Watson & Co Superannuation Pty Ltd v Dixon Advisory and Superannuation Services Ltd (Settlement Approval)

In the Federal Court of Australia, Watson & Co Superannuation Pty Ltd and others sought approval of a settlement in representative proceedings against Dixon Advisory and Superannuation Services Ltd (DASS) and others. The primary legal issues were whether the settlement amount, which represented substantially all the respondents' available funds, was reasonable and whether costs incurred by the litigation funder, Balance, in stayed proceedings should be ordered in relation to the settlement. The court also had to decide on an application by the deed administrators for directions under section 90-15 of the Insolvency Practice Schedule (Corporations) to the Corporations Act 2001 (Cth).

The court held that the settlement amount was reasonable given the respondents' limited available funds and the need to provide some return to claimants and creditors. Regarding Balance's costs, the court found that only some of the work done by Balance had an enduring benefit and awarded limited costs. The court granted the application for directions, allowing the deed administrators to proceed with a practical approach to maximise returns to claimants and creditors, acknowledging that perfection was not possible due to the limited funds available.

The final orders included approval of the settlement terms, a process for distribution of available funds to claimants, a proof of claim process, and confidentiality provisions for certain documents. The deed administrators were directed to provide notice of the orders to creditors and were granted liberty to apply for further directions. Balance's costs were limited to those that were proportionate and reasonable in the circumstances.