IMPORTANT NOTICE TO GROUP MEMBERS

IMPORTANT NOTICE TO GROUP MEMBERS

Surfstitch Class Action – Press Release 19 February 2021

IMPORTANT NOTICE TO GROUP MEMBERS

Proceedings 2017/193375 & 2017/347082

22 February 2021

On 19 February 2021 the Supreme Court of NSW approved the settlement in the Surfstitch class action. Full text can be found here. Final orders are yet to be made.

The terms of the settlement are complex and have a number of elements, including cash from the insurer ($6.5m), cash from the Administrator ($1.81m) and 12 million convertible notes from Alceon Retail Hold Co Pty Ltd (part of the group which proposed the Deeds of Company Arrangement).

The Court found the settlement was reasonable and the best that could be achieved.

The Court also approved total costs and funding commission capped at $6.5m.

The Court’s judgment made a number of things clear –

  • the case was one of the most difficult and complex cases in class action history – the first to grapple with the interaction between a class action settlement deed and Deeds of Company Arrangement, joining an insurer, whilst dealing with a competing class action and separate representation for two funders. (6 parties);
  • settlement was approved as reasonable in all the circumstances ([15], [57]);
  • although disappointing in quantum, it was the best available in all the circumstances ([15], [41]-[42], [61]);
  • the judge found the group members’ interests were satisfactorily protected ([310], [338]), and that was why the plaintiffs’ lawyers had appointed and paid for the Contradictor – to look after the interests of the non-funded group members.  The Court’s solution to a disappointing outcome was to cap all costs and funding commission at a fair sum;
  • Gadens’ costs were approved at a sum higher than it claimed ([38], [258]-[260]);
  • the Court recognised the extreme difficulty of the issues in this case had the effects of causing delays and increasing costs ([21], [47]-[48], [68]-[87], [160], [278], [330]).

The administrator of the settlement will now set about calculating entitlements for distribution of the settlement pool.

Should Continuing Group Members have any other queries or concerns in relation to your registration under the class action settlement, please contact the Gadens Team via email at vic-surfstitch@gadens.com or call our office on 03 9252 2555.

Glenn McGowan QC

Partner & Chief Counsel

Rebecca Di Rago

Associate

vic-surfstitch@gadens.com

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.