SurfStitch Settlement Approval
On 1st and 2nd November 2018 his Honour Justice Stevenson heard the McConnell and Nakali Plaintiffs’ applications for Settlement Approval in respect of the SurfStitch DoCA adopted at the creditors’ meeting on 4 April 2018.
In respect of that hearing, the Plaintiffs sought orders for the Court to dispense with Opt Out and for a Common Fund Order to be made, as per the Notice to Group Members posted on our home page dated 1 August 2018.
His Honour determined the Court does not have power to dispense with Opt Out, and in any event would not exercise the Court’s discretion to make a Common Fund Order.
The parties have since been engaging in commercial negotiations in respect of how the Settlement Approval should proceed, which has involved complex and ongoing legal arguments with the SurfStitch administrators.
Separately, on 8 March 2019 the matter was listed for directions before his Honour Justice Hammerschlag, at which the McConnell Plaintiff filed a motion seeking leave of the Court to join as a third defendant Chubb Insurance Australia Limited (Chubb), the defendants’ Director’s & Officer’s Policy Liability insurer.
It is intended Chubb be joined, as it has not extended indemnity under its D&O Policy to SurfStitch or Mr Cameron. The Chubb insurance policy could expand the recovery pool to group member claimants.
The motion includes an Amended Commercial List Statement which now pleads the Plaintiff’s case against Chubb separately from SurfStitch and Mr Cameron. The Nakali Plaintiff simultaneously filed a similar motion in its proceeding seeking to join Chubb as the second defendant in that proceeding.
Accordingly, his Honour made orders, among others for:
1. Chubb to file any evidence in reply by 27 March and the Joinder Motion to be stood over to the 29 March 2019 in the Motions List;
2. the parties, Chubb and the litigation funders ILP and Vannin take part in a mediation to be convened by 31 May 2019 (Mediation);
3. the parties to notify the Court of the Mediation date by 31 March 2018;
4. SurfStitch, Mr Cameron and Chubb to provide the other mediation participants with position papers 14 days prior to the Mediation;
5. the costs of the Mediation to be shared between the parties and Chubb equally;
6. the Plaintiff’s Amended Settlement Approval motion dated 1 November 2018 (filed in Court on 8 March 2019) to be listed for hearing (administrative mention) on 29 March 2019 at 9:15 am.
7. Subject to further order, Mr Donnellan, the contradictor, be excused from further participation in the proceeding.
8. the parties have liberty to apply on 3 days’ notice.
9. Costs be reserved.
The Court Notes:
10. Any application for costs in respect of, or arising from the Settlement Approval Application will be fixed for hearing on a date after, and subject to the outcome of the Mediation.
The Chubb Joinder Motion will be heard before his Honour Justice Hammerschlag on 29 March 2019 unless otherwise ordered.
The joinder of Chubb, and intended mediation is therefore necessary to resolve all outstanding issues in the proceeding and in relation to the SurfStitch DoCA.
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Glenn McGowan QC
Partner & Chief Counsel
Rebecca Di Rago
This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.