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.
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
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.