FEDERAL COURT OF AUSTRALIA Barker v Santos Limited [2020] FCA 972 File number: NSD 520 of 2019 Judge: BROMWICH J Date of judgment: 10 July 2020 Catchwords: PRACTICE AND PROCEDURE – interlocutory application for approval of settlement under s 33V of the Federal Court of Australia Act 1976 (Cth) – where representative proceeding seeking damages on behalf of group members who have not been paid travel entitlements – whether terms of settlement fair and reasonable having regard to the claims to be made by group members who will be bound by the settlement – settlement approved Legislation: Aboriginal Cultural Heritage Act 2003 (Cth) Australian Consumer Law s 236 Federal Court of Australia Act 1976 (Cth) pt IVA, ss 33V, 33ZF, 37AG(1)(a) Property Law Act 1974 (Qld( s 55(3)(a) Cases cited: Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 Australian Securities and Investments Commission v Richards [2013] FCAFC 89 Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 Camilleri v The Trust Company (Nominees) Ltd [2015] FCA 1468 Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2011] FCA 671 Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 6) [2011] FCA 277 Uren v RMBL Investments Ltd (No 2) [2020] FCA 647 Williams v FAI Home Security Pty Ltd (No 4) [2000] FCA 1925; 180 ALR 459 Date of hearing: Determined on the papers Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 15 Solicitor for the Applicant: Eddy Neumann Lawyers Solicitor for the Respondent: Levitt Robinson Solicitors ORDERS NSD 520 of 2019 BETWEEN: GWEN DALLIS BARKER Applicant AND: SANTOS LIMITED ACN 007 550 923 Respondent JUDGE: BROMWICH J DATE OF ORDER: 10 JULY 2020 THE COURT NOTES THAT: 1. The parties have complied with orders 4 to 10 of the orders made on 20 April 2020. 2. No group member has opted out or given notice of objection to the proposed settlement of this proceeding in accordance with orders 5 and 8 of the orders made on 20 April 2020. BY CONSENT, THE COURT ORDERS THAT: Approval and Scheme Administrator 1. Pursuant to s 33V and s 33ZF of the Federal Court of Australia Act 1976 (Cth) (Act), the settlement of this proceeding be approved on the terms set out in the Proposed Settlement Scheme set out in exhibit ESN-3 to the affidavit of Eduard Salomon Neumann affirmed 12 March 2020, being the annexure to these orders as entered. 2. Pursuant to s 33ZF of the Act or otherwise, the Court authorises the applicant nunc pro tunc for and on behalf of persons who fall within the description of group members in the originating application and who did not file an opt-out notice (Group Members) to enter into and give effect to the Settlement Scheme for and on behalf of Group Members. 3. Pursuant to s 33ZF of the Act, Mr Steven Nicols of Nicols + Brien Business Recovery be appointed scheme administrator of the Settlement Scheme (Administrator) and act in accordance with the rules of the Settlement Scheme, subject to any direction of the Court. 4. The proceeding otherwise be dismissed. Confidentiality 5. The confidential exhibit ESN-4 to the affidavit of Eduard Salomon Neumann affirmed 12 March 2020 in support of this application be confidential and not published, including to the respondent, pursuant to s 37AG(1)(a) of the Act, upon the ground that the order is necessary to prevent prejudice to the proper administration of justice because exhibit ESN-4 contains material subject to client legal privilege which has not been waived. 6. The period for which order 5 operates is five (5) years from the date of these orders, which may be varied and in respect of which there is liberty to apply generally. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BROMWICH J: 1 These are reasons for approving a settlement in this representative proceeding. 2 The applicant, Ms Gwen Dallis Barker, commenced this proceeding as a representative proceeding pursuant to Part IVA of the Federal Court of Australia Act 1976 (Cth) (Act) on behalf of group members who, at any time after 20 August 2010, were nominated and accepted employment as, and performed duties as, "Casual Cultural Heritage Officers" during a field placement more than two hours from Brisbane (one way), and who have not been paid their full travel entitlements. Ms Barker may also be referred to as the lead applicant. It is convenient to refer to Ms Barker and the group members she represents collectively as the applicants. 3 The case for the applicants is that the respondent, Santos Limited, and named individuals as "endorsed parties" on behalf of the Wongkumara People, became parties to a Cultural Heritage Management Plan pursuant to the Aboriginal Cultural Heritage Act 2003 (Cth) and to an ancillary agreement on 22 August 2010. Under the Plan, if Santos proposed to conduct any disturbance activities or seismic activities, it was required to employ persons nominated by a Cultural Heritage Coordinator to conduct a cultural heritage survey of the work area or a cultural heritage clearance of the seismic area. It is claimed that: (1) Santos agreed to fund positions including Casual Cultural Heritage Officers; (2) under an amended agreement in 2015, Santos agreed to pay, inter alia, "two days … per field placement if [Casual Cultural Heritage Officers were] travelling more than 2 hours (one way) from home location to Brisbane" as travel entitlements; (3) Santos entered into contracts with applicable employers, for the purposes of discharging Santos' obligations in employing the Casual Cultural Heritage Officers, but did not disclose the requirements regarding travel entitlements to those applicable employers; (4) by reason of that non-disclosure, Santos made false or misleading and deceptive representations in trade or commerce. (5) Ms Barker was not paid the appropriate travel entitlements. 4 By bringing this proceeding, Ms Barker sought damages pursuant to s 236 of the Australian Consumer Law (ACL). Alternatively, she claims that Santos failed to perform its promise to her and seeks orders pursuant to s 55(3)(a) of the Property Law Act 1974 (Qld) that Santos pay the travel entitlements. It is important to note that Santos has denied, and continues to deny, any wrongdoing of the kind alleged. 5 On 12 March 2020, following lengthy and protracted settlement negotiations through much of 2019, Ms Barker, in her representative capacity, filed an interlocutory application by which she sought orders to facilitate the notification of a proposed settlement, and for a hearing, if required, for the approval of that proposed settlement by the Court. Orders were duly made for the giving of notice to group members of the hearing of an application pursuant to s 33V of the Act for approval of the proposed settlement, including the fact that such members may oppose the proposed settlement in accordance with an opt-out notice. That notice was required to be sent to the last known email address of each person known to be a group member, and upon receipt of any delivery failure notice in response to any such email, to be posted to the last known postal address. The notice was also required to be published in the Koori Mail newspaper and on the website of Ms Barker's solicitor, Mr Eduard "Eddy" Salomon Neumann, the principal of Eddy Neumann Lawyers. 6 I am satisfied by affidavit evidence that each of the steps required to be taken were in fact taken by Mr Neumann, and that sufficient notification was given to all known group members, noting that this was a relatively confined group of people. I am also satisfied that no group member contacted has opted out of the proceeding, nor objected to the proposed settlement as detailed further below. Given the nature of the settlement proposed, that is unsurprising. As there was no opposition to the proposed settlement, I acceded to the joint position of Ms Barker in her representative capacity and Santos that this was a case in which the proposed settlement could be considered in chambers, and if considered appropriate, approved. 7 A particular reason for acceding to consideration of approval of the settlement in chambers was that Mr Neumann deposed, in an affidavit affirmed on 25 May 2020, several lists of people to whom he conveyed the opt out notice as being known to him personally as members of the of the Wongkumara People, whom he has acted for in relation to native title and related matters continuously since 2006. In the course of preparation of this proceeding and a related proceeding, and for some 18 months prior to the commencement of the two proceedings, he had contact with various members of the Wongkumara People in relation to the subject matter of the two proceedings (being payment of travel entitlements), and consequent upon those contacts undertook extensive inquiries of members of the Wongkumara People to attempt to identify all individuals who may have such claims. Those inquiries enabled Mr Neumann to assemble the lists of persons in his second affidavit and their contact details, being as many people as he had been able to identify as potential members of the represented group in this proceeding. 8 Mr Neumann's first and primary affidavit affirmed 12 March 2020 exhibits: (1) a copy of the Plan and ancillary agreement; (2) a copy of the amendment agreement; (3) a copy of the agreed conditional settlement scheme; and (4) a copy of counsel's opinion on the conditional settlement scheme, which is subject to legal professional privilege, has not been disclosed to the respondent, and is therefore to remain confidential as privilege has not been waived. 9 The proposed settlement was arrived at by an ultimately collaborative process. The initial draft was prepared by the solicitors for Santos. Mr Neumann then negotiated the terms with those solicitors in light of his knowledge and experience of the Wongkumara People, and prior matters in which he has been retained concerning Santos. He also took advice from counsel who has experience in class actions and prior involvement in matters concerning the Wongkumara People. As can be seen from the settlement scheme annexed to the orders as entered published with these reasons, that scheme provides for claims to be made for travel entitlements that were not paid, a process of assessment of those claims and if valid, for them to be paid, and a review process for claims that are not approved. The group members are therefore in substance put in the position that they would have been had they known about the entitlement at the time the work was performed, and made a claim for it. 10 I have carefully read and considered the confidential advice of counsel. As noted above, it has not been provided to Santos or its lawyers. Rather, it was obtained for the benefit of Ms Barker, and indirectly for the benefit of group members. In those circumstances, it is not appropriate to divulge the substance of that advice beyond noting its well-reasoned support for the proposed settlement. The primary purpose of considering that advice is to ensure that thorough and well-thought-out consideration has been given to the settlement that has been arrived at. I am amply satisfied in that regard. I go so far as to find that it is unlikely that any better result could have been arrived at by litigating the proceeding to a successful conclusion. I am satisfied that the proposed settlement provides for a sound and sensible process for the ascertainment and payment of any unpaid travel entitlements, which is mutually beneficial to Ms Barker, the remaining group members, and Santos at least in terms of a protracted process and substantial expense, without Santos making any admission of wrongdoing in not having made the payments in the first place. 11 On the topic of costs, I have been advised that agreement has been reached between Mr Neumann on behalf of Ms Barker, and the lawyers for Santos, obviating the need for any adjudication. There is no provision in the settlement terms for any reduction in the benefits of the proposed settlement for the deduction of costs. That too is a most beneficial outcome. 12 Overall, I am satisfied, as required by s 33V of the Act, that the terms of settlement are fair and reasonable, having regard to the claims to be made by group members who will be bound by the settlement, in all the known circumstances. This has been determined having regard to the interests of the group members as a whole, not merely Ms Barker and Santos. It is sufficient to make reference to the following authorities in support of the factors that generally need to be considered: (1) Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 per Branson J at 258; (2) Williams v FAI Home Security Pty Ltd (No 4) [2000] FCA 1925; 180 ALR 459 per Goldberg J at [19]; (3) Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 6) [2011] FCA 277 per Flick J at [21] and the cases there cited; (4) Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2011] FCA 671 per Jacobson J at [70]; (5) Camilleri v The Trust Company (Nominees) Ltd [2015] FCA 1468 per Moshinsky J at [5]. (6) Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 per Murphy J at [12]-[13]. (7) Uren v RMBL Investments Ltd (No 2) [2020] FCA 647 per Murphy J at [19]. I pause to observe that the approval decision was considerably easier to reach in this case than it apparently was in any of those cases. This is a case especially well-suited to representative proceedings, and for which the settlement proposed made eminent sense for all concerned. 13 In particular, I am mindful of the factors that may be potentially relevant in assessing the fairness and reasonableness of the proposed settlement, identified by reference to authority in Williams v FAI as follows at [19]: Ordinarily the task of a court upon an application such as this, is to determine whether the proposed settlement or compromise is fair and reasonable, having regard to the claims made on behalf of the group members who will be bound by the settlement. Ordinarily in such circumstances the court will take into account the amount offered to each group member, the prospects of success in the proceeding, the likelihood of the group members obtaining judgment for an amount significantly in excess of the settlement offer, the terms of any advice received from counsel and from any independent expert in relation to the issues which arise in the proceeding, the likely duration and cost of the proceeding if continued to judgment, and the attitude of the group members to the settlement. In Re General Motors Corp Pick-Up Truck Fuel Tank Products Liability Litigation 55 F 3d 768 at 785 (1995) the United States Court of Appeals for the Third Circuit referred to the nine-factor test it had adopted: … to help district courts structure their final decisions to approve settlements as fair, reasonable and adequate as required by Rule 23(e) [which requires court approval for settlement of class actions]. See Girsh v Jepson 521 F 2d 153 at 157 (1975) (3rd Cir). Those factors are: (1) the complexity and duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining a class action; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement in light of the best recovery; and (9) the range of reasonableness of the settlement in light of all the attendant risks of litigation. (See also County of Suffolk v Long Island Lighting Co 907 F 2d 1295 at 1323 (1990) (2nd Cir), 5 Moore's Federal Practice, 3rd ed, p 23–348.) This nine-factor test is equally helpful in the Australian jurisdiction and I find it a useful guide in considering the present proposed settlement. I am satisfied that every one of the factors identified in Williams v FAI above, and more besides, fall strongly in favour of the proposed settlement. 14 I am also satisfied that more than adequate provision is made to protect the interests of the wider group members, none of whom have participated in this process, but also none of whom has objected to or opposed the proposed settlement: see Australian Securities and Investments Commission v Richards [2013] FCAFC 89 at [8]. Indeed, I see little reason to suppose that any such interest is seriously at risk. 15 I am therefore satisfied that approval of the proposed settlement is fair and reasonable and therefore appropriate, and commend the parties for reaching and proposing it for approval by the Court. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromwich. Associate: Dated: 10 July 2020