McDonald v Commonwealth of Australia
[2025] FCA 380
•17 April 2025
FEDERAL COURT OF AUSTRALIA
McDonald v Commonwealth of Australia [2025] FCA 380
File number: VID 312 of 2021 Judgment of: MORTIMER CJ Date of judgment: 17 April 2025 Catchwords: REPRESENTATIVE PROCEEDINGS – application for court approval of settlement under s 33V of the Federal Court of Australia Act 1976 (Cth) – claim for non-payment or under-payment of wages to Aboriginal and Torres Strait Islander workers in the Northern Territory between 1933 and 1971 – whether the settlement is fair and reasonable – whether proposed deductions are fair and reasonable – deductions for legal costs and funding commission – priority of payments – directions to the administrator – settlement approved
ABORIGINAL AND TORRES STRAIT ISLANDER PEOPLES – outreach program – remote communities – best practice principles for law firms operating outside the communities in which their clients are living – expertise and use of locally experienced cultural advisers, interpreters, community engagement staff or community development staff
Legislation: Australian Human Rights Commission Act 1986 (Cth) s 46PO
Federal Court of Australia Act 1976 (Cth) ss 23, 33V, 33ZC, 33ZF, 37P, 37AF, 37AH, 37AG, 37AI, 37AG, 54A
Racial Discrimination Act 1975 (Cth) s 9
Slavery Abolition Act 1833 (Imp) (3 & 4 Will IV c 73)
Administration and Probate Act 1969 (NT)
Cases cited: Arthur (Litigation Representative) v Northern Territory of Australia (No 2) [2020] FCA 215
Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd (No 3) [2020] FCA 1885; 385 ALR 625
Australian Securities and Investments Commission v Richards [2013] FCAFC 89
Bellamy’s Australia Ltd v Basil [2019] FCAFC 147
Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330
Bolitho v Banksia Securities Ltd (No 18) [2021] VSC 666
Bradshaw v BSA Ltd (No 2) [2022] FCA 1440
Bushby (by his litigation representative Webling) v State of Victoria (Department of Education and Training) (No 2) [2023] FCA 340
Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296
Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527
Camilleri v The Trust Company (Nominees) Ltd [2015] FCA 1468
Court v Spotless Group Holdings Limited [2020] FCA 1730
Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd (No 2) [2006] FCA 1388; (2006) 236 ALR 322
Eckardt v Sims Ltd [2022] FCA 1609
Elliott-Carde v McDonald's Australia Ltd [2023] FCAFC 162
Ellis v Commonwealth of Australia [2023] NSWSC 550; 411 ALR 578
Fordham v Commonwealth Bank of Australia [2023] FCA 1106
Galactic Seven Eleven Litigation Holdings LLC v Davaria [2024] FCAFC 54
Ghee v BT Funds Management Ltd [2023] FCA 1553
Gill v Ethicon Sàrl (No 11) [2023] FCA 229
Iddles v Fonterra Aust Pty Ltd [2023] VSC 566
Ingram as trustee for the Ingram Superannuation Fund v Ardent Leisure Ltd (Settlement Approval) [2024] FCA 836
Jeffriess v Perpetual Trustee Company Ltd (No 2) [2023] FCA 911
Jenkings v Northern Territory of Australia (No 5) [2021] FCA 1585
Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund) v BHP Group Ltd [2019] FCAFC 107; 369 ALR 583
Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Limited [2016] FCAFC 148; 245 FCR 191
Pearson v State of Queensland (No 2) [2020] FCA 619
Perera v GetSwift Limited [2018] FCA 732; 263 FCR 1
Petersen Superannuation Fund Pty Ltd v Bank of Queensland Ltd (No 3) [2018] FCA 1842
Scandolera v State of Victoria [2015] FCA 1451
Streetv State of Western Australia [2024] FCA 1368
Tour v Australia and New Zealand Banking Group Ltd [2024] FCA 1513
Watson & Co Superannuation Pty Ltd v Dixon Advisory Superannuation Services Ltd (Settlement Approval) [2024] FCA 386
Webb v GetSwift Limited (No 7) [2023] FCA 90; 414 ALR 500
Williamson v Sydney Olympic Part Authority & Ors [2022] NSWSC 1618
Wills v Woolworths Group Ltd [2022] FCA 1545
Division: General Division Registry: Victoria National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 608 Date of last submissions: 24 February 2025 Date of hearing: 7 November 2024 and 17 December 2024 Counsel for the Applicant: Mr WAD Edwards KC, Mr AH Edwards, Ms M Benn and Mr JA Brezniak Solicitor for the Applicant: Shine Lawyers Counsel for the Respondent: Ms F McLeod SC, Ms Z Maud SC, Mr J Ingrames and Ms S Molyneux Solicitor for the Respondent: Australian Government Solicitor Counsel for the First Intervener: Ms F Forsyth KC and Mr O Nanlohy Solicitor for the First Intervener: William Roberts Lawyers Counsel for the Second Intervener: Mr DR Sulan SC and Ms J Ibrahim Solicitor for the Second Intervener: Shine Lawyers Amici Curiae: Mr D O’Leary SC and Ms T Herrmann ORDERS
VID 312 of 2021 BETWEEN: MINNIE MCDONALD
Applicant
AND: COMMONWEALTH OF AUSTRALIA
Respondent
LLS FUND SERVICES PTY LTD (ABN 51 627 975 213)
First Intervener
SHINE LAWYERS
Second Intervener
ORDER MADE BY:
MORTIMER CJ
DATE OF ORDER:
17 APRIL 2025
THE COURT NOTES THAT:
A.On 9 December 2024, interim suppression orders were made by National Judicial Registrar Colbran in this proceeding and remain in place.
THE COURT ORDERS THAT:
Ms Harris’ report
1.Pursuant to r 28.67(1)(b) read with r 1.40 of the Federal Court Rules 2011 (Cth), Ms Harris is to provide an explanation by way of a further report on the matters raised in these reasons concerning possible miscalculations in her report dated 28 November 2024.
2.The further report is to be provided to the Court, the parties and interveners on or before 4pm on 5 May 2025.
3.On or before 15 May 2025, and having conferred, the parties and Shine Lawyers are to file a joint proposal for the Court’s consideration addressing the issues identified by the Court and Ms Harris’ explanation in her further report.
4.In the event that the parties and Shine Lawyers are unable to agree on a joint proposal, the issue will be referred to mediation before National Judicial Registrar Colbran, such mediation to be completed before 21 May 2025.
Proposed orders
5.The parties and interveners are to confer in relation to the proposed orders provided to them by the Court by email on 17 April 2025.
6.By 4pm on 26 May 2025 the parties and interveners are to notify the Court of any changes to the proposed orders that are consistent with the Court’s reasons for judgment, but which in their view are necessary or appropriate.
7.The notification is to be by way of a single submission filed on behalf of the parties and the interveners, together with a set of proposed amended orders.
Suppression orders
8.By 4pm on 6 May 2025, the parties and/or interveners are to file and serve any application or applications, together with any supporting evidence, for any orders to be made pursuant to s 37AF of the Federal Court Act 1976 (Cth), to replace the interim suppression orders.
9.If the parties and/or interveners propose to apply for any replacement suppression orders, the Court will list the application(s) for hearing, and will take such steps as it considers appropriate to ensure adequate public notification of any such application(s).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
Introduction
[1]
Background
[16]
A brief outline of the claim
[18]
The taking of evidence by the Court in July 2023
[28]
The settlement approval application
[33]
The first settlement approval hearing
[47]
The appointment of amici curiae
[55]
The second settlement hearing
[59]
The evidence relied upon
[60]
Settlement approval affidavits
[61]
Further affidavit
[65]
Submissions
[66]
Some potential outstanding issues
[71]
Drafting error in the applicant’s further amended originating application
[72]
Matters in Ms Harris’ report requiring further clarification
[74]
Possible miscalculation in Ms Harris’ report in relation to the calculation of GST
[74]
Possible miscalculation in Ms Harris’ report in relation to law clerk fees
[79]
Possible miscalculations in Ms Harris’ report in relation to individual lawyers’ hourly rates
[80]
A summary of the Court’s decisions in approving the settlement
[85]
Overall approval
[86]
Deductions relevant to group members
[88]
Deductions relevant to the funder
[90]
Deductions relevant to Shine’s legal costs
[92]
Administrator
[100]
Use of the Agreed Administration Costs Component for the outreach program and registration process
[101]
Costs assessor
[105]
Priority of payments
[108]
Applicable principles
[114]
Section A
[130]
The Court’s reasons for approving the settlement OF THE PROCEEDING
[130]
The overall settlement sum and its basis
[133]
The factors I considered of most importance in this settlement approval application
[147]
Fairness and reasonableness: some intangible aspects
[149]
Risks
[161]
Delay and strain inherent in a litigated outcome
[172]
Likely compensation
[180]
Other features which were not substantively contested
[183]
The extension of payments to descendants of eligible claimants
[184]
The registration process
[191]
Class closure orders
[194]
The appointment of Julia Kaye, David Orr and Sal Algeri of Deloitte as Administrator of the Scheme
[198]
The administration period
[202]
The appointment of legal advisors and independent counsel
[203]
The costs assessor’s appointment and costs
[205]
The reimbursement payments to the applicant and other living group members who had already given evidence
[208]
Section B
[218]
The Court’s reasons for some of the particular orders made and proposed to be made
[218]
Some key features
[219]
The refusal to make a differentiation order
[226]
The interim payment of $10,000 to living eligible claimants
[253]
The funder’s fees
[262]
What the funder seeks
[268]
The approach I have taken
[273]
Capping
[328]
Should the percentage of the commission be 20%?
[339]
What should the commission attach to?
[341]
ATE insurance
[355]
Shine’s legal costs
[360]
Shine’s intervention
[379]
Cost referee’s report
[384]
What Shine seeks
[390]
The Commonwealth’s position on legal costs
[402]
Commonwealth’s argument on law clerk rates — solicitor/client costs
[404]
My reasoning
[420]
Commonwealth’s argument on costs of AHRC complaint — party/party costs
[430]
Commonwealth’s argument on future costs’ from 1 November to 17 December 2024
[434]
Consideration on legal costs and disbursements
[435]
Summary of my findings
[435]
The method adopted by Shine in the Outreach Program and Registration Process
[456]
The uplift fee
[479]
Costs from 1 November 2024 to 17 December 2024 — the registration process and ‘outreach program’
[494]
Applicant’s solicitor/client costs incurred to 17 December 2024
[497]
Law clerks
[497]
Applicant’s party/party costs incurred to 17 December 2024
[500]
Conclusion on my approach to the Applicant’s Agreed Costs and the Applicant’s Actual Costs to 17 December 2024
[501]
Future costs from 18 December to the Registration Date (31 August 2025)
[504]
The $8 million cap proposed by Shine
[504]
The evidence about alternative models of outreach and registration
[516]
The undertaking
[561]
Best practice principles
[571]
Miscellaneous orders the Court considers are unnecessary
[574]
Matters conceded, no longer pressed or outside the Court’s approval function
[577]
Priority of payments
[579]
My decision
[584]
The making of an apology
[587]
Two final observations
[592]
Future proceedings
[592]
What should happen to the material filed in the proceeding
[598]
Suppression orders
[601]
Conclusion
[605]
MORTIMER CJ:
INTRODUCTION
In this proceeding, the applicant, Ms Minnie McDonald has brought proceedings on behalf of the group members concerning the non-payment or under-payment of wages for Aboriginal and Torres Strait Islander men and women who worked in the Northern Territory over a certain period. In this context, I use “wages” to cover both monies paid that were allegedly insufficient, and monies not paid at all for work done, and also where Aboriginal or Torres Strait Islander people were given what may have been described as “keep” instead of being paid for their labour, which may have included being given other items such as clothing and tobacco. The proceeding has been known as the “Northern Territory Stolen Wages Class Action”, although talking about “stolen wages” is not entirely accurate in terms of the way the proposed settlement is structured, and may be apt to confuse those reading about this settlement.
The group members are Aboriginal or Torres Strait Islander people who:
(a)lived in the Northern Territory during the claim period between 1 June 1933 and 12 November 1971;
(b)were subject to certain ordinances and/or were inmates of Aboriginal institutions (such as missions, settlements and reserves); and
(c)worked in the Northern Territory or had their property controlled by the government during that time.
Group members worked on pastoral stations, other private workplaces, Aboriginal institutions and missions, or government-run stations during the claim period. People who were within the group definition but who have passed away are included.
It is not in dispute that the respondent, the Commonwealth of Australia, had governance responsibility for the Northern Territory during the claim period.
In terms of the proposed settlement, group members who register to participate in the settlement will be assessed by an administrator against the eligibility criteria to decide whether they are an “eligible claimant” or if an eligible claimant is deceased, whether they are an “eligible descendant claimant”. An “eligible descendant claimant” includes the most recent living spouse or living children of an eligible claimant who has passed away. In these reasons, I use the term “eligible claimant” to cover these people as well as group members because, at the moment, the process to register group members and determine eligibility is ongoing.
The parties seek the Court’s approval to the following agreed resolution of the proceeding. The principal term is that the Commonwealth will pay a sum of up to $180,000,000 to be calculated by multiplying $18,000 by the number of eligible claimants up to 10,000 eligible claimants. I shall describe the figure of up to $180,000,000 as the settlement sum. The settlement fund is the settlement sum plus any interest earnt on it.
Separately the agreed resolution has components of
(a)up to $15,000,000 for party/party legal costs including the conduct of the registration process but excluding any uplift to the applicant’s solicitors, Shine Lawyers;
(b)up to $6,000,000 for administration costs; and
(c)up to $1,000,000 for cost assessor’s costs.
I shall describe the figure of up to $22,000,000 for the applicant’s agreed costs, costs assessor’s costs and agreed administration costs as the costs sums.
The agreement between Ms McDonald and the Commonwealth was executed as a Deed in August 2024. The Deed includes a Settlement Distribution Scheme. The Scheme establishes a procedure for the distribution of money to eligible claimants including eligible descendant claimants who are defined in the Scheme.
There are of course other key terms in the Deed such as releases, and agreements about timing and distribution of the settlement sum and possible differentiation of amounts to be paid to various categories of eligible claimants. The Deed also contemplates the appointment of an administrator by the Court and the establishment of an interest-bearing settlement fund account. By orders on 14 November 2024, the Court appointed Julia Kaye, David Orr and Sal Algeri of Deloitte as administrators of the Scheme. Together, I refer to them as the Administrator.
There are also some matters for which the Court’s approval is sought that are not the subject of precise agreement in the Deed between Ms McDonald and the Commonwealth. These include:
(a)a claim by the corporation which has funded this litigation, LLS Fund Services Pty Ltd (the funder) for 20% of the gross settlement amount (i.e. 20% of up to $202,000,000 — comprised of the settlement sum and the costs sums); and
(b)claims for additional legal costs by Shine, which were quantified during the settlement approval hearings as up to an extra $7,639,390.79. This figure covered the difference between what the Commonwealth had agreed to pay to Shine for legal costs and what Shine says its actual legal costs are for running the proceeding on behalf of the applicant, as well as its claimed future legal costs for the “registration process and outreach program” designed to assist registration of eligible claimants, a process which runs until 31 August 2025.
Shine are also the solicitors on the record for the applicant in the proceeding entitled Streetv State of Western Australia [2024] FCA 1368 (WAD 237 of 2020), filed in the Western Australia registry of the Federal Court of Australia, where similar claims are made on behalf of group members who are Aboriginal or Torres Strait Islander people, and who worked in Western Australia over a similar period for little or no pay. The experiences in Street, and the Court’s decision to approve the settlement, have been referred to by the parties for a number of different reasons during this settlement approval process.
The issues in this proceeding have many layers of complexity. That is in some ways ironic. The base claim is made on behalf of a group of people who were disadvantaged and oppressed in many ways at the time of the alleged failures to pay wages. Those people, and their descendants, still experience disadvantage in terms of average levels of education, health, access to services and facilities, life expectancy, and lack of proficiency in written and spoken English compared to non-Indigenous people. Many of those characteristics are shared to some extent by the individuals who have led this class action, including the applicant Ms McDonald. The arguments and evidence in the proceeding in support of the proposed settlement have been complex for all legal representatives, and for the Court. It is difficult to ascertain how much of the complexities will have been fully understood by group members and their communities.
In explaining why it has made the orders it already has, and the orders it proposes to make following these reasons, the Court has a responsibility not to perpetuate that complexity more than is necessary to address the matters which need to be considered. The Court’s reasons should be as accessible as reasonably possible to the range of people who might wish to understand this proceeding and its outcome. These include of course the applicant, her family and community, surviving eligible claimants and their families and communities, the descendant eligible claimants and their families and communities, and First Nations communities who may have been following this and other proceedings about alleged exploitation of Aboriginal and Torres Strait Islander workers. It also includes the Australian community as a whole whose public funds have been applied to the proposed settlement by the Commonwealth, and the media who might report on these matters. The irony, and the matter which needs to change in these kinds of proceedings, is that the complexity arises almost entirely because of the arguments brought to the Court by Shine and the funder, about how much money they should receive because of the settlement of this proceeding, and when and how they receive it.
The Court provides a summary accompanying the publication of these reasons. The summary does not represent the Court’s reasoning, but is given as a way of making the Court’s reasoning more accessible.
BACKGROUND
In this section I set out a brief outline of the claim and the progress of the proceeding to the settlement that was reached, together with the process then adopted by the Court.
These reasons do not contain many references to the significant evidence already filed in this proceeding, both from Aboriginal and Torres Strait Islander workers and their families, and from a range of experts, and which the Court considers should be preserved in some way: see [598]–[600] below. The Commonwealth had access to all this material before it decided to agree to settle the proceeding. Because the matter has settled the Court is not making any findings of fact about what happened to Aboriginal and Torres Strait Islander workers during the claim period. However, on any view of the pleadings and the filed material the narrative of the claimed experiences of Aboriginal and Torres Strait Islander people in the Northern Territory casts a shameful shadow on the actions of government, government officials and other historic participants in the alleged exploitation of the labour of Aboriginal and Torres Strait Islander people. The Commonwealth properly recognised this in the statements its senior counsel made in open court during the first settlement approval hearing: see [588] below.
A brief outline of the claim
Ms McDonald was born in around 1938 and grew up at Lake Nash Station, which is located in the Northern Territory near the Queensland border, in the southern part of the Barkly Tablelands. She worked at Georgina Downs and then at Argadargada Stations as a domestic servant from around the age of 14.
In summary, Ms McDonald says that she, and other Aboriginal and Torres Strait Islander workers in the Northern Territory over the claim period were not paid properly for their labour, that labour often being performed in bad conditions. She claims that she, and other workers, were sometimes underpaid. She claims that she, and other workers, were sometimes only paid “keep” and no wages at all. She claims sometimes wages were not paid to the workers, but to government officials who were supposed to look after the wages and distribute them. She claims the government officials at the time, including people such as the Director of Native Affairs, did not look after the workers’ wages as they should have.
Ms McDonald alleges that, at various times during the claim period, Aboriginal and Torres Strait Islander workers were subject to the Aboriginal Ordinance 1918-1933 (NT), the Welfare Ordinance 1953-1955 (NT) and the Wards Employment Ordinance 1953-1959 (NT). I will refer to these collectively as the Ordinances. Ms McDonald claims that the Ordinances authorised the Commonwealth to hold the money of some workers on trust for them in some cases and some workers did not get their money from those trusts.
The applicant’s concise statement filed on 5 June 2024 sets out at [10] the relief sought by Ms McDonald:
(a)declarations that the duties she alleges were owed by the Commonwealth to her and NT Aboriginal or Islander Workers existed and were breached by the Commonwealth;
(b)declarations that the Ordinances were void and inoperative to the extent they authorised a state of slavery of any NT Aboriginal or Islander Worker contrary to the Slavery Abolition Act 1833 (Imp) (or the Slavery Abolition Act);
(c)declarations that the Commonwealth holds on constructive trust any benefit it received by breaching the duties she alleges exist;
(d)an order that an account be taken of the trust accounts that she alleges the Commonwealth is trustee of;
(e)equitable compensation from, and account by, the Commonwealth to the NT Aboriginal or Islander Workers for any losses they suffered or benefit the Commonwealth received by the breaches she alleges;
(f)an order for restitution or damages for the reasonable value of unremunerated or inadequately remunerated services provided by NT Aboriginal or Islander Workers at Aboriginal Institutions;
(g)a declaration that there has been unlawful racial discrimination by the Commonwealth against the Applicant and NT Aboriginal or Islander Workers, contrary to the Racial Discrimination Act 1975 (Cth) (or the RDA); and
(h)an order for damages for racial discrimination and an apology.
Thus, there are broadly four causes of action, with some facts being common to more than one cause of action
Firstly, fiduciary claims that the Commonwealth, or individuals exercising powers under the Ordinances, owed certain fiduciary duties to group members and that those duties were breached. Broadly, it is alleged that those duties were breached by:
(a)failing to exercise care and skill, including by failing to ensure payment of adequate or fair wages, supervise employment arrangements and pursue claims in relation to workers being paid no or inadequate wages;
(b)failing to avoid conflicts of interest by denying permission for those in Aboriginal institutions to work outside the institutions for higher wages and in certain circumstances avoiding obligations the Commonwealth had to maintain the dependants of workers;
(c)failing to account for any benefit received by the Commonwealth; and
(d)receiving benefits in breach of the Commonwealth’s fiduciary position.
Secondly, there are trust claims. It is alleged the Commonwealth, or the Chief Protector or Director of Native Affairs was the trustee under the Ordinances for various trusts for saved wages, lost wages, managed property and the property of Aboriginal and Torres Strait Islander people who had been declared wards of the State. Broadly, it is alleged that the Commonwealth or the Director breached the duties as trustee by:
(a)failing to exercise due care and skill;
(b)spending trust money to meet costs group members were not liable to pay;
(c)failing to pay trust money back to group members when they stopped working;
(d)failing to ‘get in’ any lost or saved wages from employers where those wages were required to be paid to the Director but were not paid;
(e)failing to keep proper accounts and records; and
(f)dealing with the trusts to benefit the Commonwealth or those acting on its behalf, instead of Aboriginal and Torres Strait Islander people.
Thirdly, there is a claim for what I will describe here as ‘restitution’, for group members who worked in stations, missions or in other institutions and settlements or whose working conditions were contrary to s 12 of the Slavery Abolition Act 1833 (Imp) (3 & 4 Will IV c 73). Broadly, it is alleged that group members had claims against private employers for money for work they did, and the Commonwealth is liable for the failure to pursue the employers for that money, on behalf of Aboriginal and Torres Strait Islander workers. A similar claim is also made in respect of group members who were living in Aboriginal institutions during the claim period.
Fourthly, there is a claim that the Commonwealth breached s 9 of the Racial Discrimination Act 1975 (Cth) by failing to put in place a reparation scheme for all the wages claims. The applicant seeks damages by way of compensation pursuant to s 46PO(4) of the Australian Human Rights Commission Act 1986 (Cth).
The Commonwealth contends that none of the causes of action can succeed. In its written submissions on the settlement approval application, the Commonwealth explained why this was so in considerable detail. Where necessary, I set out some of those explanations below.
The taking of evidence by the Court in July 2023
A feature of this proceeding, as with Street and Pearson v State of Queensland (No 2) [2020] FCA 619 (QUD 714 of 2016), is that many of the people who worked on stations, missions or in other institutions and settlements during the claim period have passed away. Others are alive, but a number are in poor health and in any event almost all are of advanced age, especially taking into account the difference in life expectancy in Australia between Aboriginal people and non-Aboriginal people. The applicant sought, and the Court agreed, to the taking of evidence from a group of Aboriginal people ahead of the time when evidence would usually be taken. This is known as “preservation evidence”: evidence that the Court hears, where a witness might or might not be cross-examined by other legal representatives of other parties, and which is recorded and in that sense “preserved” for any future trial.
The witnesses whose evidence was taken by the Court in this proceeding in July 2023, and preserved, were:
(a)Ms McDonald;
(b)J Stuart;
(c)Alan Drover;
(d)Veronica Dobson;
(e)Bessie Parsons;
(f)Lilly Stafford;
(g)Daniel Forrester;
(h)Kennedy Ricky;
(i)Billy Grant;
(j)Henry Bob;
(k)Frank Holmes;
(l)Peter Parlow;
(m)Mary Allum;
(n)Maisie Smith;
(o)Brian Freddie;
(p)Linda Turner;
(q)J Anzac;
(r)Susan Nurra;
(s)Marie Allen;
(t)Maybelle Terese Bourke;
(u)C Nixon;
(v)Sister Barbara Tippolay; and
(w)Nora Sullivan.
The witnesses worked at various stations, missions or in other institutions and settlements across a wide geographic area. Uncertainty attended the precise ages of many witnesses, but the majority were likely in their seventies or eighties.
Since then, sadly, and on the information available to the Court, J Stuart, J Anzac and C Nixon have passed away.
The preservation evidence was given before a different judge, Murphy J. At that time, Murphy J was the judge allocated to this proceeding. On 24 April 2024, the parties were informed that the proceeding had been reallocated to Mortimer CJ. While the reason for the re-allocation was not given at the time, the reason related to the statutory retirement of Murphy J in 2026, and the challenges that would have posed for the completion of a long and complex contested trial scheduled to run over 2025, and the finalisation of a judgment.
The settlement approval application
On 3 September 2024, and after intensive mediation efforts over a period of time, the parties conclusively agreed to resolve the proceeding and executed the Deed. By way of interlocutory application dated 5 September 2024, the applicant sought, amongst other things, approval of the form and contents of a notice to group members about the proposed settlement, including a pre-approval outreach program. On 16 September 2024, the Court made orders approving the notice to group members about the proposed settlement, as well as a range of additional orders.
By an interlocutory application dated 11 October 2024, the applicant sought approval of the proposed settlement and Scheme and arrangements for the reimbursement and payment of costs incurred and fees claimed by the funder and Shine respectively.
The Deed provides that the Registration Date is the day after the expiration of six months after the date of settlement approval or such later date as approved by the Court. By orders made on 16 September 2024, the Registration Date was fixed by the Court, by consent, as 31 August 2025. In other words, group members must have registered by 31 August 2025, subject to any extension or exceptions granted by the Court.
Ms Antzoulatos is the solicitor on the record for the applicant. She provided several affidavits for the purposes of the settlement approval process. Her evidence is that she expects, based on her experiences in Street, for “the bulk” of registrations to occur after the settlement approval hearings and when the outreach program to a range of communities in the Northern Territory is conducted.
In the Deed and Scheme is the term “Registration Process”, which includes the outreach program but goes beyond it. The term includes the obligations of the applicant, through Shine, for obtaining and processing registration forms (including those gathered earlier in the proceeding), processes for maintaining a register of potential eligible claimants, providing information on potential eligible claimants to the Commonwealth and requiring registration forms to be received by Shine before the Registration Date (with some limited exceptions set out in cl 14 of the Scheme). The Scheme requires the applicant, by Shine, to use reasonable endeavours during the registration process up to the Registration Date to seek registrations.
In their submissions to the Court the parties used a number of terms including “outreach program” and “registration process”, which are the terms I have used in these reasons. I describe the outreach program in more detail at [42]–[43] below.
Ms Antzoulatos explains that registrants will generally fall into one of two categories:
(a)Living persons who worked in the Claim Period. These persons will also (1) generally be making claims in respect of their parents, because most Aboriginal and Torres Strait Islander people who themselves worked in [the] Northern Territory between 1933 and 1971 will also have had parents who also worked during that time; and (2) sometimes be making claims in respect of a deceased spouse who worked in the Claim Period. They will therefore be registering at least three claims (some of which are likely to be shared).
(b)Children of persons who worked in the Claim Period but who did not themselves work in the Claim Period. Because , she deposes, most Aboriginal and Torres Strait Islander people alive during the Claim Period worked (or are assumed to have worked), their children will generally be registering two claims (but these will be shared between all children).
Ms Antzoulatos’ evidence is that the settlement notice approved by the Court by orders made on 16 September 2024 and information regarding the registration and outreach program and pre-approval program will be disseminated by:
(a)email, post and text message communication to group members who had previously registered with Shine Lawyers to advise of the pre-approval and outreach sessions;
(b)written communications with stakeholder organisations and telephone communication with each Land Council, Peak Organisation and Local Government listed in Annexure F of the 16 September 2024 orders;
(c)posting the settlement notices on Shine’s website;
(d)publication of the advertisement approved by the Court in the Centralian Today, the Katherine Times, the Sunday Territorian, the NT News, the NT News Realestate and the Australian Financial Review;
(e)publishing the settlement notice on Facebook, Instagram, Tik Tok and LinkedIn; and
(f)radio announcements interpreted into five languages – Arrernte, Warlpiri, Kriol, Yolngu Matha and Tiwi.
Ms Antzoulatos’ evidence is that a group member (a potential eligible claimant) can complete a registration form in one of four ways:
(a)via telephone, with assistance from Shine (typically a law clerk, paralegal or Client Service Officer);
(b) online, completing an electronic Registration Form;
(c) completing a hard copy Registration Form and posting to Shine; or
(d)completing a hard copy Registration Form in person at a community information session during the Pre-Approval Program or Outreach Program.
The orders made on 16 September 2024 authorised the applicant, through Shine, to conduct the outreach program across 114 identified communities, including communities which had been visited during a ‘pre-approval’ program, authorised by the Court.
The outreach program is to continue until 31 August 2025, being the Registration Date. Ms Antzoulatos deposed that:
At each town and/or community to be visited as part of the Outreach Program, the Shine team will host an information session which will generally run as below:
(a)each session will typically run for between two and five hours, depending on the population;
(b)a senior solicitor from Shine will provide an introduction to the attendees to explain the Settlement Notice and Registration Process;
(c)the Shine team will then assist community members in completing Registration Forms and/or amending or adding information to Registration Forms that have already been provided to Shine but do not meet the minimum requirements prescribed by the SDS. They will also answer any general questions the community member may have about this proceeding;
(d)between three and seven team members, comprising an Associate or Senior Solicitor with significant experience on the matter supported by junior solicitors, law clerks and paralegals, will attend each session, depending on the population;
(e)after each session, Shine will provide copies of the Settlement Notices and Registration Forms to key stakeholders in the community and/or town to persons who were not able to attend, where feasible and appropriate.
Ms Antzoulatos’ evidence describes the timing for settlement payments by the Commonwealth, which is set out in the Deed. In broad terms, the Commonwealth must pay the first tranche of the settlement sum to the settlement fund account within 21 days of appointment of the Administrator. The Court was informed that the Commonwealth paid the first tranche of $54,000,000 into the settlement fund on 5 December 2024.
The first tranche of orders were made on 14 November 2024, which meant the appeal period (taking into account court closure over December/January) expired on 24 January 2025 and the Appeal Expiry Date in the Deed, at least in respect of those orders, was 27 January 2025 being the day after the last day on which an appeal against settlement approval could be made unless extended by the Court. The appeal period for class actions is longer than usual appeal periods, because of the effect of s 33ZC of the Federal Court of Australia Act 1976 (Cth).
In these orders, the Court noted that they were “the first tranche of final orders” in respect of the settlement approval application and that a second tranche of final orders may be considered following the second approval hearing on 17 December 2024. In the second tranche of orders made on 20 December 2024, the Court noted that the relevant Appeal Expiry Date for the first tranche will be 27 January 2025.
The first settlement approval hearing
The first settlement approval hearing was conducted on 7 November 2024 in Alice Springs. This hearing was also livestreamed with the link provided on the Court’s daily list for access by group members, members of the public and media. Ms McDonald attended the hearing in person, as did a considerable number of members of the Aboriginal community.
After hearing from the applicant and Commonwealth at the first settlement hearing, the Court declined to make a “differentiation order” of the kind described by cl 1.1 of the Deed. The parties had agreed in the Deed there should be different payments to different categories of group members. A document was handed up by the applicant at the first settlement hearing which set out both the applicant and Commonwealth’s position on proposed categories of differentiation. Both senior counsel for the applicant and senior counsel for the Commonwealth took the Court to this document at the first settlement hearing. The two ‘models’ proposed different payments to different group members (or their spouses/descendants), calculated by reference to when they were born. I deal with why the Court declined to make this order later in these reasons.
The Court also made orders that upon the Appeal Expiry Date, being 27 January 2025, the applicant and group members are barred from making any claim against the Commonwealth in respect of the subject matter of this proceeding. That order is binding on all group members and the Public Trustee or any executor or administrator on behalf of the deceased estate of any group member. For the reasons given by Murphy J in Street, and to which the parties in that proceeding ultimately consented, the scope of the release which is within the applicant’s authority to give should be clarified by order. Accordingly, the Court proposes to make an order of the kind set out in Street at [97]; namely:
Any releases, or covenants not to sue given by Group Members are restricted to the claims the subject of this proceeding, and similar or related claims that could have been the subject of this proceeding, insofar as such releases and covenants not to sue are consistent with Part IVA of the Federal Court of Australia Act.
This order is included in the proposed orders being provided to the parties’ for their consideration. The releases are affected by the error to which I refer below at [72]–[73], so the parties are likely to need to propose further orders to accompany the one above.
The reason the Court made some orders shortly after the first settlement hearing is that the applicant was concerned to ensure that payments were able to be made as soon as practicable to living eligible claimants. This had been raised by Mr W Edwards, senior counsel for the applicant, at the very first case management hearing after the settlement was announced. I agreed with and accepted this ought to be a primary consideration in the conduct of the settlement approval process.
Poignantly, at the first settlement hearing Mr Edwards said:
MR W. EDWARDS: Yes. I do, your Honour. The position of the applicant would be that there is significant utility in having orders made at the court’s earliest opportunity next week, if possible. We are mindful that the commencement of an administration will involve some steps. The administrator needs to get on top of the file, as it were, and the sooner that that happens in terms of ball rolling, the better placed the administrator will be shortly from hence to make payments. True it is that payments may not be made until around 17 December or thereafter, but we don’t want to lose the benefit of the administrator having their feet under the desk before the Christmas period. And we do think in the interests of getting money to people as soon as possible that is a very real benefit.
…
Yes. But – and your Honour is right, but one thing I am very mindful of, standing here, is that I needed to amend our orders to add in the words “the estate of” for two of the people, one group member, one witness. Four to six weeks could be a long time for those people. It could make a lot of difference.
This is the explanation for the settlement approval hearings being in two tranches, and for the orders being in two tranches. The second tranche needed to await the preparation of the costs assessor’s report, and the parties’ consideration of that report. The orders now proposed will be the third tranche of final orders.
The parties, as well as the funder, have been cooperative and proactive in ensuring material was prepared as quickly as possible.
The appointment of amici curiae
On 20 November 2024, the Court appointed Mr Damian O’Leary SC and Ms Tessa Herrmann as amici curiae on the question of the applicant’s costs and disbursements and the amount sought by the funder in this proceeding. The term “amici curiae” is a Latin term used by Courts and the legal profession to mean “friends of the Court”. It is used to describe a person, often counsel, who do not act for any particular party in a proceeding but are there to assist the Court in its deliberations. The Court requested the amici to prepare summary written submissions and to appear at the second settlement hearing on 17 December 2024.
The nature and scope of the Court’s request was as follows:
a.the fairness, reasonableness and proportionality of the estimated future legal fees and disbursements sought by Shine, in particular:
i.whether it is fair, reasonable and proportionate to use Shine lawyers, law clerks and paralegals to conduct the outreach and registration program, as opposed to persons from locally based organisations (whether legally qualified or not), bearing in mind the nature of that work;
ii.whether it is fair, reasonable and proportionate to charge an hourly rate to conduct the outreach and registration program;
iii.whether it is fair, reasonable and proportionate to charge an uplift fee on the legal costs incurred in conducting the outreach and registration program;
b.the fairness, reasonableness and proportionality of the amount sought to be approved by LLS, taking into account the submission made by the Commonwealth as well as the justifications set out in LLS’ submissions and the affidavit of Mr Conrad; and
The questions in paragraph a. above apply equally to the Book Build process (Opt-Out Outreach Program) referred to in the affidavit of Ms Vicky Antzoulatos sworn on 25 October 2024.
c.any other matter that the amicus considers should be addressed to assist the Court to determine whether the claims by the Applicant and Shine for the Applicant’s Agreed Costs and the Applicant’s Actual Costs and the claims by LLS for the amount sought to be approved are fair, reasonable and proportionate.
The amici were not required to express any firm conclusion on any of these matters but rather to assist the Court in considering the arguments made and the evidence relied upon, providing where considered appropriate, a contradictor to the position taken by the applicant, Shine and by the funder.
In the request for assistance, the Court proposed that the costs and disbursements of the amici would be paid from any excess of funds presently apportioned through the Deed and Scheme to the costs assessor. The amici provided an estimate of their costs and disbursements in the proceeding and this estimate was provided to the solicitors for the applicant, Commonwealth, funder and Shine.
There was no objection to the appointment of the amici, nor to the proposed arrangements for them to be paid.
The second settlement hearing
The second settlement approval hearing was held on 17 December 2024 in the Court’s Victorian Registry. It was also livestreamed.
The evidence relied upon
The parties relied on a number of affidavits for the purposes of the settlement approval process. The applicant and the Commonwealth also filed and relied upon a statement of agreed facts filed on 6 November 2024.
Settlement approval affidavits
Ms McDonald read and relied on:
(a)an affidavit of Vicky Antzoulatos dated 25 October 2024 (as amended and refiled on 12 December 2024) (First Antzoulatos Affidavit), except for the index entries in the affidavit for exhibit VA-1: Tab 2 and exhibit VA-3: Tabs 23–25, paragraph [217]–[222] of the affidavit, exhibits VA-1: Tab 2 and VA-3: Tabs 23–25 and paragraph 36 of exhibit VA-2: Tab 1 which were not read;
(b)an affidavit of Vicky Antzoulatos dated 30 October 2024 (Second Antzoulatos Affidavit);
(c)an affidavit of Vicky Antzoulatos dated 4 November 2024 (Third Antzoulatos Affidavit);
(d)an affidavit of Tulli Seton dated 4 November 2024;
(e)an affidavit of Vicky Antzoulatos dated 2 December 2024 (Fourth Antzoulatos Affidavit); and
(f)an affidavit of Vicky Antzoulatos dated 16 December 2024 (Fifth Antzoulatos Affidavit).
The Commonwealth read and relied on:
(a)an affidavit of Paul Barker dated 1 November 2024 (First Barker Affidavit); and
(b)an affidavit of Paul Barker dated 9 December 2024 (Second Barker Affidavit).
The funder read and relied on:
(a)an affidavit of Stephen Conrad dated 29 October 2024 (as amended and refiled on 12 December 2024) (First Conrad Affidavit), except for paragraphs [71(d)] and [104]–[105] and portions of the exhibits at SC1:17, SC1:25, SC1:26, SC1:31 and SC1:33, which were not read; and
(b)an affidavit of Stephen Conrad dated 3 December 2024 (Second Conrad Affidavit).
By orders of 9 December 2024, National Judicial Registrar Colbran granted leave to the applicant and to the funder to respectively uplift the First Antzoulatos Affidavit and the First Conrad Affidavit and to refile those affidavits with redactions over the material that those orders set out as not read and relied upon. Both those affidavits were refiled by the applicant and funder on 12 December 2024. In the same orders, National Judicial Registrar Colbran also ordered pursuant to s 37AI of the Federal Court Act that, until determination of the application for suppression orders sought by both the applicant and the funder at the second approval hearing pursuant to ss 37AF(1)(b)(i) and 37AG(1)(a), there be no publication or other disclosure of the material to the persons identified in Annexure A and Annexure B (interim suppression orders). The ground for making the non-publication orders was that it was necessary to prevent prejudice to the proper administration of justice. I deal with this issue at [601]–[604] below.
Further affidavit
On 7 March 2025 leave was granted to Ms McDonald to read and rely on an affidavit of Ms Antzoulatos dated 17 February 2025 (the Sixth Antzoulatos Affidavit).
Submissions
Ms McDonald filed the following submissions in relation to the settlement approval application:
(a)submissions dated 25 October 2024 (applicant’s first settlement approval submissions);
(b)submissions in reply dated 4 November 2024;
(c)submissions dated 2 December 2024 (applicant’s second settlement approval submissions); and
(d)supplementary submissions dated 20 February 2025.
The Commonwealth filed the following submissions in relation to the settlement approval application:
(a)submissions dated 1 November 2024 (Commonwealth’s first settlement approval submissions);
(b)supplementary submissions dated 5 November 2024;
(c)further submissions dated 9 December 2024 (Commonwealth’s further submissions); and
(d)supplementary submissions dated 24 February 2025 (Commonwealth’s supplementary submissions).
The funder filed the following submissions in relation to the settlement approval application:
(a)submissions dated 28 October 2024 (and refiled on 12 December 2024) (funder’s submissions);
(b)submissions in reply dated 4 November 2024 (and refiled on 12 December 2024) (funder’s reply submissions); and
(c)supplementary submissions dated 3 December 2024.
Shine filed submissions in relation to the settlement approval application dated 2 December 2024.
The amici provided submissions to the Court, copied to the legal representatives of the parties and interveners dated 13 December 2024.
SOME POTENTIAL OUTSTANDING ISSUES
In the course of preparing these reasons it has become apparent that there are some apparent errors, or otherwise matters about which the Court seeks clarity, in some of the documentation relevant to the settlement approval.
Drafting error in the applicant’s further amended originating application
There is an error in the applicant’s further amended originating application filed 12 February 2024. At [13(a)], Group members are described as (emphasis added) “persons who … are Aboriginal or Torres Strait Islander persons, lived in Western Australia…”. Presumably, the material has been copied and pasted by the applicant’s representatives from documents in Street. The mistake has then been carried over to the Deed, which, at cl 1.1.1.a, defines a Defined Group Member as “all persons who, as at the date of the Settlement Approval, are described in the Originating Application to be Group Members in the Class Action…”. The term Defined Group Member is then used throughout the Deed.
Although the error is material, it is only definitional and obviously a slip. “Western Australia” ought to read “the Northern Territory”. Therefore I have proceeded on the basis that there will be no dispute about the correction of this error in due course — the parties can propose orders to rectify the error.
Matters in Ms Harris’ report requiring further clarification
Possible miscalculation in Ms Harris’ report in relation to the calculation of GST
The report of Ms Harris, at [4], includes a table setting out various legal costs and fees said to have been incurred in the course of this litigation. It is unnecessary to detail the full nature of what is represented on the table for present purposes. Two line items are presently relevant – “Professional Fees” and “GST on Professional Fees”. Under the column “Actual Costs”, which means all the legal costs said to have been incurred, and not the meaning it bears elsewhere in these reasons, the figure for “Professional Fees” is given as $8,118,203.70. GST is then calculated on this amount (added to the “Uplift Fee”), to produce the “GST on Professional Fees” row. The same calculation has been performed, subject to the presence or exclusion of an uplift fee, in the other columns. I reproduce the relevant portion of this table below:
Actual costs Allowed Costs excluding uplift fee Allowed Costs including uplift fee Costs incurred to 30 October 2024 Professional Fees $8,118,203.70 $7,631,111.48 $7,631,111.48 Uplift Fee $699,159.23 $577,990.67 GST on Professional Fees $881,736.29 $763,111.15 $820,910.22
At [50] of Ms Harris’ report, a table (which I return to below) sets out the hourly rates of various types of lawyers, as set out in the costs agreement between the applicant and Shine. The heading of the second column reads (emphasis added) ‘Hourly Rates Inc GST in LCA’ (a reference to the costs agreement). I reproduce the table below:
Role Hourly Rates Inc GST in LCA From 1.8.2022 National Special Counsel/Special Counsel $825 $866.80 Senior Associate $649 $682.00 Associate/Senior Lawyer $616 $646.80 Junior Lawyer/Solicitor $440 $462.00 Law Clerk $385 $375.10
A table at [72] of Ms Harris’ report sets out units billed by various categories of Shine fee earners, and the total amount billed by those fee earners. At the bottom of the table is a “Grand Total”, being the same $8,118,203.70 set out in the table at [4] referred to above. While the fee per unit billed is not provided in the table, this can be derived by dividing the “Sum of Amount” by the “Sum of Units” in the table. Performing this calculation, and the necessary conversion from a billable unit (6 minutes) to an hourly charge, appears to show that the fee per unit used in preparing the table could have been the “Hourly Rates Inc GST in LCA” figure referred to above. I reproduce an extract of the table below, showing the highest billing categories and the ‘Grand Total’:
Role Sum of Units Sum of Amount Law Clerk 71,595.00 $2,722,986.80 Associate 26,455.70 $1,651,262.70 Solicitor 30,620.00 $1,318,090.10 Senior Solicitor 21,265.10 $1,244,082.20 Special Counsel 3,745.80 $312,068.20 Senior Associate 3,900.90 $289,922.00 Practice Leader 3,164.50 $243,435.00 New Client Team Class Action Clerk 4,036.00 $137,627.60 Legal consultant 2,279.00 $77,713.90 […] […] […] Grand Total 170,022.50 $8,118,203.70
The Court seeks clarification from Ms Harris that GST has not been calculated twice on Shine’s professional fees, which would result in a substantial increase in what was assessed by Ms Harris and recoverable. Pending that clarification, the Court’s reasons proceed on the basis that the figures provided in Ms Harris’ report are correct.
The proposed orders accompanying these reasons provide for Ms Harris to explain her calculations in a further report to the Court, in light of this part of the Court’s reasons. The parties and Shine are to then confer on the further report and the matters raised here. They are then to make a joint proposal on what amendments might be needed to the figures in the proposed orders, and or alternatively how these sums should be treated in terms of the calculations which are to be reflected in the final orders. This process also applies to what I outline below about the fees for law clerks.
Possible miscalculation in Ms Harris’ report in relation to law clerk fees
Performing the calculation referred to in paragraph [76] above in relation to law clerks (that is, dividing the Sum of Amount by Sum of Units and deriving an hourly charge out rate) produces a result of approximately $380 an hour. This may have occurred because, as the Commonwealth noted at footnote 38 of its further submissions, the GST inclusive Shine clerk rate prior to August 2022 has been erroneously expressed as $385, rather than $357.50, in the table at [50] of Ms Harris report. The reason it averages out to approximately $380 might then be because Shine changed their law clerk hourly fee, from 1 August 2022, to be $375.10. The Commonwealth appears to have accurately expressed the fees which ought to have been used in the calculation at [28] of its further submissions.
Possible miscalculations in Ms Harris’ report in relation to individual lawyers’ hourly rates
At Annexure D of Ms Harris’ report, beginning at page 107, a table sets out individual legal professionals by name, their roles, the units they have billed to the matter and the total amount arising. A presently immaterial column, ‘% Total Time’ is also present. At the end of the table, at page 112, the same ‘Grand Total’ of $8,118,203.70 referred to above is provided. A number of the entries in the table appear to be erroneous.
For example, at page 109 of the report, a law clerk, initials LD, appears to have billed 817.70 units for a total cost of $234,225.00. This works out to a rate of approximately $286 per 6 minute billable unit, or approximately $2860 per hour. Further, at page 108, again by way of illustration, a lawyer with initials TG, who variously billed to the matter as an Associate, Senior Associate and Senior Solicitor, is recorded as having billed approximately $150,000 to the matter. In each of these different roles, the ratio between the units billed and fees charged equates to exactly $550 per unit, being $5,500 per hour. I set out below extracts from Annexure D to highlight some of the errors the Court has identified. The far-right hand italicised column, showing the amount charged per 6 minute unit, was produced for the purposes of these reasons. I have referred to individuals by their initials rather than their names. I do not suggest that this is necessarily a complete list of possible errors in the Annexure.
Initials Role Units Amount Amount/unit EG Law Clerk 43.50 $14,145.00 $325.17 ST Senior Associate 128.50 $34,945.00 $271.95 ST Senior Solicitor 8.10 $4,455.00 $550.00 TG Associate 226.70 $124,685.00 $550.00 TG Senior Associate 44.40 $24,420.00 $550.00 TG Senior Solicitor 6.60 $3,630.00 $550.00 LD Law Clerk 817.70 $234,225.00 $286.44 IB Law Clerk 208.60 $47,970.00 $229.96 JT Law Clerk 298.80 $53,657.50 $179.58 NA Solicitor 83.50 $34,910.00 $418.08 JP Law Clerk 69.00 $16,012.50 $232.07 JS National Practice Leader 45.60 $6,525.00 $143.09 JS Partner 1.00 $750.00 $750.00 RJ National Practice Leader 10.90 $7,425.00 $681.19 MB Law Clerk 9.50 $3,325.00 $350.00 AG Law Clerk 8.70 $2,177.50 $250.29 AH Solicitor 4.20 $1,890.00 $450.00 SP Law Clerk 3.10 $1,085.00 $350.00 MR Associate 1.10 $605.00 $550.00 SW Law Clerk 0.90 $315.00 $350.00
Some of these apparent miscalculations may be explicable on the grounds that ‘units’, in these rows, are in fact hours billed. This may also explain why decimal fractions are given for the ‘units’. It may also be the case that it is this issue, rather than the incorrect figure given by Shine for law clerk fees, which is responsible for the $380 per hour fee for law clerks referred to above, and perhaps may mean GST was not calculated incorrectly. The Court is not presently in a position to determine this. Again, the Court’s orders provide for Ms Harris to explain these matters in a further report and for the parties and Shine to confer on this point.
In relation to all matters raised in this section, in the event that the parties and Shine are unable to provide a joint proposal for the Court’s consideration, the Court will refer the parties and Shine to mediation on this issue.
As I reiterate in these reasons below, Ms Harris’ report was completed under considerable time pressure. The Court intends no criticism whatsoever of Ms Harris by reason of the clarifications sought in the preceding paragraphs.
A SUMMARY OF THE COURT’S DECISIONS IN APPROVING THE SETTLEMENT
In this section, I provide a summary of what the Court has approved for deductions relevant to Shine’s legal costs, the funder’s commission and other costs. I also provide a summary of my approach on priority of payments. In doing so I am using the defined terms used in the Deed, which I explain below. The figures below are based on the Court’s current calculations, without any conclusions as to the possible miscalculations referred to above, and subject to further submissions on the matters outlined in the orders accompanying these reasons.
Overall approval
The settlement sum of up to $180,000,000 has been approved.
By orders of 14 November 2024, the Court did not approve a differentiation order of the kind set out in cl 1.1 of the Deed.
Deductions relevant to group members
By orders of 14 November 2024, the reimbursement payments totalling $165,000 were approved to those named in that order.
By orders on 20 December 2024, Interim Payments of $10,000 to living eligible claimants were also authorised.
Deductions relevant to the funder
The funder’s commission of 20% of the net settlement sum will be capped at 8,750 eligible claimants. This is approved as a deduction from the settlement fund. That means the funder is approved to receive 20% of up to $157,500,000 being a commission cap of $31,500,000.
The ATE premiums of $1,045,000 are approved as deductions from the settlement fund.
Deductions relevant to Shine’s legal costs
The Applicant’s Agreed Costs to 17 December 2024 are approved at $11,737,499.40 (GST inclusive).
There is a direction to Shine to reimburse the funder in the amount of $9,738,386.63 within 7 days of receipt of the funds described at [92].
The Applicant’s Actual Costs to 17 December 2024 are approved as a deduction from the settlement fund in the amount of $1,872,829.10 (GST inclusive). The amount of $544,160.70 (GST inclusive) is approved as a deduction from the settlement fund on account of uplift. The total amount for the Applicant’s Actual Costs to 17 December 2024 inclusive of uplift is $2,416,989.80 (GST inclusive).
The legal costs of the applicant from 18 December 2024 are to be assessed by Ms Harris in accordance with the proposed orders. Broadly, the proposed orders follow the process set out in the Deed.
Ms Harris is to report on the costs she considers are recoverable on a solicitor/client basis and on a party/party basis. In respect of the party/party costs and whatever amount remains of the agreed sum of $15 million for the Applicant’s Agreed Costs, the applicant and Commonwealth are authorised to agree on those costs, and if agreed they can be paid without Court order. If agreement cannot be reached, the parties may approach the Court and the Court will make a determination of the amount payable. This will not occur until after the Registration Date.
In respect of any deduction from the settlement fund for the Applicant’s Actual Costs from 18 December 2024, the parties are to approach the Court following the Registration Date. The Court is not prepared to make orders on these costs now.
The focus in the period between the making of these orders and 31 August 2025 should be on outreach and obtaining registrations. After 31 August 2025, the Court and the parties will have a much clearer idea of the total number of eligible claimants and therefore the likely distribution figures.
The Administrator is directed to hold an amount of $8 million on account of any future deductions from the settlement fund that the Court may approve in respect of the Applicant’s Actual Costs from 18 December 2024. This is out of an abundance of caution and the Court on the present evidence and findings does not anticipate approving such a large sum, but it will remain available. After 31 August 2025, working out what figure to approve for the Applicant’s Actual Costs from 18 December 2024 should not be allowed to take a long time or consume a great deal of resources. Deciding about payments to lawyers should not unduly delay payments to group members.
Administrator
At Annexure A to the orders proposed to be made by the Court is a directed sequence of payments, to inform the Administrator in distributing the settlement funds. This Annexure deals with sequence of payments which I explain from [579] below. In order to ensure that distribution to group members is undertaken efficiently, and does not result in unnecessary costs or delay, the Court will also make an order that if for any reason complete compliance with the Court’s orders is not possible, the Administrator is to proceed at their reasonable discretion. The Applicant’s proposed annexure included directions to the Administrator to establish accounts “for bookkeeping purposes” including a minimum payment reserve account, a deductions reserve account and a reserve account. The Court is of the view that the Administrator is capable of using their reasonable discretion in relation to the establishment of any separate accounts (even if for bookkeeping purposes only) for the purposes of complying with the orders of the Court. These are matters for the Administrator, in exercising their professional skill and judgment. For such purposes, the Administrator also has access to independent legal advice (see orders of the Court on 20 December 2024). The Administrator is also given leave to approach the Court for further direction if necessary.
Use of the Agreed Administration Costs Component for the outreach program and registration process
Pursuant to the Deed, the Commonwealth has agreed to pay a maximum of $6,000,000 (GST inclusive) for the Agreed Administration Costs Component. In other words, there is a payment to the Administrator for their work. By orders on 14 November 2024, for the purposes of cl 2.15.1 of the Deed, the Court approved the Administrator’s estimated costs of $1,800,000 (GST exclusive). This was the estimated cost of the Administrator for the entire registration and distribution process. There were three tenders for the Administrator function, and Deloitte was appointed by the Court after submissions by the parties.
The Commonwealth submitted any surplus of the $6 million could be re-purposed. In its further submissions (at [69]):
If the cost of the outreach and registration process will exhaust the balance of the $15 million that the Commonwealth has agreed to pay in respect of the Applicant’s party-party costs (after deduction from the $15 million of the party-party costs incurred to date, as approved by the Court), the Commonwealth would agree to part of the $6 million allocated under the Settlement Deed for the Administration Costs being used to pay Shine’s costs, provided the Administration Costs will otherwise not exhaust the $6 million. The Commonwealth considers that Shine’s role in undertaking the outreach and registration process under the Settlement Distribution Scheme may be regarded as part of the process of administering the Settlement Distribution Scheme, and overlaps to some extent with the Administrators’ functions. Accordingly, the Commonwealth would be prepared to agree to appropriate orders which authorised the Administrators to treat some of Shine’s outreach and registration work as part of the Administration Costs. Consistently with the Settlement Deed, this would necessarily require Court approval of these costs being treated as Administration Costs and approval of an increase in the Administrator’s estimate of the Administration Costs (cl 2.15.2) and assessment by the Costs Assessor as to the reasonableness of those costs (cl 2.15.4). Plainly, the use of surplus funds from the Agreed Administration Costs Component for this purpose (with the Commonwealth’s agreement) should not be subject to the Funder’s commission.
The parties proposed an order at the second settlement hearing for a process to allow the Administrator or applicant to apply to the Court for orders deeming any part of the Applicant’s Actual Costs for conducting the outreach program and registration process to be Administration Costs insofar as they do not exceed the surplus. In this way, the surplus could be re-purposed to contribute to the Applicant’s Actual Costs.
I do not accept any such order is appropriate at the moment, especially not in an ongoing process settlement. However, as soon as reasonably practicable following the Registration Date the Administrator should notify the parties and the Court of their best estimates of any surplus. Leave should be granted to the parties to apply to the Court about how any surplus should be distributed. The Court will be in a better position at that point to assess what is just and appropriate, because the likely final number of eligible claimants will be clearer, and some of the approved payments will have been made.
Costs assessor
The Commonwealth has agreed, as part of the costs sums, to pay up to $1,000,000 (inclusive of any GST) for the cost assessor’s costs. The Deed requires the cost assessor or the applicant to obtain approval from the Court of an amount prior to carrying out the costs assessment(s).
By orders on 14 November 2024, the Court approved, for the purposes of cl 2.14.2 of the Deed, Ms Harris’ estimate, as costs assessor, of $200,000 (GST inclusive).
By orders on 20 December 2024, the Court deemed the costs of the amici to be part of the costs assessor’s costs. The Court has been informed that the actual costs of the amici were $50,941.85 (GST inclusive).
Priority of payments
The funder submitted that under the litigation funding agreement, payment of its funding commission has priority over payments made to eligible claimants and to Shine. It submits its commission payment also has priority over the $15 million payable for the Applicant’s Agreed Costs. I have not accepted the funder’s submissions in full on this issue of priority. Nor have I accepted Shine’s submissions. My view is that both Shine and the funder should wait for a portion of their deductions until after the Registrant Date. At that time, receipt of their approved deductions should happen side by side with distribution to group members, because by then the number of eligible claimants will be known.
Group members should not be left until last. This is their proceeding, brought to compensate them. That view permeates some of my approaches in these reasons.
For the reasons I explain below, the Commonwealth must pay the Applicant, via her solicitors Shine, the amounts approved as the Applicant’s Agreed Costs to 17 December 2024. The funder should be reimbursed by the applicant from that payment for the amounts the parties have agreed it has in fact contributed to the applicant’s legal costs. That should occur within 7 days of the amount approved as the Applicant’s Agreed Costs to 17 December 2024 being paid by the Commonwealth to Shine.
In respect of priority and sequence, I consider payment to the funder for the ATE premiums should be relatively early in the sequence of payments because this is a reimbursement to the funder of actual costs incurred (and to be incurred once any commission is paid).
The Court’s proposed orders approve some deductions from the settlement fund once 3,000 eligible claimants are determined by the Administrator. Those deductions are for ATE premiums, Applicant’s Actual Costs to 17 December (including uplift) and commission on up to 3,000 eligible claimants (being $10,800,000).
Whilst the Court has approved the funder’s commission at 20% of the net settlement sum up to 8,750 eligible claimants, the sequence and priority of payment of the remaining commission (being commission payable on up to 5,750 eligible claimants) will be determined by the Court after the Registration Date. I explain in the reasons from [584] why the Court has come to this conclusion.
APPLICABLE PRINCIPLES
In this section, I describe in outline the principles applicable to the Court’s consideration of whether or not to approve a proposed class action settlement under s 33V of the Federal Court Act. I do so in outline because the principles are well established and there was no debate between the parties about them.
The applicant also brought this proceeding as a representative proceeding under Div 9.2 of the Federal Court Rules 2011 (Cth). In Street at [85]–[87], and also in Arthur (Litigation Representative) v Northern Territory of Australia (No 2) [2020] FCA 215 at [71]–[79], Murphy J explained why it is appropriate to approach the question of whether the Court should grant leave to discontinue a representative proceeding under Div 9.2 in the same way as it approaches the question under s 33V of the Federal Court Act, leave being a condition imposed by r 26.12(4) of the Federal Court Rules. I respectfully agree with his Honour’s reasoning that in substance the same question should be asked by the Court: namely whether the compromise is fair and reasonable in relation to the interests of the represented persons, and as between the represented persons as a group. These reasons should be read accordingly.
Section 33V of the Federal Court Act provides:
33V Settlement and discontinuance—representative proceeding
(1)A representative proceeding may not be settled or discontinued without the approval of the Court.
(2)If the Court gives such an approval, it may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court.
The Commonwealth agreed with and accepted the summary given by the applicant in the applicant’s first settlement approval submissions at [6]–[9]:
6.The applicable principles in relation to settlement approval under s 33V of the FCA Act are well established. The Court’s fundamental task is to determine whether the settlement is fair and reasonable and in the interests of Group Members who will be bound by it, including as between the Group Members inter se: Webb v GetSwift Ltd (No 7) [2023] FCA 90; 165 ACSR 560 at [15]–[17]. The Court’s role in approving settlement was described in GetSwift at [16]. In summary, the Court assumes an onerous and protective role and must decide whether the proposed settlement is within the range of reasonable outcomes, rather than whether it is the best outcome which might have been won by better bargaining.
7.The Class Actions Practice Note (GPN-CA) sets out at [15.5] a number of factors the Court may consider on an application to approve a settlement. Those factors are derived from Williams v FAI Home Security Pty Ltd (No 4) [2000] FCA 1925; 180 ALR 459 at [19] (Goldberg J) which relied on the factors identified by the United States Court of Appeals for the Third Circuit in In re General Motors Corp Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768 (3rd Cir. 1995). There is no requirement to deal with each of these factors; they are to be approached as a useful guide, subject to the circumstances of the particular case: Caason Investments Pty Limited v Cao (No 2) [2018] FCA 527 at [13].
8. The factors set out at GPN-CA [15.5] are these:
8.1the complexity and likely duration of the litigation;
8.2the reaction of the class to the settlement;
8.3the stage of the proceedings;
8.4the risks of establishing liability;
8.5the risks of establishing loss or damage;
8.6the risks of maintaining a class action;
8.7the ability of the respondent to withstand a greater judgment;
8.8the range of reasonableness of the settlement in light of the best recovery;
8.9the range of reasonableness of the settlement in light of all the attendant risks of litigation; and
8.10 the terms of any advice received from counsel and/or from any independent expert in relation to the issues which arise in the proceeding.
9.In practical terms, there are three primary aspects to any proposed settlement, which attract different considerations:
9.1whether the settlement inter partes is fair and reasonable having regard to the interests of the group members, considered as a whole;
9.2whether the proposed arrangements for distributing the Settlement Sum inter se among the group members are fair and reasonable, again taking the group members as a whole; and
9.3whether the proposed deductions from the Settlement Sum, for past or future legal costs, for any insurance premiums, and for funder’s remuneration are fair and reasonable in all the circumstances.
I agree those passages set out the correct approach. Where necessary I refer to more specific aspects of the general approach below.
As I observed in Jenkings v Northern Territory of Australia (No 5) [2021] FCA 1585 at [18], the role of the Court in approving the settlement of a representative proceeding has been described as “important and onerous”, citing Australian Securities and Investments Commission v Richards [2013] FCAFC 89 at [8]. The role of the Court is a protective one.
The protective aspect of the Court’s role was emphasised by John Dixon J in Bolitho v Banksia Securities Ltd (No 18) [2021] VSC 666 at [1572]–[1573], in a passage with which I respectfully agree:
1573In a case that settles prior to trial, with some similarity to an ex parte hearing, the court knows far less about the issues in the case than the legal representatives acting for the parties. It was well understood in 2017 that in an application for approval of a settlement and of deductions to be permitted from the settlement sum, the court discharges a protective role in relation to group members’ interests, in respect of both the settlement itself and any deductions from that sum.
1574This protective role is necessary because the rights of many, namely the group members other than the lead plaintiff who are not before the court, may be determined. The court when exercising its jurisdiction pursuant to s 33V on behalf of those group members relied heavily on Mr Bolitho, the Lawyer Parties, and AFP to act with absolute integrity, transparency and honesty. That reliance extended to the litigation funder by reason of s 10 of the Civil Procedure Act, as discussed elsewhere in these reasons.
In Camilleri v The Trust Company (Nominees) Ltd [2015] FCA 1468 at [43]–[44] Moshinsky J provided the following summary of the relevant authorities:
43The cases indicate a number of factors relevant to the assessment whether a proposed distribution scheme is fair and reasonable having regard to the interests of the group as a whole. Some of these factors are as follows:
(a)whether the distribution scheme subjects all claims to the same principles and procedures for assessing compensation shares;
(b)whether the assessment methodology, to the extent that it reflects ‘judgment calls’ of the kind described above, is consistent with the case that was to be advanced at trial and supportable as a matter of legal principle;
(c)whether the assessment methodology is likely to deliver a broadly fair assessment (where the settlement is uncapped as to total payments) or relativities (where the task is allocating shares in a fixed sum);
(d)whether the costs of a more perfect assessment procedure would erode the notional benefit of a more exact distribution;
(e)to the extent that the scheme involves any special treatment of the applicants or some group members, for instance via ‘reimbursement’ payments – whether the special treatment is justifiable, and whether as a matter of fairness a group member ought to be entitled to complain.
44There are also procedural factors which relate to the fairness of a proposed distribution process, such as:
(a)whether appropriate individuals have been nominated to administer the scheme;
(b)whether the procedures for lodging and assessing claims are appropriate and to be conducted in a timely manner;
(c)whether the scheme incorporates appropriate ‘checks and balances’, such as procedures for ensuring consistency between assessments and meaningful opportunities for review (and objection) by group members.
Ms Antzoulatos produced a map displaying the locations and coverage of the organisation who responded positively. It appears to cover about one quarter of the communities Shine intends to attend during the outreach and registration process. Ms Antzoulatos provided an updated version of this map in her Sixth Affidavit which also included communities Shine had already visited (presumably in the November 2024 outreach program discussed above) plus additional communities that Lutheran Care are able to cover. Consequently, around one third of the communities included in Annexure E of the Court’s 16 September 2024 orders are covered by the proposals from Urapuntja Corporation, ARDS and Lutheran Care and including the five communities Shine has already visited in the outreach program undertaken in November 2024.
On the estimates above, taking into account the need to secure coverage for the other two thirds of the communities, I find that it is probable that the local Aboriginal organisations could have undertaken this work for well under $1 million and possibly closer to $500,000.
In her Sixth Antzoulatos Affidavit, Ms Antzoulatos explained that only one further substantive proposal had been received since 20 December 2024. That response was received from Redgum Legal who provided a proposal that does not specifically identify communities they are proposing to service. Redgum Legal is an independent legal and consulting firm specialising in native title and land rights, agreement making and governance, renewable energy and projects, treaty and truth telling and legislative reform and public interest litigation including class actions. Redgum Legal has a partner organisation, Australian Lawyers for Remote Aboriginal Rights. Redgum Legal staff are mostly located in Melbourne but they propose that interstate travel costs would be met by Redgum Legal.
Redgum Legal has put together a detailed project plan which includes two phases:
(a)a pre-outreach profile raising phase to develop material and present to key Aboriginal governance bodies to socialise the outreach program; and
(b)outreach visits phase which is the physical outreach to remote communities in the Northern Territory to carry out information sessions, meeting with group members and completing registration forms.
The first phase includes presentation to all-delegate sessions of each Northern Territory Land Council (the NLC, CLC, Tiwi Land Council and Anindilyakwa Land Council) and to regional shire councils and local authorities. In addition, in this phase, Redgum Legal proposes to include information adapted to use language and pictorial explanations to assist the group members to better understand the notices and registration form approved by the Court.
The second phase includes an outreach team consisting of a Principal or Senior Lawyer supported by two additional people being either a paralegal or community worker. The proposal provides that prior to visiting the community, preparation and planning would involve:
a.Identify key community leaders, workers and service providers; establish contact; and arrange to meet when we attend the community.
b.Reach out to lawyers and other staff of the NT Land Council in whose region the community is located to advise them of our intended travel and meeting plans, and seek their feedback and any relevant local knowledge that they may be able to provide.
c.Send out meeting notices for display at the community store, health clinic, local council office and/or Land Council office, advertising the dates that
These steps appear in my opinion to be “best practice” and appear to be familiar steps in the native title and land rights areas. Redgum Legal have proposed hourly rates in line with the Federal Court Scale with daily rates of $4,200 for Principal/Senior Lawyer, $2,700 for Lawyer/Law Graduate and $1,300 for Paralegal/Community Worker. For an outreach visit involving 10 days of remote travel, Redgum Legal have estimated that fees and disbursements would total $95,230.00 which includes planning and preparation, the outreach visit and post-visit tasks. I note here that Shine proposes to cap its law clerks at $1,760 per day (GST inclusive).
Ms Antzoulatos deposed to responses from a number of organisations to the effect that they did not have the capacity to assist. This included several other regionally based Aboriginal corporations and Anglicare. Given the last-minute nature of the request from Shine, and the time of year, those responses are understandable. They are not probative of whether all or some of these organisations might have been willing and able to participate in the outreach and registration process had they been invited at the appropriate time and included in the planning process from the start. The positive responses that were received, remarkably given the last-minute nature of the request, are probative in my opinion of the likelihood of a much more fulsome response, probably with coverage all over the Northern Territory, if Shine had planned to engage in such a process in a more timely and appropriate way. They are also probative to some extent of the capacity for Shine to still go back to the organisations who needed more time, and which might work in some of the communities not yet covered by local proposals.
Moreover, and just as critically, the tone of the positive responses indicate a significant level of support and willingness to be involved in the registration process, because of the importance of it to the communities these organisations serve. There is a reasonable basis to infer other organisations would have had the same levels of willingness, had they been approached at an appropriate time and given more appropriate notice and time to plan. The proposals received also indicate the widespread existing level of expertise that exists in other organisations within the Northern Territory.
I have found this evidence to be of considerable significance. It should be given considerable weight when it comes to considering in the future, what is fair and reasonable to deduct from the settlement fund for any of the Applicant’s Actual Costs incurred after 18 December 2024.
This evidence bears out my concern that there were much more cost effective, and culturally appropriate ways for this outreach and registration process to be undertaken. The evidence from Lutheran Care proves that other law firms experienced in class action proceedings, indeed in “social justice” class actions, have done precisely what Shine ought, in my respectful opinion, to have investigated as more appropriate in this proceeding from the beginning.
Mr Sulan for Shine addressed this material by informing the Court Shine would proffer an undertaking from Shine that
… they will engage with those community organisations, to the extent that they view the matter as being useful for reducing the costs and efficiencies of the – and increasing the efficiencies of the scheme. And they will provide all proposals, as well, to senior counsel, for the applicant – for him to consider, and if, for example, he forms a view that they should be doing more with a particular proposal, then he can provide his recommendation.
And all of that will form a report to the court so that the court has, in effect, the whole outworking of what occurred with respect to trying to engage with community organisations. So it will be an undertaking proffered from Shine, they will have to look at it in good faith, and with the view of reducing costs and increasing efficiency of those proposals. Mr Edwards will be let in on all the proposals, and ultimately, a report will be put to the court with a view to, in effect, reducing the costs and increasing hybrid participation insofar as is possible.
The undertaking
On 7 February 2025, Ms Han, solicitor for Shine Lawyers, emailed my Chambers with a proposed undertaking of Ms Antzoulatos.
On 19 February 2025, the Court made orders granting leave to the parties and interveners to file and serve any submissions addressing both the undertaking of Ms Antzoulatos provided to the Court on 7 February 2025 and whether the applicant should be granted leave to read and rely in the settlement approval application on the Sixth Antzoulatos Affidavit. The orders also granted leave to the Commonwealth to file the joint tables and covering note described above at [144].
On 20 February 2025, the applicant filed submissions in response to the orders of 19 February 2025. On 24 February 2025, the Commonwealth filed submissions in response to the orders of 19 February 2025. Neither of the interveners filed any submissions on this point.
In her submissions, the applicant sought leave to file and rely on the Sixth Antzoulatos Affidavit in the settlement approval application but acknowledged that the applicant “does not assume that any grant of leave implies the Court’s acceptance of the evidence given or the course suggested”. The Commonwealth did not oppose leave being granted to read and rely on this affidavit. On 7 March 2025, the Court granted leave to the applicant to read and rely on the Sixth Antzoulatos Affidavit acknowledging that it does not constitute any acceptance by the Court of the evidence given or Court approval of the course suggested in that affidavit.
In relation to the undertaking of Ms Antzoulatos, the Commonwealth did not oppose the undertaking being proffered by Ms Antzoulatos in her capacity as solicitor for the applicant but noted that “it may be prudent for the undertaking…to be also proffered on behalf of Shine”. Ultimately, the signed undertaking did not do this. In relation to the contents of the undertaking, the applicant submitted that the proposed mechanism for senior counsel for the applicant to review future proposals would allow the Court to “have the benefit of knowing such proposals have been independently scrutinised.” The Court notes that Mr Edwards KC, senior counsel for the applicant, has offered to undertake this role on a pro bono basis such that there will be no further cost to group members. The Commonwealth did not oppose the mechanism for review by senior counsel for the applicant but submitted it was ultimately a matter for the Court.
There was a question whether the registration deadline of 31 August 2025 should be extended. The applicant submitted that the “desirability of resuming the physical outreach program only after the Court delivers reasons must be weighed against the possibility of certain Group Members’ health deteriorating (which is difficult to quantify).” The applicant submitted it was a matter for the Court. The Commonwealth also agreed it was a matter for the Court and submitted that the Court should consider:
4.1.Order 1(b) of the orders made by the Court on 20 December 2024 which directs the Administrators to make interim payments to living Eligible Claimants as soon as is practicable after the relevant Appeal Expiry Date
4.2.whether extending the Registration Date would increase the number of claimants registered under the Settlement Distribution Scheme
4.3.the possibility of Group Members’ health deteriorating in the intervening period, noting that living Eligible Claimants and also many Eligible Descendant Claimants are likely to be of an advanced age
4.4.the impact of extending the Registration Date meaning that Eligible Descendant Claimants may receive payments later
4.5. whether by extending the Registration Date it would increase the costs of the registration and outreach process.
A signed undertaking was ultimately given on 6 March 2025 following the exchange of submissions referred to above. The undertaking of Ms Antzoulatos is annexed to the Court’s orders of 7 March 2025 and states:
Vicky Antzoulatos of Shine Lawyers, solicitor for the Applicant, undertakes to the Court that Shine will:
1engage stakeholders in the conduct of the outreach and registration program (to the extent that stakeholders have indicated they are available and have the required resources to assist), subject to Shine being satisfied that the relevant stakeholder’s engagement in the outreach will further the object of providing potential Eligible Group Members with a reasonable opportunity to register their claim in an efficient and cost-effective manner;
2 provide senior counsel for the Applicant on an ongoing basis, as required:
(a)all proposals received by Shine from stakeholders in respect of engaging in the outreach and registration program; and
(b)Shine’s suggested approach in the conduct of the outreach and registration program, having regard to the proposals received from stakeholders,
for the purpose of senior counsel’s assessment as to whether Shine’s proposal is fair and reasonable and in the interests of Group Members; and
3provide a report to the Court quarterly, on the outcome of paragraphs 1 to 2 of this undertaking.
Given the parties did not actively propose any extension to the Registration Date, and taking into account the Applicant’s submissions, it is not appropriate at this point to extend the Registration Date. As I have explained, the Court will consider what, if any, further deductions are appropriate for the Applicant’s Actual Costs following the Registration Date.
While far from the weightiest point in the Court’s consideration, I note that in other cases, registration costs are far lower. In Fordham, O’Bryan J noted the number of likely registrants for the settlement was more than 80,000 but Deloitte’s future fees for registration were going to be about $1 million: Fordham at [86]. O’Bryan J was concerned this was too high: [87]. Deloitte’s overall fees were $2.7 million: Fordham at [91]. Here we must not forget there is a $6 million amount set aside (subject to the Court approving any further estimates) for administration costs already. However it is not payable to Shine under the Deed, and it was not agreed to be for Shine’s legal costs during registration.
While it can be accepted that reaching the cohort of group members in this proceeding involves travel, remote and regional attendances, specialist communications and the like, one might ask rhetorically is it so many times bigger than the task in Fordham, for a much smaller number of eligible group members, that sums many multiples more than those in Fordham, can be characterised as fair and reasonable? I do not accept that is likely.
Best practice principles
I consider it is appropriate for the Court, having considered the evidence adduced by the applicant in this proceeding, to provide an indication to the parties about what the Court considers are best practice principles for outreach and registration programs in cases such as this. It is these kinds of matters which I consider should be taken into account in determining what amounts of legal costs in this proceeding are fair and reasonable, going forward. The Court’s observations are in the context of law firms operating outside the communities in which their clients or group members are living.
Best practice should include:
(a)Partnership, engagement and consultation with local organisations: at minimum, consultation should occur with community-controlled organisations and Aboriginal and Torres Strait Islander corporations already operating in community. Serious consideration should be given to engaging, through sub-contracting or consultant arrangements, on-ground work to those organisations. A true partnership model with local organisations should be seriously considered by law firms and practitioners seeking to engage with clients in remote communities — and such serious consideration must occur well before any filing of proceedings. To adopt the terminology used by Shine in its costs agreement — this method and model should be part of the “project”. Interdisciplinary approaches should be preferred over lawyers travelling to remote communities without the assistance of locally experienced cultural advisers, interpreters, community engagement staff or community development staff. Those travelling with legal teams should be Aboriginal and Torres Strait Islander staff where possible. Equally, legal teams should include Aboriginal and Torres Strait Islander practitioners where possible.
(b)Cultural advisers and other consultants: Efforts should be made to consider who may be appropriate to advise law firms engaging with clients in remote communities. For example, instead of the extensive and expensive use of law clerks who are charged out at significant rates to do largely administrative functions — either in the office or during on-country trips — Shine could have used project officers or Aboriginal engagement officers who have experience in legal proceedings but are not legally trained: for example through holding one of these roles in a native title representative body or a community legal service. These officers have community engagement and/or logistics experience, and importantly experience and expertise in working in Aboriginal and Torres Strait Islander communities.
(c)Logistics and administration: Organising logistics, planning, travel arrangements and notification to community prior to arrival are best performed by people with local knowledge, not lawyers. It is accepted that lawyers will have input into such activities but lawyers are generally not experts in logistics, especially in relation to regions they have little personal familiarity with, and may never have visited before, or visited only briefly. Logistics for operating in remote communities and remote areas are a special skill, as any person working for a land council or native title representative body can attest.
(d)Development of materials (such as notices, brochures and fact sheets): The development of brochures and fact sheets should be undertaken by those with expertise in communicating with Aboriginal and Torres Strait Islander people. Those people may not be legally qualified. Of course, review of the material for legal accuracy and to ensure any advice in the material is appropriate and accurate will be important. In this regard, the Court has the evidence of the offer of ARDS to “develop and broadcast…information about the compensation scheme”. Such offers should be explored prior to the filing of any proceedings. The use of pictorial explanations should be considered.
(e)Duplication of information: Consideration should be given to what information may already be held by organisations and whether clients or group members may be willing to consent to the use of that information. It is not appropriate, and is potentially off putting and upsetting, to press individuals in communities to go through, with strangers, personal information they have likely provided to non-indigenous public servants or organisations on several occasions in the past. For example, Urapuntja Corporation explained that they have access to community records including birth certificates and identification documents and they can seek the consent of the individual to use that information which avoids group members having to locate or re-tell that information.
In this proceeding, in assessing how Shine is seeking to fulfil the undertaking it has given, and how it is in practice taking up the offers of cooperation and partnership that have been made, and seeking out in a more timely fashion other potential partners, these principles should be borne in mind by the parties, Shine, and the costs assessor and will be borne in mind by the Court.
Miscellaneous orders the Court considers are unnecessary
I agree with the submissions of the amici (at [11]) that the Court should not make orders for reports by Shine (or the applicant) to the Court about the progress of the registration process. That is simply going to add to legal costs and involve the use of further resources. The Administrator has a responsibility to complete the administration including determination of amounts to be distributed to eligible claimants and eligible descendant claimants, and has access to independent counsel and solicitors, and can approach the Court if they see any issues which may require the Court’s attention.
The Scheme provides at cl 34:
The cost of Shine Lawyers up to the end of the Registration Process will form part of the Applicant's Agreed Costs or Applicant's Actual Costs. The cost of Shine Lawyers after the end of the Registration Process will form part of the Administration Costs and, subject to clauses 2.15 and 2.16 of the Deed, will be paid by the Administrator as a disbursement of the Scheme.
The Court has approved the Administrator’s estimate of $1,800,000 for the Administration Costs which are approved for deduction out of the Agreed Administration Costs Component. As set out in the proposed orders, interest earned on the settlement fund account is first to be applied in payment of the Administration costs. Any further amount above $1,800,000 sought to be deducted by the Administrator for its costs or for costs and disbursements to Shine following the registration process will be subject to any further Court order.
Matters conceded, no longer pressed or outside the Court’s approval function
Shine no longer presses for an uplift fee in respect of the outreach program and registration process, so no decision is required by the Court under s 33V of the Federal Court Act about this aspect.
In cl 6.3 and cl 6.5 of the costs agreement, a disclosure is made to Ms McDonald that Shine has agreed to pay Bottoms English Lawyers Pty Ltd 10% of Shine’s professional fees received by it from the funder as a “referral fee”. Ms Antzoulatos deposed at [137] of the First Antzoulatos Affidavit that she was not involved in the negotiation of that agreement. Ms Antzoulatos deposed that at the time of that affidavit, Shine had paid approximately $454,349.21 (GST inclusive) to Bottoms English. The agreement between Shine and Bottoms English was exhibited to the First Antzoulatos Affidavit at VA-4 Tab 3. Ms Harris has, at [48] of her report, excluded this charge from her consideration noting that it is “a private arrangement between the Applicant’s solicitors and Bottoms English”. Likewise, I have assumed this “referral fee” forms no part of what Shine has sought by way of deductions from the settlement fund. Therefore any payment that is made, is made as a matter of contract between Shine and Bottoms English and is outside the approval regime.
Priority of payments
The funder submitted that reimbursement for its funding and ATE premiums should be paid first to it from the $15 million to be paid by the Commonwealth for the Applicant’s Agreed Costs. That is the sum of $10,783,386.63. The funder also submitted that deductions for its funding commission should also be paid in priority to Shine.
The funder then endorsed the method of distribution involving establishing a minimum payment reserve account from which there will be a first distribution to eligible claimants. Although the funder expressed some “reservations” about the $10,000 interim payment for living eligible claimants, I considered such a payment was appropriate in the circumstances, and this was ordered to be paid out of the $54 million lump sum. This $54 million has, Ms McLeod submitted at the second settlement hearing, been deposited into the settlement fund.
The second account, a deductions account, is where the funder submits its commission should be drawn from. The funder seeks priority for this payment over Shine’s legal costs and disbursements and uplift. It submits payments should be made to it “in tranches, as soon as possible after those payments are made by the Commonwealth”. At [42] of its supplementary written submissions the funder sets out how these priority payments might be made in tranches.
At [43] the funder submitted:
the calculation of funding commission on the Agreed Administration Costs Component and the Costs Assessor’s Costs will need to await calculation and approval. The Funder is prepared to wait for payment of those parts of the commission until those costs are calculated. At this stage, that would be 20% of $2.18 million but will rise as the costs of the amici curiae and further costs assessor’s costs are incurred.
As I have described above, I am not prepared to approve a deduction from the settlement fund for the funder’s commission over the gross settlement sum of up to $202 million and I am only prepared to approve a deduction of 20% over the net settlement sum capped at 8,750 eligible claimants. Therefore, on my orders, the cost assessor component is not an amount over which the funder’s commission will be calculated. It can be seen the funder submitted its 20% commission should also be calculated inclusive of the legal costs payable to the amici who were retained by order of the Court. There is no justification for this; and it was not part of the LFA even if that agreement is seen as the principal justification for what the funder contends it is entitled to.
My decision
Annexure A of the proposed orders provided to the parties and interveners upon delivery of the Court’s reasons includes directions to the Administrator in respect of sequence of payments from the settlement fund. Payments for approved deductions for the Applicant’s Actual Costs (including uplift) and the Funder’s commission for up to 3,000 eligible claimants and ATE premiums are to be paid once the Administrator determines 3,000 eligible claimants.
The Court has decided that it will only approve certain deductions from the settlement fund account once 3,000 eligible claimants are determined by the Administrator. That is what is fair and reasonable in the circumstances. Once that happens, those deductions will be limited to the ATE premiums and the Applicant’s Actual Costs approved by the Court to 17 December 2024 (including uplift). It will also include a proportion of the commission approved for the funder, being 20% of $18,000 paid the by Commonwealth for 3,000 eligible claimants. That is a commission of $10,800,000 payable upon the Administrator’s determination of eligibility for 3,000 eligible claimants. That is a fair and reasonable proportion for the funder to receive at this point.
By the proposed orders, the Court will approve a total commission of up to $31,500,000. However, I do not consider that a sequence and priority of payments should be approved now beyond the commission calculated on 3,000 eligible claimants. That is because I have real concerns about the ultimate order of priority of payments from the settlement fund. I am concerned about the eligible claimants being paid last as set out in cl 2.16.1.e of the Deed.
THE MAKING OF AN APOLOGY
There is no provision in the Deed for the making of an apology.
Nevertheless, senior counsel for the Commonwealth said in open Court at the first settlement hearing:
The Commonwealth recognises the claims the subject of this proceeding arise from a deeply regrettable period in Australian history, during which First Nations people in the Northern Territory were subject to unfair laws. During the claim period 1933 to 1971, laws and administrative arrangements in the Northern Territory had the effect that lower wages were payable to First Nations people than other people for equivalent labour. During parts of the claim period, office holders were appointed by laws and given powers capable of significantly impacting the lives of First Nations people, including the power to determine that their wages were to be paid to someone else to be held for them and the power to remove First Nations people and place them in Aboriginal institutions.
The Commonwealth intends to make an apology in Parliament to the applicant, the group members, and the Australian community for the unfair laws in place in the Northern Territory that are the subject of this proceeding. The Commonwealth wishes to acknowledge the presence today of the applicant, Ms McDonald, and the substantial efforts of the applicant and her representatives and other First Nations peoples in bringing this class action forward to seek compensation, acknowledgement, and healing. We offer condolences to families and communities of those who gave evidence last year who have passed and thank them also for their contribution.
The Commonwealth has expressed through counsel its hope that the settlement, if approved, will bring closure to the applicant and group members for any displacement or unfairness experienced by them during the claim period by reason of these laws. While this proposed apology does not form part of the bargain reached by the parties, and therefore is not part of the settlement the Court is asked to approve, the statement should not be ignored or set aside by the Court.
The statement was made on instructions from the Commonwealth and it is on any view a matter of great significance to group members and their families and descendants, whether or not all those individuals are eligible to receive payments under the Scheme.
I infer that the willingness of the Commonwealth to make a considered public apology arises because of the settlement. To that extent it confirms the Court’s opinion that the proposed settlement is fair and reasonable because this representation by the Commonwealth accompanies the Commonwealth’s submissions that the settlement should be approved.
TWO FINAL OBSERVATIONS
Future proceedings
There are statements in the authorities, and many more in the oral and written submissions in this proceeding, that convey an apocalyptic impression of the future of legal proceedings such as this if funders such as LLS, and lawyers such as Shine (a publicly listed corporation) are not sufficiently ‘rewarded’ by courts for their participation in class action proceedings.
In these reasons, I have been critical of aspects of the conduct of the proceeding, especially by Shine, and somewhat sceptical about the approach of the funder. That is not to doubt the genuineness of these participants (including their legal representatives), and the genuineness of their desire to secure positive outcomes for group members.
Nevertheless, the pursuit of the business model has, in my respectful opinion, at times overshadowed these good intentions. It seems to me a not inconsiderable number of people in Aboriginal and Torres Strait Islander communities in the Northern Territory would look at the figures being paid to the lawyers and to the funder, indeed even to the Administrator and the costs assessor, and then look at what their family members are getting at an individual level, and they would be frustrated, and likely mystified about how city based non-indigenous participants in this proceeding come out with so much money compared to their family and friends. I doubt they would see much social justice in this outcome. That may well be compounded because of the way the outreach program has been conducted, with groups of city-based lawyers visiting towns and communities, trying to engage with people, perhaps on the first time they have ever met them, on very distressing matters, and leaving again.
Counsel and solicitors all over Australia have been acting in “social justice” cases for decades, either for no fees at all, or on a “no win no fee” basis. They have run highly complex litigation. They have done so without funders. Settlements of “social justice” proceedings occur outside funded class actions, and lawyers and other participants such as experts are paid for their work in ways which accord with the usual party/party basis on which courts operate.
While I do not cavil with the statements in the authorities about the potential benefits that commercially funded litigation might bring, in my respectful opinion it is important to see them as ‘added’ benefits. Commercial funding arrangements, and lawyers’ costs models of the kind employed in this proceeding, are not a precondition to cases being brought in Australian jurisdictions on subject matter that involve breaches of basic rights and interests of disadvantaged minorities or groups, or of vulnerable individuals or groups. Part IVA of the Federal Court Act operated before litigation funding.
Courts need to be cautious that their protective role under Part IVA is not seen as being little more than an adjunct to considerable commercial profits being made out of litigation, and on the backs of applicants and group members.
What should happen to the material filed in the proceeding
This settlement meets the criteria of s 33V of the Federal Court Act and has been approved. The Deed provides that within 7 days of the completion of the Administration, the applicant will apply to the Court for orders dismissing the class action with no order as to costs and all previous costs orders vacated.
Subject to any future order dismissing the proceeding, that means the stories and experiences of Aboriginal and Torres Strait Islander people which underlie the claims in this proceeding will never be heard in a contested proceeding, exposed to testing and findings by a Court. The enormous amount of historical and expert material will likewise not be the subject of findings and evaluation.
This enormous body of material cannot fail to move the reader. It should not sit un-accessed in the Court’s files. The Court urges the parties, and especially the Commonwealth, to consider ways in which this archive of material might be made available to the wider Australian community, and to the communities of group members, so that it can be understood and evaluated outside the narrow and adversarial confines of litigation.
SUPPRESSION ORDERS
The Court has made orders relating to non-disclosure and non-publication orders as follows:
(a)Orders on 30 October 2024 that there be no disclosure by publication or otherwise until 4pm on Thursday 7 November 2024 pursuant to s 37AF(1)(b)(i) and (iv) of the Federal Court Act of parts of the First Antzoulatos Affidavit including material in exhibits VA-1, VA-2, VA-4, VA-5, VA-6 and VA-7. This order was made on the ground that it was necessary to prevent prejudice to the proper administration of justice pursuant to s 37AG(1)(a) of the Federal Court Act.
(b)Orders on 9 December 2024 that until the determination at the second settlement hearing of the application for suppression orders sought by the applicant and funder, there be no publication or other disclosure pursuant to ss 37AF(1)(b)(i), 37AH(1)(b) and 37AG(1)(a) of the Federal Court Act of the material contained in Annexure A and Annexure B to the persons identified in those annexures (interim suppression orders). These orders were made on the ground that it was necessary to prevent prejudice to the proper administration of justice.
(c)Orders on 20 December 2024 that the interim suppression orders are to continue until further order and will be further considered upon the delivery of the Court’s reasons and final tranche of orders in relation to the settlement approval application.
It appears likely that one or more party or intervener may press for ongoing suppression orders. They are entitled to apply for such orders. By its orders today, the Court requires formal applications to be made for any ongoing suppression orders pursuant to s 37AF of the Act to replace the interim suppression orders that are currently still in place. These applications will have to be supported by evidence.
If applications are made, the Court will list the application(s) for hearing in open court. Subject to any objection by the parties or interveners, the Court will place a copy of any such application for suppression orders on the online file in this proceeding, at
The Court will also place a notification of the listing date and time of any hearing on the online file website at the same location. The purpose of such public notification is to provide an opportunity for media to appear in accordance with s 37AH(2) of the Federal Court Act. At any such hearing, the parties and interveners seeking ongoing suppression orders will be asked to justify any further suppression orders they seek, in light of the Court’s reason for judgment.
CONCLUSION
By email, the Court has provided the parties and interveners with proposed orders to reflect the conclusions reached in these reasons. The orders rely upon a number of powers in the Federal Court Act and Federal Court Rules including: ss 23, 33V, 33ZF, 37P, 54A of the Federal Court Act and Div 28.6 of the Rules.
On the issues raised by the Court about possible miscalculations in Ms Harris’ report, Ms Harris will be required to provide an explanation by way of a further report pursuant to r 28.67(1)(b) of the Rules. Rule 1.40 permits the Court to require such a report of its own motion. This further report will be provided to the Court and the parties, Shine and the funder, but this is not a matter in the Court’s present view that the funder needs to be involved in. That is because the reimbursement payment to the funder for the costs paid to Shine is a fixed sum, and not affected by Ms Harris’ report. The parties and Shine will then be required to make a joint proposal to the Court about any modifications to the calculations in these reasons, and if they cannot agree they will be referred to mediation before National Judicial Registrar Colbran on this matter.
In relation to the remainder of the proposed orders, the parties and interveners are required to confer, and notify the Court of any changes to the proposed orders that are consistent with the Court’s reasons for judgment, but which in their view are necessary or appropriate to make the orders clear and effective. To encourage reasonable unanimity, clarity and less additional legal costs, the proposal is to be made by way of a single submission on behalf of the parties and the interveners. The parties and interveners have liberty to provide a set of proposed amended orders.
The Court will also reserve liberty to apply in relation to the orders once made.
I certify that the preceding six hundred and eight (608) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Chief Justice Mortimer. Associate:
Dated: 17 April 2025
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