NSD601/2016 KIM MCKENZIE Applicant CASH CON

Federal Court of Australia
District Registry: New South Wales
Division: General                                                                    No: NSD601/2016

KIM MCKENZIE
Applicant

CASH CONVERTERS INTERNATIONAL LTD ACN 069 141 546 and others named in
the schedule
Respondents

                                                      ORDER

JUDGE:                                JUSTICE LEE

DATE OF ORDER:                        03 December 2018

WHERE MADE:                           Sydney

THE COURT ORDERS THAT:

Notice to group members of Conditional Settlement
1.         Pursuant to section 33Y(2) of the Federal Court of Australia Act 1976 (Cth) (Act) that
           the form and content of the Notice of Settlement to all group members (Notice) which is
           Annexure A, be approved.
2.         Pursuant to section 33Y(3) of the Act, that the Notice of Settlement be provided to group
           members in the proceeding according to the following procedure:
           (a)        from no later than 4:00pm on 12 December 2018 until 31 January 2019, Maurice
                      Blackburn is to display a copy of the Notice on its website;
           (b)        on or before 12 December 2018, Maurice Blackburn is to cause a copy of the
                      Notice to be sent by email to those Group Members for whom an email address
                      is provided by the respondents or who have otherwise provided Maurice
                      Blackburn with a valid email address;
           (c)        on or before 12 December 2018, Maurice Blackburn is to cause a third party mail
                      house to send a copy of the Notice by ordinary post to the last known postal
                      address for all Group Members for whom no valid email address is known;




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           (d)        the Notice may be amended by Maurice Blackburn before being posted or
                      emailed in order to correct any postal, website, email address or telephone
                      number, any typesetting or typographical error or any other formatting issue.
3.         The costs of sending, displaying and publishing the Notice as described in Order 2 above
           be paid by the applicant, on the basis that all of the above costs will subsequently fall to
           be dealt with by the Court as part of the costs of the proceeding.
Proposed Settlement Scheme
4.         The applicant serve on the respondents a draft copy of the proposed settlement scheme
           (Proposed Settlement Scheme), in accordance with the terms of the Settlement Deed
           by 7 December 2018.
5.         The respondents provide any comments or suggested amendments to the Proposed
           Settlement Scheme to the applicant by close of business on 10 December 2018.
Application for approval of settlement
6.         An application for approval pursuant to section 33V of the Act be listed for hearing at
           10.15am on 31 January 2019 (Section 33V Application).
7.         On or before 23 January 2019 the applicant:
           (a)        provide to the Associate to Lee J and serve upon the respondents, a copy of the
                      orders proposed by the applicant to be made on the hearing of the Section 33V
                      Application;
           (b)        provide to the Associate to Lee J and to the respondents, a copy of the proposed
                      Settlement Distribution Scheme;
           (c)        provide to the Associate to Lee J, a copy of any confidential material on which
                      the applicant seeks to rely for the purposes of the Section 33V Application over
                      which she intends to seek confidentiality orders;
           (d)        file and serve any submissions for the Section 33V Application.
8.         The applicant file and serve any affidavits in support of her application for approval of
           the Conditional Settlement and serve any non-confidential exhibits on the respondents
           by 23 January 2019.
9.         Any group member in the proceeding who intends to object to the proposed settlement,
           may attend the hearing of the Section 33V in person and seek leave to be heard for that
           purpose, but should use their best endeavours to notify Maurice Blackburn in writing by
           23 January 2019 of the intention to do so.



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10.        Notes that Maurice Blackburn will display the text in Annexure B on its website from 12
           December 2018 until 31 January 2019.
Costs Reference
11.        Pursuant to section 33ZF(1) and/or section 37P(2) and/or section 54A of the Act, and
           Division 28.6 of the Federal Court Rules 2011 (FCR), Ms Janet Clare McDonald of
           Counsel of Level 22 Chambers, 52 Martin Place, Sydney (Referee) is appointed for the
           purpose of conducting an inquiry (Reference) and making a report in writing to the
           Court (Report) stating, with reasons, the Referee’s opinion on the following three
           issues:
           (a)        the reasonableness of the applicant’s legal costs for work done up to the date of
                      the hearing of the Section 33V Application (including costs anticipated but yet to
                      be incurred as at the date of the Report);
           (b)        without limiting issue 1, whether the common benefit work apportioned as
                      between this proceeding and Sean Lynch v Cash Converters Personal Finance
                      Pty Ltd & Anor (NSD900/2015) at 35/65 percent is fair and reasonable; and
           (c)        the reasonableness of the sum proposed for settlement administration costs, and
                      whether the Referee can propose a cheaper and equally efficient way of
                      conducting the administration.
12.        The Referee is to submit the Report to the Court in accordance with FCR 28.66,
           addressed to the NSW District Registrar on or before 18 January 2019 or such further
           date as the Court may determine. The Report shall be no more than 10 pages in length
           and the Referees’ fees shall not exceed $20,000.
13.        Without affecting the power of the Court as to costs, the applicant is to be liable to the
           Referee for the Referee’s fees.
14.        The costs of the Reference shall form part of the applicant’s costs and shall be deducted
           from the settlement sum prior to any distribution of the settlement sum to eligible group
           members, if the settlement is approved.
15.        The Referee shall provide a copy of the Report to the Applicant and the Applicant’s
           solicitors.
16.        The Referee is not bound to conduct the Reference in accordance with the rules of
           evidence; and in the Report shall, to the extent it was necessary for the Referee to make
           any findings of fact in order to express her opinion on the issues:



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           (a)        make a statement of the facts found by the Referee from which the Court may
                      draw such inferences as it thinks fit; and/or
           (b)        submit any matter arising on the Reference for the decision of the Court, and
                      provide alternative opinions on the issue, depending on how the Court
                      determines the matter submitted to the Court.
17.        If, for any reason, the Referee is unable to comply with the order for delivery of the
           Report to the Court by 18 January 2019, the Referee is to communicate that fact to the
           Associate of Justice Lee as soon as it becomes apparent to the Referee that she will be
           unable to comply with the order.
18.        The Referee has liberty to seek directions with respect to any matter arising in the
           Reference.

Date that entry is stamped: 7 December 2018




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Level 17, Law Courts Building, Queens Square, Telephone 02 9230 8567
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                                                              Schedule

                                                                                No: NSD601/2016
Federal Court of Australia
District Registry: New South Wales
Division: General


Second Respondent                     CASH CONVERTERS (CASH ADVANCE) PTY LTD ACN 127
                                      866 308

Third Respondent                      CASH CONVERTERS (STORES) PTY LTD ACN 127 343 293

Fourth Respondent                     BAK PROPERTY PTY LTD ACN 103 054 824




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                                 Annexure A: Proposed Settlement Notice


           CASH CONVERTERS QLD “CASH ADVANCES” CLASS ACTION
        (Kim McKenzie v Cash Converters International Limited NSD601/2016)

                                              NOTICE OF SETTLEMENT

[Customer Name]
[Cash Converters ID Number]
[Customer address (if Notice sent by post)]

A Federal Court class action against Cash Converters has been settled in principle.
The class action was started in April 2016 by Ms Kim McKenzie. You are receiving
this notice because Ms McKenzie’s solicitors, Maurice Blackburn, understand that
you are a class member in this class action and if the settlement is approved by the
Federal Court, you are eligible to receive a refund.

The settlement provides for a refund to be paid to all borrowers who obtained a
“Cash Advance” loan (whether online or by going into a store) between 28 April 2010
and 30 June 2013 where Cash Converters (Cash Advance) Pty Ltd, Cash
Converters (Stores) Pty Ltd or Bak Property Pty Ltd was the lender, and who paid a
fee styled as a ‘broker’s’ fee or a ‘brokerage’ fee to a company that was owned by
Cash Converters International Limited. The Cash Converters respondents denied the
claims made against them. In agreeing to settle the claims, Cash Converters did not
admit liability.

The amount of the refund will be calculated on the basis of the ‘Brokerage Fee’ paid
by each group member on any “Cash Advance” loan(s). The maximum refund will
be the full amount of that fee, plus 20%, but it may be less and, if so, will be paid on
a pro rata basis. It may be paid in more than one instalment.

Maurice Blackburn has been ordered by the Federal Court to tell you that, if the
Court approves the settlement:
1.      The refund will be paid into your bank account last known to Cash Converters
        unless you tell Maurice Blackburn by 29 January 2019 that you want the refund
        to be paid into another bank account. Payment by bank deposit is the fastest
        and cheapest way to ensure you receive the refund. If you do not wish to
        receive payment by bank deposit, please contact Maurice Blackburn to discuss
        alternatives.
2.      If there is money left over after making these refunds, Maurice Blackburn will
        redistribute it to the class members in accordance with the settlement
        distribution scheme.
3.      If the deposit into your bank account does not work Maurice Blackburn may, but
        is not required to, try to find you to identify an alternative bank account. If any
        attempted payment is unsuccessful, it is possible that you will not receive any
        refund.

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4.      Subject to Court approval, Maurice Blackburn’s costs and any costs incurred in
        distributing the refunds will be paid from the settlement fund and interest
        earned on it. You do not have to pay any money to receive a refund.
5.      The earliest that any refund will be paid is March 2019.

If you want to know more about the case against Cash Converters and the
settlement     you      can      go     to      Maurice      Blackburn’s      website
https://www.mauriceblackburn.com.au/current-class-actions/cash-converters-class-
action-in-queensland. You have a right to object to the approval of the settlement if
you do not agree with it. If you want to object, you can attend the hearing at which
the Federal Court will decide whether to approve the settlement, to seek leave to
appear and to explain to the Court why you object to it. This hearing will take place
on 31 January 2019 at 10:15am at the Federal Court of Australia, Queens
Square, Sydney NSW 2000.

If you wish to object to the approval of the settlement, you must write to Maurice
Blackburn advising this and your reasons by 29 January 2019 at the address below.
If you think you might wish to oppose the proposed settlement of the class action,
you should obtain independent legal advice from solicitors you have chosen
immediately.
You do not need to attend the hearing to receive a refund.

Your bank account details for the payment of the refund
The bank account details that Cash Converters has provided to us for you are:
                   BSB number:        ___-___ [insert all 6 digits]
                   Account No:        ___________[***mask all but last 3 digits].

If these details are correct, you do not need to do anything. If these details are
incorrect, in order to ensure you receive a refund, you will need to provide your
correct bank account details by 27 January 2019 in one of the following ways:

1.      Go to [HYPERLINK TO MB WEBSITE] and enter your unique username
        (below). For security reasons, after this you will be sent a password via text
        message (to your mobile number below provided to us by Cash Converters).
        You must enter this password in order to log in and update your bank account
        details
        Username: [to be merged from database]
        Mobile number: [to be merged from database]
2.      Call Maurice Blackburn on 1800 550 587 to provide updated bank account or
        mobile phone details.

        Maurice Blackburn’s contact details are:
        Maurice Blackburn Lawyers
        PO Box A266
        Sydney South NSW 1235
        Email: ccqld@mauriceblackburn.com.au
        Phone:        1800 550 587


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        Fax:          (02) 9261 3318

Please note that Maurice Blackburn’s offices will be closed from 5.00pm on 21
December 2018 for its Christmas closure period and will reopen at 9.00am on 2
January 2019. During this period you will not be able to contact Maurice
Blackburn’s offices however any email or voicemail messages received during this
period will be responded to from 2 January 2019, when the office reopens.




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                                          Annexure B: Proposed Website


SETTLEMENT OF THE CASH CONVERTERS QLD “CASH ADVANCES” CLASS
ACTION

Kim McKenzie v Cash Converters International Limited (NSD 601 of 2016)

The Federal Court of Australia on 3 December 2018 ordered the publication of this
Notice of Settlement to Group Members in the Cash Converters Qld “Cash
Advances” Class Action [HYPERLINK to Notice]. Group Members will be sent the
Notice of Settlement by email or post from 12 December 2018.

The Notice of Settlement explains important information about the proposed
settlement and the payment to be provided to Group Members if the Federal Court
approves the settlement at a hearing to be held at 10.15am on 31 January 2019.

TO UPDATE YOUR BANK ACCOUNT DETAILS OR MAKE AN ENQUIRY ONLINE
CLICK HERE

FURTHER INFORMATION ABOUT THE SETTLEMENT OF THE QLD CASH
ADVANCES CASH CONVERTERS CLASS ACTIONS

1.      Who are the Group Members in the class actions?

        In the class action, the Group Members are people who obtained a Cash
        Advance loan (whether online or by going into a store) between 28 April 2010
        and 30 June 2013 where Cash Converters (Cash Advance) Pty Ltd, Cash
        Converters (Stores) Pty Ltd or Bak Property Pty Ltd was the lender, and who
        paid a fee styled as a ‘broker’s’ fee or a ‘brokerage’ fee to a company that was
        owned by Cash Converters International Limited.

        Pawnbroking loans or other services from Cash Converters, including Personal
        Loans, are not included in this class action settlement. Information about the
        Personal Loans class action (which has not settled) is available here.

2.      Legal consequences of the settlement

        Group Members’ legal rights will be affected by the proposed settlement. If the
        Federal Court approves the settlement, all Group Members, including any who
        have declined to receive a refund, will be bound by the settlement and at the
        end of the administration period all Group Members will be deemed to have
        provided releases to Cash Converters in a form to be approved.




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3.      Who will be eligible to receive compensation?

        Approximately 28,670 people will be eligible to receive compensation. Group
        Members must have paid a fee called a ‘brokerage’ fee (sometimes also
        referred to as a ‘broker’s fee’) to be eligible for compensation. Group Members
        may not be aware that they paid a ’brokerage’ fee as the amount of that fee
        would have been included in the total principal of the “Cash Advance”.

4.      When will compensation be paid?

        The earliest that compensation can be paid is 42 days after the Court decides
        whether to approve the settlement. If the Court approves the settlement, it is
        likely that compensation will be paid in late March 2019. Depending on how
        many Group Members are successfully paid, there may or may not be a further
        instalment paid.

5.      Summary of key terms of the proposed settlement

        The Federal Court must approve the settlement before it becomes final. The
        key terms are:

                Cash Converters will pay $10.6 million to be distributed to Group
                 Members.

                It is proposed that Cash Converters will pay $5.8 million to Maurice
                 Blackburn for legal fees and the costs of distributing the settlement.

                Group Members will receive a refund calculated on the basis of the
                 ‘brokerage’ fee paid. The amount of the payment will be calculated on a
                 pro rata basis and will depend upon the number of Group Members for
                 whom correct bank account details are held (or provided) and who can
                 therefore be successfully paid. Therefore, the exact amount of the refund
                 cannot be determined now. The maximum amount that can be paid is the
                 ‘brokerage’ fee’ plus 20%. It is likely that Group Members will receive less
                 than this maximum amount.

                Cash Converters has provided to Maurice Blackburn information about
                 Group Members, including loan details and bank account details, to
                 administer the settlement. The Notice of Settlement sent to each Group
                 Member identifies the bank account details held for the Group Member. If
                 these are incorrect, Group Members can contact Maurice Blackburn by 27
                 January 2019 to update their bank account details.

                Maurice Blackburn will attempt to pay all Group Members with the bank
                 account details provided by Cash Converters or provided by Group
                 Members by 27 January 2019. If any bank account details are incorrect,
                 Maurice Blackburn may (but is not required to) try to find Group Members


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                 whose payments failed, and such Group Members may miss out on
                 receiving any compensation.

                After the administration period has ended, Ms McKenzie and Group
                 Members will be deemed to have provided releases to Cash Converters in
                 a form to be approved.

6.      The claims in the class actions

        In April 2016 Maurice Blackburn's client Kim McKenzie, commenced a class
        action against Cash Converters International Limited and related companies on
        behalf of people who obtained loans through Cash Converters in Qld in the
        form of 'Cash Advances'. The case was also brought against lender companies
        that were owned by Cash Converters International Limited, being Cash
        Converters (Cash Advance) Pty Ltd, Cash Converters (Stores) Pty Ltd and Bak
        Property Pty Ltd. Ms McKenzie alleged that Cash Converters had a business
        system whereby borrowers would be charged a ‘Brokerage Fee’ comprising
        35% of the principal amount of their Cash Advance.

        As a result, Ms McKenzie sought compensation for the payment of the
        ‘Brokerage Fee’, and interest, on behalf of Group Members in the class actions.

        The Cash Converters respondents denied the claims made against them.

        In agreeing to settle the claims, Cash Converters did not admit liability.

7.      How can the statement of claim and other legal documents be obtained?

        The statement of claim and other legal documents can be obtained here:
        [HYPERLINK to Second Further Amended Statement of Claim and Further
        Amended Defence]

        Should you wish to obtain further information or a copy of the Deed of
        Settlement, please contact Maurice Blackburn at the contact details below.

8.      Court approval hearing – 31 January 2019

        At 10.15am on 31 January 2019, at the Federal Court of Australia, Queens
        Square, Sydney NSW 2000, the Federal Court will hold a hearing to decide if
        the settlement is fair and reasonable and in the interests of the Group Members
        and if the Court should approve the settlement. It is not necessary for Group
        Members to attend this hearing to support the approval of the settlement, or in
        order to receive a refund.

        If a Group Member does not believe the settlement should be approved, then
        the Group Member may choose to attend the hearing and explain to the Court


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        why the settlement should not be approved or to opt out of the proceeding if the
        settlement is approved.

        If you are a Group Member and wish to do this, you should attempt to advise
        Maurice Blackburn in writing by 23 January 2019 at the address below. If you
        think you might wish to oppose the proposed settlement of the class action, you
        should obtain independent legal advice immediately.

9.      Steps required to participate in the settlement

        Provided that Group Members’ bank account details known to Cash Converters
        are correct, they do not need to take any active steps to participate in the
        settlement as payment will be made into that bank account. Group Members
        should contact Maurice Blackburn as soon as possible and by 27 January
        2019 to provide any corrected account details.

        Payment by bank deposit is the fastest and cheapest way to ensure you
        receive a refund. If you do not wish to receive payment by bank deposit, please
        contact Maurice Blackburn to discuss alternatives.

10. Opting out of the settlement

        The opt out period for the class action ended on 1 October 2018 and there is no
        current provision to opt out of the action under the settlement. The only
        feasible way for Group Members to attempt to opt out of the settlement and
        preserve their legal rights is to make an application to the Court at the hearing
        on 31 January 2019. Group Members who are granted permission to opt out
        will not be paid any compensation pursuant to the settlement. If you think you
        might wish to opt out, you should obtain independent legal advice immediately.

11. Personal information

        The information Maurice Blackburn receives from Cash Converters or Group
        Members will only be used for the purpose of paying the refund or contacting a
        Group Member to obtain updated account details.

12. Further information

        If there is anything you do not understand or if you have any questions, do not
        contact the Federal Court or Cash Converters. You may seek independent
        legal advice or contact Maurice Blackburn. If you contact us and have received
        a notification of settlement please quote the Cash Converters ID number at the
        top of the page.

UPDATE YOUR BANK ACCOUNT DETAILS OR MAKE AN ENQUIRY ONLINE
HERE


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        Our contact details are:

        Maurice Blackburn Lawyers
        Level 32, 201 Elizabeth St
        Sydney NSW 2000
        Email: ccqld@mauriceblackburn.com.au
        Phone:        1800 550 587
        Fax:   (02) 9261 3318




Prepared in the New South Wales District Registry, Federal Court of Australia
Level 17, Law Courts Building, Queens Square, Telephone 02 9230 8567
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