CIVIL PROCEDURE — representative proceedings — Court approval — representative proceedings concerning alleged defective work in the construction of dwellings in a development — funding group members and unfunding group members — whether settlement is fair and reasonable — deductions from settlement sum for administrator and legal costs — settlement approved
Quick Take
1In representative proceedings under Pt 10 of the Civil Procedure Act 2005 (NSW), where a settlement is reached against only one of multiple defendants, it may be appropriate for the settled defect claims to be withdrawn from the proceedings entirely, as the settling defendant would otherwise face cross-claims from remaining defendants and an indemnity from the plaintiff is not realistically available in representative proceedings.
2Where settlement compensation is intended to fund rectification of defects affecting all lots equally, equal distribution among current lot owners is appropriate, and a funding equalisation factor reimbursing group members who contributed to litigation costs is a rational and reasonable approach to avoid a windfall to non-contributing group members.
3When assessing legal costs to be deducted from a settlement sum in representative proceedings, apportioning general litigation costs among defendants by reference to the number of defendants from time to time is a reasonable methodology, subject to review by an independent costs assessor.
