[2026] VSC 195
General information, not legal advice.
Supreme Court of Victoria
2026-04-08
Delany J
Original judgment source is linked above.
REPRESENTATIVE PROCEEDINGS - Part 4A group proceeding - Inadvertent error in modelling relied on when order made varying original group costs order - Application for leave to reopen by law practice - Internal rate of return - Prompt disclosure by law practice - Whether percentage allowance for legal costs specified in variation order should be amended - Modelling corrected for error - Necessary or appropriate that group costs order be amended to reflect same internal rate of return as underpinned variation order but corrected for modelling error - Supreme Court Act 1986 pt 4A, ss 33ZDA(1) and 33ZDA(3) - Allen v G8 Education Ltd (No 4) , , , and referred to.
(a) a deed of settlement dated 14 February 2025; and
(b) the plaintiff's proposed settlement distribution scheme, being the proposed scheme for the allocation of the settlement monies ('Scheme').
(a) Maurice Blackburn's outline of submissions dated 17 February 2026;
(b) Contradictors' outline of submissions dated 9 March 2026; and
(c) Maurice Blackburn's reply submissions dated 16 March 2026.
(1) On application by the plaintiff in any group proceeding, the Court, if satisfied that it is appropriate or necessary to ensure that justice is done in the proceeding, may make an order -
(a) that the legal costs payable to the law practice representing the plaintiff and group members be calculated as a percentage of the amount of any award or settlement that may be recovered in the proceeding, being the percentage set out in the order; and
(3) The Court, by order during the course of the proceeding, may amend a group costs order, including, but not limited to, amendment of any percentage ordered under subsection (1)(a).
I accept that the language of s 33ZDA(3) does not expressly impose a requirement that there be a material change of circumstances or the discovery of new material before the power to amend may be exercised. The provision confers a broad discretion on the Court to amend a GCO 'during the course of the proceeding' and the only express limitation is that any GCO (whether original or amended) must be one that the Court is satisfied is 'appropriate or necessary to ensure that justice is done in the proceeding'.
E The intersection between the Variation Reasons and the Error
[93] The question that must be addressed is whether the percentage of the settlement sum payable to the law practice in return both for undertaking the legal work, and assuming the burden of the risk, continues to be reasonable and proportionate.
[94] Although potentially relevant to an amendment of a GCO pursuant to s 33ZDA(3), in this case the risk of establishing liability and quantum undertaken by the law practice may be put to one side. That is because there has been no material change to the risk on liability or quantum since the GCO.
[114] ... [T]o permit the law practice to obtain the very high rate of return which would flow if the GCO percentage remains undisturbed, a rate of return that was well outside the range to which the modelling evidence was directed, would be contrary to the interests of justice. It would be contrary to the interests of justice to permit an IRR and an ROI which was well outside the contemplation of the Court and of the law practice when the GCO was made. To permit the GCO rate to remain would result in a rate of return to the law practice which reflects, not a change in the risk, but a change in the return resulting from the cooperative, expeditious and effective settlement conferral process that occurred in this case.
[120] A balancing is required to ensure both that the percentage return following the settlement continues to be proportionate to the risk and that any adjustment made to the IRR does not act as a disincentive to law practices to engage proactively with early settlement negotiations and, where appropriate, early settlement.
[121] In recognition of the importance of the early settlement of group proceedings to group members, with a view to ensuring that early settlements are not discouraged, and noting the overarching obligations in ss 23 and 25 of the CPA to narrow the issues in dispute and to minimise delay, I have determined to allow an IRR that is above that which was in the contemplation of Maurice Blackburn and the Court at the time of the carriage dispute, as reflected in the modelling exhibited in the second Gilsenan affidavit.
[122] Having regard to the IRR modelling results summarised in the table reproduced in confidential Annexure B I have determined to order that the GCO rate applicable to the settlement be 17.392% or $15,131,000, in lieu of 24.66% or $21,450,000 which would have been payable to Maurice Blackburn in accordance with the original GCO.
[123] Although a GCO rate of 17.392% is well below the stepped percentage rate fixed at the outset of the proceeding for the settlement sum achieved, the rate is only marginally below the percentage rate applicable under the GCO had the settlement sum been or exceeded $225 million.
[124] A rate of 17.392% results in an IRR that is materially above the IRR at the 75th percentile that was modelled at the time of the GCO, but it remains well shy of the return that the unamended GCO rate would have generated.
E.2 Where the Variation Reasons and the Error intersect
E.3 What percentage is appropriate or necessary to ensure that justice is done?
(a) First, the comparison referred to is a comparison of GCO percentages fixed by the Court at different points in the litigation cycle. The 14% ordered in DA Lynch was fixed at the outset of group proceedings. It is a percentage that is comparable to the 24.66% original GCO percentage in this case. Both are initial GCO percentages determined under s 33ZDA(1), not percentages amended pursuant to s 33ZDA(3).
(b) Second, in order for s 33ZDA(3) to apply, there must already be an earlier GCO in existence. Section 33ZDA(3) is a power to amend; a power which requires as its starting point a previous GCO in the proceeding.
(c) Third, the percentages in other cases to which reference was made are not percentages that have been fixed taking into account or influenced by an early settlement as detailed in the Variation Reasons.
(a) Pursuant to s 33ZDA(3) of the Act:
(i) in lieu of the percentage specified in paragraph 1(a) of the GCO Variation Order, the legal costs payable to the Intervener are 13.253% of the Settlement Sum; and
(ii) paragraph 1(b) of the GCO Variation Order be amended to substitute $11,530,000 for the GCO amount specified.
(b) Pursuant to s 33V(2) and/or s 33ZF of the Act, the reasonable costs of the Contradictors:
(i) are to be paid from the Settlement Distribution Fund within 30 days of the presentation of an invoice; or
(ii) if such costs are paid by the Intervener on behalf of the plaintiff in the first instance, they shall be reimbursed to the Intervener from the Settlement Distribution Fund.
(c) Pursuant to ss 17 and 18(1)(a) of the Open Courts Act 2013 (Vic), the information contained in the following materials shall not be published or disclosed without the prior leave of the Court to any person or entity other than the plaintiff and his legal advisers, CF FLA Australia Investments 3 Pty Ltd and their legal advisers, the Contradictors and the Court:
(i) The Sixth, Seventh and Eighth Taylor Affidavits and the exhibits thereto.
(ii) The submissions of Maurice Blackburn and of the Contradictors referred to in paragraph 12 of these reasons.
(iii) The transcript of the hearing on 20 March 2026.
(iv) Confidential Annexure A to these reasons.
[1] McCoy v Hino Motors Ltd (No 2) [2025] VSC 553.
[2] See generally McCoy v Hino Motors Ltd [2025] VSC 447.
[3] See Confidential Annexure A, paragraph 2 (percentage specified in row 2, column 3 of table).
[4] [2026] VSC 97, [71]. See also at [67]-[80].
[5] Maglio v Hino Motor Sales Australia Pty Ltd [2023] VSC 757.
[6] [2024] VSC 487, [63(c)].
[7] Allen v G8 Education Ltd (No 4) [2024] VSC 487, [63(d)].
[8] McCoy v Hino Motors Ltd (No 2) [2025] VSC 553, [93]-[94], [114], [120]-[124].
[9] [2025] VSC 643, [87(a)].
McCoy
Hino Motors Ltd