This decision concerned two applications for settlement approval pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (Act). The settlement concerned two related proceedings in a securities class action (the Excel-Texel Proceeding and the Davis Proceeding). The parties to the settlement were the applicants and the first respondent (Quintis Ltd) in both proceedings.
The primary question before Lee J was whether it was appropriate to bifurcate the question of the approval of the settlement and the distribution of the settlement moneys. In these proceedings, there was a forthcoming mediation and the applicants in both proceedings had agreed to defer the question of how the settlement sum should be allocated between the parties.
His Honour found that it was appropriate to bifurcate the above question in this matter. The exercise of power under s 33V(1) of the Act (the power to approve a settlement) need not occur contemporaneously with the exercise of power under s 33V(2) (the power to approve the distribution of payments under it). In this case, his Honour found that the settlement was fair, reasonable and in the interests of class members – the settlement comprised the balance of an insurance policy held by Quintis, which was the only asset available to meet the claims against Quintis in both class actions. His Honour saw that the inevitable consequence of the Court not approving the settlement would be for the settlement sum to be eroded by further defence costs. Accordingly, his Honour approved the settlement with Quintis in both proceedings and made orders to facilitate the filing of amended pleadings by the remaining parties in the proceedings.
Federal Court of Australia, Lee J
12 July 2022
Applicants’ Solicitors: Piper Alderman
First Respondent’s Solicitors: Johnson Winter & Slattery
Second Respondent’s Solicitors: Mizen + Mizen
Third Respondent’s Solicitors: Corrs Chambers Westgarth
Applicants’ Funder: LCM Operations Pty Ltd
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