This was an open class shareholder proceeding arising from allegedly criminal activities undertaken by the respondent (Crown) and its employees in the People’s Republic of China.
In this decision, Beach J approved a settlement of the proceeding in the amount of $125 million (being the fourth largest settlement in the history of Australian securities class actions). In finding that the settlement was a fair and reasonable compromise of class members’ claims, his Honour observed that “clearly it is a very strong and favourable settlement” (at ).
The approved deductions from the settlement sum were as follows:
There is only one matter that I want to specifically comment on concerning the book-build. The referee disallowed 30% of the book-build costs that she characterised as advertising, mailout of funding packs, and responding to or signing up group members. She distinguished this work from related work that she accepted was for the benefit of group members. But I do not accept her disallowance. First, there was no paid advertising of this proceeding. Second, it is unrealistic to regard the work of bringing the proceeding (or potential proceeding) to the attention of group members as not being work for their benefit. Third, there is little substantiation of the assumption that 30% of the total work related to the mechanical tasks of mailing out funding packs. Fourth, work responding to enquiries should be regarded as work for the benefit of the group members, both individually and, to the extent that it verifies group-wide loss estimates necessary for mediation purposes, for the whole class. Fifth, work undertaken by the firm for the purpose of securing funding was expressly identified in the costs agreement, as part of the “Legal Work” to which charges would apply.
After the above deductions, registered class members will receive $82.8 million, being 66.25% of the settlement sum.
Federal Court of Australia, Beach J,
29 April 2022
Applicant’s Solicitors: Maurice Blackburn
Respondent’s Solicitors: MinterEllison
Applicant’s Funder: International Litigation Funding Partners Pte Ltd
Austlii Link: Available here
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