FEDERAL COURT OF AUSTRALIA Asquith Rugby League Club Ltd v Capital Finance Australia Ltd [2012] FCA 1324 Citation: Asquith Rugby League Club Limited v Capital Finance Australia Limited [2012] FCA 1324 Parties: ASQUITH RUGBY LEAGUE CLUB LIMITED (ACN 000 610 542) and SELLHARBOUR WORKERS' CLUB LIMITED (ACN 001 068 864) v CAPITAL FINANCE AUSTRALIA LIMITED (ACN 069 663 136) File number: NSD 1198 of 2010 Judge: JACOBSON J Date of judgment: 21 November 2012 Legislation: Federal Court of Australia Act 1976 (Cth), ss 33V, 33ZB, 50 Trade Practices Act 1974 (Cth), s 46 Cases cited: Brisbane Broncos Leagues Club Ltd v Alleasing Finance Australia Pty Ltd (No 2) [2012] FCA 1112 Date of hearing: 21 November 2012 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 12 Counsel for the Applicants: Mr AJ Abadee Solicitor for the Applicants: Slater & Gordon Counsel for the Respondent: Mr BJ Lee SC with Ms A Rao Solicitor for the Respondent: Kemp Strang IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1198 of 2010 BETWEEN: ASQUITH RUGBY LEAGUE CLUB LIMITED (ACN 000 610 542) First Applicant SELLHARBOUR WORKERS' CLUB LIMITED (ACN 001 068 864) Second Applicant AND: CAPITAL FINANCE AUSTRALIA LIMITED (ACN 069 663 136) Respondent JUDGE: JACOBSON J DATE OF ORDER: 21 NOVEMBER 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to s 33ZB of the Federal Court of Australia Act (the Act), the persons affected and bound by these orders be the Applicants, the Respondent, the Cross-respondents, and the Group Members at the date of this Order. 2. In respect of the Applicants' claims (on behalf of themselves and on behalf of group members), judgment for the Respondent. 3. In respect of the cross-claim, judgment for the cross-claimant against the: (a) first cross-respondent in the amount of $225,830.71; (b) second cross-respondent in the amount of $179,155.71; (c) third cross-respondent in the amount of $280.356.77; (d) fourth cross-respondent in the amount of $114,010.14; (e) fifth cross-respondent in the amount of $84,383.55; (f) sixth cross-respondent in the amount of $84,417.20; 4. All costs orders made to date in the proceedings (including the cross-claim) be vacated. 5. The Parties are to bear their own costs of the proceedings (including the cross-claim). 6. Pursuant to s 50 of the Act the Affidavit of Van Angelo Moulis sworn 19 November 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". Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1198 of 2010 BETWEEN: ASQUITH RUGBY LEAGUE CLUB LIMITED (ACN 000 610 542) First Applicant SELLHARBOUR WORKERS' CLUB LIMITED (ACN 001 068 864) Second Applicant AND: CAPITAL FINANCE AUSTRALIA LIMITED (ACN 069 663 136) Respondent JUDGE: JACOBSON J DATE: 21 NOVEMBER 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This proceeding was commenced as a representative action in 2010. It was initially commenced as a closed class but, as a result of amendments to the statement of claim made pursuant to an order dated 24 February 2011, the group members now comprise, at least notionally, an open class. Nevertheless, as Mr Abadee submitted this morning, the effect of the definition stated in the most recent iteration of the statement of claim is that the group members comprise a de facto closed class. 2 In general terms, the class may be defined as persons or entities which entered into a rental agreement with the respondent, Capital Finance Australia Limited (Capital) and a revenue agreement with Total Concept Projects (Australia) Pty Limited (TCP) and an advertising agreement with TCP or a related entity and which suffered loss and damage as a result of what is said to be the alleged wrongful conduct of TCP and Capital. 3 The applicants are a sporting club and a workers club and the other members of the class are also clubs which may be said, in general terms, to be of similar nature to the lead applicants in this proceeding. 4 The applicants claim that they were induced to enter into the rental agreements as a result of the misleading or deceptive conduct of TCP. The alleged representations are set out in the statement of claim and I need not repeat them. An essential element of the claim is that TCP made the alleged representations with the actual and/or ostensible authority of and as agent for Capital so that Capital is therefore, said to be liable as principal for the loss and damage suffered as a result of what is said to be the misleading conduct of TCP. The applicants also allege that TCP engaged in exclusive dealing in contravention of s 47(6) of the Trade Practices Act 1974 (Cth) in the manner alleged in the statement of claim. Again, the allegation of agency is critical to this claim. 5 Capital has brought a cross-claim against the applicants and four other cross-respondents under the rental agreements claiming the amounts that are said to be due under the agreements. The parties have now reached settlement and application is made to me to approve the settlement under s 33V of the Federal Court of Australia Act 1976 (Cth). 6 Perram J recently approved a settlement in a similar proceeding, see Brisbane Broncos Leagues Club Ltd v Alleasing Finance Australia Pty Ltd (No 2) [2012] FCA 1112. The only substantial difference is that in the Brisbane Broncos matter the respondent was Alleasing Finance Australia Pty Limited which leased the plasma screens to the applicants and group members. Alleasing therefore, occupied the same position in the proceeding as Capital in the present matter. 7 The observations that Perram J made about the insolvency of TCP apply equally to the present proceeding. His Honour set out at [5] the principles which apply to the approval of a settlement in a representative proceeding, including a number of authorities in which the relevant principles have been stated. It is unnecessary for me to repeat those authorities but it is sufficient to say that the Court will not approve a settlement unless it is satisfied that it is in the interests of the group members as a whole and not merely in the interests of the applicant and the respondent. This has been said in a number of cases to be the criterion that the settlement be a fair and reasonable compromise of the claims made. 8 The proposed settlement provides for orders which describe the parties who are affected and bound by the orders which are proposed to be made. The evidence before me indicates that there are 10 group members. They comprise the applicants, namely, the Asquith Rugby League Club Limited and Shellharbour Workers Club Limited as well as Western Suburbs League Club (Campbelltown) Limited, Wyong RSL Sub-Branch Club Limited, Kedron Wavell Services Club Inc and Club Marconi of Bossley Park Social Recreation & Sporting Centre Limited and four other clubs. The six group members referred to above have given express instructions to the solicitors for the applicants to agree to the proposed settlement. The other four group members received notice of the proposed settlement and have not objected to the orders which are proposed to be made. Nor has there been any appearance today to oppose the approval of the settlement. 9 The other terms of the settlement are that there be judgment for Capital against the cross-respondents in the amounts set out in paragraph 4 of the proposed orders. These amounts comprise the amounts claimed by Capital under a liquidated damages clause in the rental agreements but with no interest since the date of termination of the rental agreements. Also all previous cost orders will be vacated and each party will bear their own costs of the proceedings. The settlement involves a compromise on both sides. Capital has surrendered its right to recover interest payable. The other benefits to class members are explained in a confidential opinion of counsel which I have read. 10 It has been said in at least one authority that it is not the role of the Court to second-guess counsel's opinion. The settlement in the present seems to be very much along the lines of the settlement which was approved by Perram J in Brisbane Broncos. In all the circumstances, I am satisfied that the settlement proposed is a reasonable one and that it is in the interests of group members as a whole and not merely in the interests of the applicants or the respondent in these proceedings. 11 I therefore propose to make orders in terms of the orders set out in paragraphs 2 to 6 of the interlocutory application, save that order 2 is to be amended to read as follows: Pursuant to s 33ZB(a) of the Act the persons affected and bound by these orders are the applicants, the respondent and Group Members as at the date of this Order. 12 I will also make an order pursuant to s 50 that the confidential affidavit of Mr Moulis sworn 19 November 2012, including the exhibits to that affidavit, not be published. The order will be in the terms set out in paragraph 7 of the interlocutory application. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 21 November 2012