//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2009] FCA 724
Federal Court of Australia
2009-06-30
North J
Original judgment source is linked above.
VICTORIA DISTRICT REGISTRY VID 1419 of 2006
REASONS FOR JUDGMENT 1 Before the Court is an application pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) by the applicant and the first, second and third respondents for the Court to approve a settlement of a representative proceeding. 2 The proceedings arise out of representations said to have been made by the first respondent in relation to the return which could be expected from leases of apartments in the Metropole Building in Brunswick Street, Fitzroy, Melbourne. The first respondent was the developer of the apartment buildings and the vendor of the individual apartments. The applicant was the representative of the purchasers who bought the apartments subject to leases. 3 The applicant and the first, second and third respondents agreed in writing to settle the proceedings on the basis that the first, second and third respondents would pay a substantial sum in instalments over two years. The settlement also involves an agreement that the costs of the proceedings be determined by the Court.
CONSIDERATION 4 Where the Court is informed that each adult member of the representative group has been advised on an individual basis as to the merits of the claim and has expressly consented to the terms of the proposed settlement, the Court need not look beyond that express consent when considering an application under s 33V: Neil v P & O Cruises Australia Limited [2002] FCA 1325 at [8]-[9]. This is the case in the present application. 5 The trial of the proceedings began on 16 April 2009 and proceeded into the second day on 17 April 2009. After the second day the trial was adjourned and a mediation was conducted on 28 April 2009 by Registrar Moore. At that session an offer was made by the first, second and third respondents (the said respondents) that caused the mediation to be adjourned until 20 May 2009. 6 Following the first session of the mediation, the solicitors for the applicant sought advice from counsel in relation to the settlement offer made by the said respondents. A written advice was provided by counsel and was supplied to all 19 group members. The group members were also given the opportunity to ask questions of and consult with their lawyers regarding the litigation. 7 In an affidavit sworn by Kim John Whitby, the solicitor for the applicant, on 30 June 2009, he stated that the group members who attended the mediation and were part of the applicant's litigation committee contacted the other group members and advised them of their impressions of the mediation. The group members also arranged meetings or teleconferences amongst themselves to discuss the proposed settlement offer and the legal advice. As a result of that interaction, the group members resolved to reject the offer and to provide additional instructions to counsel regarding the basis upon which they would settle the proceedings. 8 The mediation then resumed on 20 May 2009. In the course of that session, an in principle agreement was reached and the parties involved proceeded to draft written terms of settlement. 9 Mr Whitby deposed to advice subsequently given to him by the solicitor handling the file, Ms Nancy Hua, that each of the group members had contacted her to advise that they each accepted and approved the proposed terms of settlement and authorised counsel to sign the terms of settlement on their behalf. It is thus apparent that the group members have agreed to the terms of settlement and have done so on an informed basis. 10 The involved parties have gone further to seek to persuade the Court in oral and written submissions by senior counsel for the applicant that, on the merits, the agreement is indeed fair and reasonable: see Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 459; [2000] FCA 1925 at [19]. A number of matters were advanced in support of this conclusion. 11 The first matter was the consent of the group members to the settlement in the circumstances outlined above. Next it was contended that the complexity and potential duration of the litigation made it reasonable to settle. The trial had at least 10 more days to run with the attendant costs. 12 Then, the applicant pointed to the risk of failing to establish liability. Even if liability were established, in relation to quantum there were alternative bases proposed in the applicant's case upon which damages could be assessed. On one measure, taking the difference in capital value as the basis of the assessment of damages, the damages would have amounted to a little over a million dollars. On the alternative basis of assessing the shortfall in return as against the promised return made in the alleged representations, the range of outcomes would have been from around $292,000 to $814,000. The settlement figure falls approximately just under halfway within the range. 13 Reference was then made to the ability of the said respondents to satisfy a greater judgment. Some assessment was made by counsel in their written advice of this issue, and also to the risks of further litigation by way of appeal. 14 When all those matters are taken into account, the quantum of the settlement is amply justified. There will be orders approving the settlement accordingly. 15 It will also be necessary to adjourn the remainder of this proceeding for the Court to determine the appropriate order as to costs, and also to deal with the remaining position of the fourth respondent in VID 1419 of 2006, which has played no part in these proceedings and which is not party to the settlement. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.
Associate: Dated: 22 July 2009 Counsel for the Applicant: Mr P Cosgrave SC and Mr N Jones
Solicitor for the Applicant: McKean & Park
Solicitor for the First, Second and Third Respondents: Mr S Weill of Ellinghaus Weill
Lehmann
Winning Time Pty Ltd