FEDERAL COURT OF AUSTRALIA

McDonald v Commonwealth of Australia [2025] FCA 380

ORDERS

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

MORTIMER CJ:

Introduction

1    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.

2    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.

3    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.

4    It is not in dispute that the respondent, the Commonwealth of Australia, had governance responsibility for the Northern Territory during the claim period.

5    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.

6    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.

7    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.

8    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.

9    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.

10    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.

11    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.

12    Shine are also the solicitors on the record for the applicant in the proceeding entitled Street v 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.

13    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.

14    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.

15    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

16    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.

17    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

18    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.

19    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.

20    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.

21    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.

22    Thus, there are broadly four causes of action, with some facts being common to more than one cause of action

23    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.

24    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.

25    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.

26    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).

27    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

28    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.

29    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.

30    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.

31    Since then, sadly, and on the information available to the Court, J Stuart, J Anzac and C Nixon have passed away.

32    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

33    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.

34    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.

35    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.

36    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.

37    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.

38    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.

39    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).

40    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.

41    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.

42    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.

43    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.

44    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.

45    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).

46    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

47    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.

48    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.

49    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.

50    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.

51    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.

52    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.

53    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.

54    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

55    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.

56    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.

57    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.

58    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

59    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

60    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

61    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).

62    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).

63    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).

64    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

65    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

66    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.

67    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).

68    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.

69    Shine filed submissions in relation to the settlement approval application dated 2 December 2024.

70    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

71    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

72    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.

73    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

74    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:

75    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:

76    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’:

77    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.

78    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

79    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 rates

80    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.

81    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.

82    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.

83    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.

84    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 settlementIN APPROVING THE SETTLEMENT

85    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

86    The settlement sum of up to $180,000,000 has been approved.

87    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

88    By orders of 14 November 2024, the reimbursement payments totalling $165,000 were approved to those named in that order.

89    By orders on 20 December 2024, Interim Payments of $10,000 to living eligible claimants were also authorised.

Deductions relevant to the funder

90    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.

91    The ATE premiums of $1,045,000 are approved as deductions from the settlement fund.

Deductions relevant to Shine’s legal costs

92    The Applicant’s Agreed Costs to 17 December 2024 are approved at $11,737,499.40 (GST inclusive).

93    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].

94    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).

95    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.

96    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.

97    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.

98    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.

99    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

100    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

101    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.

102    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.

103    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.

104    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

105    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).

106    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).

107    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

108    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.

109    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.

110    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.

111    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).

112    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).

113    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

114    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.

115    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.

116    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.

117    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:

8.1    the complexity and likely duration of the litigation;

8.2    the reaction of the class to the settlement;

8.3    the stage of the proceedings;

8.4    the risks of establishing liability;

8.5    the risks of establishing loss or damage;

8.6    the risks of maintaining a class action;

8.7    the ability of the respondent to withstand a greater judgment;

8.8    the range of reasonableness of the settlement in light of the best recovery;

8.9    the 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:

9.1    whether the settlement inter partes is fair and reasonable having regard to the interests of the group members, considered as a whole;

9.2    whether 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

9.3    whether 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.

118    I agree those passages set out the correct approach. Where necessary I refer to more specific aspects of the general approach below.

119    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.

120    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:

1573    In 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.

1574    This 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.

121    In Camilleri v The Trust Company (Nominees) Ltd [2015] FCA 1468 at [43]–[44] Moshinsky J provided the following summary of the relevant authorities:

43    The 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.

44    There 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.

122    There is no dispute any longer that this Court has power under s 33V to make a Common Fund Order in respect of a claim by a litigation funder to a percentage of the whole of a settlement sum, irrespective of whether a funder had entered into an agreement with only some of the group members: see generally Elliott-Carde v McDonald's Australia Ltd [2023] FCAFC 162, and Galactic Seven Eleven Litigation Holdings LLC v Davaria [2024] FCAFC 54; 302 FCR 493. As Colvin J observed in Galactic at [143], by reference to his Honour’s reasons in Elliott-Carde at [495], where a CFO is sought as part of an overall settlement approval there:

… are reasons other than the fact of agreement with the funded members why a CFO which reflected the terms agreed with funded members may be considered to be ‘just’ at the time of settlement.

123    In the present case, the funder seeks an order which would require unfunded group members to pay the same percentage it had agreed with the applicant and other funded group members, of which there were only nine.

124    I respectfully agree with the following proposition by Colvin J in Galactic at [157]:

Further, as to those other factors, when it comes to whether a payment out of settlement proceeds to a funder is ‘just’ for the purposes of the exercise of the power conferred by s 33V(2), the Court recognises the important role of litigation funding in providing access to justice. It is for that reason that the Court brings to account matters of commercial reality and the need to properly reflect the nature and extent of the costs and risks taken on by the funder in the particular case: Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Limited [2016] FCAFC 148; 245 FCR 191 at [82] (Murphy, Gleeson and Beach JJ). However, commercial aspects of funding are to be viewed through the lens of what is reasonable in order to fulfil the purpose of providing access to justice.

125    I also respectfully agree with his Honour (at [158]), that the nature of the risk taken by a funder in relation to particular litigation will be dependent on the circumstances of that litigation, and it is in that context the Court must “form its own broad view as to the nature of the risk” taken by the funder, in determining whether the method of calculation and percentage sought by the funder is just and reasonable in the circumstances of the particular litigation it committed to funding.

126    The role of a litigation funder, and how a court decides what portion of a settlement sum it is fair and reasonable to allow to a litigation funder, has now been the subject of a number of decisions. In Elliott-Carde, Colvin J said at [461]:

Commercial litigation funding is now an established part of the way in which applicants may cover the costs and risks of conducting court proceedings. Many issues arise from the intersection between the attributes of representative proceedings as an appropriate procedure for just resolution of claims and the attributes of the commercial enterprises that provide funding to enable that procedure to be resorted to in the interests of group members: Report 134 of the Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, Chapter 6. The Pt IVA scheme should be construed on the basis that its provisions will apply in circumstances where all, some or none of the group members are funded.

127    I now turn to apply those principles to the settlement proposed in this proceeding. The settlement has a number of components, which can be broadly divided into the following topics, not all of which were controversial.

128    In Section A below, I have set out the Court’s reasons for approving the settlement of the proceeding as a whole, that approval having occurred by orders made on 14 November 2024.

129    In Section B below, I set out the Court’s reasons for the orders about which there was some dispute between the parties. Some of these orders were made on 20 December 2024 and some are in proposed form, to be provided to the parties following the delivery of these reasons.

SECTION A

The Court’s reasons for approving the settlement of the proceedingTHE PROCEEDING

130    In this section, I explain why the Court considered a settlement of the proceeding was fair and reasonable in relation to the interests of the group members, and therefore made the first tranche of final orders on 14 November 2024. I explain elsewhere in these reasons why the orders were made in tranches, at the urging of the applicant and with the support of the Commonwealth. Before the first tranche of orders, the Court was comfortably persuaded that the settlement of the proceeding should be approved subject only to the Court declining to make a differentiation order.

131    The parties made it clear there were details of the settlement on which they wished to be heard and present evidence in a sequence, so that next steps in the registration and distribution process could occur as soon as possible. Some details were not fixed by the parties’ bargain as reflected in the Deed, but rather the Deed left these matters to the discretion of the Court. Other steps such as the cost assessor report also needed to be undertaken, although none of this was submitted to stand in the way of the outreach program and registration process commencing and continuing, the Administrator being appointed and some early and fixed distributions being made. The Court agreed with these proposals, but did so on the basis of an appropriate level of confidence that the settlement of the proceeding was fair and reasonable in the interests of group members.

132    The settlement in this matter was reached after an extended mediation and approximately six months before the matter was listed for trial. In contrast, the settlement in Street was reached five days before trial. Pearson was settled in principle in July 2019, with an eight-week trial listed to commence in February 2020. The timing of the settlement measured against the fixed trial date is a factor to which I have given weight at several points in my reasoning.

The overall settlement sum and its basis

133    The applicant’s first settlement approval submissions fairly describe the key features of the settlement:

20.    The proposed settlement comprises a Deed and annexed Settlement Distribution Scheme. The terms of the Deed dealing with the settlement sum provide for a maximum total settlement sum of $202M, made up of the following components:

20.1    two amounts, together up to an amount of $180 million, being the Settlement Sums. The amounts are, in effect, calculated by multiplying $18,000 by the number of “Eligible Claimants” up to 10,000 Eligible Claimants. The Settlement Sums comprise:

(i)    a Lump Sum in an amount of $54 million, comprising an amount of $18,000 per person multiplied by an assumed 3,000 Eligible Claimants; and

(ii)    a Per Person Sum, being an amount up to $126 million, which is additional to the Lump Sum, calculated by multiplying the number of Eligible Claimants above 3,000 Eligible Claimants up to a maximum of 10,000.

20.2    three amounts comprising the Costs Sums up to an amount of $22 million, being:

(i)    the Applicant’s Agreed Costs, being the Applicant’s legal costs and disbursements as between party and party up to an amount of $15 million (inclusive of GST), including the costs of the proceeding up to settlement approval and including the registration process, but excluding any uplift;

(ii)    the Costs Assessor’s Costs, being the reasonable costs of the Costs Assessor up to a maximum of $1 million (inclusive of GST); and

(iii) the Agreed Administration Costs Component, being an amount up to a maximum of $6 million (inclusive of GST).

21.    The terms of the Deed dealing with deductions from the $202M settlement sum provide for:

21.1    the deduction of the Applicant’s legal costs from Group Member funds to the extent they exceed $15M, if approved by the Court (cl 2.16.1(d)(ii));

21.2    the deduction of a reimbursement payment for the Applicant, Sample Group Members, and any other Group Member who has provided assistance from Group Member funds, if approved by the Court (cl 2.16.1(c)); and

21.3    the deduction of ‘excess’ Costs Assessor’s Costs and Administrator’s Costs from Group Member Funds, if approved by the Court (cll 2.16.1(a) and (b)) (which event is on present information unlikely to occur).

22.    While LLS is not a party to the Deed, the Deed recognises that the Court may approve deductions for commissions or other funding costs (cl 2.16.1(d)(i)).

23.    Other Deed terms that are relevant to the current application are:

23.1    the Applicant is to file an “Approval Application” (this application) seeking approval of the settlement and related orders (cl 2.3.1); and

23.2    the releases given by the Applicant and group members to the Respondent on approval (cll 2.17 and 3).

24.    The proposed Scheme forms part of the Deed (cl 2.4.1). A key aspect of the Scheme is that the persons eligible to participate in the distribution of the net settlement sum are “Eligible Claimants” (ie, a person who worked during the Claim Period and satisfies the criteria in the table to Scheme cl 43) and “Eligible Descendant Claimants” (ie, a person who is the most recent living spouse or the living children of a deceased Eligible Claimant and satisfies the criteria in the table to Scheme cl 44).

(Original emphasis.)

134    Since it becomes relevant later in these reasons when I explain the Court’s proposed orders about Shine’s legal costs, I note here that the parties’ bargain, in terms of the parties’ agreed definition in the Deed of the term “Applicant’s Agreed Costs”, is that those costs are:

(a)    to cover the applicant’s legal costs and disbursements (e.g. travel, payments to counsel and experts);

(b)    to be at the rate as between party and party not solicitor and client; and

(c)    to include the costs of the proceeding up to settlement approval and including the registration process (and therefore the proposed outreach program) but excluding any uplift charged by Shine.

135    The Deed calculates the settlement sum by reference to eligible claimants as determined though a registration process. That registration process is to be in part conducted by Shine through what has been called an “outreach program and registration process” as described above at [42]. Ultimately the decision about eligibility is to be made by the Administrator, although largely on the basis of information collected during the outreach program and registration process, or already collected through the earlier “book build” process conducted by Shine as part of the opt out process.

136    Relevantly, the Applicant’s Agreed Costs (up to $15 million); the Agreed Administration Costs (up to $6 million) and the costs assessor’s costs (up to $1 million) are not fixed sums, but are maximum sums.

137    The criteria which group members must satisfy to be considered as “eligible claimants” is set out in cl 43 of the Scheme annexed to the Deed, and forming part of the Deed.

138    The criteria are long, but in substance, once a person has completed a registration form (whether by themselves or with assistance), the Administrator must be “independently satisfied” (whether on the information provided or after trying to secure more information) that the person:

(a)    is the person they claim to be;

(b)    is an Aboriginal or Torres Strait Islander person;

(c)    was at least 10 years old during the claim period;

(d)    worked in the Northern Territory at a workplace (whether station, mission, private workplace or institution) that existed during the claim period;

(e)    was paid “little or no wages” in respect of the work they did; and

(f)    has provided bank account details or enough information to satisfy the Administrator there is a legitimate way to pay them any compensation they are found to be eligible for.

139    There is a second category of eligible claimant. Clause 44 of the Scheme describes those who are “Eligible Descendant Claimants”; that is certain descendants of workers who would meet the criteria to be an eligible claimant but who have passed away. There are some limits imposed on which family members can meet the criteria, and I discuss those at [184]–[190] below.

140    In relation to the criterion that a person must have been at least 10 years old during the claim period, I accept this age is somewhat arbitrary and there may well have been workers younger than 10 who were paid little or no wages, especially in domestic circumstances on stations, missions or in other institutions and settlements. Indeed, filed expert evidence refers to such examples. At least one witness in the preservation evidence described how they thought they started weekend work at age 7 or 8, and if they did not work they did not get fed.

141    Nevertheless, fixing the eligible age as 10 during the claim period, when the claim period spans more than 38 years, provides sufficient flexibility to be considered reasonable. A person who was working during the claim period before they were 10 years old for little or no wages is likely still to have fallen within part of the claim period after they turned 10, on the assumption they can establish that they continued working for little or no wages after they were 10 years old. Any person who did in fact start working before they were 10 years old, or their descendants, is still likely to receive a reasonable level of compensation comparatively to group members who did not start working until they were older than 10 years.

142    As the approval hearing process progressed, it became clear that all parties substantially agreed that the likely numbers of registered eligible claimants will be between 6,000 and 8,750. The parties agreed the registration process in Street could be used, at a general level, as a guide as to likely numbers, as well as the registrations through the “book build” process. There was broad agreement between the parties that the likely number of workers in Western Australia during the claim period approximated to the likely number of workers in the Northern Territory, and that since the same lawyers were involved for the applicant, and broadly the same outreach processes employed, the registration numbers in Street could provide substantive guidance on likely registration numbers in the Northern Territory. Senior counsel for the applicant submitted that in Street there were around 8,750 eligible claimants and that in this proceeding it will “probably get to the same or similar number”.

143    At the end of the second approval hearing, the parties agreed to provide the Court with some joint documents which would accurately set out the various calculations on the disputed aspects of deductions from the settlement fund, depending on the numbers of eligible claimants who are registered by 31 August 2025.

144    On 7 February 2025, the Court was provided with the parties’ and interveners’ joint tables on settlement sum outcomes and funding commissions as well as an agreed explanatory note. By order of the Court on 7 March 2025, these documents were admitted into evidence and marked as Exhibit R-1 and Exhibit R-2 on the settlement approval hearing. The Court is grateful for the work undertaken to facilitate their provision.

145    The joint tables included an agreed summary table setting out the apportionment of the settlement sum across five different scenarios. The “all other deductions” in these scenarios include the reimbursement payments of $165,000, the cost assessor’s costs of $250,941.85 (inclusive of amici costs), the administration costs of $1,800,000 and the total legal costs sought of $22,639,390.79:

(a)    Scenario 1: if a 20% gross funding commission was ordered, as well as deductions for after-the-event insurance costs of $1,045,000, and all other deductions were approved. Under this scenario, eligible claimants would receive $10,313.47 if there were 3,000 eligible claimants, $12,867.55 if there were 8,000 eligible claimants, and $10,978.37 if there were 12,000 eligible claimants.

(b)    Scenario 2: if a 20% net funding commission was ordered, but no deductions for after-the-event insurance, while all other deductions were approved. Under this scenario, eligible claimants would receive $11,798.54 if there were 3,000 eligible claimants, $13,424.45 if there were 8,000 eligible claimants, and $11,349.63 if there were 12,000 eligible claimants.

(c)    Scenario 3: if a 16% gross funding commission was ordered, as well as deductions for after-the-event insurance costs of $1,045,000, and all other deductions were approved. Under this scenario, eligible claimants would receive $11,260.82 if there were 3,000 eligible claimants, $13,672.81 if there were 8,000 eligible claimants, and $11,635.20 if there were 12,000 eligible claimants.

(d)    Scenario 4: if a 20% gross funding commission was ordered, capped at $20.3 million, as well as deductions for after-the-event insurance costs of $1,045,000, and all other deductions were approved. Under this scenario, eligible claimants would receive $10,313.47 if there were 3,000 eligible claimants, $14,356.33 if there were 8,000 eligible claimants, and $12,570.88 if there were 12,000 eligible claimants.

(e)    Scenario 5: if a 20% gross funding commission was ordered, capped at $21.3 million, but no deductions for after-the-event insurance, while all other deductions were approved. Under this scenario, Group Members would receive $10,661.81 if there were 3,000 Eligible Claimants, $14,361.95 if there were 8,000 eligible claimants, and $12,574.63 if there were 12,000 eligible claimants.

146    One clear trend in these scenarios is that at the parties’ current estimates of likely registered claimants, claimants should receive the higher levels of compensation.

The factors I considered of most importance in this settlement approval application

147    Noting the general principles and approach set out above including the Court’s Practice Notes, which I have taken into account, in my view on this particular application the most important factors in the overall question of whether to approve the settlement, or instead to make the parties go to trial, were:

(a)    the complex nature of the claims made and the clear risks in establishing liability on any, or some, of the causes of action; and then the risks in proving damages;

(b)    the time the matter will take to come to trial and for any trial to conclude;

(c)    the resources likely to be occupied in the conduct of a trial of this nature;

(d)    the likelihood of appeals; and

(e)    the fairness and reasonableness of the compensation likely to be received by eligible claimants.

148    Reducing these factors to their core features, there were three. The first was the risks the applicant would not succeed, which could then be further broken down. The second was the delay involved in running this matter through to finality. The third was the levels of likely compensation. However, I first turn to some more intangible aspects of fairness and reasonableness.

Fairness and reasonableness: some intangible aspects

149    In Street at [137] Murphy J describes the personal, psychological, and emotional basis his Honour apprehended drove many of the 46 objections to the proposed settlement in that case.

Many of the objections were powerfully made and I was touched by the anguish and hurt some objectors expressed about the discriminatory and unjust way they and their parents were treated during the claim period, and the lasting legacy of economic and social hardship which arose from that. The objections speak to the grief, torment and anger that some class members understandably feel. The trauma suffered through forcible removal from their families and their country, and of enduring psychological, social and economic harm, with intergenerational effects, cannot be underestimated. The emotion with which some of the views are expressed acts as a reminder of the importance of acknowledging the occurrence of those wrongs.

150    In this proceeding no objections were received, although there was a lesser time frame available for such objections. It is unhelpful to speculate about why there were no objections, and whether for example the rejection of objections in Street played a role for group members in this case. See also Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Limited [2016] FCAFC 148; 245 FCR 191 at [50] and the cases referred to by the Full Court concerning the dangers in placing much weight on the absence of objections.

151    What was undeniable in my opinion is that the trauma his Honour refers to at [137] in Street is likely to exist in many group members in this proceeding, including the descendants of people who worked on the stations, missions or in other institutions and settlements during the claim period.

152    Thus, as part of considering whether the proposed settlement was fair and reasonable in relation to group members, the Court took account of how the settlement is likely to be perceived by those group members. That is a factor which I took into account in rejecting the proposed differentiation orders. Here the factor operates somewhat differently — was the amount likely to be received by individual eligible claimants so paltry or inadequate that it is likely to be perceived as an insult, a slap in the face to the very people (or their descendants) who suffered the wrongs the proceeding sought to vindicate? If the Court were persuaded of this, that might — depending on other considerations (in particular the magnitude of the risks the claim might fail) — be a powerful factor to find that the settlement of the proceeding should not have been approved.

153    At [89] in Street, Murphy J stated:

The Settlement Fund Amount is not to be understood as a series of individual settlements of a particular amount to be paid to each OEC, but rather it is a settlement on a common fund basis where the quantum of the fund is ascertained by accumulating amounts paid on account of (but not to) each OEC.

154    While I accepted that is how an overall settlement amount should be understood, I do not understand his Honour to be suggesting that as part of the approval process the Court cannot take into account what individual eligible claimants are likely to receive. In this passage, his Honour is (correctly in my respectful view) making the different point about how the aggregate settlement amount is to be characterised.

155    To focus on the overall settlement sum would have been misleading, because it was not a fixed sum, but a maximum, and because all parties accepted that because of the significant deductions for the funder and for legal costs, the proportion of that sum available to claimants was, if all deductions are approved, only between 59%–64% of the gross settlement sum for 6,000–8,000 eligible claimants.

156    In my opinion it is a legitimate and necessary aspect of the Court’s role, as part of the approval process, and as part of considering what if any other orders “as are just” should be made under s 33V, to take into account the parties’ submissions and the evidence about what eligible claimants are likely to receive, and how this might be perceived.

157    In my opinion it is likely that there will be a number of eligible claimants, and their families, who might perceive the settlement to be inadequate, and might see it as an insult to what they and their elders endured during the claim period. The nominated maximum per person amount in the Deed is $18,000. With the likely deductions for the funder’s commission and Shine’s claims for legal costs, the parties’ calculations suggest an eligible claimant might get somewhere between $12,000 to $13,500.

158    In 2024/2025, these are not objectively large sums of money for a person’s labour, even accepting the labour occurred many decades ago. The amount of time that was occupied during the two settlement approval hearings, and in written submissions, making arguments about how much the lawyers, funder, Administrator, costs consultant and others involved who are not claimants should be paid, was objectively capable of seeming disproportionate to the time spent on assessing the compensation likely to be received by eligible claimants on the distribution of the settlement fund. It would not be surprising if potential eligible claimants observing the proceedings gained the impression the proceeding was little more than a money-making exercise for others. These are matters about which all participants in the settlement approval process need to be conscious.

159    As I explain elsewhere in these reasons, the Court must be cautious and careful about the impressions that are created amongst group members and amongst the wider community about the purposes and objectives of proceedings such as this. High-minded but no doubt sincere expressions of desire to right the wrongs of the past can rightly be held up for scrutiny next to the details of these settlements, and who profits the most in absolute terms from them. The same scepticism and loss of public confidence in the Court’s processes is at risk where it is the group members who are the last to be paid.

160    Nevertheless, the fact is there were no objections made to the Court. The fact is that the Court has no other evidence to suggest the sums likely to be received by eligible claimants (including descendant eligible claimants) are perceived as so paltry as to be insulting.

Risks

161    The Court has the benefit of a confidential opinion by counsel concerning the risks which attend the prosecution of the applicant’s claims to an adversarial conclusion. It makes for sober reading; counsel are to be commended for their frankness.

162    That said, what also makes for sober reading is the recitation in the confidential opinion of the allegations of fact, drawn from expert reports and outlines of evidence, and from the preservation evidence.

163    So although the risks in terms of proving liability, and quantifying proof of loss, are plainly considerable, the factual narrative that was likely to be told in these proceedings is unlikely to have reflected well on the Commonwealth as a polity, and on a range of historical figures inside and outside government.

164    The Commonwealth’s first settlement approval submissions went into considerable details about the challenges for the applicant in establishing liability in the proceeding, and proving loss. In essence, by its written submissions the Commonwealth developed the pleadings in its defence, contending that the applicant’s various causes of action faced a range of serious difficulties. Those submissions speak for themselves, and are publicly available on the Court’s online file at: https://www.fedcourt.gov.au/services/access-to-files-and-transcripts/online-files/mcdonald-v-cth. In brief summary they address the following matters.

165    On the fiduciary claims (namely that the Commonwealth, or individuals exercising powers under the Ordinances owed certain fiduciary duties to group members), the Commonwealth submitted the relationships were not fiduciary in nature, especially because under the Ordinances many of the powers which could be exercised were inherently adverse to the circumstances and interests of the Aboriginal workers. The Commonwealth also submitted that a number of the alleged fiduciary duties described novel or new kinds of duties not yet recognised by the law; and further that it could not be held vicariously liable for many of the alleged breaches because those responsible were not its employees. The breaches of the alleged fiduciary duties arose from the exercise of independent discretions under the various Ordinances, and that would preclude the cause of action being made out.

166    On the allegations that the Commonwealth, or the Director, was the trustee under the Ordinances for various trusts for saved wages, lost wages, managed property and the property of wards, the Commonwealth submits these claims are likely to fail because no trusts enforceable in equity were created, and again even if they were, the Director would be the trustee and not the Commonwealth, and there would be no vicarious liability.

167    The claims for restitution are likely to fail, the Commonwealth contends, because the claims do not sit comfortably with the existing law about when such recompense should be paid, such as that the person against whom the claim is made should receive a benefit from the work done. Again, the Ordinances may be a barrier to the claims because the Ordinances themselves may have authorised the work and this would insulate the Director or others from claims of this kind. The applicant’s arguments to distinguish these aspects of the law rely on allegations that what occurred in the way Aboriginal and Torres Strait Islander people worked amounted to slavery, and so the Ordinances were invalid if they authorised slavery. The Commonwealth points to a range of legal problems with these claims which are set out in its first settlement approval submissions.

168    The applicant claims that the Commonwealth breached the RDA by failing to put in place a reparation scheme, which is also contended by the Commonwealth to be likely to fail. The Commonwealth alleges that the claims will fail because there is no appropriate comparator, and because no human rights or freedoms were impaired by the non-implementation of such a scheme in circumstances where group members could and did pursue legal action against the Commonwealth.

169    On many of the causes of action the Commonwealth submits the applicant would have “great difficulty” proving a breach of the alleged duties or obligations or standards. The First Barker Affidavit described many of the evidentiary difficulties for the applicant’s case. For many of the claims these difficulties were contended to arise because of the lapse of time, the absence of living witnesses (especially those who ran institutions, missions or stations), and also the memories of living witnesses, together with the absence of complete documentation. The Commonwealth also contended some claimed unremunerated work was not properly characterised as work but rather “in the nature of chores or preparation for life outside the institution, and did not constitute remunerable work”. Alternatively, workers were paid “in kind” through various purchases made by those individuals at station stores under a ‘book-down’ system; or at least, the applicant (who bore the burden of proof) would not be able to prove they were not paid in this way. Finally, and connected to the difficulties of proof, were the Commonwealth’s arguments about delay in bringing the proceeding and limitations imposed by law on bringing such claims. Delay, and the burden of proof being on the applicant were matters of significance in the Commonwealth’s contentions, and rightly so.

170    The confidential opinion should not be taken as accepting all these matters. It presents a different complexion on the applicant’s causes of action but as I said it nevertheless frankly concedes the height of the hill the applicant would have to climb to succeed in a contested trial.

171    Novelty of itself is not a barrier to success in legal claims. The common law and equity are organic creatures, and develop to fit new circumstances and claims which have not been made before; that is their fundamental strength. Likewise, challenges of proof can be overcome in various ways. Nevertheless, it is abundantly clear that at the level of legal liability and proof, there were significant hurdles before the applicant.

Delay and strain inherent in a litigated outcome

172    As the Commonwealth submissions set out, the time that has elapsed since the claim period poses a number of difficulties for any of the claims succeeding in a contested trial.

173    The time that has passed has other consequences. Many workers have passed away. It was not in contest that many of those who are left are elderly, and are not in good health.

174    Although the applicant and her witnesses have already committed much time and effort to advancing this proceeding, and have no doubt been adversely affected in several ways (see [208]–[217] in these reasons), a fully litigated trial would have involved much more stress and anxiety, and I infer, taken an even greater toll on the applicant and witnesses who are already struggling in many aspects of their daily lives. I have referred to these kinds of considerations in Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296 at [15]; and see also Scandolera v State of Victoria [2015] FCA 1451 at [32]; Bushby (by his litigation representative Webling) v State of Victoria (Department of Education and Training) (No 2) [2023] FCA 340 at [13]; Jeffriess v Perpetual Trustee Company Ltd (No 2) [2023] FCA 911 at [17]. They are challenging to quantify but these adverse effects are real and in my opinion legitimate to consider as part of the Court’s assessment of whether a settlement is fair and reasonable in relation to the interests of group members. The interests of group members include finality to their claims and being able to get on with their lives. They include being able to live their lives to the fullest extent they can, without additional burdens imposed by the continuation of hard-fought litigation, and the public discussion of their lives and circumstances, and those of their elders and families, whether or not people are called as witnesses.

175    Although this matter was listed for March 2025 for a six week hearing of lay evidence, it was far from clear that all the evidence would be completed in this time. Experience with complex and hard-fought litigation suggests parties seek to add to their forensic cases and thus the actual trial length is often extended. Then there are the vicissitudes of witnesses, both lay and expert. Preparing submissions, both written and oral and finding sufficient time for this, is likely to have meant judgment would not be reserved much before the end of 2025.

176    This would be a judgment that would take a considerable time to write, perhaps that is stating the obvious. On the best case of all proposed timings being met, it might have been delivered by mid-2026. As both parties accepted, whatever the outcome, appeal and perhaps cross-appeals were highly likely. The appeals themselves would be complex, and setting them down to be fair to the parties and their lawyers, and to fit with the Court’s timetable, might well have taken the appeals into 2027. The appellate process would be unlikely to be completed before the end of 2027, and that would be with a comparatively swift judgment by a full court. Then there is the special leave process to the High Court after that.

177    Even once the proceeding was finally determined, if the applicant succeeded on any claims, there would need to be a second stage of the proceeding to address the compensation payable to all group members and how that should be arrived at. This process, from start to finish and again allowing for appeals, would likely take at least two to three years.

178    That brings estimates of prospective finality into the next decade, after 2030.

179    Once this is stepped through, the ability to bring finality to group members in 2025 is a factor of considerable weight and adds in a critical way to the fairness and reasonableness of the proposed settlement.

Likely compensation

180    Some of the causes of action rely on proof of individual economic loss. Claims such as the RDA claims are broader and any damages that might have been awarded would have needed to be arrived at through other methods than proof of individual economic loss. Counsel’s confidential opinion gives some indication of the approach taken by the applicant to this for the purposes of mediation. The confidential opinion spends some time working through various hypothetical outcomes in terms of what might have been paid to group members, considering various ways to calculate “maximum possible recovery”. There was expert evidence filed by the applicant on these matters. It does not appear that the calculations have factored in additional amounts that might have been payable to the funder, and on account of legal costs. Valuing claims in hypothetical alternative scenarios is fraught with difficulty and risk. The confidential opinion recognises this.

181    What can be said is that the aggregate amount of the settlement — up to $180 million, allowing for the deductions discussed elsewhere in these reasons, and considering the likely per person amount, is sufficiently fair and reasonable in the interests of group members when it is proposed to be paid in 2025, or 2026. That is the appropriate context for the assessment in my view.

182    I consider below some aspects of the proposed settlement which are relevant to the fairness and reasonableness of the proposed settlement as between group members.

Other features which were not substantively contested

183    There was no debate about the following aspects of the proposed orders of the Court, and the Court considered they were appropriate on the basis of the evidence.

The extension of payments to descendants of eligible claimants

184    The bargain struck in the Deed accepted compensation payments should be extended to descendants of eligible claimants who had passed away. There was also agreement that some limits needed to be placed around which descendants should be included. Similar orders were made by the Court in Street: see [171] ff.

185    The applicant addressed this issue in her first settlement approval submissions at [42]–[45].

186    The parties’ agreement follows in broad terms what happens in the Northern Territory under the Administration and Probate Act 1969 (NT) where a person dies without a will; that is dies intestate.

187    Broadly speaking, under Northern Territory law, the people who can take an interest in the deceased person’s estate are:

(a)    the surviving spouse (up to a prescribed amount of money which is well in excess of the proposed compensation payments);

(b)    where there is no surviving spouse but there are children, the children of the deceased person; and

(c)    if there are neither spouse nor children, then the estate can pass to the parents of the deceased person or other next of kin.

188    Northern Territory law also provides for distributions in accordance with Aboriginal traditional law and custom. The Deed incorporates some aspects of Aboriginal customary law in the definition of “spouse” and “child”. The parties have elected to keep the method straightforward to administer and in a large settlement with a priority placed on getting compensation payments made in a final way, I consider that is appropriate.

189    The limit imposed by the proposed settlement that is different to Northern Territory law is that there is no ability for people other than surviving spouses and children to become eligible to receive compensation. Parents of a worker who has passed away, or other kin, are not eligible.

190    This limit is intended to keep the administration of the scheme as straightforward as possible, again to ensure that compensation payments can be made as quickly as practicable in a final way. I consider that is appropriate in the circumstances, and it will reduce disputation amongst family members. Disputation should also be reduced, in my opinion, because there is no differentiation order: see [226]–[252] in these reasons.

The registration process

191    The registration process will occur first through the outreach program. and There will then be an assessment of eligibility by the Administrator. The parties’ agreement is that Shine will conduct the outreach program and use reasonable endeavours to seek registrations during the registration process up to the Registration Date, but it is the Administrator which has responsibility for determining (subject to a prescribed review process) whether a person does or does not meet the criteria to be an eligible claimant, or an eligible descendant claimant. This task is incorporated in the more modest fees estimates of the Administrator.

192    Lessons have been learned from the registration processes conducted in Street, and earlier in Pearson. The parties, and in particular the applicant, emphasised the relaxation of certain criteria (or methods of proof for certain criteria), the ability to satisfy criteria in a number of different ways, and an attention and consciousness of the realities of the lives of group members, both currently and historically. Pertinent examples are the definition of “sign or signed” in the Scheme as including confirmation during a phone call with the Administrator’s staff or with Shine staff, the use of “trusted referees” to vouch for a person’s identity, and the variety of mechanisms available to prove a person’s identity including photo identification that has expired within the last five years.

193    I am satisfied on the evidence that the registration process and determination of claimant eligibility will be approached in a pragmatic, sensitive way, and no arbitrary or unreasonable barriers will be placed in the way of people who claim to meet the criteria.

Class closure orders

194    This aspect of the settlement has been mentioned in the notices sent to group members about the proposed settlement. Orders “closing off”, and therefore limiting, the group of people who will be eligible to receive payment under the settlement are, as the applicant submits, a common feature of class action settlements.

195    Here the mechanism used to close or limit the group of people entitled to receive payments is registration, and registration by a particular date, fixed by Court at 31 August 2025. As I have explained at [137]–[139], registration occurs when people are accepted by the Administrator as meeting the criteria to be eligible for compensation. Group members who do not register will lose their rights to sue the Commonwealth for claims covered by this proceeding, at least as far as the proposed order to be made by the Court about the correct scope for the general release given by Ms McDonald is concerned. Subject to the issue about the scope of the release, these are fair and ordinary components of settlements of this kind. They provide finality for the Commonwealth in return for its agreement to pay compensation.

196    As Beech-Jones CJ at CL observed in Ellis v Commonwealth of Australia [2023] NSWSC 550; 411 ALR 578, the Court has power to make class closure orders on a settlement approval application and it is a matter for the Court’s discretion whether such an order is appropriate, depending on the view taken about the adequacy and reasonableness of opportunities given to group members to participate in the settlement before the class closes.

197    I am satisfied that there has been and will continue to be an adequate opportunity given to group members in this proceeding to register. There had already been a substantial outreach program during the “book build” since as early as 2016 but more intensely over the last two years or so. I have found the registration criteria to be reasonable and fair, and to be flexibly administered and approached. A period of over ten months between approval of the notice of the proposed settlement to the Registration Date, given the range of notification, social media and advertisement processes undertaken to this point, and continuing, satisfies me that reasonable steps have been and will be taken to draw the proposed settlement to the attention of group members and to give them a fair chance to register. In any event, the parties are always able to apply on appropriate material to extend the Registration Date.

The appointment of Julia Kaye, David Orr and Sal Algeri of Deloitte as Administrator of the Scheme

198    The applicant proposed several possible administrators, and adduced evidence of the fees they had estimated they would charge to administer the Scheme.

199    Each estimate was based on Shine undertaking a registration process first, through the outreach program. I infer this assumption might explain the difference between what the Commonwealth had agreed to allow in the Deed for the costs of the administrator and the estimated costs; in other words, at the time of settlement it may have been assumed the Administrator would be more involved in initial checking of people who came forward to register: see the Commonwealth submissions extracted at [102].

200    The Court’s orders appointed Julia Kaye, David Orr and Sal Algeri of Deloitte, and approved the Administrator’s estimated costs of $1.8 million (exclusive of any GST). Those fees are well below the $6 million allowed in the parties’ bargain.

201    That means there is a considerable shortfall between the likely actual costs of the administration and what the Commonwealth has agreed to allow and pay. This becomes relevant in relation to some of the matters left expressly by the parties in the Deed as matters for the Court to determine.

The administration period

202    The length of time necessary for registration in this proceeding is informed to some extent by experiences in Street and Pearson, but especially Street as the process was more recent. It is also informed by the publicity which has accompanied the other two stolen wages proceedings, as well as the outreach program during the “book build” conducted by Shine early in the proceeding. There was no submission that an administration period ending on 14 November 2025, that is 12 months after the settlement approval, was anything other than a reasonable period. I accept that is the case.

The appointment of legal advisors and independent counsel

203    The Court’s orders have appointed Michael McCarthy and Tom Hutton of Hutton McCarthy to act as Legal Advisor to the Administrator for the purposes of cl 31 of the Scheme. Ms Carla Klease is to act as Independent Counsel for the purposes of Part U of the Scheme.

204    The parties agreed on several suitable firms of solicitors, and several suitable counsel and the Court selected those it considered had the requisite experience to assist the Administrator.

The costs assessor’s appointment and costs

205    By orders made on 24 September 2024 the Court appointed Ms Elizabeth Harris as Referee, to undertake a reference in accordance with orders 35 to 41 of the Court’s orders made on 16 September 2024.

206    Ms Harris was one of two proposed costs assessors whom the parties agreed would be suitable. She has considerable experience in costs assessment processes in class actions proceedings. I was satisfied she was suitable to be appointed. A slightly amended version of Ms Harris’ report was provided to the Court on 28 November 2024. I return to that report in more detail below when considering the claims by Shine for additional legal costs payments, and also when considering the proposal struck in the bargain between the parties that the Commonwealth will pay Shine the sum of $15 million on account of party/party costs and disbursements.

207    I have accepted Ms Harris’ report subject to the matters I refer to elsewhere in the reasons.

The reimbursement payments to the applicant and other living group members who had already given evidence

208    At [29] above I have listed the people who agreed to become witnesses and give evidence at a preservation of evidence hearing in July 2023.

209    Preparing to give evidence is a time-consuming process. The methods of giving evidence — by affidavit or written statement — are likely to be unfamiliar and seem cumbersome to non-lawyers. The level of attention to detail, and the use of particular words, all of which is second nature to lawyers, can be tiring and exasperating for non-lawyers. Being pressed to recall events that may have faded can also be exasperating and tiring, especially for witnesses who are older and perhaps not in good health, where their concentration and stamina are not as good as it might have been when they were younger and healthier. Often many documents have to be looked at and explained. People need to refresh their memories about events from a long time ago. Language can also pose hurdles, both in terms of lack of proficiency in English, but also in terms of making the effort required by a witness to describe and explain events, and to accurately describe the effects of those events on them.

210    In a case such as this, people are asked to talk about matters very personal to them, about their families and their separation from their families, about the conditions they lived and worked in, about bad experiences they had, and to bring all that back to the present day when they may have tried hard over a long period of time to learn to live with those memories.

211    All these characteristics of preparing to give evidence can be intensified when witnesses come from a different cultural background.

212    In this proceeding, the people who agreed to be witnesses and give evidence early did so not only to advance their own claims, but to advance and support the claims of all group members.

213    It is in recognition of the effort and active commitment of these people that the parties agreed to the reimbursement payments. The Court determined that the reimbursement payments should total $165,000, in the following amounts:

(a)    $30,000 to the applicant;

(b)    $10,000 each to Veronica Dobson, the Estate of Jacky Anzac, Daniel Forrester, Kennedy Ricky and Nora Sullivan; and

(c)    $5,000 each to Marie Allen, Mary Allum, Henry Bob, Maybelle Bourke, Alan Drover, Brian Freddie, Billy Grant, Frank Holmes, the Estate of Cecily Nixon, Susan Nurra, Peter Parlow, Bessie Parsons, Maisie Smith, Lilly Stafford, the Estate of John Stuart, Sister Barbara Tippolay, and Linda Turner.

214    The explanation for the sum of $10,000 being paid to some people and the sum of $5,000 being paid to others was that sample group members were awarded $10,000, while witnesses were each awarded $5,000. The projected involvement and commitment needed by sample group members was likely to be greater than people who agreed to be witnesses, and that is reflected in the agreed sums.

215    The applicant, Ms McDonald, received a larger reimbursement payment. This payment recognised not only the matters I have set out above in relation to her witness evidence but also the fact that as the lead applicant, she has had to be closely engaged with solicitors and counsel about the conduct of the proceeding. It is she who has had to give the lawyers instructions about how the case can proceed. It is she who assumed the burden of considering and giving instructions about the proposed settlement. She has had to engage in travel that was not part of her ordinary life, and attend meetings, take calls, and listen to advice and updates from the lawyers, on many occasions. All this is part of being a lead applicant, and the parties agreed it was appropriate she receive some reimbursement for her efforts.

216    The Court accepts payment of these sums is appropriate, and they reflect the commitment and engagement in the conduct of this proceeding, for the benefit of all group members. They are comparatively modest amounts in the context of the overall settlement, although I accept the payment to Ms McDonald exceeds what eligible claimants will receive out of the distribution. That particular payment does not exceed likely distribution payments by a disproportionate or unreasonable measure. It is fair and reasonable that the total sum available for distribution to all group members be reduced by comparatively modest amounts to recognise this contribution at the varying levels agreed by the parties.

217    Where the Court recognises contributions such as this, and allows reimbursement payments, it also signals for future lead applicants and key witnesses in future class action proceedings where the group has some characteristics of disadvantage that might otherwise impede their active participation, or make them less willing to participate, that the Court understands the effort they have made and may be persuaded to allow additional payments to them in fair recognition of the additional efforts they have made. See similar findings in Ellis at [58] (Beech-Jones CJ at CL, referring to the observations of Jessup J in Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd (No 2) [2006] FCA 1388; (2006) 236 ALR 322 at [76]).

SECTION B

The Court’s reasons for some of the particular orders made and proposed to be made

218    In this section I deal with aspects of the proposed settlement, and the orders sought, about which there was some dispute between the parties, or which I consider required more evaluation.

Some key features

219    A cornerstone of the proposed settlement in this proceeding which all parties and interveners accepted was distinct from many class action settlements is that the bargain reached between the parties, while involving a maximum ceiling for the settlement sum, did not propose a fixed sum. At times the parties referred to this as a “process settlement”. It was also described by senior counsel for the applicant at a case management hearing on 9 September 2024 where the applicant announced the settlement to the Court as a “plus cost process settlement”.

220    As I have detailed above, the reason for the acceleration is an understandable, reasonable and appropriate one. Time is an enemy. The parties and some of their legal representatives (and the funder) having experienced, or known of, two other “stolen wages” class actions, there was a consciousness of the deleterious effects of the passage of time in proceedings of this kind. Already many of the workers on the stations, missions or other institutions and settlements have passed away and therefore will not personally see any accounting for the way they were treated. Those who are alive are elderly, and many are in poor health. These characteristics of the class as a whole are well established, and indeed form key parts of federal, state and territory policies that address the disadvantage experienced by First Nations communities in this country. Annexure SJT-14 of the affidavit of Ms Sarah Jayne Thomson affirmed on 5 September 2024 and read at the hearing of the interlocutory application on 9 September 2024 is a summary of the Aboriginal and Torres Strait Islander population in the Northern Territory. It includes data on the population, housing suitability, housing tenure, language, income, education and health.

221    Commendably, the applicant by her senior counsel made one of the first matters raised on announcement of the settlement the need to program approval hearings to occur as soon as practicable, and for orders to be made, if the Court was persuaded to approve the settlement, as soon as practicable.

222    This need for acceleration also explains some of the orders concerning early payments, which I explain at [253] and following paragraphs.

223    The settlement in Street is of the same kind: see Street at [88]–[92].

224    The consequence of this, combined with the acceleration of the approval process in this proceeding, for good reason, means that there is a greater element of prediction required about the amounts, and proportions, of some of the claimed deductions from the pool of funds available for eligible claimants.

225    The parties and intervenors did their best, as I explain below in the sections about the funder’s fees, to provide the Court with information about likely figures based on a variety of scenarios in terms of how many eligible claimants are registered.

The refusal to make a differentiation order

226    The parties sought orders that would result in different levels of compensation being payable to different sections of eligible claimants. This was described as a “differentiation order”. The basic concept was that eligible claimants should receive different levels of compensation payments under the Scheme depending on their age, as a proxy for reflecting how much of their likely working life during the claim period was likely to have been affected by them receiving little or no wages. A differentiation order was proposed by the parties as a way of making the proposed settlement fair and reasonable between group members. It was contended that such a structure would be fairer than a settlement without such differentiation.

227    The parties contemplated such an order by cl 2.3.2 of the Deed, which provides:

2.3.2    For the purposes of the Differentiation Order applied for under clause 2.3.1.b, the Settlement Approval Application will seek an order that:

a.    there be no differentiation in the Eligible Claimant Payment based on the gender of the Eligible Claimants and each Party will make submissions at the hearing of the Settlement Approval Application in support of such an order; and

b.    the Court otherwise determine as it considers just any other differentiation in the Eligible Claimant Payments to be paid in respect of particular subgroups of Eligible Claimants and each Party is at liberty to make any submission to the Court that she or it wishes on this issue.

228    During the first settlement hearing, the applicant handed up an aide memoire which set out the applicant’s proposed differentiation model, the Commonwealth’s proposed differentiation model and a hybrid differentiation model. The parties also canvassed their respective models in detail in both written and oral submissions. It is sufficient to summarise the differentiation models by setting out the category descriptions proposed by each parties’ model:

(a)    The Commonwealth’s differentiation model proposed the following sub-groups:

(i)    Sub-group 1: living eligible claimants born on before 3 March 1943;

(ii)    Sub-group 2: living eligible claimants born after 3 March 1943;

(iii)    Sub-group 3: deceased eligible claimants born on before 3 March 1943; and

(iv)    Sub-group 4: deceased eligible claimants born after 3 March 1943.

(b)    The applicant’s differentiation model proposed the following categories:

(i)    Category 1: eligible claimants born on before 1 January 1930; and

(ii)    Category 2: eligible claimants born after 1 January 1930

229    As the extract from the Deed above indicates, the parties agreed that despite the historical fact of higher wages being payable to men than women during the claim period this historical discrimination should not be continued into compensation payments under the Scheme. Instead, under the Deed, male and female eligible claimants are to receive compensation at similar rates, subject to any differences imposed because of how long they worked during the claim period. The Commonwealth dealt with this issue in its first settlement approval submissions at [97]–[109] and I need not expand on those submissions here as they were common ground between the parties, and I accept them. As Ms Maud senior counsel for the Commonwealth developed orally, the historical evidence also suggested that in some of the “non-wage remuneration” situations, where people had entitlements to accommodation and keep, there was not such a stark difference in what men and women were entitled to (under the law at the time) in any event.

230    The more difficult question was the proposed differentiation based on age, designed as a proxy for how long a person was likely to have worked during the claim period, without wages or with insufficient wages.

231    The Deed provides that the Commonwealth will pay $18,000 into the settlement fund account per eligible claimant up to 10,000 eligible claimants through the lump sum and per person sum. While in oral argument senior counsel for the applicant suggested a differentiation order might introduce differences of around a few thousand dollars, the tables relied on respectively by the applicant and the Commonwealth put the potential differences at between up to $6,000 and $9,000 per eligible claimant. Comparatively, quite a large difference.

232    The proposal was to take when people were born, and calculate how much of the claim period they would have been of working age. Senior counsel for the applicant accepted this was an approximation only. The following exchange explains the challenges in straightforward language and also leads into my explanation for why I did not consider a differentiation order to be fair and reasonable as between group members:

HER HONOUR: What this compensation scheme is trying to do is to give people some redress for the wrong that was suffered by them, but not [by] calculating on a daily or yearly basis how much they were owed in wages. It’s not doing that, is it?

MR W. EDWARDS: It’s not, your Honour.

HER HONOUR: Okay.

MR W. EDWARDS: And I will come to it in due course more. But it couldn’t really, because so much of this happened such a long time ago, that there aren’t the records or the recollections to do it in a really precise way.

HER HONOUR: And that’s one of the things that the lawyers are telling the court about the problems, if this went to a trial, isn’t it?

MR W. EDWARDS: It is.

HER HONOUR: That proving how often people worked and what they did get or what they didn’t get, would have been very, very difficult, down to the details.

MR W. EDWARDS: It’s very, very hard. Because you consider, your Honour, one person who worked as a – did domestic work on a station. Now, they may have worked on five or six stations, they probably passed away, and they worked on those stations between 1940 and 1955. Very few documents from that time, very few recollections about how much people actually got in their hand at that time. And so that was one of the things that if the case would run, if we didn’t settle the case, you would have to prove those things, and proving them to the standard that the law requires is very challenging. So that is actually one of the reasons and one of the things we take into account when we consider is this a fair settlement.

And the same is also true for a man doing station work or a young person who’s doing work on a mission or in an institution. A long time ago, very few records, not many people left who can say what actually was paid. And so those are, as your Honour would have seen, in counsel’s opinion, risks. And that’s one of the reasons why a settlement of this kind is fair and reasonable, because it gives recognition to the experience that people suffered, but without the need to prove the details to the level that the law would require.

233    The Court indicated at the first settlement hearing that it was not persuaded such an order was fair and reasonable in relation to eligible claimants.

234    My basic reasoning was exposed during the hearing and is on the transcript. It is accepted the settlement agreement is not designed to reimburse workers in any precise way for the wages they lost. A sufficient evidence base to make such calculations is not available. One cannot recreate a narrative from the data and oral evidence in order to differentiate objectively between all workers in the group who are eligible claimants or their descendants, in terms of sums owed. The parties accepted the criterion of date of birth was somewhat arbitrary, and involved a number of untested and unprovable assumptions — that a person remained in the Northern Territory, that a person continued working on stations, missions or in other institutions and settlements, that a person did not subsequently get paid for their later work, and indeed that a person kept working at all.

235    In circumstances where the eligibility criteria in the Scheme do not require proof of a certain amount of underpayments, or absence of payments, for work done, do not require confirmation of absence of payment from documentary sources, and do not depend in any sense on any calculation about hours, weeks, months, years over which people were paid little or no wages, in my opinion it is not reasonable to create different levels of compensation based only on the age of a person during the claim period. It is speculative, and arbitrary.

236    A second feature of the proposed differentiation order concerned me, in terms of fairness and reasonableness between group members. During the first approval hearing, I observed that such orders:

introduce a complexity into the distribution, and they’re also capable of generating between claimants sense of resentment or unfairness. People asking, “Well, why did that family get more than us? Why are they getting more than us because they say their father worked longer? Well, we say our father worked longer even though he was born later.” Don’t you encourage that kind of conflict when you differentiate?

237    The following exchange then occurred:

MR W. EDWARDS: I would like to reflect on that. What your Honour says has a huge degree of merit. I’ve tried to be careful – and perhaps not careful enough – to not say that this is a direct reflection of working longer as distinct from, if there is to be differentiation, a reflection of length of experience in your working life under those conditions. It is not perfect; it is far from perfect. The point your Honour raises is, frankly, not one I had considered. I probably should have.

HER HONOUR: I mean, it seems to me this is another difference between the case settling now and running, because if it ran, you would be having to drill down into all those details about how long people worked and you might, at that point, if it ran and, against what might be said to be some of the odds at the moment, the applicants were successful, then people might end up getting different amounts because they’ve shown different times for which they worked and different amounts that was not paid to them, but there’s a choice now not to go down that path and therefore, as you’ve, I think quite frankly and rightly, conceded, there’s an absence of information, and there always will be, about what actually happened.

MR W. EDWARDS: Any differentiation of the kind that the parties, whether myself or my learned friend, have proposed would be based upon assumptions. It would be based upon imperfections. It would be seeking to give recognition to a concept of being, in a sense, more oppressed by the conditions, but it would necessarily do it so imperfectly. As against that, what your Honour puts to me has a huge amount of merit.

HER HONOUR: I mean, I do want all counsel to understand is I’m concerned about – the other side of the coin about the significant outreach proposals that are put forward in this proceeding and the significant information that’s going to be given to communities and people in communities and within families, extended families, one might hope are going to be talking about these things, and it seems to me there’s a real risk that offering different amounts to people based on date of birth or other categories is really likely to increase the sense of unfairness in communities, rather than decrease it.

MR W. EDWARDS: There will be unavoidable features that will mean people see different results. Namely, life and death and how big families are. Those are, in a sense, unavoidable, but what your Honour identifies, with respect, as your Honour has seen, something that I did not consider in the opinion when I was considering flat distributions.

HER HONOUR: Well, it’s not a criticism, Mr Edwards. There has been a lot to think about. So this is just something that I’m bringing as part of the settlement approval process is for the court to bring fresh eyes to some of this.

238    Having reflected carefully on the issues, at the time the relevant orders were made, I remained of the views I expressed in these passages.

239    Ultimately, and with respect fairly, senior counsel for the applicant sought instructions from the applicant, who was present in court during this discussion, about whether she continued to press for such an order. He confirmed the applicant did not. Senior counsel for the applicant informed the Court:

The second matter is I’ve taken instructions from Ms McDonald. She’s not feeling well. She has had to go home. She has confirmed she doesn’t oppose a flat distribution. That is, without differentiation. She, in fact, said she thinks it’s a good idea, and I will tell your Honour that is said straight from her.

240    The Commonwealth initially resisted removal of the differentiation order. I make no criticism of this position. Ms Maud, senior counsel for the Commonwealth, submitted that the settlement was not structured as any form of redress, but instead was an attempt by the Commonwealth to:

value and apply litigation discounts to the underlying claims, and that’s the way that the claim has been structured and that’s the way our proposed differentiation order has been structured.

241    Ms Maud patiently and carefully explained the Commonwealth’s reasoning to me. There had been a differentiation order made in Pearson. There was also a two-category distribution in Street based on the original eligible claimant’s date of birth.

242    Senior counsel for the Commonwealth indicated:

You either have to be satisfied that that is fair and reasonable, or that a differentiated model that seeks, I accept, in very broad ways to give some differentiation to the class is fair and reasonable. They are ultimately, in my submission, not very different analyses. It is still referable to the underlying claims, and so accepting that our points of differentiation are broad and can only achieve the broadest differentiation between the group, we have advanced them on that basis.

243    I remained unpersuaded about the fairness of a differentiation order. I considered the difficulty was more one of fairness than reasonableness, but there was also a reasonableness issue.

244    The fairness issue related to how the fact of different group members receiving different sums of money, with considerable variations, would be received and perceived not only by other eligible claimants but by their families and communities. That is particularly so when, as the Commonwealth submitted, the model is based on giving more money to people who were of working age for a longer period — not because there was any objective evidence they worked longer for no or little wages, but because of assumptions that they might have done so.

245    The reasonableness issue related to the arbitrariness of the assumptions that were proposed to form the basis for the differential calculations.

246    Ms Maud accepted when I put it to her that there “are vast assumptions being made” and that the considerations are arbitrary. Ultimately, Ms Maud submitted:

At the end of the day, the applicant says they’re relatively neutral as to which differentiation model is appropriate, and based on the instructions and what was said in court earlier, they seem to also be happy with a model that doesn’t provide for differentiation.

247    In respect of the Commonwealth’s position, Ms Maud submitted:

We don’t say that this settlement is only fair and reasonable if there is differentiation. We don’t say that. We do put forward a model of differentiation, but if your Honour, for the reasons that you’ve indicated, was to take the view that that’s not a fair and reasonable approach, then if you can be satisfied that an equal payment is fair and reasonable, then we say it is still open to you to approve the settlement. Your Honour can see in the middle column this is the Commonwealth’s differentiation model.

248    In Camilleri at [43], Moshinsky J referred to two factors in the evaluation of the fairness as between group members of a settlement distribution scheme, which I consider have particular relevance to this issue:

(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);

249    The proposed differentiation models of both the applicant and Commonwealth are based, in my respectful opinion, on judgment calls about how one might find a proxy for the length of time a person worked during the claim period for little or no wages. They are not based on a case that would have been advanced at trial, which of necessity would have been about actual periods of time that people worked for little or no wages, and on how much if anything they were paid and what they should have been paid.

250    In some individual cases, length of time at working age during the claim period might well correlate to how much an individual should have been paid, but was not. It is simply not possible to know with any level of reliability, on the information presently available to the Court, how many individuals fall into this category, and how many suffered losses with no such correlation. For example, individual A who was born before 3 March 1943 and lived on the same pastoral station until November 1971 and was paid wages, but not at the level they were entitled to, would receive the same level of compensation under a differentiation order as individual B who was born before 3 March 1943 and was forced to work on a mission for no wages at all and only keep for their whole working life until aged 50. In an example like this, the proxy of age might not in reality operate to deliver a more “just” result.

251    For the reasons I have explained, not only do I consider there are too many assumptions in such a method, I consider differentiation is likely to lead to dispute and debate within communities and families, and that is not conducive to obtaining the registration of as many eligible claimants as possible, nor to acceptance of the settlement as a beneficial outcome. The difference in payments might in some situations be no more than a few thousand dollars, while in others it might be many thousands. The potential strife that may be caused is not proportionate to the benefit a differentiation order seeks to confer. Proof of age for group members in this cohort is not always straightforward, and could itself cause extra distress and difficulties if proof of age is a condition that could result in higher compensation payments to both living eligible claimants and descendant eligible claimants. Further, I consider it may also result in additional time and costs in administering the Scheme.

252    For those reasons I refused to make any differentiation order.

The interim payment of $10,000 to living eligible claimants

253    While initially this proposal on behalf of the applicant met some resistance with the Commonwealth, ultimately senior counsel for the Commonwealth accepted the Court could consider such an order appropriate.

254    The Commonwealth’s concern centred on the scenario where the numbers of eligible claimants exceeded 13,000. Ms McLeod submitted that on that scenario:

this will affect the minimum payment of 10,000 per head that the applicant seeks, assuming the funder is paid their 20 per cent. If you reduce the commission or introduce a cap or disallow some other of the deductions, like the ATE insurance, there is less of an issue, in terms of that minimum payment going to class members.

255    However, as the settlement hearing progressed, it became increasingly clear that — as I have referred to above — counsel for the applicant and Commonwealth were reasonably confident that eligible claimants would number about 8,750. That led Mr Edwards to submit:

It does seem that if we are at the 6000 mark there’s no chance on either view that $10,000 wouldn’t be possible unless – and this doesn’t seem likely – there’s a enormous blow-out and you’re above the 13,000, and because the 13,000 is the actuarially assessed maximum number of living claimants and claimants with survivors, that also seems unlikely.

256    During the second approval hearing, counsel returned to this issue in more detail, armed with some of the tables and calculations that had been produced, although ultimately a set of joint tables was produced at the Court’s request as detailed above at [144].

257    I asked counsel to focus on the proposal of an order that would see an immediate interim payment of $10,000 to living eligible claimants — that is, not to spouses or descendants.

258    Mr Edwards informed the Court that his instructions were these people numbered 966 at the time of the second settlement approval hearing, in terms of registrations. He then submitted:

on the current registrations, and if the registration process follows through, as we expect, that will then roughly double, at least, because you’ve got 9000 registrations now. We think you will get 15,000. So the living people, we think, who might get a payment quick – who we want to get to payment quick – our best estimate as of today – 966 on the registration forms received today. And if those people were to receive a minimum payment very soon, that would be a very good thing, particularly noting that on – as we think – all realistic scenarios, the equal payment is going to be above 10,000. And my learned friend reminds me that whenever your Honour makes such an order, in a sense, there is a, (a) an appeal period that runs, and so they would get paid – if your Honour were to make such an order today, they would get paid come January. End of January.

259    During the hearing, I expressed no concluded view on this issue. Having reflected on the matter, I reached the conclusion that it was fair and reasonable as between group members that living eligible claimants receive, as soon as possible, a substantial portion of what they were on all the best estimates ultimately likely to receive.

260    The submission was that most of these people were in an older age group; that average life expectancy for Aboriginal and Torres Strait Islander people is less than for non-Indigenous people in Australia; and many may not be in good health. I accept that submission. There are estimated to be less than 1000 people in this category, so I saw no real likelihood of an adverse effect on sufficient funds being available for other group members.

261    Above all, it is these people who are the ones who personally suffered the wrongs for which the settlement sum is being paid. It was they who worked for little or no wages, on the claims made in this proceeding. It is members of this group who gave the preservation evidence. While I can accept that it is fair and reasonable for the settlement to include spouses and children, so as to recognise as best one can in 2024 and 2025 the value of the claims for those who have not survived, those who have survived, and have continued to live without the compensation for their labour to which they believe they were entitled, should be given some priority in the distribution. And they should be given it before any more of them, the Court hopes, pass away. For that reason the Court approved in the second tranche of orders interim payments of $10,000 to living eligible claimants.

The funder’s fees

262    This proceeding has been funded since commencement. Indeed, the evidence is that the funder brought the case to Shine. In substance that means the funder has assumed a level of responsibility for the payment of the legal costs incurred by the applicant (up to $10,520,758 (GST inclusive)), and responsibility for payment of any costs orders that might be made against her.

263    On 11 May 2021, the applicant and the funder entered into a Litigation Funding Agreement (LFA). The conditional costs agreement between Ms McDonald and Shine, signed by Ms McDonald on 10 May 2021, sets out in Recital D that the LFA was negotiated by Shine.

264    LLS (that is, the funder) was also the funder in Pearson and in Street. It was also the funder in Ellis, the Northern Territory ‘Stolen Generations’ case. The funder was experienced in this sub-set of what its submissions described as “social justice” class actions. Indeed, a memorandum provided by then-CEO of LLS Limited to the LLS Fund 1 trustee board dated 29 November 2018 regarding the investigations for this proceeding noted that “this claim will leverage from the experience of a similar case being run by LLS”.

265    The funder is not a party to the Deed. The Deed could have, but does not, make provision for payment of a fee to the funder, although any such agreement would still have been subject to Court approval.

266    Instead the Deed recognises, at cl 2.16.1, in a relatively indirect way, that the Court may order deductions from the settlement fund account in the sequence and manner approved by the Court for “any commission or other funding costs of the Litigation Funder”. The Deed then provides at cl 2.16.2:

Any deductions (including the amounts thereof) from the Settlement Fund Account as referred to in clauses 2.16.1.a to 2.16.1.d are matters to be determined and approved by the Court pursuant to sections 23 and/or 33V(2) of the FCA Act or otherwise. The Applicant, the Commonwealth and any affected parties may make submissions to the Court on what deductions are just (if not agreed in this Deed).

267    The funder sought and was granted leave to intervene in the proceeding, and was represented by junior and senior counsel at the second settlement approval hearing. The Court was much assisted by the funder’s written and oral submissions.

What the funder seeks

268    The funder seeks approval:

(a)    of a funding commission paid to it in an amount equalling 20% of the gross settlement paid by the Commonwealth under the Deed, being what the parties agreed in their covering note was the combined total of the per person sum (up to $180,000,000) and the costs sums (up to $22,000,000);

(b)    for the reimbursement for After The Event premiums in the amount of $1,045,000 for the upfront premium of $550,000 and the supplemental premium of $495,000 relating to the insurance policy taken out by it with AmTrust Europe Limited; and

(c)    of orders for the reimbursement of the legal costs the funder has already paid to Shine in the amount of $9,738,386.63.

269    The ATE policy insures the funder in relation to part of any adverse costs order in the proceeding.

270    It was common ground that a precise figure resulting from a 20% commission cannot be calculated because it depends on how much is paid out under the Scheme.

271    The funder also claims commission over the costs assessor costs and the administration costs. In relation to the administration costs, the funder’s position is that this is the amount of $6 million whereas the Commonwealth’s position is that this is the amount of $1.8 million. The covering note provided by the parties following the second settlement hearing sets out the respective positions:

The Funder considers it appropriate to assume the Administration Costs will be $6 million in light of agreed Order 12 in the draft orders sent to the Court on 16 December 2024. In accordance with the draft orders, the Commonwealth has offered (and the parties have agreed) that if there was any money remaining in the funds allocated to Administration Costs, the remaining amount may, subject to Court approval, be applied towards the Applicant’s Actual Costs of conducting the Outreach/Registration (meaning that ultimately, the full sum of $6 million for Administration costs may be paid by the Commonwealth). See also paragraph 69 of the Respondent’s Further Submissions on Settlement Application dated 9 December 2024). The Funder’s position is that consistently with the terms of the Litigation Funding Agreement, the Funder’s commission is 20% of the gross value of any money paid by the Commonwealth (including the Costs Sums) as part of the settlement. Alternatively, if the Court is minded to adopt the Commonwealth’s figure, the Funder asserts that GST must be included such that the amount for Administration Costs becomes $1,980,000.

The Commonwealth’s position is that applying surplus Administration Costs funds to the Applicant’s Actual Costs of conducting the Outreach/Registration is not something provided for in the settlement itself and is opposed to this producing a higher Funding Commission.

(Footnotes omitted.)

272    For the reasons set out below, the funding commission will be payable on the ‘per person’ settlement sum only and so it is unnecessary for the Court to decide which amount of administration costs is preferred in terms of the calculation of the funder’s commission.

The approach I have taken

273    It is common ground the Court has power to make orders of the kind contemplated by cl 2.16 of the Deed, and in the funder’s submissions, under s 33V(2) of the Federal Court Act, which provides:

(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.

274    The amici submitted and I accept these deductions can be ordered if the Court is satisfied:

the deduction of litigation funding charges from the common fund of the class members’ is that such deductions be “just”, in the sense that the funder is fairly and reasonably compensated for providing the funding which contributed to the creation of the common fund: Elliot-Carde v McDonald’s Australia Ltd (2023) 301 FCR 1 at [170] (Beach J), [423] (Lee J) and [504] (Colvin J).

275    The Full Court in Money Max at [72] explained why Court supervision of funding fees is appropriate:

Fourth, it is established that the Court’s supervision of legal costs charged to class members is appropriate (see Kelly at [324]–[348]) and we take a similar view in relation to supervision of litigation funding charges. It is appropriate that the Court exercise some oversight over litigation funding charges to class members when:

(a)    the largest single deduction from the recoveries of class members in funded class actions is usually the funding commission (or an equivalent amount under a funding equalisation order);

(b)    there is often a significant information asymmetry between the funder and the class members in relation to the costs and risks associated with the action;

(c)    at least for some claimants the only opportunity they have to recover losses suffered through alleged breaches of the law is through the funded class action; and

(d)    for small shareholders the opportunity for negotiation of the funding commission is limited or non-existent.

276    At [81] the Full Court identified the choice to be made by a funder about whether to fund a proceeding in the face of a risk that its commission, as set out in the litigation funding agreement with an applicant, might not be approved.

277    Money Max was a shareholder class action. It should also be noted the Full Court’s decision did not concern a settlement approval application but rather an earlier interlocutory application for a common fund order; namely an order requiring all group members, including those who had not signed a funding agreement, to contribute equally to the legal costs and litigation funding costs of the proceeding, including a funding commission (the rate of which was not decided by the Full Court in resolving the interlocutory application). No party submitted the nature of the proceeding affects the weight to be given to the Full Court’s obiter dicta. The dicta were in any event endorsed in Galactic at [86]–[125] (Murphy J) and [157] (Colvin J) and in Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund) v BHP Group Ltd [2019] FCAFC 107; 369 ALR 583 at [15] (Middleton and Beach JJ), and have been applied by many single justices of this Court.

278    The four factors at [72] of Money Max, concerning why Court supervision and approval of litigation funding charges is critical, can be adapted to cases such as the present one:

(a)    the largest deduction from the settlement sum, no matter what the actual sum paid by the Commonwealth is, will be the funder’s commission;

(b)    given the characteristics of group members in this proceeding, it is obvious there is an information asymmetry between group members and the funder about costs and risks associated with this proceeding, despite the notifications that have been given;

(c)    it is doubtful any Aboriginal or Torres Strait Islander worker or group of workers could have recovered anything outside this funded action and in all the time since the claim period no such proceeding has been brought; and

(d)    none of the group members were in a position to be able to negotiate the funding commissions, including the applicant.

279    The Full Court at [80] in Money Max set out a number of considerations which may be relevant to the Court’s assessment of what is “reasonable” in the circumstances of an individual case. I have had regard to those matters. In argument, the factor concerning a comparison of the funding commission with funding commissions in other Pt IVA proceedings and/or what is available or common in the market loomed particularly large, as did debates about what an appropriate return on investment was for the funder.

280    In some settlement approval decisions, these factors appear to dominate the discussion.

281    With respect to the funder’s position on this matter, these are but some of the considerations. The Court is not performing any function of assessing what is required for a funder to remain commercially viable, nor even to continue investing in class actions. These are private commercial decisions. Nor are the Court’s orders, and approval of settlement, to be treated as the mechanism through which funders can be assured of sustainable and profitable private businesses. While one can find many references in decisions of this and other courts to appropriate reward for risk, to characterise the Court’s orders as providing a reward seems respectfully somewhat incongruent with the Court’s function in doing justice according to law to group members and to respondents.

282    The funder’s submissions were also couched in this way (at [12]):

LLS submits that the involvement of litigation funders in enabling difficult, novel and complex public interest litigation to proceed should be encouraged by recognising the financial commitment made with appropriate reward for such risks. If already discounted rates are subject to further discount by the Courts, this could negatively on impact decisions to fund social justice litigation in the future.

(Footnote omitted.)

283    The Full Court in Money Max used this language at [205] to describe the kind of commission it considered appropriate:

…[a] commercially realistic but reasonable percentage…

284    This and other judicial observations have as their premise a proposition to the effect that there is a social benefit, or a social good, in commercial entities providing, through a sufficiently profitable arrangement, funding for what is sometimes labelled “social justice litigation”. That view is urged on the Court as an additional factor to the general benefit of litigation funding for class actions, aptly described by Beach J in Elliott-Carde at [103] if I may respectfully say so:

But it is not in doubt that the purpose of Pt IVA is to enhance access to justice by making some small claims economically viable to litigate, and to enhance efficiency in the administration of justice by enabling the Court to deal with common questions once and for all related claims. And it is not in doubt that commercial litigation funding has been firmly established as being conducive to the achievement of the legislative objectives of Pt IVA. And in that regard CFOs and funding equalisation orders (FEOs) are also conducive to such objectives.

285    Where the premise is that either individual claims would likely not have been brought and that neither a group proceeding nor a class action were likely without litigation funding, then it can also be accepted that (per Beach J in Elliott-Carde at [168]):

The group members’ rights should properly be understood from the bottom-up. The net value of the right is properly understood to be subject to the costs of realising the right. And a cost of realising any value from the right in such proceedings will almost always include the expense of a risk premium to secure litigation funding.

286    There are many observations about the importance of focusing on the contractual arrangements that have been made by the applicant, and in some cases other group members, and the lawyers and litigation funders. There is no doubt the Court must have regard to these arrangements. However it is for the Court to decide what is fair and just to deduct from the settlement sums otherwise payable to eligible claimants. In Galactic, in a passage with which I respectfully agree, Colvin J said at [156]–[158]:

However, the reasoning in Brewster does expose reasons for concern about using the terms agreed with some group members as the basis for an order as to payment to a funder that, in effect, will apply those terms to all group members. It follows, in my view, that little support for the making of the order sought by Galactic in the present case can be found in the fact that about one-third of the group members agreed to pay Galactic 35% of the proceeds of any settlement even if it be concluded that they were sophisticated. Nor does an assessment as to whether the proposed order was “just” depend upon some notion of a market benchmark. Whether a particular percentage for a CFO is “just” for the purposes of s 33V mostly depends upon the other factors referred to by Murphy J. Of course, it may be different in a case where more of the group members have agreed to the figure (and have done so in an informed way) or where there has been, in effect, a competitive tender for the opportunity to fund the proceedings.

Further, as to those other factors, when it comes to whether a payment out of settlement proceeds to a funder is “just” for the purposes of the exercise of the power conferred by s 33V(2), the Court recognises the important role of litigation funding in providing access to justice. It is for that reason that the Court brings to account matters of commercial reality and the need to properly reflect the nature and extent of the costs and risks taken on by the funder in the particular case: Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191 at [82] (Murphy, Gleeson and Beach JJ). However, commercial aspects of funding are to be viewed through the lens of what is reasonable in order to fulfil the purpose of providing access to justice.

It is unlikely that regard to some notion of a broader market for litigation funding will indicate a measure of the risk that has been assumed by a funder because that risk will be so dependent upon the particular circumstances that pertain to the individual proceedings. Nor will evidence of the subjective assessment that may have been undertaken by the funder at the time of entering into agreements with funded members assist. Therefore, putting to one side the case where there is, in effect, a competitive tender for the opportunity to fund the particular proceedings, in considering whether a payment out to a funder is “just” it will be necessary for the Court to form its own broad view as to the nature of that risk and I agree that reports of the kind prepared by Mr McGing will not assist in undertaking that task. In most cases, the Court will be assisted by an opinion given by independent counsel providing advice in the interests of all group members which exposes the objective circumstances which bear upon an assessment of the nature of the risks associated with bringing the proceedings. Where, as here, that advice is provided by experienced independent counsel and, as noted by Murphy J, candidly exposes all relevant matters concerning the risk that was assumed, the Court may act upon that advice in forming a view as to the nature of the risk assumed by the funder for the purposes of determining whether a CFO (or other order) is just. Of course, the funder may also wish to support the making of the order by pointing to objective aspects concerning the nature of the risk assumed.

287    In this case, no submissions were made that Ms McDonald did not understand, and did not have adequately and properly explained to her, the meaning and consequences of both the LFA and the costs agreement she signed. Despite her circumstances as set out in her outline of evidence and extracted at [377] below, the parties, interveners and the amici proceeded on the basis that a person in her position could, be held to the contractual agreements she had made, and it was appropriate for those contractual arrangements to form the basis for the orders sought about additional legal costs and the funding commission.

288    In other words, the “justness” of the orders sought was said to derive, at least in part, from the fact that this was the agreement reached between Ms McDonald and the funder on the one hand, and in relation to costs between Ms McDonald and Shine on the other. That is so even though the evidence demonstrates Shine negotiated the LFA. It is so despite the evidence of Ms McDonald and other witnesses in their preservation evidence about their own levels of literacy and education, and despite the evidence that more than 40% of Aboriginal adults, and up to 70% of Aboriginal adults in remote areas have low literacy: see affidavit of Ms Thomson on 5 September 2024 at [18].

289    That position means the Court should assume that the propositions discussed in written and oral submissions, in terms of the size of the funding commission and the size of the additional legal costs, were matters fully canvassed with Ms McDonald and sufficiently understood by her, and by the other nine group members who had signed litigation funding agreements with the funder. Ms Antzoulatos’ evidence is that those nine other group members executed litigation funding agreements as they were “potential lead applicants”. The Court should assume that all those acting for the applicant and group members discharged their professional obligations to ensure their clients understood what they were agreeing to, despite their low levels of literacy and education. That said, in supervising the payment of a commission, and the appropriate level for that commission, it may not be appropriate for the contractual obligations to the funder to be the only focus.

290    I am persuaded by aspects of the approach taken by both the Commonwealth and the amici, which focussed less on what was “fair” and “commercial” for the funder in reliance on these contractual arrangements with the applicant and the nine group members, and more on what was fair, reasonable and just in relation to the group members, including through the consideration of proportionality. This avoids the Court being drawn into too heavy a focus on protecting or advancing the private commercial interests of the funder, with a focus on calculations that go to its profit levels, based on complex contractual arrangements with litigants who have the characteristics of disadvantage identified in their preservation evidence.

291    In other words, the better focus is on the benefit secured by the applicant and group members from the existence of the funding arrangements themselves, and what, in light of that benefit, is just and reasonable for the Court to approve by way of a deduction from the settlement fund.

292    Therefore in my opinion the just and appropriate orders to be made in respect of the funder’s commission are:

(a)    that the commission should remain at 20%, being the agreed percentage in the LFA but should be calculated on the settlement sum only, being what the funder referred to as calculation on a “net” basis; and

(b)    the amount of commission recoverable should be capped at 8,750 eligible claimants being 20% of $157,500,000 which is a capped commission of $31,500,000‬.

293    The funder should also recover the ATE premiums of $1,045,000 from the settlement fund.

294    I turn to explain why I have reached those conclusions.

295    Before doing so, it is important to be reminded of the range of possible payments to the funder, on the basis of a 20% commission (on both a net and gross basis), depending on how many eligible claimants register. This allows the reader to understand not only the tremendous sums of money involved, but also the extensive variability in outcomes.

296    The joint tables and covering notes provided to the Court following the second settlement hearing include a number of scenarios which are set out above at [145].

297    I am persuaded that the following general considerations favour the conclusions I have reached.

298    I consider the funder has overemphasised the level of risk it undertook in this proceeding, and sought to diminish some facts which indicate it had a level of confidence this matter was likely to settle before trial.

299    Ultimately, after some to-ing and fro-ing in written and oral submissions, in oral submissions senior counsel for the funder accepted that the correct time for the Court to look at the level of risk assumed by the funder, objectively, was at the time the litigation funding agreement was made. Not earlier, and not when a funding rate was being considered on an “interim basis” as some of the funder’s earlier submissions suggested.

300    Therefore the correct date is 11 May 2021.

301    The funder submits it is erroneous to look only at the figures produced by a 20% commission under scenarios about the numbers of eligible claimants who register, while not considering “both the size and the complexity of the litigation which was very risky.” It is unclear to me whether a litigation funder has ever submitted that litigation it funded was neither large, nor complex, nor very risky. Those features appear inherent in the kinds of proceedings where litigation funding exists. Certainly my impression is that is what the summaries of the position by funders in most of the reported cases indicates. And without hindsight bias, it is difficult to see how accurate it would be to describe one class action proceeding as “much more risky” than another — which is the submission made by senior counsel for the funder in this proceeding when compared to Pearson. One tends to be at little more than generalities at this level of argument. To say, as the refrain in this kind of litigation appears to be, that the proceeding ‘would not have been brought without litigation funding’ demonstrates that these kinds of proceedings are inherently characterised as high risk. Otherwise, one can infer, lawyers would have no qualms about acting on a no win no fee basis. Submissions along these lines do not take the funder’s submissions very far.

302    Further, I accept the following submission made by the amici at [112]:

Thus, the 20% commission is not a “discount” in the sense of it being a reduction from the usual price or value. Instead, it was a commission which was set at the lower end of the usual scale, notwithstanding that the matter was considered riskier than Pearson, where the commission was also 20%: Conrad Affidavit 1 [65]–[67].

303    I place little weight on any comparative analysis across class actions, concerning whether commissions are increasing or decreasing, relied on by the Commonwealth and challenged by the funder. As the two sets of submissions demonstrate, one can use the numbers, and arguments about the numbers, to support either proposition. I place little weight on the Commonwealth’s submissions that the funder did not pay Shine’s invoices on time and this should count against it somehow in what the Court considers a just deduction for its commission. No doubt the circumstances surrounding the timing of the payment of invoices was factually controversial and the Court should not enter into that factual quagmire.

304    I do not find the emphasis in the First Conrad Affidavit about the attitude of the funder to funding “social justice” class actions adds much to the assessment of what level of commission is just. I accept the funder has funded several class actions to which this description has been applied. Sometimes that description can sound demeaning to the group members involved, as if they are recipients of some charity exercise, and their rights to be vindicated at law are dependent on the goodwill of funders and the legal profession, in contrast to commercial investors such as shareholders. The “social justice” label is also apt to downplay the fact that enormous sums of money will flow to the funder as a result of its investment in such a proceeding.

305    So, how has the Court identified the risk taken by the funder in this proceeding?

306    First, in terms of its risk for the applicant’s legal costs, the funder committed funding capped at $10,520,758. As the Commonwealth submits, this is very close to the sum it committed in Street ($10 million). The funder agreed to this sum having been through the proceeding in Pearson, which settled around five months before trial. The Commonwealth submitted there was no evidence the funder had agreed to provide any further funding for legal costs in this proceeding. In contrast, in Street after the cap was reached, Shine itself carried the risk of the legal costs incurred.

307    The First Conrad Affidavit describes a request for further funding from Shine on 1 October 2024 and 15 October 2024 to conduct the outreach program. The estimated costs provided by Shine for this further work was $9,448,543.76 which Mr Conrad described as “high”. Mr Conrad deposed in the First Conrad Affidavit that “LLS is continuing to discuss this request” with Shine.

308    In oral submissions at the second settlement hearing, senior counsel for the funder submitted that there was no evidence that “LLS was going to abandon further funding”. I accept the evidence shows the funder was in discussions with Shine. However, the reasons of Murphy J in Street explain that in that proceeding, which the parties have accepted has many similarities to this proceeding, the same funder did not ultimately commit further funds beyond its cap. In the covering note provided to the Court following the second approval hearing, the parties also agreed that the amount which the funder has contributed to the applicant’s legal costs was $9,738,386.63.

309    There is no clear evidentiary basis for the Court to infer the funder had decided to include further payments in legal costs as part of the risk it was taking, and certainly not at the time it entered into the funding agreement in 2021, which is accepted to be the time at which the level of risk should be assessed. To the contrary it capped its contribution and crystalised its risk in terms of the legal costs payable to Shine. What occurred in Street, in fact, is consistent with the funder taking a firm position on its capped costs payments to Shine.

310    Next, in terms of exposure to adverse costs orders, in a footnote in its reply submissions the funder criticises the Commonwealth for not adducing any evidence about its own costs. That criticism appears to have prompted Mr Barker’s second affidavit. Mr Barker deposed, in the Second Barker Affidavit, that the Commonwealth’s actual costs to the time of mediation were approximately $7,241,500. Mr Barker also deposed to his estimate of the Commonwealth’s total legal costs up to and including the initial trial (listed for March 2025): approximately $12.5 million . Mr Barker deposed they may have been lower than this.

311    The Commonwealth then set out in its submissions its estimate of likely recoverable party/party costs at the conclusion of the initial trial: approximately $8.75 million. That uses a 70% basis for the calculation of party/party costs from actual costs. The funder contends 80% is appropriate. The parties’ covering note sets out that 80% of actual costs gives a costs order of $10 million. Whichever percentage is used, there is little basis to see the risk for the funder of paying an adverse costs order after a full trial exceeding $10 million.

312    I pause here to note that these amounts are broadly commensurate with the maximum legal cost funding agreed to by the funder in its arrangement with the applicant (just over $10.5 million) and the total budget of $12,084,698 (GST inclusive) when Shine’s budgeted carry is taken into account. Care and prudence in how costs were incurred should, in my view, have allowed for these sums to cover the costs of an initial trial. Instead, there seems to have been little prudence and discipline applied by Shine to its expenditure on costs, as I explain below.

313    Ms Antzoulatos’ evidence is that at the time the applicant entered the litigation funding agreement with the funder, being 11 May 2021, the funding amount was not yet confirmed however by 23 June 2021 (less than a month later), “the budget was agreed and confirmed by LLS” (First Antzoulatos Affidavit at [139]). That budget was attached to a letter dated 23 June 2021 from the funder to Ms McDonald. Shine’s total estimated costs and disbursements for the proceeding inclusive of drafting pleadings, the book build, group member communications, drafting and responding to particulars, discovery, opt-out, preparation of lay evidence and expert evidence, mediation, preparation for trial, contested interlocutory hearings, trial and settlement approval hearing was $12,084,698 (GST inclusive) with a funding cap of $10,520,758 (GST inclusive).

314    The Commonwealth’s submission is that when the ATE insurance is taken into account (covering up to $5 million), the risk assumed by the funder in terms of an adverse costs order is around $3.75 million. On the figures I have outlined above, it might have ranged up to $5 million.

315    The funder had also decided to insure itself only for adverse costs of $5 million, and no more. Mr Conrad’s evidence (at [118] of the First Conrad Affidavit) is that the funder’s internal risk policy, at the time, required that ATE insurance be obtained on funded cases where the adverse costs exposure is greater than $150,000. The ATE declaration, signed by Mr Conrad on 28 May 2021 and exhibited to his first affidavit, describes the funder’s budgeted exposure for adverse costs in the LFA as “uncapped but best estimate at this time is $4,999,999”. There is no evidence that the funder was unable to secure a higher threshold although I accept that Mr Conrad has explained in the First Conrad Affidavit (at [120]) that there “were difficulties obtaining ATE”.

316    Therefore, at the time the litigation funding agreement was struck, the funder knew it had a fixed risk for Shine’s costs (just over $10.5 million); it had insured itself against a $5 million adverse costs order and, I find, it could reasonably expect that if the matter went to trial and the applicant was unsuccessful that there could be additional sums in adverse costs orders for which it was not insured, likely up to a maximum of another $5 million.

317    I also accept that the upfront ATE insurance premium of $550,000 plus a deductable of $375,000 formed part of the financial risks assumed by the funder at the time the ATE insurance was taken out as deposed by Mr Conrad at [123] of the First Conrad Affidavit and described by senior counsel for the funder at the second settlement hearing.

318    In summary, the financial risks of the funder were as follows:

(a)    at a maximum, a $10 million adverse cost order for the Commonwealth’s costs, $5 million of which would have been offset by the ATE insurance;

(b)    the maximum amount agreed to be invested for Shine’s legal fees of $10,520,758; and

(c)    the ATE upfront premium of $550,000 plus the $375,000 deductable for an unsuccessful outcome.

319    That means, on the funder’s preferred method of calculation, its overall financial risk could be quantified at somewhere between $15.1 million and $16.4 million. The Commonwealth took a different view and submitted that the funder’s at-risk outlay, for the purposes of calculating a return on investment, was $11,070,758.00 being the total funding cap plus the ATE upfront premium of $550,000.

320    It may well be that, on paper, the financial risk was closer to the figures given by the funder. However as I explain below, at the time the LFA was made, in my opinion the funder well understood, and had made provision for, the prospect of this proceeding settling before trial, and therefore its real risk being considerably lower. This is a matter to which I give considerable weight.

321    The LFA was signed after Pearson had settled, and after the Court had approved the settlement. That meant the funder well understood that the prospect that this kind of proceeding, with at least many of the attendant challenges being of the same nature (lapse of time, absence of documents and witnesses, legal novelty, available defence), could settle, and could settle for a significant sum in favour of group members. Indeed, the budget which formed the funding cap and described above at [312]–[313] contemplated $545,240 in legal costs attributable to a one-day “settlement approval hearing” (in addition to costs for the proceeding to go to trial).

322    Pearson settled in principle on 9 July 2019, at a time when the matter was listed for an eight-week initial trial commencing in February 2020. At the time settlement was reached there had been a total of seven reconvened mediations between September 2017 and May 2019. Discovery was complete, and most of the evidence of the applicant and 10 sample class members had been served. The State had not yet served its evidence: Pearson at [111]–[112]. At [113] Murphy J described this point as:

a point in the proceeding when the parties and their lawyers were in a position to make an informed assessment of the evidence to be adduced at trial, the strengths and weaknesses of their respective cases on both liability and quantum, and the costs likely to be incurred by proceeding to trial.

323    The Court made orders approving the Pearson settlement on 17 January 2020. The LFA in the McDonald proceeding was signed on 11 May 2021. By that stage it was over 15 months after the settlement in Pearson had been approved.

324    Indeed the funder’s confidence in that settlement can be inferred from the uncontested fact that it approached Shine about the commencement of this proceeding, not the other way around. As the amici submitted (at [114] of their written submissions):

In 2017, the Funder and Shine entered into a Costs Agreement concerning the investigation of Stolen Wages claims in States and Territories other than Queensland: Conrad Affidavit 1 [61]–[63]. Pursuant to that agreement, the Funder had ownership of all work produced from such investigations, and Shine could only make use of the work product with the Funder’s consent if the Funder confirmed it did not intend to fund consequential legal proceedings. The evidence indicates that the Funder identified the potential claim in this case as a result of its work in Pearson. That is to say, it was the Funder who took the case to Shine, not the reverse: Conrad Affidavit 1 [62]; Antzoulatos Affidavit 1 at [200].

(Footnotes omitted.)

325    In my opinion, the funder was actively looking to invest in another proceeding such as this. It is a reasonable inference that is because it had calculated that the financial risk was one worth taking, given the settlement in Pearson, and that the return it was likely to derive was worthwhile. It was not operating with a blank slate.

326    This inference is supported by the first report to the case assessment committee, annexed to the First Conrad Affidavit. The first report states:

Shine Lawyers have had extensive involvement with these proposed claims, as well as the QLD claims (in a consultant capacity) over the last three years, and they have built up a significant level of knowledge and experience, as well as valuable connections with key stakeholders and communities across the Northern Territory. They conducted a media launch around the time that the QLD action was commenced in late 2016 and have since continued to conduct a soft book build (registrations of interest).

327    For these reasons I consider at the time of the LFA the funder had high confidence this proceeding would settle. On paper its financial risk may have looked to be somewhere between $15.1 million and $16.4 million, but in practice, the funder had a substantial level of confidence those risks would not materialise.

Capping

328    As the Commonwealth and the amici submit, capping is a preferable method of maintaining proportionality between the overall settlement and the funder’s commission. In the circumstances of this proceeding, it is more reliable. The Court needs to have a level of reliability about the ultimate figures so as to assess what is fair and just. An observation about the deleterious effects on the administration of justice by the lack of certainty was made by John Dixon J in Bolitho at [1966]:

A necessary consequence of accepting this relationship between the court’s role in the proper administration of justice, when assessing what is fair and reasonable, and a fair commercial return for a funder, is that real difficulties are presented for the proper administration of justice by the ex-ante assessment of a percentage of an unknown sum to be received at an undetermined future time. The settlement sum, gross or net of costs, is uncertain until case completion, and can vary enormously. This can result in extremely wide and potentially excessive and inequitable returns on what the litigation funder actually invested or put at risk. The litigation funder and the lead plaintiff owe an overarching obligation under s 24 of the Civil Procedure Act to ensure that legal costs and all other costs incurred in connection with a group proceeding are reasonable and proportionate.

(Footnotes omitted.)

329    No different in substance are the obligations owed by the funder, the lead plaintiff and legal representatives under Part VB of the Federal Court Act, and the Federal Court Rules and Practice Notes. Similar observations were made by Murphy J in Galactic at [10].

330    In a settlement structured as this one is, with the ultimate settlement figures being unknown, I consider a cap is the most appropriate way for the Court to be reliably satisfied that the maximum amount likely to be paid to the funder by way of commission is proportionate to the investment and risk it has undertaken. The risks have been quantified by my findings above at [318].

331    Rather than impose a cap by way of a dollar figure I consider the Court should impose a cap by reference to the number of eligible claimants. This will ultimately produce a dollar figure, which can be ascertained through the parties’ tables. This again has the advantage of reliability, and enables the Court at this stage to more accurately calculate what the funder’s commission is likely to be, and therefore to assess proportionality.

332    In the Commonwealth’s further submissions, it proposed a cap in the range of $21.6 million to $28.8 million corresponding to 6,000 to 8,000 eligible claimants, but on the basis that the commission would be paid on the per person amount payable only (which is what I have referred above as the net settlement sum). Subject to the Court’s decision regarding approval of the ATE premiums, the Commonwealth also submitted that a funding commission cap of $19.6 million (corresponding to around 4,221 eligible claimants) would provide the funder with a return on investment aligned with that in Street.

333    The evidence and the parties’ submissions were highly consistent about the expected level of registrations. They and the Court also have the very recent experience in Street to draw on.

334    I consider there is a relatively high level of confidence that between 8,000–8,750 eligible claimants will be registered. At the second approval hearing these were some of the submissions made by counsel:

MS MCLEOD: ….The information we have at the moment – in Street, there were 14,000 registrations, which translated after some deduplication in around 8750 eligible claimants

…

We think 6000 to 8000 is correct, because we’ve applied the calculations that we used in Street. The evidence seems to be that they’re similar population groups, so that they’re appropriate comparisons in terms of numbers of people. There currently are – we would estimate on that calculation – around 5893 eligible claimants now, if we assume the same adjustments are made. So we’re close to 6000 now.

…

MR EDWARDS: And the Street number was 8750. The estimate at the time of Ms Antzoulatos’ first affidavit was, because the cohort is very similar in starting number, the end point was likely to be about the same. We said 6000 to 8000 in our material for a reason that buffered in, I suppose, some element of conservativism. But as my learned, Ms McLeod, points out, there are aspects of this registration process which are a little less stringent. But given – the data point, we think, is the starting number. We do maintain six to 8000 – 8750 is where we’re likely to end up.

…

MR EDWARDS: Ms Antzoulatos gave your Honour an update at paragraph 37 of what has happened, in a sense, in the last month, and these were the figures my learned friend was looking for. As at 4 November – which is the last affidavit –Shine had received 7500 registration forms. The number has increased by 1822.

….

If there are 9341 registration forms now, and the percentage converts at the rate Ms McLeod identified, yes, we are around 6000 at the moment in terms of eligible claimants.

….

But the point I’m seeking to make is that, on the basis of what has happened in the last six weeks, and where we’re up to, it does look like that final number is on track – that is, 6000 to 8000, 6000 definitely. It will get to 8000, and most likely to 8750. I hope that answers your Honour’s question.

335    Senior counsel for the funder also used the figures of 6,000–8,000:

MS FORSYTH: …. even assuming full – the full deductions sought, the group members get between 59 and 63 per cent in hand between six and 8000 registrants, which we say compares favourably to the median in class actions, which is around 47 per cent.

336    Now not all people who file registration forms may meet the criteria, even where the criteria are being flexibly applied. For that reason the raw numbers of registrations may not provide a reliable guide and may be an over-estimate.

337    Accordingly, I am comfortably satisfied on the evidence and submissions that an appropriate cap is 8,750 eligible claimants. The funder’s commission of 20% should be calculated on that figure. This will produce a commission of up to $31,500,000. I am satisfied that any higher total commission would not be fair and reasonable in the circumstances. I am also satisfied that it is fair and reasonable for the funder’s return on investment to correspond to the number of eligible claimants up to this threshold, correlating as it does to a positive and expected outcome achieved by the present proceeding.

338    I do not consider imposing a cap should have any deleterious effect on the registration process. Shine and the Administrator are not seeking to secure as many registrations as possible so as to line the pockets of the funder. That is not the purpose of the registration process and outreach program, and the flexible registration criteria. The purpose is avowedly to try and reach as many Aboriginal and Torres Strait Islander people as possible who may satisfy the eligibility criteria. A cap on the number of claimants by which the funder’s commission is to be calculated should not have any effect on the undoubtedly strenuous efforts to be undertaken to secure as many registrations as practicable by 31 August 2025.

Should the percentage of the commission be 20%?

339    I explain below that the 20% commission should not be calculated on the gross settlement sum. Nevertheless, I consider it is clearer and more certain to retain the actual percentage set out in the LFA. I accept that in this proceeding the levels of registrations are not finalised and in that sense the return to the funder remains uncertain in dollar terms — which would have remained the case on either a gross or net calculation. However, using the 20% figure as agreed in the LFA, and working with a cap on registered eligible claimants on the net settlement sum gives the Court better certainty in determining what is a fair and reasonable level of commission.

340    I consider that what the funder will receive under the calculations above is proportional to its risk in light of the circumstances I have described above about the funder’s experiences in other “stolen wages” class actions, its level of confidence that the proceeding would settle, and the level of financial risks it took in fact (see especially [318]). A deduction from the settlement sum of this amount is fair and reasonable to the group members on account of the benefit secured to them by the LFA, and the achievement of a settlement of up to $180 million.

What should the commission attach to?

341    In argument this was referred to as the distinction between a commission on the gross settlement figure and the net figure. It seems to me the better way to characterise the evaluation to be made here is to what sums, payable out of the agreed maximum of $202 million, is it just that the commission attach, so that the settlement is fair and reasonable in relation to the interests of group members. As the authorities indicate, that assessment revolves around the proposition that there has been a benefit to group members through the funding of the proceeding which has settled by the making of a common fund order. In my view the question is: what is it fair and reasonable, in exchange for that benefit, for group members to have deducted from the settlement fund otherwise available to them?

342    In the structure of the settlement, and the parties’ bargain in this proceeding, that settlement fund consists of up to $180 million. Entirely separate from that is the agreement of the Commonwealth to pay $22 million for the costs sums (Applicant’s Agreed Costs, administration costs and costs assessor’s costs).

343    Only parts of these costs sums could on any view represent part of the risk taken by the funder – that is, the applicant’s legal costs component. The administration costs and the costs assessor’s costs are not part of the risk taken by the funder at the time of the LFA, or afterwards.

344    In the funder’s reply submissions at [25], the funder sets out why the funding commission should be calculated on a gross basis. Its submission is that calculation on the gross settlement figure is appropriate for the following reasons:

(a)    20% gross calculation is the amount stipulated in the LFA between the funder and Ms McDonald;

(b)    the funder priced its commission on the basis that it would be calculated on the gross settlement sum and if it intended to fund the proceeding on a net basis, it would have “in all probability” increased the percentage in the LFA;

(c)    it is standard for a funder’s commission to be calculated on gross sums;

(d)    20% is at the bottom end of market rates, even on a gross basis;

(e)    there is “no obvious conceptual reason” advanced by the Commonwealth for preferring a net basis rather than a gross basis;

(f)    the parties reached settlement “in full knowledge” that the funder would seek a funding commission of 20% of the gross sum;

(g)    20% gross commission was advertised in the settlement notice; and

(h)    20% commission was specified in the opt-out notice pursuant to orders of Murphy J in 2022.

345    I do not accept these submissions. First, I have explained above how the costs sums is an entirely separate part of the parties’ settlement agreement. I have taken the funder’s financial risk at the time of the LFA into account, in striking both the 20% figure on $18,000 per eligible claimant (being how the settlement sum is calculated) and by approving the cap number of 8,750 eligible claimants. By this calculation, the funder will receive in my view a commission that is just and reasonable.

346    In Street at [357], Murphy J rejected the submissions of the State that it was appropriate to approve a funding commission of 15% of the settlement net of all deductions. Most of his Honour’s reasoning for that rejection concern the proposed 15% commission figure. His Honour gave two reasons why a net figure should not be used:

(c)    …Percentage funding rates are sometimes arrived at net of legal costs, but here the State takes the unusual approach that it also be net of settlement administration costs and reimbursement payments; and

(d)    the Funder did not agree to fund the proceeding on the basis of a calculation net of all deductions, nor is it a basis upon which, at least to my knowledge, a funder has ever offered to fund an Australian class action. To approve a funding commission on a basis not available in the funding market has a tendency to discourage funding and reduce access to justice.

347    In this proceeding, I take a different view. The funder will receive an appropriate return on its investment, and the proportion of the settlement sum it will receive is considerable. In my opinion there is a high level of confidence in the number of registrations reaching the cap, so there is a high level of confidence the funder will receive the full 20% on the figure of $157,500,000. The probability of the risk, in this proceeding coming as it does after Pearson in particular, that the funder would lose all its financial investment was not as high as it sought to portray.

348    The funder will receive reimbursement of $9,738,386.63 that it has paid in the applicant’s legal costs to Shine. It should not receive a 20% commission on this figure, which the parties have treated as part of the separate costs sum of $15 million. The funder’s financial risk in terms of Shine’s legal costs at the time of the LFA was, I have found, just over $10.5 million. I have already taken that financial risk into account in striking the 20% commission figure and the cap, and the return this will produce for the funder.

349    The funder will also receive reimbursement for the ATE premiums. The parties’ gross calculations did not endeavour to include the ATE payment as a separate line item over which commission is payable in any event. For the same reasons I have explained above, I have already taken the financial risk inherent in the ATE into account in striking the 20% commission figure and the cap, and the return this will produce for the funder.

350    Any difference between the $9,738,386.63 reimbursement and the $15 million the Commonwealth has agreed to pay Shine by way of party/party costs (being $5,261,613.37) should also not form part of the figure upon which the funder receives its commission. That is because the funder elected to, and bargained for, a capped costs exposure in terms of payment of the applicant’s legal costs. That cap was just over $10.5 million and the difference between the just over $9.7 million paid out by the funder and the just over $10.5 million it struck as its costs cap is already taken into account in striking the 20% commission figure and the cap, and the return this will produce for the funder.

351    The remainder of the legal costs difference is nothing to do with the funder. It represents a subsequent bargain between the Commonwealth and the applicant about what portion of her additional legal costs the Commonwealth would pay and on what basis.

352    Accordingly, the 20% commission should be calculated only on the payments made by the Commonwealth to the settlement fund, capped at 8,750 registered eligible claimants. This produces a capped settlement sum of $157,500,000, and a capped commission figure of $31,500,000.

353    In addition to this, Shine should be directed to reimburse the funder $9,738,386.63 for the costs it has paid to Shine, and a deduction from the settlement fund should also be made to reimburse the funder $1,045,000 for the ATE premiums. That makes a total receipt for the funder of up to $42,283,386.63‬‬. I consider that is just and proportionate to the inputs from the funder in this case — the level of costs funding, its exposure to adverse costs and its expenditure on ATE insurance. It is ample.

354    The fact that the structure of the payment approved by the Court does not precisely reflect the bargain struck in the funding agreement is a risk that the funder takes, and is well recognised. Indeed, the orders in Street did not reflect the bargain struck in the funding agreement, because the Court reached its own view about what was appropriate. The LFA is part of the factual matrix to be considered, but it does not govern the outcome: see Street at [263] and [385]; Bradshaw v BSA Ltd (No 2) [2022] FCA 1440 at [110].

ATE insurance

355    Mr Conrad’s evidence is that approximately half of the ATE premiums have been paid; namely $550,000 being the upfront premium. The balance ($495,000, being the supplemental premium) is payable within 10 business days of payment of some or all of the funder’s commission. I do not consider this affects the appropriateness of the ATE premiums being recovered. The whole amount of $1,045,000 must still be paid, and the funder should be reimbursed for the whole amount.

356    The Commonwealth submitted the funder should not receive the ATE premiums (at [155] of the Commonwealth’s submissions). The Commonwealth’s position in the explanatory note to the tables indicated that its position is that if the funder is to receive the ATE premium, it should only be for the upfront premium of $550,000. I accept divergent views can be found in the authorities: see on the one hand Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd (No 3) [2020] FCA 1885; 385 ALR 625 at [31]–[32] (Lee J), Perera v GetSwift Limited [2018] FCA 732; 263 FCR 1 at [194]–[195] (Lee J); Bradshaw at [161] (Bromberg J); Ghee v BT Funds Management Ltd [2023] FCA 1553 at [151] (Murphy J); Petersen Superannuation Fund Pty Ltd v Bank of Queensland Ltd (No 3) [2018] FCA 1842 at [202] (Murphy J); Court v Spotless Group Holdings Limited [2020] FCA 1730 at [96] (Murphy J). In these cases the Court has characterised a claim for a premium of this kind as double dipping, or as the cost of “defraying a component of the very risk which it contracted to accept”.

357    In contrast, other authorities have accepted it is fair and reasonable to allow a premium of this kind to be deducted from the settlement sum, generally on the basis that the assessment was concerned with the fairness and reasonableness of the overall deduction to the funder, not how it was made up. See Williamson v Sydney Olympic Part Authority & Ors [2022] NSWSC 1618 (Black J); Eckardt v Sims Ltd [2022] FCA 1609 at [40] (Wigney J); Iddles v Fonterra Aust Pty Ltd [2023] VSC 566 at [133] (Delany J); Ingram as trustee for the Ingram Superannuation Fund v Ardent Leisure Ltd (Settlement Approval) [2024] FCA 836 at [85]–[92] (Derrington J); Fordham v Commonwealth Bank of Australia [2023] FCA 1106 at [93]–[98] (O’Bryan J). As Derrington J noted in Ingram at [90], if the premium deduction were never allowed, it is likely funders would simply incorporate the cost of the premium into the funding commission calculations. Indeed, that is also the evidence of Mr Conrad in respect of this proceeding (at [125] of the First Conrad Affidavit).

358    The ATE premiums are a certain sum, and as I have explained above their purpose was to reduce the risk of what the funder might have to pay if any adverse costs order were made. The funder elected to insure itself for $5 million; in paying the ATE premiums it expended (or will expend, in relation to the supplemental premium) money to cover part of its risk in the proceeding and it is just it should recover this sum.

359    No party contended the ATE premiums should be a separate line item over which commission is payable, which would make for a form of double dipping in my view. Nevertheless, it should be recoverable by the funder. The deduction back to the funder will come out of the settlement fund, over which commission is payable. In other words, the funder ends up getting a commission of 20% on a figure ($157,500,000) out of which the ATE premiums will be paid.

Shine’s legal costs

360    Just as with the funder’s fee, the Court has a responsibility to scrutinise the proposed legal costs arrangements carefully. In considering the applications made to the Court for deductions, as the Deed contemplates, the Court is still performing a protective function in relation to group members: see Bolitho at [1572]–[1573]; Petersen at [88] (Murphy J); Webb v GetSwift Limited (No 7) [2023] FCA 90; 414 ALR 500 at [15]–[16] (Murphy J); Ingram at [15] (Derrington J); Tour v Australia and New Zealand Banking Group Ltd [2024] FCA 1513 at [8] (Beach J).

361    The Court’s general power to award costs must be exercised in a way “that promotes the overarching purpose” of the quick, inexpensive and efficient resolution of disputes according to law set out in s 37M of the Federal Court Act: Bellamy’s Australia Ltd v Basil [2019] FCAFC 147 at [24]. The same is true when the Court is considering an approval of a deduction of costs from a settlement sum, or approval of a separate payment of costs, under s 33V. See Gill v Ethicon Sàrl (No 11) [2023] FCA 229 at [7]:

Central to the Court’s duty to protect the interests of class members is judicial oversight of legal costs and disbursements. The Court must satisfy itself of the reasonableness of the amounts charged and proposed to be deducted from the settlement sum, the rationale being that the settlement power in s 33V must be interpreted and applied in promotion of the overarching purpose of civil litigation in this Court.

362    The applicant signed a costs agreement with Shine on 10 May 2021 and it is because of that costs agreement that the terms in the Deed are referred to as the applicant’s costs. The Deed reflects the parties’ agreement on some aspects of the applicant’s legal costs and the costs of the Scheme. Those sums are separate from the settlement sum.

363    The more difficult question is what sum is fair and reasonable to deduct from the settlement sum in relation to legal costs for the work undertaken and to be undertaken. This is the question the parties did not address in the Deed and instead left for the Court’s approval.

364    In making this assessment, the Court focuses on what additional amounts are fair and reasonable to be deducted from the sum available to the eligible claimants, where the legal costs were incurred for the benefit of the applicant and group members. In other words, for legal work that was reasonably expected to provide a benefit to group members, and was reasonable both as to the manner and extent of how those costs were incurred: what is fair and reasonable for the Court to approve being deducted from the pool of funds available for eligible claimants? See Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 at [148] (Murphy J); Watson & Co Superannuation Pty Ltd v Dixon Advisory Superannuation Services Ltd (Settlement Approval) [2024] FCA 386 at [190] (Thawley J).

365    With respect, and subject to some observations below which are particular to the circumstances of this proceeding, I agree with the following statement by Beach J in Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330 (at [181]):

But what is claimed for legal costs should not be disproportionate to the nature of the context, the litigation involved and the expected benefit. The Court should not approve an amount that is disproportionate. But such an assessment cannot be made on the simplistic basis that the costs claimed are high in absolute dollar terms or high as a percentage of the total recovery. In the latter case, spending $0.50 to recover an expected $1.00 may be proportionate if it is necessary to spend the $0.50. In the former case, the absolute dollar amount as a free-standing figure is an irrelevant metric. The question is to compare it with the benefit sought to be gained from the litigation. Moreover, one should be careful not to use hindsight bias. The question is the benefit reasonably expected to be achieved, not the benefit actually achieved. Proportionality looks to the expected realistic return at the time the work being charged for was performed, not the known return at a time remote from when the work was performed; at the later time, circumstances may have changed to alter the calculus, but that would not deny that the work performed and its cost was proportionate at the time it was performed. Perhaps the costs claimed can be compared with the known return, but such a comparison ought not to be confused with a true proportionality analysis. Nevertheless, any disparity with the known return may invite the question whether the costs were disproportionate, but would not sufficiently answer that question.

(Emphasis added.)

366    The parties’ bargain included an agreement by the Commonwealth to pay up to $15 million, in respect of the legal costs the applicant has incurred to Shine for the conduct of this proceeding, on a party/party basis. That amount was agreed between the parties to cover both past and future legal costs on a party/party basis.

367    In the Deed there is a definition of “Applicant’s Agreed Costs”, to which the figure of $15 million relates. That definition is:

the Applicant’s legal costs and disbursements as between party and party of the Class Action, within the meaning of Schedule 1 of the FCR, up to a maximum amount of $15,000,000 (any GST inclusive).

For the avoidance of doubt, the reference to costs and disbursements:

a)    includes the costs and disbursements of the Class Action up to the date of execution of this Deed and future costs and disbursements incurred in relation to Settlement Approval and conducting the Registration Process; and

b)    excludes any uplift component of those costs and disbursements

(Emphasis added.)

368    There is a second term used in the Deed. That is the “Applicant’s Actual Costs”. That is defined as:

the difference between the Applicant’s legal costs and disbursements of the Class Action incurred on a solicitor and own client basis and the amount paid by the Commonwealth under clause 2.13

369    In these reasons I use the term Applicant’s Actual Costs to identify this category of legal costs, being the difference between the solicitor/client costs and the party/party costs. Like the funder’s commission, the precise amount of the Applicant’s Actual Costs, or even the maximum amount, did not form part of the parties’ bargain as recorded in the Deed, being the bargain the Court is asked to approve.

370    The payment of any of the Applicant’s Actual Costs is to be by way of deduction from the settlement fund pursuant to s 33V of the Federal Court Act. The only parts of the Deed dealing with this issue are cl 2.16.1 and cl 2.16.2, as set out at [266] above.

371    There is no evidence before the Court about how the sum of $15 million for party/party legal costs was arrived at, although the sum is similar to the amount agreed with the State of Western Australia in Street: see Street at [4(b)].

372    However as I have explained above, there is detailed evidence about how the funder and Shine had previously arrived at the sum of just over $10.5 million as the capped costs the funder would pay Shine to conduct the proceeding through to the end of the initial trial and settlement approval hearing. There are about eight pages of detailed calculations, including solicitors’ costs and disbursements, covering each stage of the proceeding (exhibit VA-4 Tab 5 to the First Antzoulatos Affidavit). The total budget once Shine’s carry is accounted for was $12,084,689 (GST inclusive).

373    I accept the budget estimates in the LFA do not include the outreach program and registration process now to be conducted after the settlement. However, they include all estimates for the matter to run to trial as well as a line item for $545,240 for a settlement approval hearing, so there is still comprehensive consideration of likely legal costs included in this estimate. Due to the way the budget associated with the approximately $10.5 million agreed cap was structured, many significant categories of these estimated legal costs have not been required to be expended, because the matter has been settled, and as I have noted, the prospect of legal costs to be incurred in settlement approval was expressly provided for.

374    The sum of $15 million for the Applicant’s Agreed Costs was negotiated as part of the Deed where parties understood and contemplated there needed to be a registration process undertaken and they agreed in the Deed that Shine would undertake that process: see cll 7–9 of the Scheme. The definition of the Applicant’s Agreed Costs in the Deed explicitly contemplates that it covers future costs incurred in relation to conducting the registration process (which includes the outreach program).

375    I consider it is a reasonable inference to draw that the sum of $15 million was considered by the Commonwealth as reasonably capable of covering all of the party/party costs of Shine up to the point where, in August 2025, the registration process was closed and the Administrator took over more or less completely from Shine. It is also important to note the parties allowed a considerable sum, $6 million, for the Agreed Administrator’s Costs, so in no way did the parties contemplate the Administrator’s role would be minimal. The applicant agreed to this sum, and the Court assumes she was fully and properly advised when she did so.

376    In the Commonwealth’s letter to Shine on 29 November 2024 (exhibited to the Fourth Antzoulatos Affidavit), the Commonwealth set out its position in respect of the $15 million:

The Commonwealth also agreed to an amount of $15 million to cover party-and-party costs, which the Commonwealth regarded as a realistic estimate of what those costs, including post-settlement costs, might be. In this regard, we note that Shine’s party-and-party costs up the settlement approval hearing have been assessed at $10.74 million, leaving approximately $4.26 million for Registration and Outreach (which is reasonable).

(Emphasis added. Footnote omitted.)

377    If the Court does not approve the further payments sought by Shine as the Applicant’s Actual Costs, the applicant remains liable for those costs under the costs agreement. The applicant is an elderly Aboriginal woman living in relative poverty with her son. Ms McDonald’s outline of evidence, prepared by Shine, states:

25.    Ms McDonald will say that there was no school where she grew up and she never went to school in her life. She will say it was hard to grow up in the bush with no school.

26.    Ms McDonald will say that she can’t read or write, nothing like that. She will say that she can understand English when people talk, but she can’t read at all.

27.    Ms McDonald will say that she can understand money a little bit now, but when she was living on the stations, she knew nothing much about money. She will say she never saw money on the stations.

28.    Ms McDonald will say that she now lives at her son’s house and she could never buy a house. She will say that she has got nothing, is broke and a pensioner.

378    Although no undertaking was given, the Court has proceeded on the basis that Shine will not pursue Ms McDonald for any legal costs it contends remain payable under the costs agreement and where the Court has rejected or not included these legal costs as deductions.

Shine’s intervention

379    As I have said, all of the evidence about Shine’s legal costs was adduced through Ms Antzoulatos and other lawyers acting for the applicant, as the applicant’s evidence. There is a question mark over this approach, where Shine as a profit-making legal business in its own right, is seeking additional and considerable funds to be deducted from the settlement fund. On the other hand, strictly, the applicant is liable for these costs under the costs agreement. Nevertheless, there is tension apparent in lawyers for the applicant employed and engaged by Shine providing evidence and argument about the amounts that should be deducted from the settlement fund intended for group members and on the grounds those funds should instead be deployed to pay Shine for the costs incurred.

380    Belatedly, this tension was addressed by an intervention application by Shine itself, filed on 6 November 2024, a day prior to the first settlement hearing. However, the evidence relied on has still been adduced by the solicitor on the record for the applicant and filed on behalf of the applicant. That can strictly be explained perhaps because of the applicant’s contractual obligations under the costs agreement. Nevertheless, there is more involved in these circumstances than strict contractual obligations. There are matters of public perception and confidence. In future proceedings, in my respectful opinion, greater care and attention should be paid to the apprehensions created, especially on the part of group members, by this practice. I made this clear during the hearing to counsel who accepted the distinction, and accepted that the role of counsel for the applicant was to be seen to advance the interests of Ms McDonald and the group members, not their instructors’ financial interests.

381    In reply, Mr Edwards pointed out that the applicant and the eligible claimants (including potential eligible claimants) have an interest in making sure the registration process:

is actually carried out because the risk of it falling into a void where no one is prepared to do it, that would be catastrophic if that were to come home.

382    That may be so, but the outcome contemplated by a submission such as this would raise all sorts of professional and ethical considerations for lawyers in those circumstances.

383    Given what I have explained above, it was clearly appropriate that Shine be granted leave to intervene. It could then, and did, ably advance submissions at the second settlement hearing in support of the orders about its costs that it contended should be made. The Court is grateful to senior counsel for Shine, Mr Sulan, and his junior for the submissions they made.

Cost referee’s report

384    By orders of the Court on 16 September 2024 and 24 September 2024, Ms Elizabeth Harris was appointed pursuant to s 33ZF(1) and/or s 37P(2) and/or s 54A of the Federal Court Act and Div 28.6 of the Federal Court Rules for the purposes of conducting an inquiry and making a report to the Court stating her opinion on:

Q.1.    the reasonableness of the Applicant’s legal costs and disbursements for work done up to the date of the Approval Hearing (including costs anticipated and yet to be incurred); and

Q.2.    what proportion of those costs (excluding any uplift component) would be recoverable as costs between party and party, within the meaning of Schedule 1 of the Federal Court Rules.

385    In accordance with those orders Ms Harris provided a report to the Court on 28 November 2024. I have noted at [74]–[83] above that there are some matters in relation to which the Court seeks clarification in the report. The Court will await a proposal from the parties about how to address these matters.

386    Where the Court considers a report such as this, it has a limited role. I respectfully agree with the observations of Beach J explained in Blairgowrie (at [180]):

Generally, let me say that my role is not that of a taxing registrar or master. Further, subject to the question of proportionality, if unchallenged expert opinion is put before the Court which sets out a commercial and reasonable methodology consistent with the terms of any retainer and which demonstrates that it has been accurately and thoroughly applied to sufficient and probative source records of the solicitors, then it is no part of my function to:

(a)    reject that evidence as to whole or part without very good reason; or

(b)    apply one’s own subjective view of what the legal work is “really worth”, divorced from the reality of the commercial context within which the work was carried out and the expenses incurred.

387    Having said this, there may be circumstances where, conscious of the Court’s protective function, the Court decides not to accept an aspect of a cost referee’s report. In Street at [224] and [226] Murphy J set out the principles attending a decision not to adopt part of a referee’s report. In this proceeding, and following from submissions by the Commonwealth, I have concluded that in addition to the possible miscalculations discussed above, there is good reason for Ms Harris’ opinion not to be accepted in two limited respects. No criticism of Ms Harris’ work is intended by this conclusion. Both matters flow from issues that are unlikely to have been drawn to her attention when she completed her report under considerable time pressure.

388    A summary of Ms Harris’ report (excluding the costs of her own report) is as follows:

(a)    party/party costs assessed as allowable up to 31 October 2024 is $9,890,654.50 (GST exclusive);

(b)    party/party costs assessed as allowable from 1 November 2024 to 17 December 2024 is $795,302.00 (GST exclusive).

(c)    total party/party costs assessed as allowable up to 17 December 2024 is $11,754,552.15 (GST inclusive);

(d)    solicitor/client costs assessed as allowable up to 31 October 2024 excluding uplift is $13,128,768.85;

(e)    solicitor/client costs assessed as allowable up to 31 October 2024 including uplift is $13,764,558.59;

(f)    solicitor/client costs assessed as allowable from 1 November 2024 to 17 December 2024 is $874,832.20 (GST inclusive) (this excludes uplift which was not claimed by Shine for this period);

(g)    total solicitor/client costs assessed as allowable up to 17 December 2024 excluding uplift is $14,003,601.05 (GST inclusive); and

(h)    total solicitor/client costs assessed as allowable up to 17 December 2024 including uplift is $14,639,390.79 (GST inclusive).

389    I deal with the parties’ submissions on Ms Harris’ report below.

What Shine seeks

390    In [1] of its written submissions, Shine sets out the orders it seeks:

Pursuant to its interlocutory application dated 6 November 2024, the legal representatives of the Applicant (Shine) seek orders that the Court approve:

a)    a proposed apportionment of the Agreed Costs Component from the Settlement Sum which reimburses the Litigation Funder, LLS Fund Services Pty Ltd (ABN 51 627 975 213) for its Project Costs, provides part-payment to Shine for its costs and places the balance of the party-party costs in a controlled monies account for payment of the Applicant’s future costs (order 1);

b)    the payment of the Applicant’s Actual and Future Costs (orders 2 and 3); and

c)    a proposal for the Applicant’s Actual and Future Costs, and any commission granted to LLS, to be paid in simultaneous and equal tranches from the settlement fund (order 4).

391    In the proposed orders attached to its submissions, Shine quantifies the amounts. In terms of the $15 million the Commonwealth has agreed to pay as the Applicant’s Agreed Costs under the Deed, Shine proposes:

(a)    $9,717,951.55 is to be reimbursed to the funder, pursuant to the LFA. Shine uses the term used in the LFA, which describes these as “project costs”.

(b)    For the remaining $5,282,048.45:

(i)    $1,045,000.00 to the funder in reimbursement for the ATE premiums;

(ii)    $1,024,104.95 to Shine in part-payment of the Applicant’s Actual Costs; and

(iii)    the balance ($3,212,943.50) to be paid into an interest-accruing ‘Controlled Monies Account’ to be set up by the Administrator. All monies and interest earned to be held for payment of the “Applicant’s Future Costs” incurred in conducting the registration process in accordance with the Deed.

392    The term “Applicant’s Future Costs” is a new term and is not a defined term in the Deed. I infer from Shine’s submissions that this term is intended to cover Shine’s asserted solicitor/client costs after 18 December 2024. The problem with that term is that it ignores the defined term in the Deed – “Applicant’s Agreed Costs”, which includes future party/party costs, as assessed by the costs assessor. As I explain below, it is this mixing of categories of legal costs that leads to Shine’s proposals about its legal costs not being consistent with the Deed.

393    The settlement approval process has been undertaken in a tranched way, principally at the request of the applicant to hasten the distribution process. That may have not assisted in separating what is agreed in the Deed from what has been left for the Court to fix in its orders.

394    In proposed order 2, Shine identifies and proposes to cap its “future costs” at $8 million (GST inclusive). This is a modified estimate. Shine has reduced the costs it initially contended should be paid to it for the outreach program and registration process. Initially it contended its costs estimate for the outreach program and registration process was $9,448,543.67 (GST inclusive) (First Antzoulatos Affidavit at [130]). On this estimate for future costs, the total legal costs claimed to have been incurred, or to be incurred, by Shine would have been $24,387,039.26 (GST inclusive and inclusive of uplift). Ms Antzoulatos also deposed in her First Antzoulatos Affidavit to a “buffer” being applied to some of her calculations such that the total costs were actually estimated at $26,000,000 (see VA-3 Tab 22).

395    Subsequently, and after the first settlement hearing, Shine proposed to cap its costs for the outreach program and registration process at $8 million (GST inclusive), an amount it proposed could only be exceeded with the Court’s leave. This refinement and reduction differentiates Shine’s proposal from the applicant’s proposed orders but I did not understand, naturally, that the applicant opposed the reduction.

396    The Fourth Antzoulatos Affidavit (at [30]) explains the basis that Ms Antzoulatos has been informed of the $8 million cap and the “reductions” offered by Shine. Shine agreed it will cap fees for its law clerks, paralegals and members of its “Client Services Team” to $200 per hour (GST exclusive), and cap their daily fees at $1,600 (GST exclusive) (per person). Shine has also agreed to cap the daily rate it charges for admitted legal practitioners to $3,000 per day (GST exclusive). Shine will seek 50% of the costs for travel time — although as the amici noted in their submissions, the LFA (in schedule 5 being the standard lawyer terms between the funder and Shine) already provided for travel to be charged at 50% for flights between capital cities, so how much of a further reduction this achieves is unclear.

397    Shine then also seeks an order, apparently in addition to the orders proposed in order 1, that the Court approve a payment from the settlement fund of $3,897,334.29, including an uplift fee for the applicant’s solicitors.

398    Thus, what Shine claims in its proposed orders is a total of $22,639,390.79 for its legal costs, which is inclusive of the amount which is to be reimbursed to the funder (being the agreed amount of $9,738,386.63).

399    I do not accept Shine’s submissions. As I have observed, Shine’s proposed order 1 is not in accordance with the Deed. First, the $15 million for the “Applicant’s Agreed Costs” is expressly stipulated to be on account of party/party costs but Shine seeks the reimbursement of the whole legal costs amount paid by the funder, which I assume is on a solicitor/client or full cost basis although I note that Shine did agree to carry 25% of the legal fees during this period. It then also seeks additional sums be held in a controlled monies account and paid out to it, again apparently to cover costs on a solicitor/client basis.

400    Contrary to Shine’s proposal, the Deed does not provide for the ATE premiums to be deducted from the $15 million paid by the Commonwealth for the Applicant’s Agreed Costs, as this sum (to repeat) concerns party/party costs of the applicant. Indeed the ATE premiums seems more properly viewed as part of the “other funding costs” of the litigation funder as found in cl 2.16.1(d) of the Deed. The funder also seemed to make this submission that “reimbursement to LLS of its funding and ATE costs should be paid first to LLS from the $15 million Agreed Costs Component”.

401    As I say, these suggestions do not accord with the Deed. For that reason, I am not prepared to approve them. Ms McDonald gave her instructions for a settlement as reflected in the Deed.

The Commonwealth’s position on legal costs

402    The Commonwealth submitted that it is open for the Court to accept Ms Harris’ report, and allow some legal costs deductions from the settlement fund, save for three aspects of her opinion that the Commonwealth contends the Court should not accept. I turn to each of these matters including setting out the applicant’s position.

403    The applicant did not make any submissions against the adoption of Ms Harris’ report. At the second settlement hearing, senior counsel for the applicant submitted:

The applicant, of course, must accept that she contractually agreed to pay Shine’s rates. The applicant accepts that the group members and her benefited from the work that was done. The applicant accepts that the cost referee has said that rates are within the range charged by law firms with expertise to conduct a case like this. The applicant accepts that she and the group, therefore, could not have got the work done which benefited them by anyone else cheaper for past costs, but Issues have been raised with the referees report in relation to the rates…

Commonwealth’s argument on law clerk rates — solicitor/client costs

404    The costs agreement between Ms McDonald and Shine provided, subject to annual revision, that the hourly rate for law clerks was $325 (excluding GST). The Commonwealth summarised the rates charged by Shine as follows:

Shine has charged its Law Clerks at the following hourly rates:

(a)    $325 (GSTe) or $357.50 (GSTi) prior to 1 August 2020; and

(b)    $341 (GSTe) or $375.10 (GSTi) from 1 August 2022.

(Footnote omitted.)

405    Ms Harris’ opinion was that “the rates charged are within the range of rates charged by Australian law firms with the expertise and capacity to conduct class actions comparable to this matter” (at [49] of her report).

406    The Commonwealth submitted that the rates charged for law clerk attendances was “significantly higher” than the rates provided in the Federal Court Scale and in the New South Wales Costs Assessment Rules Committee Guidelines.

407    The Commonwealth submitted that the Guidelines provide for hourly rates on a party/party basis:

(a)    for paralegals (not admitted but holding a law degree or diploma or equivalent experience), a range of $120 – $250 (excl. GST) from 2016, and $135 – $300 (excl. GST) from May 2023; and

(b)    for ‘clerks/secretaries’ (unqualified), a range of $75 – $150 (excl. GST) from 2016, and $90 – $180 (excl. GST) from May 2023.

408    The Commonwealth submitted that the Scale provides for the following hourly rates:

(a)    attendances capable of performance by a law graduate or articled clerk for each unit of 6 minutes: $27 i.e. $270 per hour (excl. GST); and

(b)    attendances capable of performance by a clerk or paralegal – for each unit of 6 minutes: $13 i.e. $130 per hour (excl. GST).

409    The Commonwealth’s supplementary submissions provided (at [36]):

There is little evidence before the Court to justify charging Law Clerks at the rates set out in [28] above. The CRR [Ms Harris’ report] identifies that:

(a)    ‘clerical’ work was undertaken by Law Clerks and charged for, which included arranging appointments, deliveries, collation of documents and arranging travel and attendances at the various communities. The Costs Referee accepted that it was necessary for some of this work to be undertaken by Law Clerks and lawyers with knowledge of the specific requirements, but there was a proportion of this work which could have been undertaken by administrative assistants. The Costs Assessor adopted a broad-brush approach in her reductions to take this into account;

(b)    Law Clerks had some involvement with ‘searches’, ‘research’, ‘compilation of briefs to Counsel’ and ‘discovery’ (although the nature and complexity of the work undertaken is not identified in the CRR)

(c)    88.65% of the work in the group member communications/management and in-office time/group member communications and registration phase was undertaken by Law Clerks and members of the ‘New Client Team’;

(d)    Law Clerks were responsible for first drafts of subpoenas, which were settled by more senior practitioners and in some case counsel. The Costs Referee expressed the opinion that the overall time spent by Law Clerks on this task was ‘unreasonable’, and she took this into account in her global adjustment;

(e)    Law Clerks were involved in extensive planning and organisation of the Opt Out outreach program. The Costs Referee noted that there was a level of administrative work which should have been undertaken by administrative assistants, which was addressed as identified in subparagraph (a) above;

(f)    Law Clerks were recorded as undertaking 362.6 hours work (at a cost of $123,515.40) for work associated with the Dr Skyring report. This work may have included transcribing from typewritten or handwritten archival records, locating regulations, ordinances, particular archival documents and published sources, formatting the final report, formatting the footnotes, proof-reading and compiling the Annexures. Some of this work was not allowed;

(g)    Law Clerks provided assistance to Mr Box/Grant Thornton by searching for documents and drafting ‘memoranda’ (although the nature and complexity of the memoranda is not disclosed in the CRR);

(h)    Law Clerks attended the Pre-Approval Outreach Program sessions;

(i)    Law Clerks would be answering group member enquiries in the Future Costs Spreadsheet.

(Footnotes omitted.)

410    Ms Harris’ report explains that the work of law clerks claimed by Shine totalled 71,595 units being $2,722,986.80 (GST exclusive, subject to the matters noted at [74]–[83] above). They were overwhelmingly the highest charging bracket of Shine staff working on this proceeding followed next by Associates who billed 26,455.7 units being $1,651,262.70 (GST exclusive, again subject to the matters noted at [74]–[83] above).

411    The Commonwealth submitted that Ms Harris erred in the amount assessed as reasonable for the hourly rate for law clerks on a solicitor/client basis. The Commonwealth contended that the hourly rate for unqualified law clerks should be reduced by half, so that prior to 1 August 2020 the hourly rate would be $178.75 (GST inclusive) and from 1 August 2022 it would be $187.55 (GST inclusive).

412    The Commonwealth submits that if 75% of law clerks used by Shine were unqualified and those unqualified law clerks undertook 75% of the work on the file charged by law clerks then, based on the hourly rates at [404] above, the total fees charged by Shine for its law clerks would reduce by $1,123,232.06 (GST inclusive). To this figure would be applied the reduction of 6% used by Ms Harris. This results in the allowable amount for solicitor/client professional fees as reported by Ms Harris to reduce from $8,394,222.63 (GST inclusive) to $7,334,569.75 (GST inclusive).

413    In the applicant’s second settlement approval submissions (at [19.4(ii)]), the applicant submitted that the revised budget for the outreach and registration process, including Shine’s proposed cap of $8 million, takes into account the findings of Murphy J in Street regarding the rates of Shine’s law clerks by reducing those rates to $200/hour, reducing amounts charged for travel days and capping daily rates.

414    Senior counsel for Shine submitted at the second settlement hearing:

HER HONOUR: That doesn’t quite address the same question, though, does it, about whether it was appropriate to use law clerks to perform the functions that they were used for.

MR SULAN: That - - -

HER HONOUR: It deals with the rate - - -

MR SULAN: Correct.

HER HONOUR: - - - at which they were charged - - -

MR SULAN: Yes.

HER HONOUR: - - - out at.

MR SULAN: Yes, that is correct. And what I will seek to demonstrate is that this – the case before your Honour is different to Street, insofar as his Honour was considering law clerk rates. Because, in this case, your Honour has ample evidence that the law clerks were performing law functions as opposed to administrative functions. So a vast amount of the law clerk work, for example, was caught up with discovery, which is pretty standard in a large case. And so it’s very different to the facts in Street, and if the – in respect of the matters that his Honour was critical about in Street, as to the right being charged. One has to look at the tasks, and the referee does, in this report, look at it on a phased basis, or a task basis, and occasionally, say, “Well, I don’t think the law clerk should have been doing that work at this rate.” And that’s what feeds into the referee’s 6 per cent deduction, or reduction for the overall fees.

So her Honour has – the referee has engaged in an exercise which, we say, is comprehensive, considered and obviously, independent, which does seek to accommodate, in effect, the question that your Honour just put to me, and I can give your Honour some references.

415    Mr Sulan then directed the Court’s attention to [220] of Street to emphasise that in this proceeding, the outreach program and registration process of which Murphy J was critical has not yet been completed and those costs were not the costs assessed to date by Ms Harris.

416    Responsively to the Commonwealth’s criticism, the Fifth Antzoulatos Affidavit details the law clerks working on the proceeding. At VA-18 Tab 2, Ms Antzoulatos exhibits a letter from Shine to the Commonwealth dated 16 December 2024 which confirms Shine had 21 law clerks and 12 paralegals working on the proceeding. In relation to the law clerks, 16 of them were in their final or penultimate years of their law degrees, four had attained a Bachelor of Laws and were completing practical legal training and one was admitted as a solicitor but employed as a law clerk. In this regard, 76.5% of law clerks had not completed a law degree. The letter then goes on to say that “at least 34,932 units of the 71,595 units (48.79%) were worked by law clerks who were legally qualified (ie, those who had received a law degree but were not admitted).”

417    The letter at VA-18 Tab 2 then goes on to describe the work of law clerks:

Specifically, law clerks:

(a)    conducted the majority of the first pass review of the Commonwealth’s discovery (comprised 2,455 documents totalling 234,843 pages). They also reviewed the preponderance of subpoena documents;

(b)    identified the 505 documents totalling 46,503 pages served as the Applicant’s discovery;

(c)    compiled documentary materials and related memos on group member population distributions, wages, trust payments, legislation, delegated legislation and Commonwealth arbitration decisions for Mr Joseph Box’s consideration in preparing his two expert reports. This work substantially comprised conducting searches across the discovery database and other sources;

(d)    compiled the preponderance of documents used by Dr Skyring in her expert historical report and assisted Dr Skyring to format her report;

(e)    were responsible for all day-to-day communications with group members, including providing updates and completing work history questionnaires which informed the aggregate quantum report by Mr Joseph Box;

(f)    cross-checked statements in points of claim and witness statements against the documentary record;

(g)    travelled to the Northern Territory to assist counsel and solicitors in interviewing lay witnesses and sample group members. One law clerk also provided support at the Preservation of Evidence Hearing; and

(h)    are conducting the Registration Process and Outreach Program, including assisting group members to complete Registration Forms, rectifying Registration Forms, completing eligibility assessments, completing duplicate reviews, and identifying where descendant claims should be “linked” by virtue of being in respect of a common Eligible Claimant.

418    The breakdown of work billed by law clerks was as follows (see Fifth Antzoulatos Affidavit):

(a)    24,907 units billed in respect of discovery;

(b)    8,724 units billed in respect of expert evidence;

(c)    11,356 units billed in respect of group member communications;

(d)    9,542 units billed in respect of lay evidence;

(e)    528 units billed in respect of mediation;

(f)    5,406 units billed in respect of opt-out;

(g)    963 units billed in respect of pleadings;

(h)    1,149.3 units billed in respect of preliminary investigations;

(i)    2,885 units billed in respect of registration;

(j)    5,444 units billed in respect of subpoenas/notices to produce;

(k)    192 units billed in respect of approval hearing phase; and

(l)    498.7 units billed in respect of other work.

419    Ms Antzoulatos’ evidence is that Shine’s hourly rates for law clerks prior to 1 August 2022 was $325 per hour (GST exclusive) and from 1 August 2022 it was $341 (GST exclusive).

My reasoning

420    I consider that the rates Shine was charging for certain (but not all) categories of work completed by law clerks was excessive. Those categories are: group member communications, opt-out and registration totalling 19,647 units. I accept Mr Sulan’s submissions that otherwise the rest of the categories are, or are likely to be, “law functions”.

421    For these three categories however, the evidence shows that the tasks associated with these categories of work are logistical and administrative in nature: Fifth Antzoulatos Affidavit at [52]–[53]; [58]–[59]; [64]–[65]. They are not tasks which would attract a top-tier law clerk rate. As I explain below, it would have been suitable and more appropriate for this work to have been conducted by administrative officers, project officers, logistics coordinators or community engagement officers employed by local Aboriginal organisations, to the extent possible. The high fees charged for these tasks illustrate the failures and flaws in the method and approach adopted by Shine in the past.

422    That proposition seems borne out by Shine’s own concession, ahead of the second settlement hearing, that going forward it will charge law clerks at the rate of $200 per hour (GST exclusive) for the outreach program and registration process. That is, I find, a proper but belated recognition that it had overcharged for some of the work law clerks had done, and in any event had been charging at rates that were very much at the upper limit of what might be justifiable.

423    I do not accept Mr Sulan’s submissions that this overcharging is set off by the overall 6% reduction on Shine’s costs imposed by Ms Harris. That 6% reduction took into account a wide range of factors. In contrast the law clerk rate is a specific and clear example, and also occurred in Street.

424    What is the fairest and most reasonable way to protect the settlement fund from unreasonable deductions for these costs, without the Court itself engaging in speculation, or in what starts to look like a taxation exercise? I consider the Commonwealth’s approach tends to involve both these flaws.

425    A more appropriate approach is to take Shine’s now conceded rate of $200 per hour (exclusive of GST) for law clerks and apply it not only for future legal costs (as Shine proposes) but for these three past categories of legal costs for work done by law clerks. In my view this represents an application of Shine’s now more responsible concession that this administration and logistical work did not need to be done by legally qualified people (or people working to achieve their law degree and practicing certificate), and indeed going forward it is this kind of work Shine has undertaken to partner with local and regional organisations to undertake, to the extent it will make the process efficient and cost-effective. This approach would see Shine only receive a deduction from the settlement fund for the 19,647 units billed in respect of group member communications, opt-out and registration at a rate of $200 per hour (exclusive of GST).

426    The current average cost per hour for law clerks billed across the life of the matter is $380.30 (see discussion at [74]–[83] above), being 71,595 units billed at a total cost of $2,722,986.80, on the basis of Ms Harris’ report. If the 19,647 units are charged at $200/hour instead, the total law clerks fees is instead $2,368,522.44 (before GST and 6% reduction)‬. After the application of GST and the 6% reduction, the reduction to professional fees is $354,464.36.

427    I have also considered the ‘future costs’ between 1 November 2024 and 17 December 2024 and have applied the $200/hour (GST exclusive) rate for law clerks for the “Field work/Registration outreach” and “In Office Registration” components of the estimates provided at page 130 of Ms Harris’ report. These reductions are on the basis of my reasoning above. The new total for allowed ‘future’ solicitor/clients costs is $848,075.80 (GST inclusive), a reduction of $26,756.40. Ms Harris did not apply the 6% broad brush reduction to this figure, and the Court has followed this approach here.

428    Accordingly, it is just and appropriate to reduce the solicitor/client costs in the amount of $484,901.59 after applying Ms Harris’ 6% broad brush reduction. I consider that it is still appropriate to apply the broad brush reduction to costs incurred to 31 October 2024 because her consideration for applying that reduction still applies, even if the rate charged changes.

429    The Commonwealth submitted that the uplift fee is a matter for the Court but if the Court is minded to allow an uplift fee then that fee should be reduced in line with any reduced hourly rate for law clerks. I have accepted that submission below.

Commonwealth’s argument on costs of AHRC complaint — party/party costs

430    Secondly, the Commonwealth submits that the costs of the Australia Human Rights Commission complaint (AHRC complaint) were incorrectly treated as recoverable by Ms Harris on a party/party basis. The Commonwealth submits that the AHRC is a “no costs” jurisdiction and the Court’s power under s 43(1) of the Federal Court Act to award costs in a proceeding under s 46PO(1) of the AHRC Act does not extend to the costs of the AHRC complaint. Senior counsel for the applicant conceded, at the second settlement hearing, that the applicant does not press for the AHRC complaint costs to be included on a party/party basis.

431    The evidence in the Fifth Antzoulatos Affidavit was that the costs attributable to the AHRC complaint were $17,052.75 (GST inclusive).

432    I accept the Commonwealth’s submissions that the costs of the AHRC complaint should not have been included by Ms Harris as part of Shine’s party/party costs.

433    The Commonwealth does not take a position about whether the costs of the AHRC complaint properly form part of the applicant’s solicitor/client costs and whether they should be deducted from the settlement fund. I do consider they should be. Incurring these costs was an appropriate step for at least the RDA aspect of the applicant’s claim in this Court, because there may otherwise have been a debate about this Court’s jurisdiction: see s 46PO of the AHRC Act. Ms Harris included the AHRC costs in her calculations in respect of allowed solicitor/client costs.

Commonwealth’s argument on future costs from 1 November to 17 December 2024

434    Thirdly, Ms Harris assessed the work to be undertaken by Shine for the period 1 November to 17 December 2024, being what Ms Harris referred to as “future costs”, based on estimates of that work provided to Ms Harris by Shine. The Commonwealth submitted that an assessment of the actual costs incurred rather than estimates of work to be undertaken should occur and the Court should not approve payment of the costs Ms Harris assessed from 1 November to 17 December 2024. I do not accept this submission for the reasons below.

Consideration on legal costs and disbursements

Summary of my findings

435    I do not consider Shine’s proposed cost deduction orders are appropriate. I broadly agree with the Commonwealth’s submissions, save for:

(a)    one substantive submission about the “future costs” for the period between 1 November 2024 to 17 December 2024. On this issue I favour the position put by the applicant as it is more efficient in the circumstances; and

(b)    the ultimate deductibility of the costs of the AHRC complaint as part of the Applicant’s Actual Costs. As I have explained above, those costs were appropriately incurred.

436    What that means is as follows. I note again these sections assume the correctness of all Ms Harris’ calculations.

437    The parties’ bargain is that $15 million was, as a maximum, to be paid by the Commonwealth for the Applicant’s Agreed Costs being those costs and disbursements assessed to be allowable on a party/party basis to be paid in accordance with cl 2.13 of the Deed. A process was agreed by the parties, which has been followed for legal costs accrued to 31 October 2024. That is what Ms Harris reported on. As described above, Ms Harris also provided her opinion on the costs and disbursements that Shine estimated it would incur from 1 November 2024 to 17 December 2024.

438    On a party/party basis Ms Harris has assessed the applicant’s costs to 31 October 2024 as $9,890,654.50. This included an amount of $17,052.75 (GST inclusive) for the costs of the AHRC complaint. I accept the Commonwealth’s submissions and the applicant’s concession that these costs do not properly form part of the party/party costs and therefore this amount should not be included. I deal with this below.

439    Then Ms Harris also assessed the solicitor/client costs excluding uplift to 31 October 2024 as $13,128,768.85 but I deal with those separately as they do not come out of the $15 million reserved for the Applicant’s Agreed Costs. This difference comes out of the settlement fund if approved by the Court.

440    Although the Commonwealth submits the party/party costs from 1 November 2024 to 17 December 2024 were assessed on estimates only, in my opinion it would not be efficient given the amounts involved between those periods ($795,302.00 for party/party and $874,832.20 for solicitor/client) to compel the applicant and Ms Harris now to go back and formally assess them. Those amounts can be ordered on the basis of Ms Harris’ assessment, which I have generally accepted as reliable.

441    An order should be made allowing $11,737,499.40 (GST inclusive but excluding the costs of the AHRC complaint) to be paid by the Commonwealth to Shine for the Applicant’s Agreed Costs up to 17 December 2024, with a direction that Shine reimburse the funder for what the parties agree is the amount the funder has paid to Shine; namely the sum of $9,738,386.63.

442    No other amounts should be ordered to be paid by the Commonwealth for the Applicant’s Agreed Costs at the moment, because under the Deed that the $15 million sum was only intended to cover party/party costs determined in accordance with the process at cl 2.13 of the Deed. The parties need to follow the process they have agreed for the remainder of the Applicant’s Agreed Costs incurred after 17 December 2024 and if they cannot agree, return to the Court pursuant to the orders proposed by the Court.

443    In this regard, there should be some clarification of order 13 of the orders made on 14 November 2024 in respect of ‘tranche 1’ of the settlement approval. The Court is separately ordering payment of the Costs Assessor’s Costs (to the amount included in order 12 of those orders) and Administration Costs (to the amount included in order 11 of those orders) by the Commonwealth. These amounts are not deductions from the settlement fund. This accords with the processes in the Deed.

444    Further, the Court is ordering direct payment by the Commonwealth to the applicant’s solicitors of the amount at [441] above in respect of the Applicant’s Agreed Costs to 17 December 2024. This money does not need to be processed through the settlement fund account which the Deed provides is made up of the settlement sums plus interest. The settlements sums are the Lump Sum and the Per Person Sum (if applicable) which together cannot exceed $180 million in total. By cl 2.5.2 read with cll 2.16.1.a to 2.16.1.d, sums deducted from the settlement sum (and therefore paid out of the settlement sum account) are amounts the Deed has left to the Court to fix and approve. For example, under cl 2.13 the Applicant’s Agreed Costs are to be paid directly by the Commonwealth.

445    If the parties cannot agree and were to return to the Court in respect of further amounts to be paid by the Commonwealth up to $15 million for the Applicant’s Agreed Costs, the Court will assess reasonableness based on what I set out below about what the applicant and Shine are now aware of, in terms of effective and appropriate outreach and registration processes. Those sums would then be ordered to be paid by the Commonwealth to the Applicant’s solicitors directly.

446    That then leaves the $2,884,838.64 claimed for the Applicant’s Actual Costs to 17 December 2024 being the claimed difference for this period between the solicitor/client costs and party/party costs assessed by Ms Harris.

447    I am prepared to approve a deduction from the settlement fund for some of the Applicant’s Actual Costs, but as I have explained there should be a reduction for law clerks, so the order will be limited to $1,872,829.10‬ (plus uplift, dealt with elsewhere, and GST inclusive).

448    Going forward, for the Applicant’s Actual Costs from 18 December 2024, there will be no order at the moment in relation to those costs. The Court will not put in place any cap or estimate at the moment and rejects the applicant’s submissions on this. That is not to say the Court expects actual costs from 18 December 2024 to be anywhere near $8 million, especially since most of those costs will cease on and from 31 August 2025.

449    However to provide certainty to the Administrator and taking a cautious approach in case there are unforeseen legal costs during the outreach program and registration process, there will be a direction to the Administrator to hold back the sum of $8 million in the settlement fund account from distribution pending any further Court approval of the Applicant’s Actual Costs, from 18 December 2024 onwards, an approval process that should occur after August 2025 being the Registration Date, subject to any further orders.

450    Going forward, the Court will examine, with the further assistance of report(s) from Ms Harris, how faithfully and fully Shine has adhered to the undertaking it has now given, to use more logistically and culturally appropriate and cost-effective methods for the outreach program going forward. I discuss the evidence about this below.

451    I accept that the applicant and Shine did not have this information to hand prior to the second settlement hearing. That is why I am prepared to allow them most of their actual costs prior to the second settlement hearing. I am not prepared to find against them that in the past they deliberately ignored this option so as to increase their own profits by way of legal costs.

452    Now however Shine are aware there are more logistically and culturally appropriate and cost-effective methods for the outreach program going forward. After the Court prompted them on this topic, they adduced much of the evidence themselves (filed on behalf of the applicant), to their credit. Shine then also gave the undertaking, to its credit.

453    What that means is that for the Applicant’s Actual Costs going forward, Ms Harris will need to assess these, through the prism of the Court’s reasons and the evidence now adduced about more logistically and culturally appropriate and cost-effective methods for the outreach program, and incorporate that into her assessment. In this regard, the process in cl 2.13.8.b of the Deed is to be followed by the orders proposed by the Court. The Court proposes to order that the Applicant’s Actual Costs from 18 December 2024 to 31 August 2025 be assessed by Ms Harris up to the Registration Date, currently 31 August 2025. Ms Harris will also need to take into account the Court’s findings about the use of law clerks, and Shine’s concession about charging $200 per hour going forward.

454    There is an agreed process for party/party costs and it should be straightforward for that same process to be followed for the Applicant’s Actual Costs, except that deductions from the settlement fund for the Applicant’s Actual Costs are not matters to be agreed between the parties (see cl 2.16.2) and any further deductions for the Applicant’s Actual Costs incurred after 18 December 2024 will need to be approved by the Court.

455    I turn to explain those conclusions.

The method adopted by Shine in the Outreach Program and Registration Process

456    In Fordham, O’Bryan J at [67] summarised the relevant principles governing the Court’s discretion to approve legal costs and disbursements out of settlement sums:

Briefly stated, the legal costs and disbursements must be in accordance with the terms of the relevant costs agreements; they must be fair and reasonable having regard to the work undertaken; and they must be proportionate, in the sense that, at the time the work was to be performed and the costs expended, the costs were proportionate to the value of the benefit expected to be gained from the work.

457    I consider Shine adopted an unnecessarily expensive and resource intensive process for its book build program and the start of the registration process.

458    To begin with, the estimates in cl 6.4 of the costs agreement for the matter to run right through to trial ($10,623,264.69–$11,685,591.16) were not very much more than the funding cap imposed by the funder being $10,520,758. Those estimates were for “total legal fees and disbursements”. Although cl 6.5 then foreshadowed that the estimate might change, it was not until more than three years later that Ms McDonald was provided with an updated costs disclosure. In the First Antzoulatos Affidavit, Ms Antzoulatos deposed that at this time, Ms McDonald received independent legal advice from Ms Monique Cowden of counsel.

459    However, on 12 July 2024, Ms McDonald signed an updated costs disclosure which estimated total costs with an uplift fee to be $21,913,209.94 (GST inclusive). This is almost double the original estimate for the whole trial and almost double the cap under the LFA.

460    Next, Ms Harris states in her report at [73] that:

In total 131 fee earners worked on the matter, which is the largest team of any class action in which I have been involved. I excluded phases which where law clerks were principally involved, being discovery, group member communications, subpoenas. However, there were still a surprising number of fee earners working on the matter over the duration of the proceeding, with 95 fee earners involved and 33 recording less than 5 hours on the matter.

(Emphasis added.)

461    This statement is consistent with the view I have formed on the basis of all the evidence adduced by the applicant about legal costs; namely that there has been an excessive level of human resources applied to the conduct of this proceeding by Shine, and applied in a way which was not conducive to the most effective and efficient conduct of the proceeding.

462    Ms Harris expands on this at [77]–[81]:

77.    Even having regard to the size and scope of the proceeding, the number of fee earners is unusually high. The problem with a large team is that costs can increase for a number of reasons:

•    Duplication of work between fee earners

•    Work of new team members familiarising themselves with the matter. This familiarisation work also occurs where a team member has inconsistent involvement, requiring time getting up to speed with what has been happening on the matter since their previous involvement.

•    Communication is less likely to be direct giving rise to misunderstandings. It can be more difficult to share information unless there is a very structured approach to information sharing.

•    It can be more difficult to manage resources efficiently, resulting in high administrative and coordination costs.

78.    The work of those team members who recorded a low number of time entries can be of doubtful benefit to group members. A team member who is consistently working on a matter, with fewer conflicting priorities, has an increased ability to focus on the work required resulting in more effective management of tasks.

79.    In my experience, a good measure of the consistency of the team is the number of fee earners whose time represents at 70% of the total time. Here, twelve members recorded 70.49% of total time excluding time on discovery, group members communications and opt out.

80.    I have therefore looked at the consistency of the core team over time. There has been a reasonable level of consistency, albeit that some core team members have only been involved for limited periods of time.

81.    Having undertaken a broad review of the time of non-core team members, I am of the opinion that costs have been increased by reason of the large team, for the reasons I set out in this part. I take this into account in my global adjustment.

463    The number of people involved also led to tasks passing through many hands. For example, at [147] Ms Harris states, in relation to the work on subpoenas and notices to produce:

However, the level of drafting work is higher than reasonable, due to law clerks being responsible for first drafts, which were then settled by more senior practitioners, and in some instances by counsel. I accept that it was necessary for law clerks to be involved, as they were the team members undertaking the research and review of discovered documents to identify the targets and bases for subpoenas, but I am of the view that the overall time is unreasonable.

464    There are other aspects of Shine’s fees which Ms Harris considered reasonable but which were plainly only necessary because of the model used by Shine. For example, the costs of training Shine’s team members before the registration and outreach phase: see [104] of her report. The difficulty here is in the model chosen by Shine, and the failure to even consider prior to being prompted by the Court using experienced local organisations, already working within these First Nations communities, who would not have need for any “training”.

465    Likewise, even though discounted, costs of travel because the Shine staff were mostly based in Brisbane was considerable: Mr Harris’ report at [118]–[120].

466    Another example is how Shine used its own staff to assist experts. In relation to Dr Skyring:

171.    Dr Skyring’s report explains that:

At my request, the staff at Shine Lawyers have assisted me in transcribing, from typewritten or handwritten archival records, excerpts from the archives that I have quoted throughout this report. They have located regulations, ordinances, particular archival documents and published sources at my request and provided them to me. Staff at Shine Lawyers have also assisted in formatting the final report, formatting the footnotes, proof-reading and compiling the Annexures.

172.    The solicitors’ hourly rates of between $385 and $616 are significantly higher than Dr Skyring’s rate of $185.

467    Ms Harris concludes, in relation to the work of Shine solicitors and law clerks in assisting Dr Skyring (one of the experts):

174.    In my opinion, it is unreasonable for group members to bear the full cost of this work. Whilst I accept that it was necessary for someone to proof, format, footnote and reference check Dr Skyring’s report, and it appears that she did not have access to such resources, the rates charged for this work are unreasonable, with the appropriate rates being the hourly rates which would be charged by research assistants or administrative staff employed by Dr Skyring. No profit margin should attach to this work.

468    Another example was the level of legal attendance at mediation:

188.    The question is whether the number of people in attendance was reasonable. Mr Allsopp had no previous involvement in the matter and Ms Antzoulatos’ involvement had been limited, with Ms Thomson having primary responsibility for the conduct of the proceeding. Whilst both Mr Allsopp and Ms Antzoulatos bring considerable class action experience to bear, in my opinion, the group members were ably represented by Mr Edwards KC and Mr A Edwards and did not require additional assistance from Mr Allsopp.

469    I note here that Mr Allsopp is the solicitor on the record for Shine in its interlocutory application filed on 6 November 2024.

470    Ms Harris found nothing unreasonable in the amount and incurrence of counsel fees, and based on what is in her report, I respectfully agree.

471    In conclusion at [239] Ms Harris’ opinion was that reasonable legal costs and disbursements for the applicant for work done up to the approval hearing (and this includes the future costs I discuss below) are $14,639,390.79 if the uplift fee is included and exclusive of the costs of Ms Harris’ referee report which, as the applicant’s submissions for the second approval hearing set out, are to be paid from a separate account. This figure was arrived at after making what Ms Harris called at many points in her report a “global adjustment”.

472    As I have described above, the Commonwealth submitted the broad brush reduction was 6% of the actual professional fees, and I have accepted that approach. The 6% reduction is not being applied to the “future costs” allowed for the period between 1 November 2024 and 17 December 2024.

473    Ms Harris also reported on her opinion about what the party/party costs would be. She concluded they would be $10,685,956.50 (GST exclusive) inclusive of the future costs up to 17 December 2024: see [285] of the report. This excluded any uplift and the costs of Ms Harris’ report. That is close to the funder’s carry in the budget included in the letter dated 23 June 2021 which become the total capped fees agreed to by the funder (see VA-4 Tab 5 to the First Antzoulatos Affidavit).

474    As Murphy J observed in Street at [235] there is no evidence about how much staff of Shine are actually paid, or what Shine’s profit ratio is. On any view, $15 million in party/party costs for a single proceeding that settled six months before trial is a reasonable sum. Ms Harris’ report, and the funder’s cap, and the costs estimate in the LFA and the costs agreement all come in under this figure.

475    Overall, I consider Shine has not attempted to ensure that the method it adopted through the staff it employed on the matter, and how it conducted the proceeding was prudent and cost effective. It had more staff working on this matter than Ms Harris had ever seen in a class action proceeding. It ran the proceeding out of its Brisbane office which, because of the model it decided to use in securing registrations through the proceeding as it went, meant considerable travel costs, and time costs for the staff involved.

476    There is no evidence that counsel or solicitors advised Ms McDonald that she could apply for a costs capping order so as to keep the legal costs to which she (or the funder) might be exposed in an adverse costs order, or her own legal costs for which she could be liable, to reasonable and limited sums. There may have been little incentive for Shine to advise their client about a process such as this, despite the Commonwealth being the respondent and despite the consideration the Commonwealth would have needed to give such an application in its position as a model litigant. The entire proceeding has been conducted on the basis that Shine will be able to take from any settlement fund enormous amounts of money on account of its legal costs; amounts which of course have built into them a profit for Shine, over and above what it pays its lawyers and staff.

477    As the evidence in Street at [295] discloses, Shine and the funder appear to consider themselves “business partners” in this series of proceedings:

Ms Antzoulatos rejected Ms Colantonio’s suggestion that all of the substantial fees and disbursements it had incurred in the run-up to trial, and the substantial costs it would incur in any trial, should be treated as Remaining Costs. By return email the same day she said:

No we are obviously not content for everything above the funding cap to form part of Remaining Costs. There will need to be a renegotiation of the budget in particular if the matter goes to trial. As business partners, I am sure we can achieve that.

(Emphasis added.)

478    The Court is not alone in its scepticism about these proceedings being driven by a business model that may not sit as well with the best interests of First Nations peoples, and best practice when acting on behalf of First Nations peoples. In evidence are responses from the Northern Land Council (NLC) to inquiries made at the last minute by Shine, after the Court raised concerns, about whether organisations such as the land councils operating in the Northern Territory might be better placed to conduct parts of the registration processes. When asked if it would participate to assist in the registration process, the NLC and Central Land Council (CLC) responded that they are concerned about “reputational risk in working with Shine on this Proceeding, given criticism levelled at Shine, their position in communities and their known mandate”. When the evidence adduced after the last minute inquiries is taken into account, the overall approach of Shine to deploying very large numbers of people, using law clerks liberally for matters that could have been done by staff who were not legally trained, and accumulating high amounts of legal costs is not one which is easily described as fair and reasonable in relation to the interests of group members.

The uplift fee

479    Ms McDonald agreed to pay an uplift fee; and this is set out in cl 5.5 of the costs agreement:

As consideration for incurring the Remaining Costs for Project Investigation and Remaining Legal Costs on a speculative basis, if there is a Successful Outcome, Shine will also charge You an Uplift Fee of 25% of the total Remaining Costs for Project Investigation and total Remaining Legal Costs (excluding GST).

480    Ms Harris assessed the uplift fee on a deferral of Shine’s professional fees of $2,311,962.68 (GST exclusive) out of the total allowed solicitor/client fees of $7,631,111.48 (GST exclusive). The applicant submitted that this amounted to a deferral of 30% of Shine’s fees. I agree with that submission. Shine sought a deduction for its uplift fee. Ms Harris assessed that in the amount of $635,789.74 (GST inclusive).

481    I accept that it is appropriate for the uplift fee to be deducted from the settlement fund. Shine did carry a considerable proportion of the Applicant’s Actual Costs, however I have accepted that the allowed solicitor/client costs assessed by Ms Harris should be reduced on account of the rates charged by Shine for law clerks. The Commonwealth submitted (at [32(c)] of the Commonwealth’s further submissions) that uplift should be reduced in line with any reduced hourly rate for law clerks. I have not accepted the Commonwealth’s approach on law clerks, but have reduced the rate to $200 per hour for past costs in relation to the three categories identified in my reasoning above and two categories of costs estimates for the period 1 November 2024 to 17 December 2024. Accordingly, the allowed solicitor/client professional fees are $7,297,914.98 (GST exclusive) with Shine’s carry being $1,978,766.18‬. The 25% uplift fee on that carry is $544,160.70 (GST inclusive). That is the amount of uplift that I approve to be deducted from the settlement fund.

482    By the point of the second settlement hearing, the evidence was that Shine will not charge an uplift fee on any of the outreach program and registration process work (see [29] of Fourth Antzoulatos Affidavit). The applicant’s second settlement approval submissions indicated that the applicant’s understanding was that Shine will not charge an uplift fee on any work after 30 September 2024 (at [11]).

483    As counsel for Shine submitted, there was little if any adverse comment from other parties or the funder about Shine’s invocation of that clause in light of the carry of fees by Shine throughout the proceeding.

484    I accept there was no real debate at the Bar table about it being reasonable for an uplift fee to form part of the deductions from the settlement fund. It was Ms Harris in her expert report who suggested it may not be recoverable because there had not been proper disclosure of counsel’s fees in the costs agreement with Ms McDonald, which in Ms Harris’ opinion could render the costs agreement void: see Ms Harris’ report at [66]–[70].

485    Different approaches have been taken to consequences of non-disclosure in fee agreements and Ms Harris discusses these in her report at [65]–[68]. I note in particular the detailed and careful analysis by Beach J in Wills v Woolworths Group Ltd [2022] FCA 1545, and his Honour’s reasoning about why non-disclosure would not preclude recovery of an uplift fee. That reasoning is persuasive, with respect.

486    Further, in this case, the “assumed charge-out rates per hour” of counsel were purportedly disclosed to the applicant in the budget attached to a letter to Ms McDonald from the funder dated 23 June 2021 (exhibited to the First Antzoulatos Affidavit at VA-4 Tab 5), the total in the budget (less Shine’s 25% carry) which was to form the funding cap for the proceedings at Schedule 1 of the LFA. The budget also estimated counsels’ fees at $2,334,250 for steps including the preparation of evidence, registration and class closure, mediation, trial (including preparation), expert witnesses and case management. Ms Antzoulatos describes the budget as a “further updated costs disclosure”. There is a space at the bottom of the cover letter for Ms McDonald to sign the letter, presumably to acknowledge the contents and also for Shine to sign the letter. Neither Ms McDonald nor Shine have signed the letter. I find that it is evident that Shine is in receipt of the letter because it is exhibited to Ms Antzoulatos’ affidavit. In relation to Ms McDonald, there is no evidence of how she received this letter nor how the funding cap of $10,520,758 was explained to her or that the total budget prepared by Shine (inclusive of Shine’s 25% carry) was $12,084,689 (GST inclusive).

487    Shine submits that the applicant would not have made a different decision if there had been proper disclosure of counsels’ fees in the costs agreement, and in any event the applicant supports payment to Shine of the uplift fee in the applicant’s second settlement approval submissions at [12]. The Court assumes the latter part of this submission was made on instructions, and there is no basis not to accept it.

488    I accept it is unlikely the applicant would have made a different decision about whether to enter into a costs agreement (and agree to an uplift fee) if counsels’ fees had been properly disclosed. I make that finding for a different reason to the one advanced by Shine.

489    I remain sceptical about what level of detail given to Ms McDonald about these agreements, their defaults, nuances and consequences. There is no evidence at all about this. However, I do have the transcript of the preservation of evidence hearing before Murphy J and the outline of evidence of Ms McDonald about her having no real education and not being literate in English. Further, the parties’ submissions emphasise the disadvantages suffered by group members, including Ms McDonald, which are not consistent with individuals with these attributes being able to understand in any detailed sense, let alone contradict in any negotiation sense, complex agreements written in a language they cannot read.

490    The Court should assume counsel and solicitors for the applicant have complied with their professional duties to ensure their client understands the legal obligations being imposed on her. Especially since she does so as a representative party. There are of course a number of ways to fulfill these obligations when dealing with clients in the position of Ms McDonald. It would be wrong for the Court to infer non-compliance with any of these professional obligations.

491    Therefore the question posed by the authorities is, in the particular circumstances of this case, an artificial one. It may not be so for a sophisticated lead plaintiff who is an investor in a shareholder class action. But it is entirely artificial here and I do not propose to engage in an artificial exercise. I find Ms McDonald was likely to have signed whatever agreement she was assured by her lawyers was in the best interests of her being able to pursue this claim on her own behalf and on behalf of group members. Disclosure or non-disclosure of specific aspects of the costs payable was not likely to have made a difference to her, because I find it is unlikely Ms McDonald had detailed comprehension of the level of detail in the costs agreement or LFA.

492    That is also why arguments that invoke the strict terms of these agreements are not the most persuasive arguments on fairness and reasonableness in a proceeding such as this one. I do not consider that position involves the Court being unduly paternalistic, because there was no countervailing evidence to Ms McDonald’s preservation evidence and her outline of evidence about her literacy levels to suggest a detailed appreciation by Ms McDonald of the nuances and consequences of either the LFA or the costs agreement. As part of its protective function, the Court should be realistic in the approach it takes to issues about understanding legal agreements.

493    I accept the basic point advanced by Shine that the uplift fee is a reasonable return for Shine carrying additional reasonable legal costs owed to it.

Costs from 1 November 2024 to 17 December 2024 — the registration process and ‘outreach program’

494    In her report, Ms Harris considered the reasonableness of estimates given to her by Shine for “future work”, between 1 November and 17 December 2024. This is a period after the settlement was announced and essentially during the settlement approval hearing process, but also including some registration and outreach work.

495    The Commonwealth submitted that as Ms Harris assessed the costs between 1 November and 17 December 2024 on the basis of estimates, the Court should not approve these costs until Ms Harris assessed the actual costs incurred for this period.

496    I have decided not to accept this submission. I do not consider it would be efficient given the amounts involved between those periods ($795,302 assessed for party/party and $874,832.2 assessed for solicitor/client) to compel the applicant and Ms Harris to go back and formally assess them. In their written submissions, the amici made a similar point about false economies and accruing additional legal costs unnecessarily. That is what I consider likely to occur here if Shine have to undertake a costs amendment process with Ms Harris.

Applicant’s solicitor/client costs incurred to 17 December 2024

Law clerks

497    Shine had law clerks doing work that could easily have been done by non-legally qualified people, as Ms Harris identified from [105]–[115] of her report. This submission was also made by both the Commonwealth and the amici. Shine made a limited concession about this by adjusting the rate for future work by bringing it down to $200 per hour for the outreach program and registration process.

In relation to the use of law clerks for planning and organisation of the opt-out outreach program (conducted pursuant to orders made in September 2021 and February 2022), the amici submitted (at [49]–[50]):

49.    This phase of outreach is said by the Costs Referee to have included extensive planning and organisation “which was necessarily undertaken by law clerks with input from solicitors, given the complexities of the logistics”, and included “extensive costs” for travelling to various communities: [154]. We do not agree that logistical complexity requires the involvement of law clerks or solicitors, as opposed to administrative assistants or others without legal qualifications. There is nothing inherent in the completion, or studying, of a law degree which equips a person to better deal with complex logistics. While solicitors would have been required to participate in planning, including to ensure the plans adequately facilitated the effective provision of legal advice to Class Members, we consider this is an area where there could have been greater costs savings.

50.    In particular, we consider it is a reasonable assumption that local knowledge and/or experience in planning remote travel and consultation with First Nations communities would have held greater significance and value. Without such knowledge or experience, it is not clear why the hourly rate for law clerks should have exceeded the rate that could reasonably have been charged for a staff member without legal qualifications, such as an administrative assistant.

498    I accept the amici’s submissions.

499    The most appropriate way to address this is to apply Shine’s concession about the $200 rate going forward to the three categories of law clerk time units I have identified at [419] above. This sufficiently recognises that there could and should have been greater costs savings in this area.

Applicant’s party/party costs incurred to 17 December 2024

500    I accept also the submission made that the costs of the AHRC complaint should not be recoverable on a party/party basis: see Commonwealth’s further submissions at [44]–[49]. As set out above, Ms Antzoulatos deposed that the costs of the AHRC complaint totalled $17,052.75 (GST inclusive). Ultimately, both parties agreed that the costs of the AHRC complaint are not recoverable on a party/party basis. The Court agrees. Accordingly, the amount assessed by Ms Harris to 17 December 2024 for party/party costs should be reduced to $11,737,499.40 (GST inclusive).

Conclusion on my approach to the Applicant’s Agreed Costs and the Applicant’s Actual Costs to 17 December 2024

501    I now pick back up the terminology of the Deed.

502    As set out above, I consider that the Applicant’s Agreed Costs to 17 December 2024 are $11,737,499.40 (GST inclusive) — calculated on the basis of the amount assessed as allowable by Ms Harris on a party/party basis of $11,754,552.15 (GST inclusive) less the AHRC complaint costs of $17,052.75 (GST inclusive).

503    On my approach to the rates charged by law clerks, the applicant’s solicitor/client costs to 17 December 2024 are $14,154,489.20 (GST inclusive and inclusive of uplift). Therefore, the Applicant’s Actual Costs (being the difference between the applicant’s legal costs and disbursements incurred on a solicitor/client basis and the amount paid by the Commonwealth for the Applicant’s Agreed Costs) is $2,416,989.80 (GST inclusive). I approve a deduction in this amount from the settlement fund.

Future costs from 18 December to the Registration Date (31 August 2025)

The $8 million cap proposed by Shine

504    The outreach program is governed by the Court’s orders of 16 September 2024.

505    Shine’s written submissions (at [9(c)]) contend that:

Third, Shine has resolved to fund the necessary future work required in respect of the outreach and registration program. The cost of this work is not insignificant – capped at $8 million (inclusive of GST). Shine does not intend to charge an uplift fee in respect of the outreach and registration program.

506    In Caason at [148], Murphy J said:

Class actions are to be conducted for the benefit of the applicants and class members rather than for service providers such as lawyers (or funders) and the costs should be proportionate. … I consider the appropriate question is the benefit which the solicitors reasonably expected the applicants and class members would achieve not the benefit they actually achieved.

507    I agree with that statement. It is consistent with the approaches I have extracted at [365] and [456] above.

508    The Fourth Antzoulatos Affidavit indicates that Shine is prepared to cap its costs for the outreach program and registration process at $8 million (GST inclusive). At this time, the Court will not make a decision about the cap proposed by Shine or the reasonableness of legal costs and disbursements proposed to be incurred by Shine in respect of the conduct of the outreach program and registration process from 18 December 2024 onwards and to accommodate approval of a further sum. The sum sought is large and is only an estimate.

509    However, to provide certainty to the Administrator, the Court will direct the Administrator to hold back, in a way it considers appropriate, the sum of $8 million which is to be quarantined from distribution pending further approval by the Court of any of the Applicant’s Actual Costs incurred between 18 December 2024 and 31 August 2025. The Court notes that, following the Court’s proposed orders today, there is still $3,262,500.60 available from the Applicant’s Agreed Costs for party/party costs incurred from 18 December 2024. That is a significant sum of money available to the applicant and her solicitors, Shine. If there is agreement between the applicant and Commonwealth in respect of the sum agreed to be paid from this $3,262,500.60 as the Applicant’s Agreed Costs for party/party costs incurred from 18 December 2024, that sum can be paid by the Commonwealth to Shine without further order until the maximum of $15 million is reached.

510    The Court’s proposed orders provide that as soon as practicable after the Registration Date, the parties and Shine are to file a single document of no more than 10 pages which addresses any remaining part of the Applicant’s Agreed Costs of $15 million about which there is disagreement, any sums the parties and Shine agree are to be deducted from the settlement fund in relation to the Applicant’s Actual Costs and any sums about which there is disagreement about in relation to the Applicant’s Agreed Costs.

511    Once this document is filed, the Court will determine amounts payable in respect of these items. After this determination, the parties and interveners are to file with the Court proposed orders covering the timing and sequence of deductions from the settlement fund as well as the timing and sequence of distributions to eligible claimants. In other words the Court will first make a determination on what legal costs payments are approved, and separately and subsequently, when and how they can be deducted from the settlement fund.

512    The process the Court proposes is staged, but it does contemplate Shine will have further legal costs approved. It may not get all it is asking for, but no decision is being made at this point. I accept Ms Antzoulatos’ evidence that throughout the outreach and registration process, group members “often ask questions about the class action, the history of the proceedings or about the settlement”. I also accept the amici’s submission (at [46]) that “the largest number of registrations to date occurred during the period in which the Opt-Out Outreach Program was conducted” which indicates the importance of the on-country component of the registration process through the outreach program.

513    The Court accepts the outreach and registration process currently underway is necessary and appropriate in the circumstances of this proceeding. The Commonwealth and the amici did not dispute this. Where the debate arises is in the manner and method employed by Shine. In respect of the outreach program, the Commonwealth submitted (at [62]–[63] of the Commonwealth’s further submissions):

62.    The purpose of the program is to maximise the number of Group Members who register and are able to participate in the settlement as Eligible Claimants. However, there is a balance to be struck between designing a registration and outreach program that will maximise the ultimate number of Eligible Claimants, and ensuring that the program is conducted as efficiently and cost-effectively as possible so as to minimise the costs of the program. To the extent that the costs of the program exceed the balance of the $15 million agreed to be paid by the Commonwealth in respect of the Applicant’s Agreed costs after deduction of the first tranche of the Applicant’s party-party costs, the costs will be deducted from the Settlement Fund Account and therefore reduce the amount available for distribution to Eligible Claimants.

63.    Shine contends that it cannot effectively conduct the outreach and registration program for less than $8 million. That is a very significant amount. Even capping the cost of the outreach and registration program at $8 million will likely result in a deduction of around $4.75 million from the Settlement Fund Account, which is a significant reduction in the amount that would otherwise be available to pay to Eligible Claimants.

(Footnotes omitted.)

514    I accept Ms Antzoulatos’ evidence that having Shine team members on-country with the Shine registration portal allows review of registrations “in real time” (Fourth Antzoulatos Affidavit at [17]). This is a benefit to potential eligible claimants.

515    At this stage in the registration process, where many eligible claimants are registered, and others are likely to be aware they need to register, the need for legal advice should reduce and the need for practical, culturally appropriate assistance will increase. That in turn supports the use of a refined method and model for the remainder of the outreach program, a method and model that relies more on local and regional Aboriginal organisations, and less on lawyers and law clerks from the city.

The evidence about alternative models of outreach and registration

516    Shine elected to plan what I consider was the most expensive way that the outreach and registration process and the book build could have been undertaken. Many of Ms Harris’ observations in her report bear this out.

517    There is no evidence Shine investigated whether resources might be available within the First Nations communities where group members live, or regionally within parts of the Northern Territory, to engage with group members. Indeed, the letter from Ms Antzoulatos to Ms Harris dated 24 November 2024 at Annexure G to the report of Ms Harris describes the following work in relation to the settlement outreach program (at [33]–[34]):

Significant work was required to identify towns and communities in the Northern Territory that should be visited as part of the Settlement Outreach Program, including conducting extensive research to identify the populations of Aboriginal and Torres Strait Islander communities in the Northern Territory (as it was considered that all communities with populations greater than 50 people should be visited).

Once the locations were identified, team members were required to plan the logistics of travelling to such rural and remote locations across the Northern Territory, which includes with consideration of workplace health and safety team member matters (i.e. ensuring a sufficient number of drivers, over the age of 25 (due to car hire insurance requirements) are available to manage driver fatigue). In addition, complexities faced by our planning team include weather conditions, Sorry Business, community entry requirements, cultural celebrations, illness, transience of community members, and remoteness of communities throughout the vast Northern Territory landscape.

518    Shine adopted this model and method without any apparent reflection on whether group members might be registered more quickly, efficiently and effectively if they were being approached by organisations and people they were already familiar with, organisations staffed by people who work with their communities and in whom group members may already have a level of trust. The organisation and logistical requirements described above such as the “significant” work undertaken to identify towns and communities and “extensive research” about population sizes in communities may have been unnecessary, or significantly reduced had Shine partnered or collaborated at a much earlier stage in the proceeding with local organisations with that existing knowledge and expertise.

519    The enormous amounts of money Shine contends are required to conduct this process could have been injected, as disbursements, into First Nations communities and the regional organisations that serve them. These organisations have well-established expertise in serving these communities.

520    This is one of the principal reasons that the “social justice” refrain through the material rang somewhat hollow.

521    The Commonwealth is not immune from criticism. The National Indigenous Australians Agency (NIAA) is the agency instructing the Commonwealth’s solicitors (see affidavit of Marcella Bievenue on 29 October 2021). The NIAA’s purpose is described on its website:

The National Indigenous Australians Agency (NIAA) works in genuine partnership to enable the self-determination and aspirations of First Nations communities. We lead and influence change across government to ensure Aboriginal and Torres Strait Islander peoples have a say in the decisions that affect them.

522    Yet at no time is it apparent from the evidence that the NIAA suggested using the networks it has throughout the Northern Territory to assist the applicant and Shine, really Shine, to develop a registration process that was best practice for First Nations communities, was community driven, and would return at least some of the remarkably large amounts of costs in this proceeding to those communities.

523    Rather, the Commonwealth’s position, is reflected in its letter to Shine on 29 November 2024, following the first approval hearing (exhibited to the Fourth Antzoulatos Affidavit):

Third, it was not part of the settlement reached (and approved) that the Commonwealth would undertake the Registration Process or Outreach Program. Like all government agencies, the NIAA receives specified funding and resources to undertake its specified functions. It does not currently have capacity or available resources to assist with Outreach or Registration (in the way indicated by Shine), even if such activities fell within its functions. Further, given approved funds for the settlement have been used, there is no approved funding available to increase the NIAA’s resources to conduct or support the Outreach Program and Registration Process. In any event (and as noted), the settlement provides a reasonable amount for Shine to undertake Registration and Outreach. It is not an answer to Shine’s high costs problem to seek the expenditure of further public money (through use of the NIAA). As indicated in our letter of 22 November 2024, Shine should explore other potential costs savings to ensure the costs of Registration and Outreach are reasonable.

524    Ultimately, the Commonwealth noted (at [9] of its letter on 29 November 2024) that the NIAA can assist by:

a.    answering additional enquiries that it receives about the class action and directing those who ask about the class action to Shine, and

b.    advising those who ask of the dates and times that Shine intends to be in their community (provided that information is provided to the NIAA with time enough to share with people who ask), and

c.    providing wording to service providers and other organisations in the relevant communities so that they are also encouraged to direct inquiries about the class action to Shine.

525    At the first settlement hearing when the Court raised the potential use of local organisations, there was a flurry of activity from the parties. The funder announced that it would adduce evidence of an alternative pathway:

MS FORSYTH: So that was the point about notification. The point about outreach – I say outreach. Outreach is essentially the dispute which your Honour may hear in some more detail which is Shine’s costs exceeding the 15 million. Now, your Honour will have undoubtedly seen in our written materials that LLS, who’s the funder, has already indicated that it has concerns about those costs, and it’s still considering and discussing what it will fund once the budget is expended. But what it has done – and we haven’t put on evidence about this but we have circulated to our learned friends and I will provide a copy to the court – is it has reached out to some local firms to see what they could do to assist in a more cost effective way along with some local knowledge and experience.

And we do have a capability statement from a firm called Hutton McCarthy which I will provide to the court. We understand that what it – it’s really so that your Honour is aware of other options, other rates, really matters that potentially could assist in the consideration of the reasonableness of those costs and to indicate to your Honour also that as the funder, there is certainly an active intention to encourage those costs to come down. So we wanted to put that before your Honour just - - -

…

MS FORSYTH: So I just wanted to bring that to your Honour’s attention. We’ve been actively trying to assist and I will just put that before the court.

MR W. EDWARDS: I should add - - -

HER HONOUR: Well, I mean, it’s not really before the court.

MR W. EDWARDS: I’m sorry, your Honour. I should just identify I just need to reserve my position on that tender. I’m sure your Honour will take it into account in due course, but I am conscious that the firm has made an application to intervene, which presumably this would go to. In a sense, it’s their issue, not my issue, but it probably can’t be dealt with further in the absence of that application being determined.

HER HONOUR: I think that’s probably right and so, Ms Forsyth, what that will give your instructors an opportunity to do is to put this in an affidavit and annex it.

That would be helpful.

MS FORSYTH: And – certainly.

526    That evidence was not ultimately adduced.

527    The Commonwealth also raised, in its letter to Shine on 22 November 2024 (annexed to the Second Barker Affidavit) concerns about the “very high” estimated costs of Shine conducting the outreach and registration process and noted costs savings could be achieved:

Shine proposes to use 2 solicitors and 6 law clerks or paralegals working on average of eight billable hours per day for the outreach program (VA Affidavit, [132]). We understand that one of the solicitors to be used is an Associate ($588 ph GSTe). Is it necessary for there to be more than 1 solicitor? Noting that law clerks are proposed to be charged out at a discounted rate of $260 ph GSTe, would it lower costs for Shine to use non-legally trained people to assist (under supervision)? The Commonwealth suggests that it may be helpful and valuable to utilise the expertise of community engagement officers within well-known community organisations who may makeup part of the team travelling to community to reduce the amount spent at solicitor or law clerk rates. Using such officers may have other benefits as well, including that they would have experience in engaging with community in a culturally appropriate and sensitive way.

(Emphasis added.)

528    The applicant’s reaction (again, in truth Shine’s reaction) following the second settlement hearing was to issue some belated invitations to various organisations to assist in the registration process. Ms Antzoulatos provided several affidavits on this subject.

529    The Court acknowledges the candour shown by Ms Antzoulatos (and therefore Shine) in producing the Fifth Antzoulatos Affidavit, the contents of which did not support all of the arguments Shine sought earlier to advance. In doing so, she properly observed her first duty to the Court.

530    Indeed, Ms Antzoulatos deposed to Shine’s engagement with stakeholder organisations in three affidavits from early December 2024 until mid-February 2025 — the Fourth Antzoulatos Affidavit on 2 December 2024, the Fifth Antzoulatos Affidavit on 16 December 2024 and the Sixth Antzoulatos Affidavit on 17 February 2025. The Court has been assisted by these affidavits. At the second settlement hearing, Mr Edwards also properly conceded that the material demonstrated an alternative model could be used. He was also at pains to assure the Court that Shine was not putting to the Court any ultimatum that unless it was paid $8 million more from the settlement fund, it would not undertake the outreach and registration process:

Now, the only evidence as to the terms on which the law firm is prepared to coordinate this package of services is in Ms Antzoulatos’ affidavit, the fourth one at 29 through to 30. I have to be mindful that I don’t want there to be a situation where it is – I have to – the court needs to be assured that it will be carried out; that’s probably the best that I can put it. And the concern that I have for the applicant and group members is that if bits of it, in a sense, are adjusted in particular ways, we might end up in a world where the overall service, that is the registration process as a whole, is either compromised or not carried out in part. Now, I can’t tell your Honour because it’s – at what point Shine would say they’re not going to do this. They haven’t said that. There’s no evidence that they’re not going to do it.

…

HER HONOUR: It would not be appropriate, do you accept, on many levels, hypothetically, in a hypothetical case, if lawyers for an applicant were to come to a court and say, “We will only complete our professional task if you approve the payment of x and otherwise, we won’t”.

MR EDWARDS: I would be surprised if lawyers would make that approach, your Honour. I would be surprised.

531    Ms Antzoulatos deposed that on 27 November 2024, she caused a letter to be sent to 164 Northern Territory stakeholder organisations exploring the potential opportunity to collaborate with them in the conduct of the outreach program. In the Sixth Antzoulatos Affidavit, Ms Antzoulatos deposed that Shine has continued to engage with the stakeholders who responded to explore the potential for them to assist in the outreach and registration process. I explain this further below.

532    In response to the original November 2024 communication from Shine, the NLC and CLC stated that they could not respond in the time frame requested, and would need to wait for their executive meetings. Ms Antzoulatos deposed that she had been told:

(f)    the NLC and CLC lawyers were concerned about the risks of being associated with Shine and the class action, because:

i.    the proposed registration work is not within their statutory functions;

ii.    the class action has the potential to cause conflict within communities;

iii.    the process of taking registrations has the potential to expose staff to health and safety risks, including exposure to vicarious trauma; and

(g)    that they are concerned about reputational risk in working with Shine on this Proceeding, given criticism levelled at Shine, their position in communities and their known mandate;

533    Ultimately, the CLC responded to Shine that it could only assist with publication of notices in its various newsletters and social media.

534    Lutheran Care responded. It is a non-profit organisation operating in the Northern Territory providing services including financial counselling. Lutheran Care operates in the centre of the Northern Territory rather than the north, and so their work in communities is less affected by the wet season. Lutheran Care had partnered with Maurice Blackburn to take registrations in the Northern Territory in Jenkings. Maurice Blackburn provided Lutheran Care with fixed rate funding to undertake a registration process.

535    The evidence is that Lutheran Care had partnered with Financial Counselling Australia to take registrations for the Telstra remediation program. Again this was at ‘fixed rate’ funding for this work, even though the number of registrations was uncertain.

536    Lutheran Care provided a partnership proposal with Shine in relation to the outreach program in 15 communities. Some of those communities had already been “visited by Shine”, Ms Antzoulatos deposed. This proposal estimated $343,560 of funding would be required for the process in those 15 communities. The resources Lutheran Care estimated it would need were:

1.    0.2 FTE Program Manager

2.    2.0 FTE Aboriginal Engagement Workers – prioritising the employment of Aboriginal people where possible.

3.    1.0 FTE Aboriginal Engagement Worker – employed by Lhere Artepe Aboriginal Corporation

4.    Extensive travel costs

5.    A small contingency in the event fly-in, fly-out workers are needed from our South Australian team to maintain service delivery

6.    Management and Administration overheads

537    Shine continued discussions with Lutheran Care into early 2025 and Ms Antzoulatos deposed that, at Shine’s request, Lutheran Care confirmed they could attend, at an additional cost, 11 further communities than those originally included although no updated budget for this work is in evidence. Lutheran Care proposed to send one employee specifically for taking registrations in this proceeding and one employee to carry out the usual business of Lutheran Care for approximately 1.5 days per community from January 2025 to August 2025. Shine employees would also be invited to attend these communities to assist. Ms Antzoulatos has proposed to send two staff members with the Lutheran Care staff or alternatively to request further Lutheran Care staff to attend as it is Ms Antzoulatos’ view that the number of registrations requires more staffing resources.

538    The Urapuntja Aboriginal Corporation responded. It is an Aboriginal corporation serving the Urapuntja Homelands, an area largely previously occupied by Utopia Station, in the Barkly region of the Northern Territory. It serves 16 communities in that region, the largest five of which are on Shine’s list of communities for the outreach program: Atheley, Arawerr, Arlparra, and Atneltyey (Boundary Bore). Ms Antzoulatos deposed that Shine had some contact with community members in these areas during the pre-settlement registration process.

539    The Urapuntja Corporation stated in an email that because of the connection to Utopia Station:

Accordingly, we expect all adult community members to have an interest to register.

540    The email stated that the Urapuntja Corporation had already been helping community members to register given the extremely low levels of literacy. It then stated:

a.    Urapuntja Corporation has resources (in terms of infrastructure and people) to assist applicants to register, however little to no funding to pay dedicated staff members to facilitate the process

b.    The Urapuntja Homelands are centred around Arlparra, 250km NE of Alice Springs on the Sandover Highway

c.    We propose to allocate 2 staff members for 1-2 days per week until 31 August, 2025 to assist processing registrations. The registrations will be processed from our Families and Children Centre in Arlparra.

i.    We have capacity to have up to 2 x staff members allocated to the task

ii.    Staff are resourced from our locally recruited Community and Social Programs Team. Our locally recruited indigenous team members are literate, good computer skills, culturally sensitive and respected by the community. They will also have access to community records which include birth certificates and identification documentation (subject to individual consent).

iii.    Staff live in the Homelands, work in Arlparra.

d.    We estimate that we will provide assistance for approximately 1000 individuals. Of those, at least half will be registering for both parents. Consequently, it will not surprise us if we assist in the lodging of approximately 1500 registrations. To facilitate this, we are allowing 2 x staff for 1-2 days per week for the next 8 months. Total staff hours is estimated at 672 hours (2 staff x 7/hrs/day x 1.5days/week for 32 weeks). Our Community and Social Programs Team Members are paid at a casual rate of $35.00/hr (on-costed to $40/hr). In total, the expense to this organisation in staff time is expected to be $26,880 (672hrs x $40/hr).

(Emphasis added.)

541    To say these proposed costs are modest is an understatement in the context of the costs accumulated by Shine so far. Just as critically, an organisation such as this does not need to provide any “training” to those who will participate in the registration process. They will require some information about the proceeding and registration form but will have all the necessary skills and experience, and they have ‘on the ground’ familiarity with the communities they are dealing with.

542    Using organisations such as these avoids the need for stories to be told at length, which in some of the evidence and submissions on behalf of the applicant (but I infer in truth on behalf of Shine) seemed to be cast as a good outcome. For people who have lived through these experiences during the claim period, or their spouses and children, I have no doubt that at least some of them, at some point, may value further opportunities to ‘tell their stories’. This should not however be the focus of the registration process.

543    The irony in the submissions on this aspect was that the more time taken to tell stories, the higher the legal costs charged by Shine. Using local people, known organisations, and especially using Aboriginal staff members, is much more likely to keep the focus where it should be – on an efficient registration process so people can receive their payments if they are eligible.

544    ARDS Aboriginal Corporation (ARDS) responded. This corporation provides support within Yolngu communities in Northeast Arnhem Land. Its response stated:

ARDS is supportive of as many Aboriginal people and families receiving compensation in this matter as possible, and as such we’re interested in assisting to the extent it fits within our current capacity.

545    ARDS’ response in substance was:

4)    Proposal – based on your letter, the most effective way that I can see ARDS helping Yolŋu people complete and submit the registration forms is

a.    Radio and social media information in Yolŋu matha (language), advising community that ARDS is available to assist with completing and submitting registration forms, together with eligibility criteria of who should be contacting ARDS for this purpose.

b.    Radio and social media information advising people to contact or come to an ARDS office if they would like assistance, or to speak with an ARDS staff member in their community.

c.    Internal training to ensure that remote staff and staff regularly visiting relevant communities have sufficient knowledge to assist in filling out the registration form.

d.    Additional community information when specific ARDS teams (eg health promotion, law and justice team) are conducting an outreach visit to a remote community (for unrelated reasons), providing information to the relevant community advising people to contact the ARDS team for assistance with registration forms at the time the team is present in the community.

e.    ARDS employs approximately 70 Yolŋu staff based in the communities listed above, and I also anticipate that internal communication to those staff, who will then pass on information through existing community networks, will also be an effective way of informing communities to contact ARDS for assistance with forms.

f.    ARDS would allocate one of our on-staff lawyers to be our first point of contact for other staff who are assisting Yolŋu families with registration forms, so that all staff engaged in this activity have an easy point of contact if questions arise. We also have capacity for staff who attend our Nhulunbuy or Galiwin’ku office to video-link to one of our Darwin lawyers.

5)    Costings – we charge $187.13 per hour for work that falls outside our usual day-to-day business. My initial estimate of costings is as follows (GST inclusive);

a.    In language radio and social media information - $4,400

b.    Radio broadcasts - $49 per 30 second play. 5 per week x 26 weeks = $6,370

c.    Internal training (1 hour x 30 staff) - $5,613.90

d.    Internal coms to other remote staff (10 hours) - $1,871.30

e.    Incidentals - $500

f.    Direct assistance to Yolŋu families filling in registration forms - $187.13 per hour, or $46.78 per 15 minutes. Given that most Yolŋu people in our region speak English as an additional language, we’ll want to make sure we allocate sufficient time to allow for full explanations and understanding.

g.    Coordination and liaising with Shine lawyers (anticipated 10-20 hours @ $187.13) –

546    These costings add up to $18,755.2 with some costs, such as the direct assistance in filling out the registration forms and liaison with Shine, remaining on an hourly basis. I infer ARDS’ participation would be unlikely to cost more than $177,815.5 which includes $159,060.50 for direct assistance and liaison with Shine which is based on 34 weeks (between 1 January 2025 and 30 August 2025) with 25 hours of work per week at $187.13 per hour. In coming to this calculation, I have considered the Urapuntja Corporation’s estimate of 2 staff for 1.5 days per week for 32 weeks. It may be that some weeks would require more than 25 hours of direct assistance and liaison with Shine and some weeks would require less.

547    By February 2025, Ms Antzoulatos confirmed that ARDS’ proposal had not changed since the one originally provided and extracted above. Ms Antzoulatos deposed that the hourly rate proposed by ARDS “is substantially similar to Shine’s hourly rate”. Ms Antzoulatos also confirmed that Shine is still considering the proposal and whether it will “add value, drive efficiencies, and reduce costs in the conduct of the Outreach Program, beyond what Shine is offering”. Ms Antzoulatos deposed that Shine will provide the proposal to senior counsel for his assessment in accordance with the terms of the undertaking.

548    A further response was also received on 17 January 2025 from Laynhapuy Homelands Aboriginal Corporation who offered to assist any impacted Yolngu people. Laynhapuy Corporation provided some options for consideration which included:

(a)    Shine provides their own staff and Laynhapuy Corporation assists with logistics leveraging from their relationship in the homelands which could include a fixed price for utilising their vehicle and accommodation whilst travelling in the homelands;

(b)    Shine utilising an office in Yirrkala with no charge for the use of this office and no charge for Shine if they “jump on our already planned visits to homelands”;

(c)    Employ Yolngu cultural adviser and translator for the duration of Shine’s visit at a rate of $48.9 per hour plus superannuation with a minimum of 4 hours payable per day; and

(d)    Translation of brochures or materials into Yolngu Matha at a fixed rate of $500 per document.

549    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.

550    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.

551    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.

552    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.

553    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.

554    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

555    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).

556    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.

557    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.

558    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.

559    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.

560    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

561    On 7 February 2025, Ms Han, solicitor for Shine Lawyers, emailed my Chambers with a proposed undertaking of Ms Antzoulatos.

562    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].

563    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.

564    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.

565    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.

566    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.

567    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:

1    engage 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

3    provide a report to the Court quarterly, on the outcome of paragraphs 1 to 2 of this undertaking.

568    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.

569    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.

570    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

571    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.

572    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.

573    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

574    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.

575    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.

576    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

577    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.

578    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

579    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.

580    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.

581     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.

582    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.

583    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

584    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.

585    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.

586    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

587    There is no provision in the Deed for the making of an apology.

588    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.

589    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.

590    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.

591    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

592    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.

593    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.

594    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.

595    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.

596    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.

597    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

598    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.

599    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.

600    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

601    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.

602    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.

603    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 https://www.fedcourt.gov.au/services/access-to-files-and-transcripts/online-files/mcdonald-v-cth.

604    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

605    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.

606    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.

607    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.

608    The Court will also reserve liberty to apply in relation to the orders once made.

Associate:

Dated:    17 April 2025