Bradley Smith

The High Court has agreed to rule on whether common fund orders can ever be made in class actions, including so-called solicitors’ common fund orders allowing lawyers to earn a cut of any settlement.

If it takes up the Federal Court’s ruling in favour of solicitors seeking to earn a cut from a class action, the High Court will be asked to overrule its 2019 decision against common fund orders.

The High Court has been asked to overturn a Full Court decision finding lawyers can take a cut from a class action settlement under a solicitors’ common fund order and to finally settle the question of whether the court has the power to issue common fund orders at all.

Lawyers are allowed to take a cut from a class action settlement or judgment under a so-called solicitors’ common fund order, the Full Federal Court has ruled, saying they are a permissive use of the court’s power.

Bonza creditors voted Tuesday to wind up the budget airline after its administrators at Hall Chadwick ran an “extensive sales campaign” but received no offers to purchase the collapsed airline.

The administrators for budget airline Bonza have found it likely traded while insolvent in the lead-up to its voluntary administration, suggesting the airline’s directors may have breached their duties under the Corporations Act. 

Hearing arguments Tuesday on whether lawyers should be permitted to earn contingency fees in Federal Court class actions, judges on a Full Court bench appeared to lean in favour of allowing so-called solicitors’ common fund orders, rejecting claims they are “unjust”. 

Administrators of collapsed budget airline Bonza have been given two more months to try to sell the company, with the Federal Court finding a sale would be of greater benefit than liquidation to the airline’s 58,428 creditors, who are owed $116 million. 

A judge has expressed concerns that measures implemented to deal with the large number of Bonza creditors expected at the first creditors meeting on Friday unintentionally “foreclosed” on their right to vote to replace Hall Chadwick as administrators.

Budget Australian airline Bonza owes almost 58,000 customers, 320 employees and 130 suppliers after it was put into voluntary administration last week when aircraft lessors claimed the airline was in default and grounded its planes, a court has heard.