Maurice Blackburn was instructed in a class action on behalf of those who suffered injury, loss or damage as a result of the Kilmore East - Kinglake Black Saturday bushfire of 7 February 2009. The bushfire resulted in 119 deaths, the destruction of 1,242 homes, damage to a further 1,084 homes, and the burning of over 125,000 hectares of land.
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.
On 22 August 2019, the Full Court of the Federal Court heard the appeal of a decision in relation to a dispute about certain deductions that would reduce the amount of tax payable by the Scheme Administrator.
On 27 May 2020, the Full Court handed down its decision on the appeal in favour of the ATO. The Full Court found that certain deductions that would reduce the amount of tax payable by the Scheme Administrators were not allowed.
On 14 October 2020 the High Court handed down its decision and unfortunately denied the application for special leave to appeal. This application to the High Court was the final avenue of appeal. The consequence of the High Court’s decision is that the Australian Tax Office’s (ATO) assessment of the tax payable by the Scheme Administrator is upheld.
There are no further steps that can be taken to challenge the ATO’s assessment of the tax payable.
Throughout the appeal process, we have taken advice from tax specialists who have consistently maintained that there were grounds upon which to challenge the ATO’s assessment of the tax payable and reasonable prospects that an appeal could be successful.
While we are disappointed by the High Court’s decision to deny the application for special leave to appeal, we were advised that it was appropriate to pursue the issue to the High Court because had the Scheme Administrator ultimately been successful the result would have been a reduced amount of tax payable to the ATO and a further distribution of settlement funds to group members.
Given the High Court’s decision there will be no further distribution to group members, and the Scheme Administrator will now take the necessary steps to conclude the Administration.
The Scheme Administrator will now need to carefully consider the implications of the judgement for claimants in both the Murrindindi and Kilmore Kinglake-East matters.
This will require the Scheme Administrator to take advice from our tax lawyers as to whether an appeal to the High Court is in the best interests of claimants.
If, based on the advice of the tax lawyers, no further appeal is lodged, there is unlikely to be any further distribution to claimants. If an appeal is lodged, it will be some time before the matter is finally resolved.
A further update will be provided once the Scheme Administrator has had an opportunity to receive and consider advice from our tax lawyers.
For further information on the taxation dispute and decision of the full court of the Federal Court of Australia please refer to:
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
On 15 July 2014, after a 16-month trial against SP AusNet and four other defendants, the plaintiffs and the defendants reached an agreement to settle the class action for a record settlement of more than $494 million dollars.
On 23 December 2014 the Supreme Court of Victoria approved the settlement of the Kilmore East - Kinglake Black Saturday Bushfire Class Action and the proposed settlement distribution scheme. It is the largest class action settlement in Australian history.
All payments to members of the Black Saturday Bushfire class actions have been finalised.
Murrindindi-Marysville Bushfire Class Action
If you are after information about the Murrindindi-Marysville Bushfire Class Action, please click here.