Gibson v Malaysian Airline System Berhad - [2019] FCA 1007 - FCA 2019 case summary — Zoe

Gibson v Malaysian Airline System Berhad - [2019] FCA 1007 - FCA 2019 case summary — Zoe

PERRAM J: 1 This morning I made orders approving the settlement and dismissal of this representative proceeding under s 33V of the Federal Court of Australia Act 1976 (Cth). Ordinarily, a grant of such leave requires a close consideration of the terms and context of the settlement. This is ordinarily necessary because the settlement affects the position of group members who are not before the Court. The interests of those parties may not necessarily coincide with the interests of an applicant or applicants in the proceeding. The applicants and respondents may, in a sense, be friends of the bargain. Consequently, in approving a settlement under s 33V it is accepted that the Court performs a protective function in relation to those parties who are not before the Court: Australian Securities and Investments Commission v Richards [2013] FCAFC 89 at [7]-[8] per Jacobson, Middleton and Gordon JJ. 2 This case is different, however. The group has always been defined in a limited way and following the opt-out notices there were, so I was told, only at most 12 group members. Each of those group members has now settled with the respondent on a group basis and is party to the deed of settlement. Each is also represented by the same lawyers who represent Ms Gibson, the lead applicant. In that circumstance, there is no role for the Court's protective function. In deciding whether leave should be granted in such a case, it is not necessary for the Court to assess the reasonableness of the settlement (leaving aside the position of infants and so on). 3 In any event, if it had been necessary I would have been satisfied that the settlement was a reasonable one. The terms of the settlement are confidential. Without setting out the detail, the respondent has paid the group members a sum which, whilst not especially large, is not small or trivial either. It has done so in circumstances where the High Court's recent decision in Parkes Shire Council v South West Helicopters Pty Limited [2019] HCA 14 meant that the largest claim made by each group member (that for nervous shock) was no longer maintainable. The costs charged by the group members' lawyers are reasonable in my view. There is an issue between some of the group members as to how those costs are to be apportioned. However, that does not in my view impact on the reasonableness of the settlement in this case. 4 At the same time that I made the orders under s 33V, I also made orders suppressing the evidence relating to the reasonableness of the settlement (much of which was privileged). I also dispensed with the need to notify the group members of the settlement under s 33X(4). I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.