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This was a class action on behalf of superannuation investors against Suncorp Portfolio Services Ltd and two of its directors alleging payment of excessive fees and commissions. On the first day of trial, the parties agreed to an in-principle settlement in the amount of $33 million. In this judgment, Stevenson J approved that in-principle settlement, including the following deductions from the settlement sum:

  • reimbursement to the funder of approximately $6.2 million for legal costs paid by it;
  • funder’s commission of 25%, being $8.25 million;
  • reimbursement to the funder of an ATE insurance premium in the amount of approximately $1.3 million;
  • unpaid costs in the amount of approximately $2.4 million; and
  • settlement administration costs of approximately $600,000.

His Honour approved the settlement notwithstanding that these deductions from the settlement sum totalled approximately $18.7 million, or about 56.5% of the settlement sum (therefore leaving only about 43.5% for distribution to class members).

The settlement as approved would result in an average return to each class member of about $470, in circumstances where the average amount which they paid on account of the impugned fees and commissions was $1,800 (thus representing a return to class members of about 26% of their base claim, or about 18% of their total claims once additional alleged losses were taken into account). However, having regard to the confidential opinion of counsel, his Honour was satisfied that the settlement was fair and reasonable.

His Honour also adopted the report of a Court-appointed referee (Mr Ian Ramsey-Stewart) in relation to the legal costs claimed, which his Honour considered were fair and reasonable and proportionate.

The proposed commission payable to the funder (being 25% of the settlement sum) was sought on the basis of a ‘common fund order’ (CFO). His Honour agreed with Rees J’s conclusion in Haselhurst v Toyota Motor Corp Australia Ltd [2022] NSWSC 1076 that the Court does have power to make a CFO at the conclusion of a proceeding (and also held that it was appropriate to make such an order in this case). His Honour also held that it was appropriate for the funder to recover its ATE insurance premium.

Lastly, his Honour had no hesitation in approving a reimbursement payment to the lead plaintiff in the amount of $12,000, and reimbursement payments to two sample class members in the amount of $5,000 each.

Quirk v Suncorp Portfolio Services Ltd in its capacity as trustee for the Suncorp Master Trust (No 2) [2022] NSWSC 1457

Supreme Court of New South Wales, Stevenson J,
25 October 2022

Plaintiff’s Solicitors: William Roberts Lawyers
Defendants’ Solicitors: King & Wood Mallesons; Arnold Bloch Liebler
Plaintiff’s Funder: LCM Operations Pty Ltd

Austlii Link: Available here

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