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Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634

Michael Hodge QC (with Z Maud) appeared for Respondent, instructed by the Australian Government Solicitor in Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634.

Six Applicants sought approval from the Court for the settlement of a class action brought against the Commonwealth for its use of an automated debt-collection system from July 2015 to November 2019 – also known as ‘Robodebt’. The Applicants submitted that the requested settlement would address their claims for unjust enrichment from the Commonwealth in respect of invalid debts it had raised. The Applicants also had claims in negligence though the Court described these as “something of a distraction”.

An unusual feature of the settlement was that only some of the Applicants, and certain categories of group members, would receive any part of the settlement sum of AUD112 million. The issue that arose was whether the settlement was fair as between different categories of group members. The Court ultimately approved the settlement with some changes to the terms initially proposed, including allowing 680 group members who had filed objections to have a further opportunity to opt out. A declaration was made that, subject to certain circumstances, decisions made by the Commonwealth that a person owed a social security debt were invalid where the Commonwealth had relied solely on income averaging from ATO data.

In Justice Murphy’s summary, his Honour noted the complex and difficult issues raised in the case and thanked the parties’ lawyers for how they had conducted the proceedings.

The judgment is published here.

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