROCEDURE – application for approval of the settlement of two representative proceedings under s 33V of the Federal Court of Australia Act 1976 (Cth) – where lead applicants allege that they did not receive their full entitlements under the General Retail Industry Award 2010 for the hours worked in contravention of the Fair Work Act 2009 (Cth) – whether the proposed settlement is fair and reasonable in the interests of group members and as between them – respondents agreeing to pay lead applicants’ costs – whether legal costs proposed to be charged by lead applicants’ lawyers are in excess of that which may be lawfully claimed – lawyers’ retainer void – lawyers failing to comply with the Legal Profession Act 2006 (ACT) – desirability of transparency and accountability in asserted claims for legal costs for class actions whether under a retainer or otherwise – relevance of the statutory context under the Fair Work Act 2009 (Cth) – discretion of the Court to fix a lower costs amount consistent with the settlement agreement reached between the parties – rejection of claimed costs amount – lower sum fixed – settlement approved
Legislation:

Fair Work Act 2009 (Cth) ss 12, 539, 540, 557C, 570

Federal Court of Australia Act 1976 (Cth) ss 33X, 33V, 33ZJ, 37AE, 37AG, 54A

Judiciary Act 1903 (Cth) s 79

Legal Profession Act 2006 (ACT) ss 269, 271, 277, 279, 283, 284, 287, 293

Federal Court Rules 2011 (Cth) r 28.61
Cases cited:

Australian Securities and Investments Commission v Richards [2013] FCAFC 89

Baker v Woolworths Group Limited (No 2) [2022] FCA 534

Blairgowrie Trading Ltd v Allco Finance Group Ltd (recs & mgrs apptd) (in liq) (No 3) [2017] FCA 330; 343 ALR 476

Bywater v Appco Group Australia Pty Ltd [2020] FCA 1877

Caason Investments Pty Limited v Cao (No 2) [2018] FCA 527

Camilleri v The Trust Company (Nominees) Limited [2015] FCA 1468

Duck v Airservices Australia (No 3) [2021] FCA 304; 304 IR 99

Earglow Pty Ltd v Newcrest Mining Limited [2016] FCA 1433

Evans v Davantage Group Pty Ltd (No 3) [2021] FCA 70

Fair Work Ombudsman v Woolworths Group Limited (Case Management) [2022] FCA 376

Gall v Domino’s Pizza Enterprises Ltd (No 2) [2021] FCA 345; 391 ALR 675

Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323; 335 ALR 439

Modtech Engineering Pty Limited v GPT Management Holdings Limited [2013] FCA 626

Mutch v ISG Management Pty Ltd [2020] FCA 362

Petersen Superannuation Fund Pty Ltd v Bank of Queensland Ltd (No 3) [2018] FCA 1842; 132 ACSR 258

Prygodicz v Commonwealth of Australia (No 2) (2021) 173 ALD 277

Sheehan v Thiess Pty Ltd [2019] FCA 1762

Stanford v DePuy International Ltd (No 6) [2016] FCA 1452

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Thomas v Romeo Lockleys Asset Partnership and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2022] FCA 1106
Decision Date

CaseChat Overview and Summary

In the case of Thomas v Romeo Lockleys Asset Partnership, the Federal Court of Australia was tasked with approving a settlement of two representative proceedings. The lead applicants alleged they did not receive their full entitlements under the General Retail Industry Award 2010 for the hours worked in contravention of the Fair Work Act 2009. The court was required to determine whether the proposed settlement was fair and reasonable for the group members and if the legal costs claimed by the lead applicants' lawyers were lawful and reasonable. Specifically, the court needed to assess whether the costs were in excess of what could be lawfully claimed under the Legal Profession Act 2006 and whether the lawyers' retainer was void due to non-compliance with these laws.

The court concluded that the settlement was fair and reasonable, but it was not satisfied with the quantum of legal costs claimed by the lead applicants. The court found that the cost estimates provided by the lead applicants' lawyers were excessively high and did not align with the work performed. The court also highlighted the importance of transparency and accountability in the claims for legal costs in class actions, particularly within the statutory context of the Fair Work Act 2009. Given these concerns, the court exercised its discretion to fix a lower costs amount, which was consistent with the settlement agreement between the parties. The court approved the settlement but reduced the legal costs to a sum it deemed reasonable, and the lead applicants, the respondents, and the interested non-party were given liberty to apply to vary the amount fixed.

The court's final orders approved the settlement subject to specific conditions, including the appointment of Adero Law as the Settlement Administrator and the fixing of a lower costs amount. The court also imposed confidentiality orders on certain documentary material to prevent prejudice to the proper administration of justice. Additionally, the court extended the time for one objector to opt out of the proceedings and allowed for ancillary and consequential orders to be applied for by the parties.

Orders

Orders of the court

Approval of settlement

1. Subject to these orders, pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the settlement recorded in the Deed of Settlement and Release and the Settlement Distribution Scheme forming annexures RMM1-1 and RMM1-2 to the affidavit of Mr Rory Michael Markham sworn 17 November 2021 is approved.

2. Pursuant to s 33ZB(a) of the FCA Act, the persons affected by these orders are the lead applicant and all group members (whether registered or not) who have not opted out of the proceedings.

3. Pursuant to s 33ZF of the FCA Act, Adero Law be appointed as the Settlement Administrator of the Final Settlement Scheme and authorised to act in accordance with cl 3 of the Settlement Distribution Scheme, subject to any direction of the Court.

4. Adero Law as the Settlement Administrator of the Final Settlement Scheme has liberty to apply in relation to any matter arising under the Settlement Distribution Scheme.

Costs

5. For the purpose of the Deed of Settlement and Release, the Costs Amount is $560,893.52.

6. The applicant, the respondent and Adero Law (interested non-party) have liberty to apply to vary the amount fixed by paragraph 5, such liberty to be exercised on or before 11 October 2022.

7. In the event that a party or the interested non-party exercises the liberty in paragraph 6, the question be referred to a Registrar for inquiry and report pursuant to s 54A of the FCA Act and r 28.61 and r 28.66 of the Federal Court Rules 2011 (Cth), on terms of reference and subject to conditions to be fixed by the Court.

8. In the event that the liberty in paragraph 6 is exercised by the interested non-party, the interested non-party is to bear its own costs of the application, including the costs of participating in the inquiry.

9. All outstanding costs orders otherwise be vacated.

Confidentiality and public access

10. For the purposes of sub-clause 16.1 of the Deed of Settlement and Release:

(a) subclause 16.1.2 is approved only to the extent that it refers to the Calculation Principles;

(b) subclause 16.1.3 is approved;

(c) clause 16 is not otherwise approved.

11. Nothing in paragraph 10 excuses non-compliance by any person with the order in paragraph 12.

12. Pursuant to s 37AF and s 37AG(1)(a) of the FCA Act, in order to prevent prejudice to the proper administration of justice, the following documentary material (suppressed material) is to remain confidential and its publication is prohibited:

(a) the opinion of Ms Bronwyn Byrnes of Counsel, forming annexure RMM2-7 to the affidavit of Mr Markham sworn 22 February 2022;

(b) the Calculation Principles set out in Schedule 1 to the Deed of Settlement and Release, forming pages 53 to 57 of the affidavit of Mr Markham sworn 17 November 2021;

(c) paragraphs 35 and 36 of the applicant’s written submissions filed on 22 February 2022;

(d) page 15 of the affidavit of Mr Markham sworn on 22 February 2022 containing the table of Group Member eligibility;

(e) pages 18 and 23 of the affidavit of Mr Cutchie affirmed on 22 February 2022;

(f) paragraphs 13, 15, 16, 20, 21, 23, 25, 27, 34, 37, 38, 39, 42, 43, 45, 47, 50, 52, 56, 57, 58, 59, 60, 61 and the table titled “Figure 1” of the affidavit of Mr Cutchie affirmed on 22 February 2022.

13. All previous suppression, non-publication and confidentiality orders are revoked.

14. On or before 26 September 2022 the applicant is to upload to the Court file the materials referred to in paragraph 12, with supressed material redacted in accordance with the order.

15. A request by any non-party for access to a document on the Court file is, by this order, allowed to the extent that the document is not the subject of a suppression order and, to that end, a person requesting a copy of a document referred to in paragraph 12 shall (upon payment of any applicable fee) be provided with a copy of the redacted version of the document filed in accordance with paragraph 14.

Further time to opt out

16. Pursuant to s 33J(3) of the FCA Act, the time and date for the objector referred to at paragraph 146 of the reasons for judgment published today to opt out of this proceeding is extended to 5pm on 10 October 2022.

17. On or before 23 September 2022, the applicant is to serve on the objector a copy of the orders made today and a copy of the reasons for judgment.

Other orders

18. The parties have liberty to apply for ancillary and consequential orders.

19. The order referred to in paragraph 13 is to operate as and from 4:00pm (ACST) on 20 September 2022.

20. Pursuant to s 37AF of the FCA Act 1976, and on the grounds specified in s 37AG(1)(a), the name in paragraphs 16 and 17 of the orders provided to the parties today (and as pronounced in Court upon the delivery of judgment) is suppressed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Fourthly, at least at the commencement of the hearing the Court was not satisfied that Group Members had been provided with sufficient information to enable them to make an informed decision as to whether to oppose the approval of the Proposed Settlement (assuming it was appropriate to extend the deadline for them to do so). As will be seen, that issue was resolved by the fragmentation of the hearing to enable the preparation of additional evidence and notices to Group Members and the extension of time by which Group Members may file notices of objection.THE HEARING AND EVIDENCE At the commencement of the hearing, the lead applicants relied on the affidavits of solicitors employed by Adero Law, namely two affidavits of Mr Rory Markham sworn on 17 November 2021 and 22 February 2022 and an affidavit of Mr Ashley Cutchie affirmed on 22 February 2022. Mr Markham’s affidavit of 17 November 2021 annexes the Deed and the Settlement Distribution Scheme. In his affidavit of 22 February 2022, Mr Markham addresses the steps that Adero Law had taken to advise the lead applicants about the prospects of the proceedings and he sets out his own assessment of the merits of the claim. He annexes to opinions of a costs consultant, Mr Kim Chapman, and Ms Byrnes of Counsel. The focus of Mr Cutchie’s affidavit is the mechanics of the settlement incorporating a “model” that he developed on behalf of Adero Law in conjunction with accountants to estimate the value of claims in another representative proceeding. The model has apparently been used in the present proceedings to assist in the negotiations for the settlement of the claim, presumably by quantifying its total asserted value. The respondents relied on an affidavit of a solicitor Ms Gemma Borrello, sworn on 1 March 2022. It largely addresses the steps the respondents have taken to notify Group Members of the Proposed Settlement. When the hearing commenced, I ventured the preliminary opinion that I did not have sufficient evidence to consider the appropriateness of the Costs Amount. My initial concerns about the quantum of costs were caused in part by cost estimates contained on the face of the Retainer. Those estimates suggested that the lead applicants may incur legal fees in the amount of $400,000.00 (excluding GST) in each matter, only to the point of the first case management hearing. On the material then in evidence, the total estimate of $800,000.00 (excluding GST) for the two proceedings up to the first case management hearing was (and remains) surprising. The pleadings in each matter were substantively identical and the work encompassed in the estimate did not include the preparation of evidence, any interlocutory process or attendance at any other hearing. I made a number of additional observations concerning the methodology employed by the costs consultant Mr Chapman. I did not consider the opinion of Mr Chapman to be sufficiently rigorous to support the orders that were sought, and I remain of that view.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.