Class closure unlikely to improve settlement prospects in AMP Super Fees class action

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This was a judgment concerning opt out, registration and ‘soft’ class closure orders. In short, the first and second respondents (Trustee Respondents) brought an application seeking a ‘soft’ class closure order prior to a pending mediation, which was dismissed by Murphy J on the day of the hearing. In the subsequently published reasons, his Honour held that the Trustee Respondents’ application for registration and ‘soft’ class closure had little or no merit, and dismissed it for the following reasons:

• The application was strenuously opposed, on cogent grounds, by the applicants. Although the position taken by the parties in relation to such an application cannot be determinative, his Honour held that it was “appropriate to exercise real caution” when class closure was opposed by the applicants (given the applicants have fiduciary obligations to act in the interest of class members, and the respondents’ interests are “inimical to the group members’ interests”).

• The Trustee Respondents’ central argument was that registration and class closure were appropriate because they did not have sufficient information in relation to class members’ claims (which was due to, inter alia, the archiving of administration systems incomplete and outdated records, and other historical deficiencies). Sufficient information would therefore be provided through a registration process, the Trustee Respondents contended, and that would ensure the pending mediation was efficient and effective, and capable of leading to a settlement. His Honour accepted there were deficiencies in the Trustee Respondents’ records but found the evidence did not establish that their records were insufficient to enable them to compile a representative sample of class members’ claims.

• His Honour found that registration rates from other ‘superannuation’ class actions had some probative value (contrary to Delany J’s view in Anderson-Vaughan v AAI Ltd (No 2) [2024] VSC 65) and that, accordingly, the proposed registration orders in this class action were likely to result in a very low registration rate. Consequently, the Trustee Respondents’ records were likely, in any event, to be a much better source from which a representative sample of claims could be compiled.

• His Honour did not accept the Trustee Respondents’ evidence that ‘soft’ class closure orders would further the prospects of settlement. Instead, his view was that one of the purposes of the application was to limit the number of class members who would be permitted to benefit from any settlement; the proposed registration process was, at “least in part, a cloak to disguise the fact the respondents wish to so confine the class”.

• The fiduciary nature of the relationship between the Trustee Respondents and class members pointed away from making a ‘soft’ class closure order.

• The evidence did not establish that a registration process must occur at some stage because the majority of class members would not need to register to be identified and paid a share of any settlement or judgment amount (given the majority remained AMP members or could be paid via the Australian Tax Office’s trustee voluntary payment mechanism (which had occurred in other ‘superannuation’ class actions)). For any persons that did need to register to participate, the appropriate time for that to occur was after any settlement or judgment.

• The registration process was likely to cost approximately $2 million, which the Trustee Respondents “balked at the idea of themselves paying for”, and divert resources from preparing for the upcoming mediation and trial. Thus, the significant cost coupled with the likely low registration rate provided a “strong reason to refuse the application”.

• The facts of three recent cases, where ‘soft’ class closure orders were made despite the opposition of the applicants, were different to the present case. First, two of those cases were in the Supreme Court of Victoria, where s 33ZG of the Supreme Court Act 1986 (Vic) provides an express power enabling the Court to make class closure orders. Secondly, in J Wisbey & Associates Pty Ltd v UBS AG [2024] FCA 147, Beach J expressed the view that, in assessing whether to make registration and class closure orders, the extent to which such orders would improve the prospects of settlement was a ‘paramount factor’. Justice Murphy found this factor to be ‘important’ rather than ‘paramount’, but, in any event, reiterated that registration and class closure was unlikely to improve settlement prospects in this case.

His Honour also made an order that the Trustee Respondents pay the applicants’ costs of and incidental to the application.

Alford v AMP Superannuation Ltd (No 2) [2024] FCA 423

Federal Court of Australia, Murphy J, 24 April 2024
Applicants’ Solicitors: Maurice Blackburn; Slater and Gordon Lawyers 1st and 2nd Respondents’ Solicitors: King & Wood Mallesons; 3rd, 4th, 5th and 6th
Respondents’ Solicitors: Clayton Utz Applicants’
Funder: Harbour Fund IV, L.P.; Therium Litigation Finance Atlas AFP IC

AustLII link

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