Update on Taxation Dispute
On 28 February 2019, the Court handed down a decision which held that the Scheme Administrator is not entitled to deduct the costs incurred by the Settlement Distribution Scheme (Scheme) from the interest which was earned on the settlement monies, in calculating the taxable income of the Scheme.
This result means that the amount which was previously withheld from distribution to meet our potential taxation liability must be paid to the taxation office.
We have carefully reviewed the Court's decision and taken advice from our independent tax lawyers as to whether an appeal should be taken.
If an appeal was to be successful, it would likely have the effect that the Scheme Administrator could make a further distribution to claimants, rather than paying that money to the ATO. In all the circumstances, we consider than an appeal is in the best interests of the claimants.
Accordingly, our tax lawyers have now filed an appeal from the decision of the Federal Court. It is unclear as to exactly how long our proposed appeal might take to be heard and decided upon, but we will likely have more information in that regard shortly.
For further information on the taxation dispute and decision of the Federal Court of Australia please refer to:
- Reasons for Judgment
- Section G in the ‘Final report into the Bushfires class actions Settlement Administration‘ linked below
Final report into the Bushfire class actions Settlement Administration
The Settlement Administration of the Kilmore East – Kinglake & Murrindindi – Marysville Black Saturday Class Actions is now substantially completed. The primary outstanding issue to be resolved is a dispute as to the taxation of the settlement monies, which has proceeded to litigation in the Federal Court of Australia.
The Settlement Administration has been overseen by the Supreme Court of Victoria and the Scheme Administrator has provided regular updates to the Court by attending case management hearings and filing written materials containing information about the Settlement Administration and its progress.
So that group members have access to a single, comprehensive analysis as to the operation of the Settlement Administration, Maurice Blackburn has prepared a Final Report into the Black Saturday Bushfire Class Actions Settlement Administration and filed it with the Supreme Court of Victoria.
Read the Final Report, the related Deloitte Access Economics Report and the ALCG Report:
The costs of the preparation of the Final Report were borne entirely by Maurice Blackburn and have not been passed on to group members in either of the Kilmore-East Kinglake or Murrindindi Bushfire class actions.
These documents have also been published on the website of the Supreme Court of the Victoria.
About the Bushfire class action
Maurice Blackburn was instructed in a class action on behalf of those who suffered personal injury, loss or damage as a result of the Murrindindi Black Saturday bushfire of 7 February 2009.
The action alleged that the fire started at the rear of the Murrindindi Saw Mill, Wilhelmina Falls Road, Murrindindi, and that the cause of the fire was a break in a power line resulting from deficiencies in the construction and configuration of a power pole. The fire spread rapidly, killing 40 people, destroying over 500 homes, and causing millions of dollars of damage. The plaintiff alleged that the power utility company was negligent in, among other things, the construction and configuration of the power pole.
On 6 February 2015, the parties announced an in-principle agreement to settle the class action for the sum of $300 million dollars without admission of liability. This settlement was reached before the trial, originally due to start on 4 February 2015, commenced.
The settlement was approved on 27 May 2015 by Justice Emerton of the Supreme Court.
All payments to members of the Black Saturday Bushfire class actions have been finalised.