Federal Court of Australia

B3S2 Pty Ltd as Trustee for the B & S D’Avoine Enduring Family Superannuation Fund v Australian Public Custodian Limited (in liq) [2025] FCA 573

ORDERS

THE COURT ORDERS THAT:

Notice of Settlement

1.    Pursuant to ss 33X(4) and 33Y of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), the form and content of the notice of settlement substantially in the form of Annexure A to these orders (Notice of Settlement) is approved.

Distribution of Notice of Settlement

2.    Pursuant to s 33Y of the FCA Act, the Notice of Settlement must be given to all Group Members on or before 6 June 2025 (Distribution Date) according to the following procedure (Distribution Procedure):

(a)    the Applicant shall cause a copy of the Notice of Settlement to be sent by electronic mail to the email addresses and by ordinary post to the postal addresses of all Group Members identified in the Piper Alderman Client Schedule annexed to the Affidavit of Louise Ellen Thompson sworn 21 March 2024 (Thompson Affidavit); and

(b)    the applicant shall cause a copy of the Notice of Settlement to be sent by electronic mail to the email addresses and by ordinary post to the postal addresses of the Additional Investors identified in paragraph 10 Thompson Affidavit, which addresses are identified in the Confidential Exhibit A annexed to the Thompson Affidavit.

3.    The costs of and incidental to the Distribution Procedure be borne by the Applicant, with the ultimate incidence of such costs to be subsequently determined by the Court.

4.    Any Group Member who wishes to oppose the proposed settlement must, before 4.00pm on 16 June 2025, deliver a notice in the form of Schedule 1 to the Notice of Settlement to the Victorian District Registry of the Court:

(a)    by mailing it by ordinary prepaid post to Federal Court (Victorian Registry), Owen Dixon Commonwealth Law Courts Building, 305 William Street, Melbourne VIC, 3000; or

(b)    by transmitting it by email to vicreg@fedcourt.gov.au.

5.    The solicitors for the parties have leave to inspect the Court file and to copy any Notice of Settlement filed in the proceeding.

Confidentiality of documents

6.    Pursuant to section 37AG(1)(a) of the FCA Act, on the grounds that the order is necessary to prevent prejudice to the proper administration of justice, the following documents exhibited to the affidavit sworn by Joanne Louise Hardwick on 20 May 2025 be treated as confidential and be sealed on the Court file in an envelope marked "Not to be opened except by leave of the Court or a Judge" and they shall not be published or made available until further order:

(a)    Confidential Exhibit A, being the Deed of Settlement dated 13 May 2025;

(b)    Confidential Exhibit B, being the Opt Out Notice cover letters and emails sent to Group Members and the responses received;

(c)    Confidential Exhibit C, being the Settlement Distribution Scheme;

(d)    Confidential Exhibit D, being the letters from Piper Alderman to the Piper Alderman Clients dated 29 August 2023, 2 October 2023, 30 October 2023 and 18 December 2024;

(e)    Confidential Exhibit E, being the letters from Piper Alderman to the Piper Alderman Clients dated 24 October 2019, 14 November 2019, 20 April 2021 and 22 December 2021;

(f)    Confidential Exhibit F, being the Piper Alderman Invoices issued pursuant to the Investigation Retainer;

(g)    Confidential Exhibit G, being the Piper Alderman Invoices issued pursuant to the Proceeding Retainer;

(h)    Confidential Exhibit H, being the Piper Alderman Investigation Retainer Work in Progress Report;

(i)    Confidential Exhibit I, being the Piper Alderman Proceeding Retainer Work in Progress Report; and

(j)    Confidential Exhibit J, being the confidential opinion of Mr Simon Rubenstein of Counsel dated 19 May 2025.

Other matters

7.    The application for settlement approval is listed for final hearing at 10.15am on 19 June 2025.

8.    The parties have liberty to apply.

9.    Costs be reserved.

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

ANNEXURE A

Notice of Settlement

[The Order entered is available on the Commonwealth Courts Portal, which attaches the Notice of Settlement.]

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from transcript)

SARAH C DERRINGTON J:

1    This is the first return of an application for settlement approval pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (FCA Act). The applicant seeks orders for the provision of notices to group members informing them of the proposed settlement (Notice of Settlement). Further, the applicant seeks confidentiality orders pursuant to s 37AG(1) of the FCA Act in relation to certain confidential exhibits to the Affidavit of Joanne Louise Hardwick sworn on 20 May 2025 (Hardwick Affidavit).

CONFIDENTIALITY ORDERS

2    As to the suppression or non-publication orders sought in respect of the exhibits to the Hardwick Affidavit, the relevant principles are well-settled and are not in dispute.

3    Section 37AG(1) of the FCA Act provides:

(1)    The Court may make a suppression order or non-publication order on one or more of the following grounds:

(a)    the order is necessary to prevent prejudice to the proper administration of justice;

(b)    the order is necessary to prevent prejudice to the interests of the Commonwealth or a State or Territory in relation to national or international security;

(c)    the order is necessary to protect the safety of any person;

(d)    the order is necessary to avoid causing undue distress or embarrassment to a party to or witness in a criminal proceeding involving an offence of a sexual nature (including an act of indecency).

4    The Full Court summarised the position in The Country Care Group Pty Ltd v Commonwealth Director of Public Prosecutions (No 2) [2020] FCAFC 44; 275 FCR 377 at [7]-[9]:

The relevant principles in relation to the making of suppression or non-publication orders under s 37AF of the FCA Act are fairly well settled.

Suppression or non-publication orders should only be made in exceptional circumstances: Rinehart v Welker (2011) 93 NSWLR 311; [2011] NSWCA 403 at [27]; Rinehart v Rinehart (2014) 320 ALR 195; [2014] FCA 1241 at [23]. That is both because the operative word in s 37AG(1)(a) is “necessary” and because the court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice: Rinehart v Welker at [32]; Rinehart v Rinehart at [25]. The paramount consideration is the need to do justice; publication can only be avoided where necessity compels departure from the open justice principle: Rinehart v Welker at [30]; Rinehart v Rinehart at [26].

The critical question is whether the making of a suppression or non-publication order is “necessary to prevent prejudice to the proper administration of justice”. The word “necessary” in that context is a “strong word”: Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 at [30]. It is nevertheless not to be given an unduly narrow construction: Fairfax Digital Australia and New Zealand Pty Ltd v Ibrahim (2012) 83 NSWLR 52; [2012] NSWCCA 125 at [8], citing Hodgson JA in R v Kwok (2005) 64 NSWLR 335; [2005] NSWCCA 245 at [13]. The question whether an order is necessary will depend on the particular circumstances of the case. Once the court is satisfied that an order is necessary, it would be an error not to make it: Hogan at [33]. There is no exercise of discretion or balancing exercise involved: Australian Competition and Consumer Commission v Air New Zealand Limited (No 3) [2012] FCA 1430 at [21].

(Emphasis added.)

5    In Clark v Digital Wallet Pty Ltd [2020] FCA 877 at [20]-[22], and on which the applicant relied, Abraham J said:

Mere embarrassment, inconvenience, annoyance, or unreasonable or groundless fears will not suffice to found a suppression or non-publication order: Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 1) [2015] FCA 607; (2015) 331 ALR 68 at [30]; Chen v Migration Agents Registration Authority (No 1) [2016] FCA 649 at [11].

It is well established that commercial in confidence or commercially sensitive information may form a sufficient basis for the grant of a confidentiality order: Hogan at [38]–[39]; Rinehart v Welker [2011] NSWCA 403 at [37]; Australian Competition and Consumer Commission v Air New Zealand Ltd (No 3) [2012] FCA 1430 at [35].

The question whether an order is necessary will depend on the particular circumstances of the case.

6    More recently, in Farrell v Super Retail Group Limited (Confidentiality Applications) [2024] FCA 954 at [5], Lee J reiterated the deprecation by Full Courts of parties seeking inappropriately broad confidentiality and suppression orders notwithstanding the settled principles, and noted that courts have repeatedly sought to remind the profession of the express statutory limits on the making of such orders, the demanding nature of the statutory test involved, and the “very heavy” onus that needs to be discharged to obtain such an order.

7    I have perused the confidential exhibits. They contain information of a commercially sensitive nature, including: the commercial terms of the settlement; personal details of each group member; precise amounts payable to each group member; the terms of the applicant’s solicitors’ retainer; invoices and detailed narrations of work undertaken by those solicitors; and legal advice. I am satisfied that it is appropriate for confidentiality orders to be made in respect of that information in circumstances where, consistent with the principal business of this Court of quelling disputes between parties according to law, be that by trial or by compromise, a significant dispute has been quelled by the parties’ agreement. Upholding the parties’ agreement, if appropriate to do so, is consistent with the overarching purpose of the Court as reflected in ss 37M(1) and (2) of the FCA Act. In circumstances where the disclosure of the information contained in the confidential exhibits might risk upsetting such a compromise, the orders should be made so as to prevent prejudice to the proper administration of justice.

NOTICE OF SETTLEMENT

8    As to the Notice of Settlement, such a notice is required by s 33X(4) of the FCA Act, the form of which must be approved by the Court: s 33Y(2). Section 33Y(3) of the FCA Act requires that the Court specify who is to give the notice and the way in which the notice is to be given. Section 33Y(5) provides that the Court may not order that notice be given personally to each group member unless it is satisfied that it is reasonably practicable, and not unduly expensive, to do so.

9    As the applicant submitted, it is well established that notices under s 33X of the FCA Act are required to ensure that group members are able to make informed decisions concerning their rights. Accordingly, notices must be “both accurate … and expressed in as plain and simple language as is consistent with the information sought to be communicated”: Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 6) [2011] FCA 277 at [9] (Flick J).

10    The applicant submits that the Notice of Settlement is expressed in appropriate language and that, in circumstances where there are only 28 members of the group, it is reasonably practicable and not unduly expensive to order that the Notice of Settlement be given to each member personally as proposed. I agree.

DISPOSITION

11    I will make the interlocutory orders sought in the terms of the draft form of order handed up by the applicant during the hearing on 2 June 2025. I will list the settlement approval application for hearing on 19 June 2025.

Associate:

Dated:    3 June 2025

SCHEDULE OF PARTIES