In July this year the parties to the Great Southern class action
advised the Supreme Court of Victoria that they had reached
settlement. However, that settlement is only conditional until it
receives Court approval.
Justice Croft heard the approval motion on 17 and 18 November
2014. His Honour reserved his decision.
The Great Southern litigation was one of the largest matters in
Victorian history. The plaintiffs are investors in the Great
Southern timber plantation schemes who claim that they invested in
the schemes based on the misleading and deceptive conduct of the
The defendants are the liquidated companies that operated the
schemes, the former directors and the lenders who advanced funds to
the investors to participate in the schemes.
In the proceedings the plaintiffs sought damages as well as
orders setting aside the loans which they took out to fund their
After eight months of hearing and even longer preparing the
judgment, the presiding judge, Justice Croft, advised the parties
that he would deliver judgment on 25 July 2014.
Two days before Justice Croft was due to deliver the judgment
the parties notified the Court that they had reached settlement.
The judgment was never delivered.
As a class action involves the interests of parties that are not
active participants in the proceedings, any settlement must be
approved by the Court. To grant approval the Court must be
satisfied that the settlement is fair and reasonable to all the
group members who will be bound by it.
The hearing of submission on the settlement approval commenced
on 27 October 2014 before Justice Judd.
The settlement terms involved a payment of $23 million dollars
by the insurer of the scheme operator to the group members. In
return the group members agreed that the loans they had taken out
were repayable in full.
Of the settlement amount, the majority would be applied to
reimburse the funders of the legal proceedings. Of the $23 million
only $3.55 million would be distributed to the group members
providing a return of approximately $17.00 for each $10,000
A large number of group members opposed the settlement, arguing
that the benefits were so insignificant they would prefer to take
their chances with the judgment.
At the conclusion of the second day of hearing, Justice Judd
declined to hear the matter further. He stated that he was
uncomfortable assessing the settlement knowing that a judgment had
been prepared and remained locked away in a cupboard. He concluded
that the only person who could assess the settlement was Justice
Croft and he adjourned the matter to be heard by him 17 November
The hearing before Justice Croft went for two days, during which
time submissions were provided by all parties involved. At the
conclusion of the hearing his Honour reserved his decision.
As he has already prepared a judgment it seems that Justice
Croft will have no choice but to assess the settlement against it.
If the settlement is more favourable to the group members than the
judgment he must approve it. If it is less favourable, he can only
refuse it. Either way all parties will now get to see the judgment.
During the course of the hearing Justice Croft advised the parties
that he will be providing his judgment to them whatever the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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