FEDERAL COURT OF AUSTRALIA

Pan v Royal National Capital Alliance Ltd [2020] FCA 1834

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to section 33V of the Federal Court of Australia Act 1976 (Cth) (Act), the settlement of this proceeding be approved upon the terms set out in:

(a)    the draft Deed of Settlement marked as Exhibit “A” (Settlement Deed);

(b)    the Settlement Distribution Scheme set out in clause 2.1 of the Deed in Relation to Representative Proceedings between the Applicant and Group Members marked as Exhibit “B” (Group Members’ Deed).

2.    Pursuant to section 33ZB(a) of the Act, the persons affected and bound by the settlement are the parties to the Settlement Deed and Group Members.

3.    The proceeding be dismissed:

(a)    With no order as to costs and with all previous costs’ orders vacated;

(b)    With the dismissal of the proceeding to take effect 60 days after the date of this order.

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

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (Act), the settlement of this proceeding be approved upon the terms set out in:

(a)    the draft Deed of Settlement marked as Exhibit “A” (Settlement Deed); and

(b)    the Settlement Distribution Scheme set out in clause 2.1 of the Deed in Relation to Representative Proceedings between the Applicant and Group Members marked as Exhibit “B” (Group Members’ Deed).

2.    Pursuant to s 33ZB(a) of the Act, the persons affected and bound by the settlement are the parties to the Settlement Deed and Group Members.

3.    The proceeding be dismissed:

(a)    With no order as to costs and with all previous costs’ orders vacated;

(b)    With the dismissal of the proceeding to take effect 60 days after the date of this order.

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

REASONS FOR JUDGMENT

(Revised from Transcript)

LEE J:

1    In Abbott v Zoetis Australia Pty Ltd (No 2) [2019] FCA 462; (2019) 369 ALR 512, I noted (at 513 [1]):

Class actions come in an array of shapes and sizes. They might be open or closed, funded or unfunded. Group membership may be very limited or exceedingly vast. The individual claims may be modest, or they may be significant. The subject of the claim may be of signal public importance, or no more significant than a joint enterprise seeking to use litigation as a means to make money. The claim may be advanced in the context of a “no costs” jurisdiction, or where “ordinary” costs rules apply. The claims advanced may be dodgy, or they may be dripping in merit. The group members may be the poor and dispossessed, or as rich as Croesus, they may be natural persons, or artificial (or a combination of both).

2    Despite the heterogeneity of class actions, s 33V(1) of the Federal Court of Australia Act 1976 (Cth) provides that “[a] representative proceeding may not be settled or discontinued without the approval of the Court”.

3    There is a fundamental difference however, between the approach the Court takes in relation to a settlement where there are absent group members, to the approach the Court takes when all group members have given express instructions to enter into the agreement and are represented by a solicitor who also appears for the representative applicant.

4    These two representative proceedings are brought by a representative applicant and are advanced on behalf of 10 group members. They are claims made on behalf of persons who invested moneys in and therefore became members of a trust known as the “Royal JC Fund”, which was marketed and operated by the first respondent, Royal National Capital Limited. The second, third and fourth respondents were directors of the first respondent.

5    There is no need to go into the details of the proceedings. Following a joint mediation, these proceedings, one of which was commenced in 2018 and the other in 2019, have resolved. Given the solicitors have obtained expressed instructions from the applicant and the group members that the resolution is in the perceived interests of those group members, the Court is entitled to proceed on that basis. In my view, this is sufficient to discharge any protective role the Court has in undertaking the task of deciding whether the settlement should be approved. It is fair and reasonable and in the interests of group members to approve a settlement to which they have all given open consent through their solicitor.

6    Accordingly, I am satisfied that I should make an order under s 33V(1), approving the settlement of both proceedings.

7    It is also appropriate to make an order pursuant to s 33ZB, that the persons affected and bound by the settlement are the parties to the settlement deed and group members.

8    Wide ranging confidentiality orders have been sought, which I declined to make on the basis that I am not satisfied that they are necessary to be made in the interests of justice. There is an important public dimension to representative proceedings, and notwithstanding the small classes here, there is a legitimate interest in how the Pt IVA regime within this Court operates, and the nature of the settlements that are approved.

9    The distribution scheme under the settlement should occur very promptly. To guard against the possibility that some issue may arise during the settlement distribution phase, I will make an order that the proceeding be dismissed but that order will not operate until 60 days following the date of that order.

Associate:

Dated:    23 December 2020