McKay Super Solutions Pty Ltd (Trustee) v Bellamy's Australia Ltd (No 3) [2020] FCA 461

McKay Super Solutions Pty Ltd (Trustee) v Bellamy's Australia Ltd (No 3) [2020] FCA 461

The settlements were approved because the proposed funding equalisation mechanisms produced an effective funding commission of 28.99% of the gross settlement amount in each proceeding, which was substantially below the relevant contractual rates and below the 30% maximum previously fixed in the McKay common fund...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
13 March 2020
Procedural Posture
Group Proceedings; Open Class Securities Class Actions Under Part IVA Concerning Settlement Approval / Interlocutory Applications for Approval of Settlement Under S 33 V(1) of the Federal Court of Australia Act 1976 (cth); Reasons for Orders Approving Settlement
Outcome
Settlements approved in both proceedings; proceedings dismissed with no orders as to costs on completion of administration of the Settlement Schemes.
Legal Topics
['settlement Approval Under S 33 V(1)' 'funding Equalisation Mechanisms' 'common Fund Orders' 'litigation Funding Commissions' 'group Member Costs and Administration Costs']
['class Actions' 'corporations' 'civil Procedure' 'litigation Funding'] ['settlement Approval Under S 33 V(1)' 'funding Equalisation Mechanisms' 'common Fund Orders' 'litigation Funding Commissions' 'group Member Costs and Administration Costs']

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Procedural Posture

Group Proceedings; Open Class Securities Class Actions Under Part IVA Concerning Settlement Approval / Interlocutory Applications for Approval of Settlement Under S 33 V(1) of the Federal Court of Australia Act 1976 (cth); Reasons for Orders Approving Settlement

Legal Issues

  1. 1 ['Whether the proposed settlements of the two group proceedings should be approved under s 33V(1) of the Federal Court of Australia Act 1976 (Cth).' 'Whether funding equalisation mechanisms should be applied in each proceeding instead of enforcing the earlier common fund order in the McKay proceeding.' 'Whether the reduced funding commission rates were reasonable for group members.']

Ratio Decidendi

The settlements were approved because the proposed funding equalisation mechanisms produced an effective funding commission of 28.99% of the gross settlement amount in each proceeding, which was substantially below the relevant contractual rates and below the 30% maximum previously fixed in the McKay common fund order, and was within the range approved as reasonable in other cases. The funders' agreement to reduce or cap their commissions was critical; without that reduction the Court would not have approved the settlements.

Court Disposition

Settlements approved in both proceedings; proceedings dismissed with no orders as to costs on completion of administration of the Settlement Schemes.

Orders

  • ['In VID 163 of 2017, the proposed settlement was approved under ss 33V and 33ZF on the terms of the Settlement Agreement and Settlement Scheme.' 'In VID 163 of 2017, the applicant was authorised nunc pro tunc to enter into and give effect to the Settlement Agreement for and on behalf of group members.' 'In VID 163...