Plaintiff v Defendant

2 On 9 July 2012, the plaintiff brought this proceeding pursuant to Part 4A of the Supreme Court Act 1986 (Vic) (the 'Act') on his own behalf and as representative of all persons who suffered loss or damage to property as a result of the Blampied bushfire.

3 The plaintiff alleges that while conducting civil works on or near the Midland Highway, the defendant used a demolition saw to cut reinforced concrete, allowing hot particles to discharge from the saw and start the fire. He pleads causes of action in breach of statutory duty, negligence and nuisance. He alleges breach of duty by the defendant as operator of the worksite under the Occupational Health and Safety Act 2004 (Vic) (the 'OHS Act') in respect of the use of plant and systems of work associated with plant, and of the defendant's common law duty of care to ensure all reasonable care was taken in the operation of plant and equipment and in carrying out road improvement works on the Midland Highway so as not to cause fire. The plaintiff further alleges that the defendant committed private nuisance by operating liquid fuelled power equipment in the course of the works, and thereby brought fire onto the verge of the Midland Highway which subsequently spread to other properties.

4 The defendant does not admit the obligation under the OHS Act and denies that it was breached, or that it gives rise to private rights of action enforceable by the plaintiff or group members. The defendant does not admit the existence and denies the breach of the common law duty of care and denies that it committed any nuisance.

5 In December 2013, the plaintiff and the defendant executed heads of agreement in settlement of the proceeding (the 'Settlement Agreement'). The defendant has agreed to pay a fixed percentage of each group member's claim, plus interest and costs. Each group member's claim is to be assessed individually according to law. The defendant's exposure under this arrangement is therefore uncapped and it will pay whatever amounts follow from the application of the agreed principles to those claims which are presented for assessment.

6 By his summons filed on 4 December 2013 the plaintiff now seeks orders pursuant to:

(a) section 33V (and ss 33ZF, 33ZG and 33ZJ) of the Act for approval of the proposed settlement of the proceeding pursuant to the terms set out in the Settlement Agreement;

(b) sections 33X and 33Y for approval of the form and content of and the manner of distributing a notice to group members informing them of the making of orders approving the proposed settlement.

7 In support of this application, the plaintiff refers to and relies upon:

(b) the affidavit of Brendan Francis Pendergast sworn on 6 December 2013 in support of the application for approval of the Notice of Proposed Settlement;

(c) the affidavit of Mr Pendergast sworn on 14 January 2014 in compliance with paragraph (2) of the orders of Dixon J made on 6 December 2013; and

(d) the confidential affidavit of Mr Pendergast sworn on 11 February 2014.

8 The plaintiff also relies upon the opinion prepared by his counsel, setting out their views as to whether the proposed settlement is fair and reasonable in the interests of group members. The opinion has been filed on a confidential basis, in accordance with the orders made by Dixon J on 6 December 2013 and with the established practice in group proceedings under Part 4A of the Act and cognate legislation in other jurisdictions.

9 The Settlement Agreement is a relatively simple one.

10 By clause 2 of the Settlement Agreement, the defendant agrees to pay each participating group member 95% of the value of the member's claim as assessed according to law. In the event that damages have not been paid by 1 May 2014, interest shall accrue from 1 May 2014 at the rate of 10% per annum, save that where particulars of loss are received after 1 February 2014, such interest will be payable from a date three months after the particulars have been provided.

11 The defendant will also pay the plaintiff's costs of the proceeding, including reserved costs, to be taxed in default of agreement, and will further pay the costs of the individual assessments of the participating group members' claims.

12 The Settlement Agreement contemplates that the Court will make a 'class closure' order, requiring group members who wish to claim compensation to register their claims with the plaintiff's solicitor, Maddens Lawyers ('Maddens'), by a date fixed by the Court. The Settlement Agreement provides that as soon as practicable after the registration date, Maddens will deliver to the defendant's solicitors a list of the group members who have registered with Maddens and that, within three months of the date of the Settlement Agreement or the registration date, Maddens will deliver to the defendant's solicitors particulars of loss for each participating group member.

13 The Settlement Agreement provides that the assessment of losses will be determined by the Court or by agreement, but that before referring any claim to the Court for determination, the parties will participate in a settlement conference and use their best endeavours to reach agreement in respect of each participating group member's quantification of loss.

14 As to the payment of claims, the defendant acknowledges that the plaintiff has or may have rights to require that a portion of any amount payable to a group member pursuant to the settlement be applied in reimbursement of the plaintiff's unrecovered costs of the proceeding, and the defendant, accordingly, will pay all amounts payable in consequence of the settlement into a trust account held by Maddens. However, the parties acknowledge that Maddens will endeavour to implement a system of advancing up to 50% of each participating group member's compensation payment to the member as the payment is received from the defendant, notwithstanding the plaintiff's claim for contributions to his unrecovered costs of the proceeding.

15 The costs contribution order sought by the plaintiff is in the following form:

Pursuant to s 33ZF, alternatively the inherent jurisdiction of the Court:

(a) each group member who becomes entitled to a payment of compensation in consequence of the Settlement Agreement shall apply the compensation entitlement first in reimbursement of the plaintiff for the difference between those costs incurred by the plaintiff and recovered from Hazell Bros ('recovered costs') and the total costs incurred by the plaintiff in respect of the common questions in the proceeding (that difference being the plaintiff's 'unrecovered costs'); and

(b) the reimbursement amount payable by each group member referred to in (a) be calculated by multiplying the total amount of the plaintiff's unrecovered costs by the proportion which the individual group member's compensation entitlement bears to the total value of all compensation entitlements assessed in favour of the plaintiff and group members.

Is the proposed settlement fair and reasonable?

16 The principles applicable to applications for court approval of proposed settlements of class actions have been described and consistently applied in a number of decisions of the Court in recent times.[1] It is unnecessary to set out those principles again in any detail. The plaintiff submitted, and I agree, that the principles identified in the relevant decisions may be distilled to the proposition that the proposed settlement must be fair and reasonable, and in the interests of all group members who will be bound by the settlement. Group members who are not clients of Maddens are not directly represented and it is their interests, in particular, which the Court is concerned to ensure are addressed fairly relative to the plaintiff and other group members, and having regard to the overall merits of the claims made on their behalf in the action.

17 When considering the reasonableness of the settlement, I have had regard to the confidential opinion, the pleadings, as well as to the legal context in which the claims are brought and the defences are advanced.

18 The settlement provides for group members to recover nearly the full amount of their claims. There is a small discount for liability and no interest is payable on the amounts recovered for the period up until 1 May 2014 or the period concluding three months from the date that the claim is submitted.

19 The Court was informed that in the absence of a settlement, the trial could take anywhere between five to fifteen days of hearing time, and that more time could be spent on the necessary interlocutory steps, particularly if joint expert reports and concurrent evidence were required. The settlement avoids a trial and provides finality for the parties and group members. The Court was also informed that the early delivery of particulars of loss by nearly all members of the claim group had resulted in agreement between the parties of many of the claimed losses and that it was not anticipated that the Court would be troubled with contested hearings in relation to the assessment of losses.

20 In the circumstances, I am satisfied that the claimants are likely to receive their compensation entitlements considerably more quickly than if the action were to proceed to trial and judgment, and that the proposed settlement achieves benefits for group members by accelerating the payment of such compensation as may be due to them and reducing their overall costs of obtaining compensation.

21 The litigation is potentially complex, and the settlement provides for its resolution at a very early stage. In my view, there is no question that it is reasonable to accept a small discount for liability risk and in the interests of securing a speedy and cost effective resolution of the proceeding.

22 A further important question is whether the settlement differentiates between group members so as to give rise to questions as to whether it is fair and reasonable between them. The starting point is that group members are not competing for funds from a limited pool: this is not a settlement with a cap on the amount of damages that any particular group member may receive and the quantum of any particular group member's entitlements does not affect any other group member's entitlements. Moreover, the processes contemplated for registering, assessing and paying claims, and for the sharing of legal costs involve no different treatment of the plaintiff relative to the group members and no relevant differences in treatment between group members.

23 The proposed General Form of Order submitted to the Court by the plaintiff provides for claims registration (class closure) by requiring the group members who wish to claim compensation to register their claims with Maddens by 28 April 2014, in default of which the group member shall not, without further order of the Court or the consent of the defendant, be entitled to participate in or obtain any payment pursuant to the loss assessment procedure set out in the Settlement Agreement.

24 The open nature of the class gives rise to the possibility of unidentified group members. In this case, most group members are in fact known: eight have entered into client agreements with Maddens and a further three group members are known to them. Because the perimeter of the fire is identifiable from aerial photographs, it is likely that there are no other group members apart from the 11 who are clients of, or who are known to, Maddens. Nonetheless, I am satisfied that in an open class action such as the present, the potential for unidentified claims requires steps to be taken to close the class. In this regard, the Settlement Agreement is neither unfair nor unreasonable, and the appropriateness of the form of order proposed is well supported by authority.

25 There remains the question of the special provision made for the plaintiff's costs and the fairness of requiring group members to contribute to the plaintiff's unrecovered costs in respect of the common questions in the proceeding. I note that costs contribution orders of this kind have been made in other bushfire class actions. In my view, there is no reason why the plaintiff should bear the whole of the unrecovered costs of pursuing the common questions in the proceeding, and there is every reason to require his unrecovered costs to be shared among the plaintiff and the participating group members. Furthermore, it is fair and reasonable that the costs contribution order is framed to ensure that each successful group member contributes pro rata to the plaintiff's unrecovered costs.

26 As to the treatment of the individual assessment costs, a proposal providing for the defendant to pay the costs of assessing individual benefit costs, with such costs to be taxed in default of agreement, is also fair and reasonable.

27 I note that the administrative steps which will be required in order to ensure that the compensation funds are not disbursed until all due costs are paid will necessarily delay the final distribution of compensation until the resolution of the slowest claims. The plaintiff submitted, and I accept, that this is unavoidable in the circumstances. However, I also note that to ameliorate any concerns, the Settlement Agreement contemplates that an interim distribution of 50% of gross compensation be paid to group members pending finalisation of all claims.

28 The existence of the proceeding and the proposed settlement has been advertised in accordance with the requirements imposed by the Court and it is unlikely that any group members are unaware of the proceeding and its proposed settlement. The Court has not been alerted to the existence of any group member who objects to the proposed settlement. Group members were given an opportunity to object to the settlement at the hearing of the plaintiff's application for approval of the settlement in Ballarat on 17 February 2014. No group member appeared or attended to make an objection. It is open to infer that group members are content with and/or support the proposed settlement.

29 In conclusion, I am satisfied that the settlement reflects an appropriate compromise of potentially difficult and complex litigation, having regard to the risks for group members in the proceeding. I am also satisfied that the proposed settlement is fair and reasonable as between group members.

31 Subject to any further submission as to the form of appropriate orders, the Court will make orders in the following form:

1. Pursuant to sections 33V, 33ZF, 33ZG and 33ZJ of the Act, settlement of the proceeding upon the terms set out in the document titled 'Terms of Settlement' signed by the parties ('Settlement Agreement') is approved.

1. Pursuant to section 33ZG of the Act, group members who wish to claim compensation in respect of the claims made on their behalf in the proceeding must register their claims with Maddens Lawyers ('Maddens') by 28 April 2014, in default of which the group member shall not, without further order of the Court or the consent of the defendant, be entitled to participate in or obtain any payment pursuant to the loss assessment procedure set out in the Settlement Agreement.

Settlement Approval and Claims Registration - notice to group members

1. Pursuant to sections 33X and 33Y of the Act, the form and content of the notice to group members, informing them of the making of orders 1 and 2 above, set out in Annexure A to these Orders ('Settlement Approval Notice') be approved.

1. Pursuant to section 33X of the Act, by 4:00pm on 10 March 2014, notice of the approval of the settlement of the proceeding upon the terms set out in the Settlement Agreement be given to group members by the plaintiff, by his solicitors, causing the Settlement Approval Notice to be:

(a) published in one weekday edition and one Saturday edition of the 'Ballarat Courier' newspaper;

(b) where the database of registered group members maintained by the plaintiff's solicitors contains:

(i) an e-mail address for a group member - emailed to that email address;

(ii) a postal address for a group member - sent by ordinary pre-paid post to that postal address;

(c) uploaded to the website of the plaintiff's solicitors.

1. By 4pm on 17 March 2014, the plaintiff by his solicitors file and serve an affidavit as to compliance with Order 4 above.

1. Pursuant to section 33ZF, alternatively the inherent jurisdiction of the Court:

(a) each group member who becomes entitled to a payment of compensation in consequence of the Settlement Agreement shall apply the compensation entitlement first in reimbursement of the plaintiff for the difference between those costs incurred by the plaintiff and recovered from Hazell Bros ('recovered costs') and the total costs incurred by the plaintiff in respect of the common questions in the proceeding (that difference being the plaintiff's 'unrecovered costs'); and

(b) the reimbursement amount payable by each group member referred to in (a) be calculated by multiplying the total amount of the plaintiff's unrecovered costs by the proportion which the individual group member's compensation entitlement bears to the total value of all compensation entitlements assessed in favour of the plaintiff and group members.

1. The reimbursements ordered pursuant to Order 6 above be payable and paid to the plaintiff's solicitors, and the said solicitors have leave to calculate and deduct the reimbursement payment of each group member prior to disbursing from their trust account the balance of the compensation entitlement of the group member.

1. Pursuant to section 33ZF, Maddens Lawyers and Hazell Bros each have leave to apply to the Court for orders in respect of any issue arising in relation to the administration of the Settlement Agreement.

1. The further conduct of the proceeding, including the hearing of any application for orders pursuant to Order 8 above, be referred to the trial judge.

1. Within 14 days of Maddens disbursing from their trust account the final balance of compensation entitlements to the plaintiff and group members, the plaintiff by his solicitors file and serve an affidavit as to the completion of the loss assessment procedure set out in the Settlement Agreement.

1. Following the filing of the affidavit referred to in Order 10 above, the proceeding be dismissed with no order as to costs, save for orders made pursuant to taxation of costs in accordance with the Settlement Agreement or in connection with orders made pursuant to Order 8 above.
2. Liberty to apply.

Persons who suffered loss of or damage to property as a result of the bushfire at Blampied 24 February 2012 should TAKE NOTICE that a SETTLEMENT of the class action on behalf of victims of the fire has now been APPROVED by the Supreme Court of Victoria.

If you are, or think you might be, a person who suffered loss of or damage to property as a result of the bushfire at Blampied 24 February 2012, you should read this notice carefully as it may affect your rights.

The 24 February 2012 Blampied Bushfire Class Action was commenced in the Supreme Court of Victoria by the plaintiff, Dr David Campbell. Dr Campbell brought the action on his own behalf and on behalf of all persons who suffered loss of or damage to property as a result of the fire which started adjacent to the A300 Midland Highway at Blampied, approximately 1:33pm on 24 February 2012 ('the Blampied fire'). Those other persons are called 'group members' in the class action.

The defendant to the class action is Hazell Bros (Vic) Pty Ltd ('Hazell Bros'). Briefly, Dr Campbell alleges that the Blampied fire started because of wrongdoing by Hazell Bros employees, servants or agents using a demolition saw in the course of road works to cut steel reinforced concrete pipe causing sparks and/or embers to start a fire which spread over a wide geographic area, being the Blampied fire. Dr Campbell claims compensation and other remedies on his own behalf, and on behalf of all the group members as defined in the class action.

The claims which Dr Campbell makes against Hazell Bros are set out in the 'Statement of Claim'. A copy of that document can be viewed at the offices of Dr Campbell's solicitors, Maddens Lawyers, or on their website at [www.maddenslawyers.com.au\]. Hazell Bros deny the claims made by Dr Campbell, and is defending the class action. A copy of its defence can also be viewed at Maddens' offices or on the website.

Dr Campbell and Hazell Bros reached an agreement for the settlement of the class action in December 2013 ('Settlement Agreement').

The Settlement Agreement was conditional upon approval being obtained from the Supreme Court. On 27 February 2014 the Supreme Court granted its approval.

The grant of Court approval for the Settlement Agreement means that the agreement becomes binding on all persons who fit the definition of 'group members' above.

Under the Settlement Agreement, all persons who wish to claim compensation for the losses and damage they suffered as a result of the Blampied fire will be required to REGISTER as group members.

To register, group members must complete the 'Group Member Registration Form' shown at the bottom of this notice and send it to Maddens Lawyers BEFORE 28 April 2014.

If you are a group member but you do not register, you will lose your right to claim compensation from Hazell Bros for any property loss or damage you suffered as a result of the Blampied fire.

Persons who register as group members with Maddens Lawyers by 28 April 2014 will be required to prepare 'Particulars of Loss' identifying the loss and damage they suffered as a result of the Blampied fire. Group members will need to provide all available supporting documentation.

Particulars of loss will then be delivered to Hazell Bros, and the assessed value of each claim either agreed between the group member and Hazell Bros, or determined by the Court. Once each claim has been assessed, Hazell Bros will pay compensation equal to ninety five per cent (95%) of the assessed value, plus 10% interest from 1 May 2014, save that where particulars of loss are received by Hazell Bros after 1 February 2014, such interest will be payable from a date three months subsequent to the particulars being provided.

Further details of the Settlement Agreement, including an explanation of the 'loss assessment procedure', may be viewed at the Maddens Lawyers' website (details above).

You can obtain more information about preparing the 'Claim Book' from the Maddens Lawyers website, at http://www.maddenslawyers.com.au/Bushfire-Compensation.

There is no requirement that you engage lawyers to help you prepare Particulars of Loss, or participate in the 'loss assessment procedure'. If you do wish to engage a lawyer then you may use Maddens Lawyers (contact details below) or other lawyers as you choose. The lawyers will charge fees for doing that work. Hazell Bros has agreed it will pay a portion of any legal costs incurred by a group member in the loss assessment procedure (namely the costs covered by the Court's 'standard' cost rules), but the remainder of any fees will be payable by each group member.

You should also note that Hazell Bros will be required to pay some but not all of the legal costs Dr Campbell incurred in running the main or 'common' issues in the class action. The Court has ordered that the 'common' costs not payable by Hazell Bros be shared between them and the group members, and be paid out of the compensation receipts in proportion to the amounts which each group member becomes entitled to receive as a result of the settlement. These amounts will be fixed at the end of the loss assessment procedure and will be deducted from any compensation you become entitled to receive.

The Settlement Agreement is binding on every group member, and the 'loss assessment procedure' is the only way for group members to recover compensation for the losses caused by the Blampied fire.

If you are a group member and do not register your claim with Maddens Lawyers by 28 April 2014 you will not be entitled to participate in or obtain any payment under the Settlement Agreement, and you will lose the right to make any claim against Hazell Bros for loss of or damage to property as a result of the Blampied fire.

Please consider the above matters carefully, and if you wish to claim compensation then make sure you return your 'Group Member Registration Form' to Maddens Lawyers as soon as possible. PLEASE ACT PROMPTLY.

Name of Group Member: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Is the Group Member already a client of Maddens Lawyers? Yes / No (circle one)

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[1] Rod Investments Pty Ltd v Abeyratne [2010] VSC 457; Wheelahan v City of Casey [2011] VSC 215; Thomas v Powercor Australia Ltd [2011] VSC 614; Mercieca v SPI Electricity Pty Ltd [2012] VSC 204; Perry v Powercor [2012] VSC 113; Pathway Investments Pty Ltd v National Australia Bank Limited (No 3) [2012] VSC 625; Place v Powercor Aust Ltd [2013] VSC 6; Matthews v SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Ltd (Ruling No 16) [2013] VSC 74.