Harrison v Sandhurst Trustees Ltd [2011] FCA 541

FEDERAL COURT OF AUSTRALIA

Harrison v Sandhurst Trustees Ltd [2011] FCA 541 Citation: Harrison v Sandhurst Trustees Ltd [2011] FCA 541

Parties: MARK HARRISON and RHONDA HARRISON v SANDHURST TRUSTEES LTD (ACN 004 030 737)

File number: VID 616 of 2009

Judge: GORDON J

Date of judgment: 20 May 2011

Date of hearing: 20 May 2011

Date of last submissions: 20 May 2011

Place: Melbourne

Division: GENERAL DIVISION

Category: No Catchwords

Number of paragraphs: 33

Counsel for the Applicants: Dr CL Pannam QC and Mr C Young

Solicitor for the Applicants: Slater & Gordon

Counsel for the Respondent: Mr M Connock SC with Mr G Ahern

Solicitor for the Respondent: Baker and McKenzie

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 616 of 2009

BETWEEN: MARK HARRISON

First Applicant

RHONDA HARRISON

Second Applicant

AND: SANDHURST TRUSTEES LTD (ACN 004 030 737)

Respondent

JUDGE: GORDON J DATE OF ORDER: 20 MAY 2011 WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. Paragraph 2 of the Application filed 24 August 2009 be amended to provide that group members to whom the proceeding relates within the meaning of s 33H of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act) are those persons who: (a) (except where d(ii) or d(iii) applies) on 23 March 2007 held Debentures and/or Unsecured Notes issued by Fincorp Investments Limited (ACN 098 838 549) pursuant to the Debenture Trust Deed dated 5 August 2002 and the Unsecured Note Trust Deed dated 5 August 2002; (b) acquired such Debentures and/or Unsecured Notes on or after 7 December 2004 (where "acquired" means the person first made the investment and was issued with the Debentures and/or Unsecured Notes on or after 7 December 2004 or the person first made the investment and was issued with the Debentures and/or Unsecured Notes before 7 December 2004 but rolled over the Debentures and/or Unsecured Notes on or after 7 December 2004); (c) suffered loss and damage as a result of the Respondent's alleged contraventions of s 283DA of the Corporations Act 2001 (Cth) during the period 7 December 2004 to 1 July 2006; (d) either: (i) continue to hold the Debentures and/or Unsecured Notes; or (ii) are the legal personal representative of a person who held the Debentures and/or Unsecured Notes as at 23 March 2007; or (iii) are the holder of the Debentures and/or Unsecured Notes by reason of the assignment of the Debentures and/or Unsecured Notes from a person who held the Debentures and/or Unsecured Notes as at 23 March 2007, other than pursuant to an arm's length transaction for value from an unrelated person; and (e) either: (i) appear in the Schedule of Group Members that is Schedule B to the Deed of Settlement; or (ii) do not appear in the Schedule of Group Members but lodge a claim which is accepted by the administrator in accordance with the Scheme (as defined in the Deed of Settlement). 2. Pursuant to ss 33V and 33ZF of the Federal Court Act, the Court approves the settlement of this proceeding on the terms set out in the Deed of Settlement, a copy of which is a confidential exhibit to the affidavit of Kenneth John Fowlie sworn and filed on 18 May 2011 (the Deed of Settlement). 3. The Settlement Sum (or part thereof, as the case may be) be deposited into a Controlled Money Account within the meaning of ss 3.3.2 and 3.3.15 of the Legal Profession Act 2004 (Vic). 4. Interest earned on the Settlement Sum while invested in accordance with order 3, shall be applied to the Applicants' Legal Costs, to the extent of any shortfall, as defined in the Deed of Settlement and to the extent of any surplus, shall be returned to the Respondent. 5. The Applicants will, on or before 24 May 2011: (a) cause a notice in the form of Annexure 1 to these Orders (the Notice) to be sent by pre-paid ordinary post to the last known address of each person listed in Schedule B to the Deed of Settlement; (b) cause the Notice to be published in the legal notices section or the equivalent of The Australian; and (c) cause the Notice, the Scheme in the form of Annexure 2 to these Orders and the Deed Poll in the form of Annexure 3 to these Orders to be published on Slater & Gordon's website (www.slatergordon.com.au). 6. The cost of complying with Order 5 be paid by the Applicants and then be part of the Applicants' costs in the cause. 7. All costs orders made to date in the proceeding be hereby vacated. 8. There be no order as to the costs of the proceeding. 9. Pursuant to s 33ZF of the Federal Court Act or otherwise, the Applicants be authorised nunc pro tunc on behalf of the group members who are defined in the Application filed 24 August 2009 as amended by Order 1 to enter into and to give effect to the Deed of Settlement and the transactions thereby contemplated for and on behalf of those group members. 10. Pursuant to s 33ZB(a) or s 33ZF of the Federal Court Act, the persons affected and bound by these orders be the Applicants, the Respondent and the group members, who are defined in the Application filed 24 August 2009 as amended by Order 1, save for those group members who have opted out of the representative proceeding pursuant to notices filed with the court pursuant to s 33J of the Federal Court Act where such opt out notice was received by the Court before 4.00 pm on 21 April 2011. 11. The Application filed 24 August 2009 as amended by Order 1 be otherwise dismissed without prejudice to the right of the Respondent to bring a claim against any person (save as against the Applicants or any group member defined in the Application filed 24 August 2009 as amended by Order 1 except for any claim against the Applicants and/or any group members arising out of the terms of the Deed of Settlement or the need to enforce any provision of the Deed of Settlement) for any relief which is related to or connected with the subject of the Proceeding. 12. Pursuant to s 50 of the Federal Court Act, the Confidential Affidavit of Kenneth John Fowlie sworn and filed on 19 May 2011 and annexures not be published to any person without further orders of the Court and be sealed on the Court file and not disclosed to any person without further order of the Court. 13. The Parties shall have liberty to apply on 3 business days' notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. ANNEXURE 1 ADVERTISEMENT NOTICE APPROVED BY THE FEDERAL COURT OF AUSTRALIA CLASS ACTION AGAINST SANDHURST TRUSTEES LIMITED NOTICE TO GROUP MEMBERS OF SETTLEMENT Federal Court Proceeding No VID 616 of 2009 1. This Notice is published pursuant to the order of the Honourable Justice Gordon made on 20 May 2011. 2. You should read this Notice if you have lost money through investing in the failed Fincorp group. 3. On 24 August 2009, Mark and Rhonda Harrison (as "Applicants") commenced a Class Action against Sandhurst Trustees Limited (Sandhurst) in the Federal Court of Australia (being Proceeding No VID 616 of 2009). The Class Action was commenced by the Harrisons on their own behalf and on behalf of certain other people (known as "group members") who acquired notes in Fincorp Investments Limited ("Fincorp Investments"), described as "debentures", "first ranking notes" and "unsecured notes", during the following periods: 7 December 2004 – 30 July 2005 31 July 2005 – 30 October 2005 31 October 2005 – 7 January 2006 8 January 2006 – 29 April 2006 30 April 2006 – 30 May 2006 31 May 2006 – 30 July 2006 31 July 2006 – 23 March 2007