FEDERAL COURT OF AUSTRALIA Brisbane Broncos Leagues Club Ltd v Alleasing Finance Australia Pty Limited (No 2) [2012] FCA 1112 Citation: Brisbane Broncos Leagues Club Ltd v Alleasing Finance Australia Pty Limited (No 2) [2012] FCA 1112 Parties: BRISBANE BRONCOS LEAGUES CLUB LTD v ALLEASING FINANCE AUSTRALIA PTY LIMITED ACN 003 421 136 File number: NSD 1177 of 2010 Judge: PERRAM J Date of judgment: 15 October 2012 Catchwords: PRACTICE AND PROCEDURE – Representative proceedings – application for approval of proposed settlement – whether proposed settlement reasonable Legislation: Federal Court of Australia Act 1976 (Cth) s 33V(1) Cases cited: Australian Competition and Consumer Commission v Chats House Investments Pty Limited (1996) 71 FCR 250 applied Clime Capital Ltd v Credit Corp Group Ltd (No. 3) [2012] FCA 218 applied Kirby v Centro Properties Ltd (No. 6) [2012] FCA 650 applied Taylor v Telstra Corporation Ltd [2007] FCA 2008 applied Date of hearing: 26 September 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 10 Counsel for the Applicant: AJ Abadee Solicitor for the Applicant: Slater & Gordon Counsel for the Respondent: S Nixon Solicitor for the Respondent: Mallesons Stephen Jaques IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1177 of 2010 BETWEEN: BRISBANE BRONCOS LEAGUES CLUB LTD Applicant AND: ALLEASING FINANCE AUSTRALIA PTY LIMITED ACN 003 421 136 Respondent JUDGE: PERRAM J DATE: 15 October 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This matter was commenced in 2010 as a representative action. The class members were, broadly speaking, clubs who had suffered loss and damage as a result of their involvement with a system under which plasma screens would be leased to them on which would be shown advertising. The clubs were to get the advertising revenue thereby derived and this was expected to offset the rental charges. It seems that they did not. 2 There were two businesses involved in the supply of this arrangement. One was the promoter, Total Concept Projects (Australia) Pty Ltd ('TCP') and the other was the owner and lessor of the plasma screens, Alleasing Finance Australia Pty Ltd. The clubs' case was that, inter alia, TCP had engaged in misleading and deceptive conduct and that it had been Alleasing's agents. A claim of exclusive dealing was also made. 3 TCP is insolvent and there is no sensible prospect of recovering from it. A notice of discontinuance as against TCP was filed on 24 August 2011. The action has, therefore, proceeded only against Alleasing. 4 A key part of Alleasing's defence is that TCP was never its agent. 5 The parties have now reached an accommodation and wish the proceedings to be brought to an end. Because, in most cases, representative proceedings involve the rights of persons not before the Court and because the interests of those persons may not entirely be aligned with those who are, the leave of the Court is required ('A representative proceeding may not be settled or discontinued without the approval of the Court': s 33V(1), Federal Court of Australia Act 1976 (Cth)). Generally a grant of leave will be appropriate if the Court is satisfied that the settlement is in the interests of the group members as a whole and not merely in the interest of the applicant and the respondent: Australian Competition and Consumer Commission v Chats House Investments Pty Limited (1996) 71 FCR 250 at 258 per Branson J; Taylor v Telstra Corporation Ltd [2007] FCA 2008 at [56]-[66] per Jacobson J; Clime Capital Ltd v Credit Corp Group Ltd (No. 3) [2012] FCA 218 at [19] per Nicholas J. More recently, Middleton J has described the task as being to inquire into whether the settlement is a fair and reasonable compromise of the claims made: Kirby v Centro Properties Ltd (No. 6) [2012] FCA 650 at [2]. For present purposes, at least, these do not raise different issues. 6 The settlement proposed has these features: Alleasing will obtain judgment in its favour; Alleasing's cross-claims against those clubs who have not met all of their rental payments for the plasma televisions will be dismissed; All costs orders will be vacated; and The clubs will execute a deed. Under this deed, those clubs who owed unpaid rent to Alleasing but who have now been released from the obligation to pay by reason of the dismissal of Alleasing's cross-claims will share the economic benefit thereof with those class members who had met all of their rental payments and who were not sued by Alleasing. 7 The opinion of counsel for the clubs was placed before me explaining some of the difficulties which confronted the claim. I have taken this into account in formulating my opinion that the settlement is a fair and reasonable one. 8 The settlement has involved compromise on both sides. Alleasing has surrendered its right to recover unpaid rent; the clubs have surrendered their claims against Alleasing. Those clubs who did not have an outstanding rental obligation have shared in the benefit obtained by those who did. It is not necessary to set out how the deed providing for this operates; it suffices to say that having inspected it, its operation appears fair. 9 Obviously, there has been a significant backdown by the class members. This, however, reflects the substantial difficulties they faced demonstrating that TCP was Alleasing's agent. 10 In all the circumstances, the settlement proposed is a reasonable one. It is for those reasons that I made the orders I did in these proceedings on 26 September 2012, which were as follows: THE COURT ORDERS THAT: 1. Pursuant to sections 33V and/or s 33ZF of the Federal Court of Australia Act (the Act), the Court approves the settlement of the proceeding between the Applicant and the Respondent on the terms set out in the Class Action Settlement Deed, a copy of which is exhibited to the affidavit of Van Angelo Moulis sworn and filed on 25 September 2012 (the Deed). 2. Pursuant to s 33ZB(a) and/or s 33ZF of the Act or otherwise, the persons affected and bound by these orders be the Applicant, the Respondent and the group members as defined in paragraph 2 of the Amended Statement of Claim filed on 18 March 2011 save for those group members who have opted out of the proceedings pursuant to notices filed with the Court pursuant to s 33J of the Act on or prior to 2 November 2011. 3. Pursuant to s 33ZF of the Act or otherwise, the Applicant be authorised on behalf of the group members to enter into and to give effect to the Deed on behalf of the group members. 4. There be judgment for the Respondent. 5. The cross-claims by the Respondent be dismissed. 6. All costs orders made to date in the proceedings (including the cross-claims) be vacated. 7. There be no order as to the costs of the proceedings (including the cross-claims). 8. Pursuant to s 50 of the Act the Affidavit of Van Angelo Moulis sworn 25 September 2012 (including all exhibits) that was delivered to the Court in a sealed envelope (Confidential Affidavit) not be published to any person without further order of the Court and be sealed on the Court file in an envelope marked "Not to be opened except by leave of the Court or a Judge". I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 15 October 2012