Evans v Health Administration Corporation

Supreme Court of NSW|2019-12-09|Before: Ward CJ

), s 38 Cases Cited: 'D' and Wentworthville Leagues Club [2011] AICmr 9 'DK' and Telstra Corporation Limited [2014] AICmr 118 'EQ' and Great Barrier Reef Marine Authority [2015] AICmr 11 ALZ V SafeWork (NSW) (No 4) [2017] NSWCATAD 1; AOZ v Rail Corporation NSW (No 2) [2015] NSWCATAP 179 Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 CJU v SafeWork NSW [2018] NSWCATAD 300 Director General, Department of Education and Training v MT (2006) 67 NSWLR 237; [2006] NSWCA 270 Dorajay Pty Ltd v Aristocrat Leisure Ltd [2009] FCA 19 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 Giller v Procopets (No 2) (2009) 24 VR 1; [2009] VSCA 72 Hodges v Waters (No 7) (2015) 232 FCR 97; [2015] FCA 264 Jane Doe v Australian Broadcasting Corporation [2007] VCC 281 Jo and Comcare [2016] AICmr 64 Johnston v Endeavour Energy [2016] NSWSC 1132 King v Liverpool City Council (No 3) [2018] NSWSC 1047 Rowe v AusNet Electricity Services Pty Ltd [2015] VSC 232 Smith v Australian Executor Trustees Limited; Creighton v Australian Executor Trustees Limited (No 4) [2018] NSWSC 1584 Wheelahan v City of Casey [2011] VSC 215 Wilson v Ferguson [2015] WASC 15 Category: Principal judgment Parties: Tracey Evans (Plaintiff) Health Administration Corporation (First Defendant) Waqar Malik (Second Defendant) Representation: Counsel: M Rivette with M Gerace (Plaintiff) Mr S Free SC with Ms J Taylor (Defendants)

Solicitors: Centennial Lawyers (Plaintiff) Crown Solicitor's Office (Defendants) File Number(s): 2017/00374456 Publication restriction: Nil

Judgment

HER HONOUR: Before me for hearing on 9 December 2019 was an application pursuant to s 173 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) for approval for the settlement of these proceedings in accordance with a Deed of Settlement dated 7 November 2019 between the plaintiff (Ms Evans), on her own behalf and on behalf of each Group Member as defined in the amended statement of claim, the first defendant (Health Administration Corporation) and the first defendant's solicitors (Centennial Lawyers), as amended by deed of variation dated 3 December 2019 (the varied deed of settlement being referred to in these reasons as the Deed of Settlement).
The central question on the application for approval is whether the proposed settlement is fair and reasonable in the interests of Group Members considered as a whole (see Smith v Australian Executor Trustees Limited; Creighton v Australian Executor Trustees Limited (No 4) [2018] NSWSC 1584 (Smith v Australian Executor Trustees (No 4)) per Ball J; King v Liverpool City Council (No 3) [2018] NSWSC 1047 at [25] per Garling J; Johnston v Endeavour Energy [2016] NSWSC 1132 (Johnson v Endeavour Energy) at [22] per Hoeben CJ at CL; Rowe v AusNet Electricity Services Pty Ltd [2015] VSC 232 at [49]-[51] per Emerton J; Matthews v SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Ltd (Ruling No 16) [2013] VSC 74 at [35] per Dixon J; Wheelahan v City of Casey [2011] VSC 215 at [57] per Emerton J citing Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 at 258).
I was satisfied, following my review of the evidence and hearing the submissions made for the plaintiff and the first defendant, that the proposed settlement was fair and reasonable in the interests of Group Members as a whole and I made orders accordingly, indicating that I would provide my reasons as soon as practicable. These are those reasons.

Underlying dispute

By reference to the pleadings (the amended statement of claim filed 27 March 2018, the defence filed 8 May 2018, the reply filed 5 June 2018 and the statement of cross-claim filed 8 May 2018), the dispute as between the plaintiff (on her own behalf and on behalf of the Group Members) as against the first defendant relates to the alleged disclosure by the first defendant to the second defendant (Mr Malik) of Employee Confidential Information, Employee Health Information and Employee Private Information (as defined in the pleadings) provided by each Group Member (the Group Members all being employees or former employees of the first defendant) in circumstances constituting: a breach of the Information Protection Principles contained in Pt 2, Div 1 of the Privacy and Personal Information Act 1998 (NSW) (Privacy and Personal Information Act); a breach of the Health Privacy Principles in Sch 1, ss 5(1)(c) and 5(1)(d) of the Health Records and Information Privacy Act 2002 (NSW) (Health Records and Information Privacy Act); a breach of confidence in equity; misuse of confidential information in equity; and/or a breach of the individual's Employment Agreement (being a breach of a term of trust and confidence implied by law and an express and/or implied term of confidentiality); contravention of the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law (Australian Consumer Law), ss 18 and 29; and a breach of the tort of invasion of privacy for which it is alleged the first defendant is liable or vicariously liable.
The relief sought as against the first defendant includes: damages for breach of contract; damages pursuant to s 236 of the Australian Consumer Law; damages and/or equitable compensation (including aggravated damages) for breach of confidence; aggravated and exemplary damages; interest and costs (including interest on costs).
The causes of action pleaded against the first defendant are thus, in summary, claims for: 1. a breach of confidence (and misuse of confidential information) in equity for which the first defendant is said to be liable or vicariously liable; 2. a breach of the individuals' Employment Agreements, through a breach of the term of trust and confidence implied by law; and an express and/or implied term of confidentiality. 3. a contravention of ss 18 or 29 of Sch 2 of the Australian Consumer Law; and 4. a breach of the tort of invasion of privacy, for which the first defendant is said to be liable or vicariously liable.

Deed of Settlement

The Deed of Settlement recites various matters as to the proceedings, including that the second defendant has not taken an active part in the proceedings (recital D) and that, on a without prejudice basis (after arms-length negotiations undertaken with the assistance of legal advice both in court-ordered mediation and otherwise), the plaintiff and the first defendant have agreed to settle the dispute on the terms and conditions set out in the deed (recital E).
Relevantly, the settlement of the proceeding is conditional upon the making of orders approving the settlement (cl 9.1).
The structure of the settlement recorded in the Deed of Settlement is that a specified sum (the Settlement Sum) is to be paid within 14 days after the Final Settlement Approval (as defined) into an interest bearing account to be opened by the principal of Centennial Lawyers "appointed as fund administrator" with any one of four large trading banks within 14 days after the execution of the Deed of Settlement (see cll 3.1 and 3.2). That sum (the Settlement Distribution Fund) is to be held on trust for the plaintiff and Group Members in accordance with the Deed of Settlement.
Clause 10 of the Deed of Settlement provides for the distribution of the Settlement Sum. In summary, Centennial Lawyers is to carry out a "class member settlement claim" process by which Centennial Lawyers will provide a form via which Group Members can claim their Initial Entitlement (as defined) from the Settlement Distribution Fund prior to the Claim Deadline (and provide details for payment of any share of remaining moneys in the Settlement Distribution Fund after the Claim Deadline (cl 10.1)).
The Distribution of the Settlement Sum is to be: an initial specified sum to the lead plaintiff (Ms Evans) (to be made as soon as practicable after the payment of the Settlement Sum into the Settlement Distribution Fund - I interpose to note that this is presumably because there is no doubt as to her claim details); an initial (and lesser) sum to each of the remaining Group Members (within five business days of receipt of a claim by the relevant Group Member); and any money remaining in the Settlement Distribution Fund after the Claim Deadline (less bank administration costs) is to be allocated in equal portions between the Participating Group Members and the lead plaintiff, and distributed to them as soon as practicable after the Claim Deadline (cl 10.2).
Clause 10.3 provides that: All Group Members who do not claim their Initial Entitlement on or before the Claim Deadline will be bound by the releases and covenant not to sue provided in this Deed, will not be entitled to any distribution of funds in connection with this settlement, and will be precluded from advancing or maintaining any further claim in or through the Proceeding.
Clause 11 deals with the payment of the plaintiff's costs. A specified amount (just less than the amount of the Settlement Sum but, as I note in due course, a significant discount from the actual costs that have been incurred to date in the proceedings) has been agreed, subject to the approval of the court, to be paid to the plaintiff's solicitors and allocated towards all past and future legal and other costs including all future costs relating to the administration of the Settlement and Distribution. The amount to be paid to the plaintiff's solicitors in respect of the plaintiff's costs is a separate sum to the amount of the Settlement Sum.
Thus, the plaintiff will receive a minimum specified amount without deduction for (or any requirement that she pay) any legal costs and each Group Member who responds with a claim form within the Claim Deadline will receive a lesser minimum specified amount (again, without deduction for or any requirement to pay any legal costs); and all Group Members who lodge a claim form within the Claim Deadline will share equally in any undistributed amount of the Settlement Distribution Fund.
The Deed of Settlement is without admission of liability (cl 12.1).
Relevantly, the releases (and covenant not to sue) contained in the Deed of Settlement only involve claims against the first defendant; not any claim against the second defendant (who, as noted above, has taken no active part in the proceedings), who is not party to the Deed of Settlement (see cll 5 and 6). Hence, any claims that Group Members have against the second defendant in relation to the making of the disclosure about which complaint is here made are not affected by the Deed of Settlement.
There are clauses dealing with representations and warranties (cl 13) and confidentiality (cl 14). In relation to the latter, it should be noted that the fact of settlement of the proceedings and the approved orders may be disclosed publicly (see cl 14.2).

Legal principles

I have referred above to the decision of Ball J in Smith v Australian Executor Trustees (No 4). After noting that the central question when determining whether to approve a settlement under the class action provisions is whether it is fair and reasonable in the interests of Group Members considered as a whole ([22]), his Honour went on to note that, in making that assessment, the task is to consider whether the settlement falls within the range of reasonable settlements having regard to all the risks associated with the litigation (see at [22] and the authorities there cited by his Honour). His Honour then said (at [23]-[24]): In considering the question of reasonableness, it is also necessary for the Court to consider whether the settlement is reasonable as between group members and, to the extent that group members are treated differently, whether there is a rational and reasonable basis for doing so: Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd (2006) 236 ALR 322; [2006] FCA 1388 at [34], [60]-[64] per Jessup J; Thomas v Powercor Australia Ltd [2011] VSC 614 at [25] per Beach J; Mercieca v SPI Electricity Pty Ltd; SPI Electricity Pty Ltd v Eagle Travel Tower Services Pty Ltd [2012] VSC 204 at [38]-[39] per Emerton J. It is also necessary for the Court to consider whether the costs were reasonable having regard to the terms of any agreement relating to costs and the reasonableness of the costs that are sought to be paid from the settlement amount particularly having regard to the proportion of the settlement funds to be paid in costs: Wheelahan v City of Casey [2011] VSC 215 at [103] per Emerton J; Courtney v Medtel Pty Ltd (No 5) (2004) 212 ALR 311; [2004] FCA 1406 at [61] per Sackville J; Modtech Engineering Pty Ltd v GPT Management Holdings Ltd [2013] FCA 626 at [24]-[54] per Gordon J; Modtech Engineering Pty Ltd v GPT Management Holdings Ltd (No 2) [2013] FCA 1163; Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq) (No 9) [2013] FCA 1350 at [58] per Jacobson J; Downie v Spiral Foods Pty Ltd [2015] VSC 190 at [177] per J Forrest J; Rowe v AusNet Electricity Services Pty Ltd [2015] VSC 232 at [112]-[113] per Emerton J.
In Johnston v Endeavour Energy, Hoeben CJ at CL, when summarising the principles that govern an application for approval of a settlement of a group proceeding noted (at [22]): … (ii) There will rarely be one single or obvious way in which a settlement should be framed, either between group members and the defendants (inter partes aspects) or in relation to sharing the compensation among group members (inter se aspects) - reasonableness is a range and the question is whether the proposed settlement is within that range (Darwalla Milling Co Pty Ltd v F Hoffman-La Roche & Ors Ltd (No 2) [2006] FCA 1388; 236 ALR 322 at 336 [40] (Jessup J) (Darwalla). (iii) It is not the task of the Court to "second-guess" or go behind the tactical or other decisions made by the plaintiff's legal representatives, but rather to satisfy itself that the decisions are within the range of reasonable decisions according to the known circumstances and the reasonably perceived risks of the litigation (Matthews, Darwalla, see also Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 6) [2011] FCA 277 at [22] (Flick J) (Pharma); Modtech Engineering Pty Ltd v GPT Management Holdings Ltd [2013] FCA 626 at [12] (Modtech) (Gordon J). (iv) In assessing the fairness and reasonableness of a proposed settlement the court relies heavily upon the candid, frank and confidential opinions provided to it by the plaintiff's legal representatives requiring them to disclose the factors which were material to the decision to accept the settlement (Thomas v Powercor Australia Limited [2011] VSC 614 at [18] (Beach J) (Powercor); Wheelahan at [75]; Rod Investments (Vic) Pty Ltd v Abeyratne & Ors [2010] VSC 457 at [11] and [18] (Almond J) (Abeyratne); Lopez v Star World Enterprises Pty [1999] ATPR 41 - 678 at 42 - 670; [1999] FCA 104 (Finkelstein J) (Lopez). (v) The factors adopted in Williams v FAI Home Security Pty Ltd (No 4) [2000] 180 ALR 459; [2000] FCA 1925 (Williams) indicate some of the considerations typically relevant to an assessment of an application for approval. As Goldberg J pointed out in Williams, this is a useful but not exhaustive guide. Those considerations are: (A) The complexity and duration of the litigation. (B) The reaction of the class to the settlement. (C) The stage of the proceedings. (D) The risks of establishing liability. (E) The risks of establishing damages. (F) The risks of maintaining a class action. (G) The ability of the defendants to withstand a greater judgment. (H) The range of reasonableness of the settlement in light of the best recovery; and (I) The range of reasonableness of the settlement in light of all of the attendant risks of litigation. …
His Honour noted that an important consideration is whether group members were given timely notice of the critical elements so that they had an opportunity to take steps to protect their own position if they wished; and that, once appropriate notice is given, the absence of objections or other response action from group members is a relevant consideration in support of the settlement and all its elements (see at [22(xvi)] referring for example, to Dorajay Pty Ltd v Aristocrat Leisure Ltd [2009] FCA 19 per Stone J). His Honour also noted that, where a group member objects to the settlement, an important question is whether the objector is prepared to assume the role and risks of being lead plaintiff.
Hoeben CJ at CL observed (see [22(xvii)]) that: [i]t is easy for group members who face no adverse costs risk to want a plaintiff to fight to the very end. The weight to be given to objections will diminish where the objector is unwilling or unable to take on all of the economic and other burdens which the plaintiff otherwise bears (Wong v Silkfield [2000] FCA 1421 at [24] - [30] (Spender J)).
His Honour also considered that the factors identified by Goldberg J in Williams v FAI Home Security Pty Ltd (No 4) [2000] FCA 1925; [2000] 180 ALR 459 as typically bearing on an assessment of a proposed settlement provide a useful framework; those being: the amount offered to each group member; the prospects of success in the proceeding; the likelihood of the group members obtaining judgment for an amount significantly in excess of the settlement offer; the terms of advice received from counsel and from any independent expert in relation to the issues which arise in the proceeding; the likely duration and cost of the proceeding if continued to judgment; and the attitude of group members to the settlement (see at [24]).

Confidential opinion of Counsel

In the present case, I had the benefit of a confidential memorandum of advice prepared by Mr Michael Rivette of Counsel (Counsel retained by the plaintiff in these proceedings) in which he expresses the opinion that the Settlement Sum and proposed distributions fall within the range of fair and reasonable outcomes, and that the settlement is in the interests of the Group Members.
Central to Mr Rivette's opinion in that regard is that, from information obtained through the issuing of subpoenas, it now appears that the information disseminated was confined to only that information contained in what is defined in the amended statement of claim as "the Coloured List" (that being a document allegedly prepared by or at the instigation of the second defendant in which is recorded the information the subject of the present complaint).
In particular, Mr Rivette has advised that, although the Coloured List contained personal information as defined under the Privacy and Personal Information Protection Act (and contained what in his opinion was confidential information, being health information), that health information was descriptive of the injury suffered by each individual only, and did not contain any details of medical treatments or medical history. Mr Rivette also attaches significance to the fact that it now appears that the Coloured List was provided by the second defendant only to a single recipient (a lawyer who reported it to police once he suspected that the second defendant might not have had the necessary authority to give him the Coloured List).
Mr Rivette has pointed in his opinion to the inherent risks in this litigation (noting his instructions that the second defendant is unlikely to have funds to pay any compensation orders), those risks including the following: that it is presently undecided in New South Wales whether an equitable cause of action for breach of confidence will sound in damages or equitable compensation for mental distress falling short of psychiatric illness (as claimed by certain of the Group Members); that the causes of action pleaded for breach of the tort of invasion of privacy depend upon the court accepting that "it should take an incremental step and recognise the existence of the new tort" (as has been the case in New Zealand and the United Kingdom); the fact that, insofar as the second defendant committed criminal offences through conduct that was outside the scope of his engagement/employment, the first defendant may contend that it cannot in these circumstances be held vicariously liable for the second defendant's actions (especially when the disclosures occurred around twelve months after he had left the first defendant's employment); and, in relation to the misleading and deceptive conduct claim, that the plaintiff will need to meet the first defendant's claim that its dealings with its employees are not in trade and commerce, and therefore not covered by either s 18 or s 29 of Schedule 2 of the Australian Consumer Law.
As to the nature of the information and its dissemination, as noted above Mr Rivette accept that the information was of a limited nature and its dissemination was limited to one person. The Coloured List contains the following types of information about the individuals there recorded: name; address; date of birth; a short general description of how the injury occurred (for example: manual handling of a patient; twist/bend-no patient; exposure to mental stress factors); and a short general description of the affected body part (for example: back-lower; forearm; psychological system). Mr Rivette is of the opinion that this constitutes personal information as defined in the Privacy and Personal Information Protection Act, health information as defined in the Health Records and Information Privacy Act and confidential information as it contains some health information relating to those individuals; but notes that any health information was generally descriptive only, and in no way detailed as to treatment or prognosis.
By way of elaboration of the risks inherent in the litigation, Mr Rivette points to the following.
As to the claim for breach of confidence, he is not aware of any decision in New South Wales in which the equitable cause of action for breach of confidence has sounded in damages or equitable compensation for mental distress falling short of psychiatric illness. He notes that s 38 of the Supreme Court Act 1986 (Vic) (which was relied upon to justify the award of compensation in Giller v Procopets (No 2) (2009) 24 VR 1; [2009] VSCA 72 (Giller v Procopets) per Neave JA), differs from the form of s 68 of the Supreme Court Act 1970 (NSW). It is, however, also noted that (as a matter of principles of precedent), as a decision of an intermediate appellate court, at first instance a court in this jurisdiction (and also the Court of Appeal) should not depart from that decision unless convinced it is plainly wrong (see Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [135]).
As to the causes of action pleaded for breach of the tort of invasion of privacy, it is noted that such a tort has not been recognised in this jurisdiction.
As to the claim that the first defendant has vicarious liability for the conduct of the second defendant (in addition to the direct claims made against the first defendant as to the second defendant being given direct and unfettered access to the information in question), it is noted that the first defendant will argue that it cannot be held vicariously liable for the second defendant's actions in circumstances where: the second defendant committed criminal offences; through conduct that was outside the scope of his engagement/employment; and where the disclosures occurred around twelve months after he had left his employment with NSW Ambulance. It is noted that the first defendant will seek to rely on the decision of Director General, Department of Education and Training v MT (2006) 67 NSWLR 237; [2006] NSWCA 270; and that although it is arguable that this decision is distinguishable, it is a defence the first defendant will press and that will need to be met by the plaintiff in relation to the vicarious liability claims.
As to the Australian Consumer Law claims, it is noted that one argument the plaintiff must meet is that the first defendant's dealings with its employees are not in trade and commerce, and therefore not covered by either ss 18 or 29 of the Australian Consumer Law. It is noted that although the activities of the first defendant have a commercial component to them (referring to subscription payments or charges for use of ambulances) the argument will be whether the internal relationships are relationships are in trade or commerce; and this will be a defence that the plaintiff will need to meet.
Mr Rivette notes that in order to determine whether the distribution amounts fall within the appropriate range of what may be considered a fair and reasonable outcome, guidance can be obtained from awards of compensation in different jurisdictions relating to privacy and data breaches. In this regard, it is his opinion that although direct claims for compensation have not been made under either the Privacy and Personal Information Protection Act or the Privacy Act 1988 (Cth), determinations under these Acts still offer guidance as to the appropriate range of compensation for non-economic loss in privacy breach cases.
In relation to compensation for breach of confidence, Mr Rivette draws attention to three cases in which it has been found that breach of confidence will sound in damages or equitable compensation for mental distress falling short of psychiatric illness (which he considers also offer some guidance, albeit as to what can be considered the higher end of compensation for the "most egregious disclosures").
The most comparable complaint that Mr Rivette has identified is a complaint determined by the Office of the Australian Information Commissioner (OAIC) in Jo and Comcare [2016] AICmr 64 (Jo and Comcare). It is noted that Comcare was found to have interfered with the complainant's privacy by disclosing information about workplace injuries at his current employment to his former employer and an insurance company, in breach of Australian Privacy Principle 6. It is noted that, unlike the current proceeding, this was a disclosure made to multiple recipients, which were all large organisations. An award of $3,000 was made by way of compensation for the loss or damages suffered by the complainant by reason of this interference with his privacy.
Mr Rivette points out that, generally, higher awards will be given by the OAIC when the dissemination is broader, or the suffering arising from the breach is greater (reference there being made to: 'EQ' and Great Barrier Reef Marine Authority [2015] AICmr 11; 'D' and Wentworthville Leagues Club [2011] AICmr 9; and 'DK' and Telstra Corporation Limited [2014] AICmr 118).
Relevant decisions by the New South Wales Civil and Administrative Appeals Tribunal (NCAT) on the assessment of compensation for breach of the Privacy and Personal Information Protection Act as identified by Mr Rivette are: CJU v SafeWork NSW [2018] NSWCATAD 300; ALZ V SafeWork (NSW) (No 4) [2017] NSWCATAD 1; and AOZ v Rail Corporation NSW (No 2) [2015] NSWCATAP 179.
As to awards of compensation for breach of confidence, reference is made to Giller v Procopets; Jane Doe v Australian Broadcasting Corporation [2007] VCC 281; and Wilson v Ferguson [2015] WASC 15. It is noted that each of those cases involved the wide broadcast or dissemination of highly sensitive and personal matters relating to rape or intimate sexual material (and hence it is said that the awards must be seen to be in the highest category of compensation for non-economic loss or injury falling short of psychiatric injury). It is noted that these awards relate to far more explicit and confidential material than that disclosed by the second defendant and that in all those cases there was actual distress (or psychiatric illness) that resulted from the breach, and not a mere presumption of loss through distress.
As to the differential amount of the minimum initial distribution to the lead plaintiff (approximately four times that of the minimum initial payment to the remaining Group Members), Mr Rivette has opined that the additional amount so allocated is justified given the time, money and energy expended in preparing witness statements, attending on experts for the purposes of those experts providing expert evidence to the court, and generally providing instructions in relation to the proceeding; and the fact that she has assumed the risks associated with being the lead plaintiff in a class action.
Thus, Mr Rivette has concluded that, having regard to the awards by the OAIC and NCAT in other cases, the settlement amount and the proposed initial distributions are within the range of acceptable outcomes "even before one factors in the risks associated with the litigation". It is his view that the awards for breach of confidence relate to the wide dissemination of highly sensitive, intimate and confidential information that was never meant to be seen or heard by any other person and are therefore not representative of what could be expected if the plaintiff's claims in breach of confidence succeeded in the present case; and that the most comparable award of compensation is the $3,000 award by the OAIC in Jo and Comcare being for the dissemination by an employer of worker's injury information (but noting that the disclosure in Jo and Comcare was direct and was not from an illegal act by a person employed/engaged by the defendant paying the compensation; and hence that that proceeding did not have the same inherent risks that appear in this proceeding).

First defendant's submissions

The first defendant supported the application for approval of the settlement. In particular, Counsel for the first defendant, Mr Stephen Free, noted the following matters.
First, that the affidavit evidence discloses that the legal costs of the plaintiff already substantially exceed the amount that will be recovered by the plaintiff's legal representatives. Mr Free points out that when comparing what Group Members would face if the settlement were not approved one must take into account the risk, going forward, for the Group Members that, even if ultimately successful, they would, in the ordinary course, be required to compensate the plaintiff for any unrecovered legal costs that the plaintiff has incurred and hence (given the modest size of the likely damages) there is every chance that even a modest success would be consumed by legal costs (T 12.4).
Second, that in terms of differential treatment of the lead plaintiff, the question is whether there is a rational and reasonable basis therefor and that in Hodges v Waters (No 7) (2015) 232 FCR 97; [2015] FCA 264 (at [102]) Perram J approved a settlement which involved a special allowance for a lead applicant, expressing the opinion that that was fair and reasonable involved a recognition of the time and inconvenience to the lead applicant in taking the burden of running the case. In addition, it was noted that the plaintiff has here served evidence describing her particular circumstances and concerns about confidentiality that demonstrate that she is quite likely to be at the high end in terms of her degree of personal distress at the disclosure (T 12.45). It is submitted that the Group Members will obtain the benefit of settlement without having had to go to the same personal inconvenience and stress themselves, which provides a rational basis for a differential treatment in that regard (T 13.26).

Determination

Having regard to the matters put before me, I was of the opinion that the proposed settlement is fair and reasonable in the interests of Group Members considered as a whole; and, in particular, that the settlement falls within the range of reasonable outcomes in comparable or similar cases having regard to the particular risks associated with this litigation (including the need to establish new ground in relation to some of the claims sought to be pressed in this jurisdiction and the defences to be raised by the first defendant); and having regard to the limited nature of the information now found to have been disclosed and its very limited dissemination.
I was also of the view that it was appropriate to allocate a differential amount to the lead plaintiff, who has taken on the stress and burden of acting as the representative plaintiff to date.
I was also of the view that the amount of costs to be paid to the plaintiff's lawyers was a reasonable sum having regard to the actual expenditure incurred (and noting that it has effectively been quarantined so as to permit the Group Members to obtain a net recovery out of the Settlement Sum). Although in terms of quantum it is a sum almost equal to the sum to be distributed, it is clear that it represents only around half of the actual costs incurred (and I suspect part of the reason for that has been the perhaps unanticipated difficulty in locating various Group Members).
The remaining issue was as to whether it was just to proceed with the settlement in circumstances where the evidence is that, of the Group Members, a very small number have not been able to be directly notified of the proposed settlement (see s 175(4) of the Civil Procedure Act). In that regard, there have been extensive efforts to locate all Group Members (including advertisements in relevant publications) that have been the subject of directions made during the course of earlier directions hearings in this matter. Given the evidence before me as to those attempts, I formed the view that it was just to proceed notwithstanding that for three or so Group Members there has been no ability to identify or locate them. Relevant in that regard is that it is accepted that, in the administration of the Settlement Distribution Fund, Centennial Lawyers will continue to take steps to identify the missing Group Members. I consider that it is just to proceed to approve the settlement at this stage in circumstances where there is nothing to suggest that any further process of advertisement or the like will bring the very small number of missing Group Members to light (and indeed some members who have previously been identified have not provided any contact details to enable those members to be located from which one might infer that they are not interested in pursuing any claim in any event). I also note that most Group Members have been notified of the proposed settlement (and provided with Counsel's confidential opinion or a summary thereof) and that there has been no objection raised to the approval of the proposed settlement.
In those circumstances, I made the orders that were sought.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 December 2019

Privacy and Personal Information Act 1998(NSW)

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Legislation Cited (7)

Cases Cited (36)

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