TW McConnell Pty Ltd as trustee for the McConnell Superannuation Fund v SurfStitch Group Ltd (administrators appointed) (No 4); Nakali Pty Ltd v SurfStitch Group Ltd [2021] NSWSC 121

Supreme Court New South Wales

Medium Neutral Citation: TW McConnell Pty Ltd as trustee for the McConnell Superannuation Fund v SurfStitch Group Ltd (administrators appointed) (No 4); Nakali Pty Ltd v SurfStitch Group Ltd [2021] NSWSC 121 Hearing dates: 20-22 October 2020; further evidence and submissions 23 November 2020; further evidence and submissions 24 December 2020; further submissions 29 January 2021 Date of orders: 19 February 2021 Decision date: 19 February 2021 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Settlement approved on condition that the Funders' entitlement to commission and costs be capped at $6.5 million Catchwords: CIVIL PROCEDURE – representative proceedings – shareholder claim against public company and chief executive officer – where level of likely directors and officers insurance cover revealed shortly after proceedings commenced - where company went into administration shortly thereafter and proceedings stayed - where efforts then made to settle proceedings - where part of settlement comprised a deed of company arrangement – where balance of settlement involved compromise by insurer – court approval – whether settlement reasonable inter partes – whether settlement reasonable inter se – where claimed costs and commission would consume bulk of settlement pool - whether costs proportionate - whether plaintiffs' legal advisers and funders engaged in disentitling conduct Legislation Cited: Civil Procedure Act 2005 (NSW) Civil Proceedings Act 2011 (Qld) Corporations Act 2001 (Cth) Cases Cited: Blairgowrie Trading Pty Ltd v Allco Finance Group Limited [2017] FCA 330; 118 ACSR 614 BMW Australia Limited v Brewster [2019] HCA 45 Brewster v BMW Australia Limited [2020] NSWCA 272 Bolitho v Banksia Securities Ltd [2019] VSC 638 Botsman v Bolitho (2018) 57 VR 68; [2018] VSCA 278 Caason Investments Pty Ltd v CAO (No 2) [2018] FCA 527 Camilleri v Trust Company (Nominees) Limited [2015] FCA 1468 Cantor v Audi Australia Pty Limited (No 5) [2020] FCA 637 Chocolate Factory Apartments Pty Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784 Court v Spotless Group Holdings Limited [2020] FCA 1730 Courtney v Medtel Pty Ltd [No 5] (2004) 212 ALR 311 Dyczynski v Gibson [2020] FACFC 120 Earglow Pty Ltd v Newcrest Mining Limited [2016] FCA 1433 Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323; 112 ACSR 584 Liverpool City Council v McGraw-Hill Financial, Inc [2018] FCA 1289 Modtech Engineering Pty Ltd v GPT Management Holdings Limited [2013] FCA 626 Newstart 123 Pty Ltd v Billabong International Limited [2016] FCA 1194 Peterson Superannuation Fund Pty Ltd v Bank of Queensland [2018] FCA 1842; 132 ACSR 258 Petersen Superannuation Fund Pty Ltd v Bank of Queensland Ltd (No 3) [2018] FCA 1842 Smith v Australian Executor Trustees Ltd [2018] NSWSC 1584 TW McConnell Pty Ltd as trustee for the McConnell Superannuation Fund v SurfStitch Group Ltd (subject to deed of company arrangement) (No 3); Nakali Pty Ltd v SurfStitch Group Ltd (subject to deed of company arrangement) (No 2) [2018] NSWSC 1749; 133 ACSR 98 Vernon v Village Life Limited [2009] FCA 516 Williams v FAI Security Pty Ltd (No 4) [2000] FCA 1925 Category: Procedural rulings Parties: In proceedings 2017/193375: TW McConnell Pty Ltd as trustee for the McConnell Superannuation Fund (Plaintiff) SurfStitch Group Ltd (in administration) (First Defendant) Justin Peter Cameron (Second Defendant) Chubb Insurance Australia Ltd (Third Defendant)