FEDERAL COURT OF AUSTRALIA

Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 10) [2011] FCA 1510

THE COURT ORDERS THAT:

1.    Clause 8.1 of the Loss Assessment Process be amended pursuant to the Settlement Distribution Scheme by adding at the end of that clause:

“or in default by reference to the foreign currency exchange rates available at Thomson Reuters for the period from 28 April 2003 to 28 May 2003.”

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    This is a further application under cl 13.2 of the scheme by the administrator of the settlement distribution scheme, approved by the Court, for the payment and distribution of the amounts realised in this class action. That clause provides:

“13.2    If the Administrator considers it necessary to do so, he may approach the Court in respect of any amendment required to this Scheme to ensure the efficient and fair distribution of the Fund to Group Members, or otherwise if in his opinion such amendment is reasonable and necessary for the proper administration of the Scheme. The Administrator may obtain confirmatory opinion of Senior Counsel prior to approaching the Court pursuant to this clause.”

2    In Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 9) [2011] FCA 1111, Flick J construed the second limb of cl 13.2. That limb is actuated because the administrator forms an opinion about whether an amendment is reasonable and necessary. The present application, as I apprehend it, is based on the first limb, namely, that the administrator considers it necessary for an amendment to be made. However, the administrator himself had not filed an affidavit of his own view of the matter. Instead, the application was based initially on an affidavit of a solicitor who has the conduct of the administration of the scheme.

3    The circumstances in which the application is made are that in Pharm-a-Care Laboratories Pty Ltd v the Commonwealth of Australia (No 8) [2011] FCA 745, Flick J varied cl 8.1 of the scheme. That clause had originally provided that the administrator would use exchange rates available from the Commonwealth Bank of Australia for the period from 28 April 2003 to 28 May 2003, as the basis for conversion into Australian dollars of claims made by creditors of the scheme in foreign currencies. It transpired that the exchange rates for some foreign currencies in which claims came to be made were not available from material kept by the Commonwealth Bank in 2003. The administrator discovered that, at that time, the claims that were then causing difficulties could be converted into Australian dollars using exchange rates maintained by the Australian Taxation Office or the Reserve Bank of Australia. Accordingly, Flick J made a variation to cl 8.1 to permit those two sources of reference to be used.

4    Subsequently, claims have now been made in Israeli shekels, Egyptian pounds, Bahraini dinars, Qatari riyals and Kuwait dollars. The current sources provided for in cl 8.1 of the scheme, as amended, do not have exchange rates for any of those currencies. The administrator has ascertained that there is a source of reference maintained by Thomson Reuters for the period in question, by which he can ascertain appropriate exchange rates. He asks for an amendment to cl 8.1 to allow him to use those rates.

5    The purpose of the scheme is to ensure that persons who have claims for which the scheme was established are able to have distributions made in accordance with its provisions. I am satisfied that it is necessary for claims that were incurred in foreign currency obligations to be converted into Australian dollars in order that the administrator may then ensure a proper calculation to compensate, in accordance with the scheme, the persons who are entitled.

6    Ordinarily, applications by persons in the position of an administrator acting for the purposes of the Court ought personally to ensure that they put before the Court their own evidence as to why they wish to make the application and seek to enliven a right given to them to obtain the assistance of the Court in the administration of a scheme or other duty. This is the more important because, in this scheme, it is the administrator, and the administrator alone, who has the power to apply to the Court for an amendment under cl 13.2 in circumstances of the administrator either considering it necessary or forming an opinion as to its reasonableness and necessity.

7    Nonetheless, it seems to me that the amendment presently sought is, obviously, necessary. I required the administrator to confirm that he, personally, was asking for the exercise of the power on the above basis by filing an affidavit identifying that fact. The administrator’s affidavit sworn and filed today has satisfied me that he considers the amendment necessary and I made the order in chambers.

8    For these reasons, and upon the administrator making the affidavit I have referred to, I consider it appropriate to vary the scheme in the manner sought.

Associate:

Dated:    23 December 2011