introduction
1 These are reasons for orders made approving a settlement in this representative proceeding.
2 The broad nature of the proceeding brought by the individual group members represented by the representative party, Mr Timothy Boase is discussed in two earlier judgments (Boase v Sullivan Commercial Pty Ltd trading as McGees Property [2010] FCA 1441) (Boase No 1) and Boase v Sullivan Commercial Pty Ltd trading as McGees Property (No 2) [2011] FCA 510 (Boase No 2) (at [1]-[11])).
3 As a result of mediation conducted by a Deputy District Registrar of this Court and at which all parties were advised by experienced legal practitioners the parties reached a settlement. (Such legal advice was available for part of the time only in the case of Mr Boase.) The agreement resulting from that settlement has come before me for approval under s 33V of the Federal Court of Australia Act 1976 (Cth) (the FCA Act). That provision is as follows:
33V Settlement and discontinuance - representative proceeding
(1) A representative proceeding may not be settled or discontinued without the approval of the Court.
(2) If the Court gives such an approval, it may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court.
4 Without disclosing in these reasons the terms of the confidential settlement, I am satisfied on the basis of the content of Mr Boase's affidavit sworn on 6 December 2012 that the settlement should be approved by the Court. Following the agreement being reached in principle at the mediation, Mr Boase undertook to put the terms of the settlement to the group members. He did so. The terms of the settlement were expressly agreed to by the individual group members. Those confirmations of approval to the agreement are annexed to the affidavit of Mr Boase.
5 The settlement was appropriate and a reasonable offer in the circumstances. Its acceptance by both Mr Boase and the group members is equally appropriate. In addition to the precise terms of the settlement, I take into account the fact that Mr Boase has, for all practical purposes, been conducting the complex proceeding himself. Although he has had legal advice, there has been no solicitor formally on the record and all appearances have been by Mr Boase in person.
6 While Mr Boase has put a lot of effort into the conduct of the proceeding and has achieved a favourable outcome, it has not all been smooth or comfortable sailing. There can be significant complexities behind representative proceedings. The anticipation of the legislation and rules is that such proceedings will usually be conducted by persons well versed in the procedure of the Court generally. Mr Boase does not purport to be well versed with Court proceedings generally let alone the special nature of representative proceedings. He has complained several times about documents being rejected by the Registry and made a variety of complaints about his experience in the Court proceeding generally. I mention these matters only to make clear that had the matter progressed to trial, Mr Boase would have been even further out of his depth. It was clear that while he had legal advice at and around the mediation, that legal advice was not to be continuing. It was not suggested that any other legal advice and representation was to be forthcoming.
7 All that said, having regard to the specific terms of the settlement, it is unsurprising that it was acceptable to the group members and it is a settlement which should be approved by the Court as I do.
8 One of the slight mechanical difficulties in finalising the matter was that pursuant to the terms of the settlement it was anticipated that a settlement sum would be paid into Court seven days prior to the listing of the application to approve the settlement. That event did not occur for reasons which are not presently relevant and to which I attribute criticism to neither party. It required a minor re-fabrication of orders which might usually be made.
9 On assurance that the settlement sum could be paid into Court promptly but with liberty to apply to cater for delay should difficulties be occasioned, I approved the settlement subject to the payment being made into Court.
10 I need to touch on two final matters. First it is necessary to comment briefly on the position of the former Twenty-Fifth and Twenty-Sixth Group Members. Section 33J(2) of the FCA Act provides that a group member of a representative proceeding may opt out by written notice given under the Federal Court Rules 2011 (Cth) (the Rules). Rule 9.34 provides that an opt out notice under s 33J(2) of the FCA Act must be in accordance with Form 21. For reasons that are not presently relevant, no formal opt out notice was provided by the Twenty-Fifth and Twenty-Sixth Group Members to the Court. On 3 August 2012, Mr Boase filed a minute of substituted statement of claim omitting the Twenty-Fifth and Twenty-Sixth Group Members from the schedule of parties to the proceeding. On 11 September 2012 I ordered that the minute dated 3 August 2012 stand as the substituted statement of claim. Mr Boase's affidavit of 6 December 2012 reveals that the former Twenty-Fifth and Twenty-Sixth Group Members made quite clear that they did not wish to participate in the representative proceeding prosecuted by Mr Boase. It was for those reasons that, pursuant to my discretionary powers conferred by r 1.32 of the Rules, it was in the interests of justice for the Twenty-Fifth and Twenty-Sixth Group Members to be removed as Group Members. That was achieved by the orders of 11 September 2012.
11 Secondly, Mr Boase had informally foreshadowed (prior to the hearing at which the orders herein were made) that he would also make an application for reimbursement of certain legal costs and expenses he has incurred in the conduct of the proceeding pursuant to s 33V(2) and s 33ZJ of the FCA Act. I did not have any difficulty in principle with this proposition. The only consideration about that aspect which I raised with Mr Boase in open court was that there was no evidence that he had given any indication to any of the group members of his intention to attempt to deduct those amounts from the settlement sum before distributing the balance to them. Having pointed this out to Mr Boase, he unequivocally withdrew the application and said that he would sort the issue out with the group members himself. There may have been other ways to approach this issue - specifically, by approving the payment on condition that no group member raised valid objection within a reasonable period of being informed of the proposed deduction from the settlement proceeds - and indeed this had been my intention. Mr Boase however was emphatic that he would withdraw this application and deal with the group members separately. There was little doubt that Mr Boase, who has achieved a good result for those persons he represents, was understandably keen to avoid further delay in completing recovery of payment under the settlement.
12 For the foregoing reasons, the following orders were made:
1. Subject to payment into and out of Court as set out in orders 4 and 5, the "Terms of Settlement" between the Group Members and the Respondents set out in Annexure "TB1" on page 12 of the affidavit of Timothy Boase sworn on 6 December 2012 are approved pursuant to section 33V of the Federal Court of Australia Act 1976 (Cth) (the FCA Act).
2. Pursuant to section 50 of the FCA Act, the affidavit of Timothy Boase sworn on 6 December 2012 in support of his settlement approval application (including all exhibits) be sealed on the Court file in an envelope marked "Not to be opened except by leave of the Court or a Judge" and not be published to any person without further order of the Court.
3. The parties and their legal representatives do keep the terms of settlement confidential.
4. The First Respondent pay the settlement sum as set out in the "Terms of Settlement" into Court on or before 12 noon Monday 24 December 2012.
5. Upon written direction by the Representative Party to District Registrar Jan, the settlement sum be paid out of Court to the Group Members in equal shares in accordance with the number of lots acquired in the development.
6. Within 14 days of payment of the settlement sum out of Court to the Group Members, the proceeding be dismissed.
7. All previous orders made to date in the proceeding, including costs orders and future listings, be vacated.
8. There be no order as to costs.
9. All parties have liberty to apply.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.