Federal Court of Australia

Impiombato v BHP Group Limited (No 6) [2025] FCA 1594

ORDERS

THE COURT ORDERS BY CONSENT THAT:

Settlement Approval

1.    Pursuant to ss 33V and 33ZF of the Federal Court of Australia Act 1976 (Cth) (the Act), the Court approves:

(a)    settlement of the proceeding on the terms set out in the Deed of Settlement entered into between the Applicants, the Respondent, Phi Finney McDonald Pty Ltd (ACN 618 727 905) (Phi Finney McDonald), Maurice Blackburn Pty Ltd (ABN 21 105 657 949) (Maurice Blackburn), G&E KTMC Funding LLC (the Funder), Grant & Eisenhofer P.A. and Kessler Topaz Meltzer & Check, LLP and dated 9 September 2025 (Settlement Deed); and

(b)    the scheme for distribution of the settlement sum (and any schedules therein) (the Settlement Distribution Scheme) annexed to the affidavit of Cameron Peter Myers sworn on 4 December 2025,

(together, Settlement Documents).

2.    If and to the extent necessary, pursuant to s 33ZF of the Act, the Court authorises the Applicants nunc pro tunc for and on behalf of persons who meet the definition of “Group Member” in paragraph 3 of the third further amended consolidated statement of claim filed on 25 March 2025 and who have not opted out of the proceeding in accordance with the orders dated 13 March 2024 (Group Members) to enter into and give effect to the Settlement Documents and the transactions contemplated therein for and on behalf of Group Members.

3.    Pursuant to ss 33ZB and 33ZF of the Act, the persons affected and bound by these orders are:

(a)    the Applicants;

(b)    the Respondent; and

(c)    the Group Members.

Deeds of Indemnity

4.    The Respondent is to return to the Applicants’ solicitors or destroy all deeds of indemnity executed by AmTrust Europe Limited and provided by the Applicants as security for the Respondent’s costs of the proceeding, within 3 days of:

(a)    if no appeal or an application for leave to appeal from the Settlement Approval Orders is commenced, the expiration of the 49-day period provided for any appeal from orders approving the settlement of this proceeding under s 33V of the Act is made (Settlement Approval Orders); or

(b)    if an appeal or an application for leave to appeal from the Settlement Approval Orders is commenced, the date of the ultimate determination of the matters the subject of the appeal (including any subsequent appeal or application to appeal).

Appointment of Administrator of the Settlement

5.    Pursuant to s 33ZF of the Act, Phi Finney McDonald and Maurice Blackburn are appointed as Scheme Administrator of the Settlement Distribution Scheme (Scheme Administrator) and are to act in accordance with the rules of the Settlement Distribution Scheme, subject to any direction of the Court.

Participating Group Members

6.    Pursuant to s 33ZF of the Act, the four persons identified in paragraphs 43-46 of the affidavit of Cameron Peter Myers sworn 4 December 2025 be defined as Registered Group Members as if they had registered their claim by the Class Deadline in accordance with paragraph 9 of the orders made on 13 March 2024.

7.    Pursuant to ss 33V and 33ZF of the Act, only “Registered Group Members” (as defined in the orders made on 13 March 2024, 11 July 2025 and 31 October 2025 and paragraph 6 above) are entitled to receive any distribution per the Settlement Distribution Scheme.

Common Fund Order

8.    Pursuant to s 33V of the Act, all Registered Group Members are to pay to the Funder a pro-rata percentage of the Funder Entitlements (as defined in the Settlement Distribution Scheme) from any distribution received from the settlement.

Referee’s Reports

9.    Pursuant to s 54A(3) of the Act, the Court adopts the reports of the Costs Referee appointed pursuant to the orders made on 31 October 2025, being the revised report of Ms Elizabeth Harris dated 27 November 2025 and the supplementary report of Ms Harris dated 28 November 2025.

Settlement Distribution

10.    Pursuant to ss 33V(2) and 33ZF of the Act, for the purposes of the Settlement Distribution Scheme:

(a)    the “Applicants’ Reimbursements”, being reasonable compensation for the time and expenses incurred by the Applicants in the interests of prosecuting the proceeding on behalf of group members as a whole, is approved in the amount of $40,000.00 (incl. GST) and is to be paid to each of the Applicants in the following proportions:

(i)    $20,000 to be paid to the First Applicant; and

(ii)    $20,000 to be paid to the Second Applicant;

(b)    the “Applicants’ Costs and Disbursements”, being costs and disbursements incurred in connection with the proceeding on the Applicants’ own behalf and on behalf of all group members in the proceeding including conditional fees and uplift and any costs or disbursements not paid by the Funder, is approved in the amount of $23,310,736.65 (incl. GST) to be paid to the Applicants’ solicitors in the following proportions:

(i)    the amount of $9,364,009.87 (incl. GST) to be paid to Phi Finney McDonald; and

(ii)    the amount of $13,946,726.78 (incl. GST) to be paid to Maurice Blackburn;

(c)    the “Administration Costs”, being costs and disbursements estimated to be incurred by the Scheme Administrator in connection with the administration of the Settlement Distribution Scheme, is approved in the amount of $623,770 (incl. GST); and

(d)    the “Funder Entitlements”, being costs and expenses incurred and to be incurred directly by the Funder, and a funding commission to be paid to the Funder, is approved in the amount of $31,689,263.35 (incl. GST).

11.    Pursuant to ss 33V(2) and 33ZF of the Act, Phi Finney McDonald is to pay all monies received pursuant to the costs orders made in favour of the First Applicant in the appeal proceedings VID59/2019 and VID127/2019 and held on trust into the “Settlement Distribution Fund” (as defined in the Settlement Deed) within 5 business days of the Settlement Distribution Fund being opened, and those monies will thereafter form part of the Settlement Distribution Fund and be distributed in accordance with the Settlement Distribution Scheme.

Final Orders

12.    All costs orders made to date in the proceeding be vacated.

13.    There be no order as to costs.

14.    The proceeding be dismissed upon notification by the Scheme Administrator to this Court of the completion of the administration of the Settlement Distribution Scheme, on the basis that the dismissal is a defence and absolute bar to any common claims between the Applicants and Group Members, which relate to matters or issues the subject of this proceeding and which the Applicants make, made or were capable of making on behalf of Group Members in this proceeding.

15.    Pursuant to s 33ZF of the Act, the releases and pleas in bar in the Settlement Deed and paragraph 14 of these orders operate without prejudice to:

(a)    the right of any party to the Settlement Deed (including any Registered Group Member) to make an application to enforce the Settlement Deed in a new proceeding; or

(b)    the right of the Scheme Administrator to refer any issues relating to the Settlement Distribution Scheme to the Court for direction or determination in accordance with the terms of the Settlement Distribution Scheme.

Liberty to apply

16.    Any person affected by these orders, including for the avoidance of doubt the Scheme Administrator, has liberty to apply in relation to the Settlement Distribution Scheme.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MOSHINSKY J:

Introduction

1    The joint applicants, Vince Impiombato and Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund) (Klemweb) apply under s 33V of the Federal Court of Australia Act 1976 (Cth) (the Act) for approval of a proposed settlement of the proceeding and of a scheme for the distribution of the settlement proceeds.

2    The settlement terms include that the respondent, BHP Group Limited (BHP Ltd) will pay $110 million in full and final settlement of the applicants’ and group members’ claims in the proceeding, on a non-admissions basis, and that there be no order as to costs.

3    It is proposed that $55 million be deducted from the settlement sum for legal costs and disbursements and funding expenses. This would leave $55 million – 50% of the settlement amount – for the applicants and registered group members.

4    The proceeding has been conducted on the basis of a registration process whereby group members were given the opportunity to register by a certain date if they wanted to participate in any settlement. Approximately 68,000 group members have registered to participate in the settlement.

5    Four group members who did not register by the relevant date have sought to participate in the settlement. Otherwise, no group member has objected to the settlement.

6    The application for approval is brought by interlocutory application dated 27 November 2025. The following affidavits have been filed in connection with the application:

(a)    three affidavits of Cameron Myers, a principal lawyer employed by Phi Finney McDonald (PFM), one of the two law firms acting for the applicants (the other being Maurice Blackburn Lawyers (MB)), dated 28 October 2025, 27 November 2025 and 4 December 2025;

(b)    an affidavit of Bryony Adams, a partner of Herbert Smith Freehills Kramer, the solicitors for BHP Ltd, dated 3 December 2025; and

(c)    an affidavit of Stuart Berman, a Managing Member of G&E KTMC Funding LLP (the Funder), the funder for the applicants in this matter, dated 28 November 2025.

7    Mr Myers’ affidavit dated 27 November 2025 annexes a confidential opinion prepared by Dr Parkinson KC and Mr Olivier of counsel dated 26 November 2025 (the “Confidential Counsel Opinion”). In that opinion, counsel express the opinion that the settlement is fair and reasonable and in the interests of group members.

8    In addition, the Court has been provided with reports prepared by a Court-appointed costs referee, Ms Elizabeth Harris. In particular, the following reports are relevant for present purposes:

(a)    a revised report of Ms Harris dated 27 November 2025 (Ms Harris’s Revised Report); and

(b)    a report of Ms Harris on future costs and settlement administration costs dated 28 November 2025 (Ms Harris’s Supplementary Report).

9    The parties have filed written submissions in support of the proposed orders.

10    Parts of the material are the subject of an application for confidentiality orders. It is in the nature of an application for approval of a settlement of a class action that some parts of the material in support of the application should be kept confidential from the respondent. For example, the Confidential Counsel Opinion contains a detailed and frank assessment of the issues and risks of the litigation from the applicants’ perspective. It would not be appropriate for material of that nature to be disclosed to the respondent.

11    For the reasons that follow, I consider it appropriate to approve the settlement of the proceeding and the scheme for the distribution of the settlement proceeds.

Overview of the proceeding

Applicants’ claims

12    The proceeding is brought by the applicants as a representative proceeding pursuant to Part IVA of the Act. The group members are defined in paragraph 3 of the third further amended consolidated statement of claim (3FACSOC) as all persons who, during the period 8 August 2012 to 9 November 2015 (the relevant period), acquired an interest in ordinary shares in BHP Ltd (formerly known as BHP Billiton Limited) and/or BHP Group Plc (BHP Plc) (formerly BHP Billiton Plc), a company registered in England and Wales.

13    During the relevant period, BHP Ltd was an ASX-listed entity and its ordinary shares were quoted on the Australian Stock Exchange (ASX). Ordinary shares in BHP Plc had a primary listing on the London Stock Exchange (LSE) and a secondary listing on the Johannesburg Stock Exchange (JSE). At all material times, BHP Ltd and BHP Plc had a dual-listed company structure pursuant to which they operated as if they were a single unified economic entity.

14    The claims made in the proceeding arose from the collapse of the Fundão tailings dam on 5 November 2015 (Brazilian time), which killed 19 people and caused significant economic, social and environmental damage. The dam formed part of the Germano iron ore mine complex located in the state of Minas Gerais, Brazil. The Germano complex was operated by Samarco Mineração SA (Samarco), a 50:50 joint venture company owned by BHP (via a wholly-owned subsidiary) and the Brazilian mining corporation Vale SA. The price of shares in BHP Ltd and BHP Plc suffered significant falls following the dam’s collapse.

15    In summary, the applicants allege that BHP Ltd was aware of material information regarding the safety and risks of the Fundão dam, and contravened s 674(2) of the Corporations Act 2010 (Cth) by failing to disclose that information to the market during the relevant period. The applicants also allege that BHP Ltd engaged in misleading or deceptive conduct contrary to s 1041H(1) of the Corporations Act and s 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), by making representations to the market concerning its commitment to safety and the safety of its operations, including at Samarco.

16    The applicants allege that, during the relevant period, BHP Ltd’s contraventions caused BHP Ltd and BHP Plc shares to trade at a higher price than their true value and/or the market price that would have prevailed but for the contraventions. As a result, it is alleged that the applicants and group members who acquired an interest in BHP Ltd and BHP Plc shares did so at an inflated price and thereby suffered loss and damage. It is also alleged that some of the group members suffered loss on the basis that, had the contraventions not occurred, they would not have acquired shares in BHP Ltd or BHP Plc during the relevant period.

Procedural history

17    The proceeding has a long history, involving numerous contested hearings, interlocutory applications and appeals. Some of the key events that occurred in the course of the litigation are set out below.

18    The first applicant, Mr Impiombato, commenced proceedings against BHP Ltd as the sole representative applicant on 31 May 2018, represented by PFM. Klemweb commenced a competing representative proceeding on 31 August 2018, represented by MB (VID1077/2018). A third representative proceeding was commenced by the Los Angeles County Employees Retirement Association (LACERA) on 24 September 2018 (VID1218/2018).

19    A carriage motion to determine which of the three competing proceedings should continue was heard at first instance on 29 October 2018 with judgment delivered on 18 December 2018: Impiombato v BHP Billiton Limited (No 2) [2018] FCA 2045; 364 ALR 162.

20    Appeals from the carriage motion decision were heard by the Full Court on 27 and 28 May 2019, with orders made on 28 May 2019 and reasons for judgment delivered on 21 June 2019: Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund) v BHP Group Limited [2019] FCAFC 107; 369 ALR 583. Klemweb’s appeals were allowed in part, with a view to Mr Impiombato and Klemweb making a joint proposal for the consolidation of their proceedings. LACERA’s applications for leave to appeal were dismissed with costs (LACERA Appeal Orders), with the effect that its proceeding was permanently stayed.

21    Pursuant to the Full Court’s decision on the carriage motion appeal, on 13 June 2019, PFM and MB filed a joint proposal for consolidation of the Impiombato and Klemweb proceedings. On 19 July 2019, the Full Court made orders consolidating the proceedings. On 31 July 2019, PFM, MB and the Funder entered into the cooperative litigation protocol annexed to the 19 July 2019 orders.

22    Paragraphs 7 and 8 of the Full Court’s orders dated 19 July 2019 varied a common fund order that had been made on 3 August 2018 so that the amounts payable to the Funder, PFM and MB in accordance with the cooperative litigation protocol would not exceed 15% of a Gross Recovery up to and including $150 million and 10% of any Gross Recovery in excess of $150 million. The Gross Recovery was defined in the orders to mean the gross amount payable by way of settlement or judgment, inclusive of any amount paid pursuant to a costs order against BHP Ltd.

23    On 16 August 2019, the applicants filed a consolidated statement of claim in the consolidated proceeding.

24    Prior to the multiplicity issue arising, BHP Ltd had applied for a temporary stay of the proceeding, on grounds of prejudice arising from criminal proceedings relating to the failure of the Fundão dam, commenced in Brazil in October 2016, against BHP’s Brazilian subsidiary, Samarco, and certain BHP employees. The individual defendants to those proceedings include representatives of BHP on Samarco’s board of directors and committees and subcommittees of the board.

25    The stay application was heard on 26 November 2019 and judgment dismissing the application was delivered on 17 March 2020: Impiombato v BHP Group Limited [2020] FCA 350; 143 ACSR 301.

26    On 4 December 2019, the High Court of Australia handed down its decision in BMW Australia Ltd v Brewster [2019] HCA 45; 269 CLR 574 (Brewster) in which it decided that the Court does not have the power to make common fund orders in the early stages of class action litigation.

27    On 14 April 2020, as a result of the decision in Brewster, the Court made orders by consent setting aside the common fund orders made in the proceeding on 3 August 2018 and 19 July 2019.

28    On 12 May 2020, BHP Ltd filed an application seeking orders excluding from the proceeding group members who were non-residents of Australia and striking out the claims brought by the applicants on behalf of shareholders in BHP Plc. The application raised novel issues, including whether Part IVA of the Act applied to claims brought on behalf of non-residents and the scope of legal causation under the relevant provisions of the Corporations Act and ASIC Act.

29    BHP Ltd’s application was heard on 7 and 8 September 2020. Judgment dismissing the application was delivered on 27 November 2020: Impiombato v BHP Group Limited (No 2) [2020] FCA 1720.

30    BHP Ltd appealed from the decision dismissing its strike-out application. The appeal was heard by the Full Court on 21 May 2021 and judgment was delivered dismissing the appeal on 31 June 2021: BHP Group Limited v Impiombato [2021] FCAFC 93; 286 FCR 625. BHP Ltd was granted special leave to appeal to the High Court, which appeal was heard on 9 August 2022. The High Court dismissed the appeal on 12 October 2022: BHP Group Limited v Impiombato [2022] HCA 33; 276 CLR 611.

31    On 5 July 2023, the applicants applied for BHP Ltd to give non-standard discovery in the proceeding. That application was heard on 13 September 2023, with judgment delivered on 14 September 2023: Impiombato v BHP Group Limited (No 3) [2023] FCA 1104.

32    By that time, group proceedings had been commenced against BHP Ltd and BHP Plc in the UK, on behalf of persons who had suffered loss as a result of environmental damage caused by the collapse of the Fundão dam (Municίpio de Mariana & Others v BHP Group (UK) Ltd (formerly BHP Group plc) & BHP Group Ltd (the UK Proceeding)). In view of the overlap between the facts and issues in this proceeding and those in the UK Proceeding, and the pending disclosure to be given by the defendants in that proceeding, this Court ordered BHP Ltd to give discovery in this proceeding of all documents that the defendants disclosed in the UK Proceeding, plus certain additional categories of discovery.

33    BHP Ltd gave discovery of the ordered documents over approximately 19 tranches, totalling 257,380 documents produced to the applicants between October 2023 and 28 November 2024.

34    On 18 October 2023, a hearing was held to determine a process for opt-out and related matters including the form, timing and method of provision of notices to group members. In that context, a dispute had arisen between the parties as to whether the group definition, as it was then pleaded, included persons who had acquired an interest in BHP Ltd or BHP Plc in the relevant period through means other than trading on the ASX, LSE or JSE.

35    On 3 November 2023, I delivered judgment on that issue, determining that the group member definition in the then current originating application and pleading included only persons who, during the relevant period, had acquired shares in BHP Ltd or BHP Plc through trading on the ASX, LSE or JSE: Impiombato v BHP Group Limited (No 4) [2023] FCA 1354.

36    On 24 November 2023, the applicants applied for leave to appeal from that decision. The application was adjourned pending determination of an interlocutory application by the applicants to amend the group definition and other aspects of their pleading filed on 5 December 2023. The group definition amendments were intended to clarify that the class included all persons who had acquired an interest in BHP Ltd or BHP Plc shares during the relevant period.

37    The applicants’ amendment application filed on 5 December 2023 was heard by Murphy J on 25 March 2024. His Honour delivered judgment on 6 June 2024, allowing the amendments to the group definition (among other things) and ordering the relation-back of those amendments to the commencement of the proceeding: Impiombato v BHP Group Limited (No 5) [2024] FCA 591.

38    BHP Ltd appealed Murphy J’s decision and that appeal was heard together with the applicants’ appeal from the 3 November 2023 decision. The Full Court delivered judgment on 12 February 2025: Impiombato v BHP Group Limited [2025] FCAFC 9; 308 FCR 250. Relevantly, the Court allowed the amendments to the group definition but ordered that they take effect from 5 December 2023. The applicants filed an application for special leave to appeal the Full Court’s decision to the High Court on 12 March 2025. That application was refused on 12 June 2025.

39    In the meantime, on 13 March 2024, Murphy J made orders in the proceeding for opt out and registration (Opt Out and Registration Orders), including orders approving the form and distribution of a notice to group members regarding opt out and claim registration (Opt Out and Registration Notice).

40    The Opt Out and Registration Orders included:

(a)    an order fixing 4.00 pm (AEDT) on 31 May 2024 as the deadline by which a group member could opt out of the proceeding (Class Deadline) (order 1);

(b)    orders for the distribution of the Opt Out and Registration Notice using the contact information recorded in the BHP Ltd and BHP Plc share registry. They provided that the notice be emailed to group members in the first instance and, failing that, the notice be sent by post (orders 7(a) and (b));

(c)    orders for the notice also to be posted on the Court’s website and the websites of the applicants’ solicitors (orders 7(c) and (d)); and

(d)    orders that any group member who wished to register their claim in the proceeding had to, by the Class Deadline, complete and return a registration form (order 9) or otherwise have already executed a funding agreement with the Funder or a conditional legal costs agreement with MB (order 10), with such persons being defined as “Registered Group Members” (order 11).

41    On 21 February 2025, the applicants served a proposed third further amended consolidated statement of claim on BHP Ltd, incorporating amendments arising from their expert evidence filed at the same time. An informal amendment application was heard on 24 March 2025, following which the Court granted the applicants leave to file the 3FACSOC.

42    BHP Ltd filed its defence to the 3FACSOC on 15 April 2025. It filed an amended defence to the 3FACSOC on 27 June 2025. The applicants filed a reply to the amended defence on 18 July 2025, in respect of which BHP Ltd raised various objections.

43    On 25 July 2025, the commencement date of the initial trial was varied from 2 September 2025 to 9 September 2025.

44    On 12 August 2025, the parties attended a Court-ordered mediation of the proceeding; the parties engaged in settlement discussions thereafter.

45    On the morning of 9 September 2025, the day the initial trial was listed to commence, a settlement deed in relation to this proceeding was executed and exchanged (the Settlement Deed).

46    On 31 October 2025, the Court made orders relating to the hearing of the applicants’ application for approval of the proposed settlement. The orders included:

(a)    an order approving the form and content of a notice (Notice of Proposed Settlement) that would give notice of the proposed settlement of the proceeding and the applicants’ intention to make an application seeking the Court’s approval of the proposed settlement pursuant to s 33V of the Act and related orders (order 2);

(b)    an order setting out the procedure by which the Notice of Proposed Settlement would be given to Registered Group Members (order 3);

(c)    orders requiring a notice of estimated distribution to be given to Registered Group Members (orders 5-7);

(d)    orders providing a mechanism by which group members could raise objections to the proposed settlement (orders 10-13);

(e)    orders appointing Ms Harris as independent costs referee for the purpose of conducting an inquiry and making a report to the Court (orders 14-17); and

(f)    orders for the filing of material in connection with the approval application and listing the application for hearing on 5 December 2025 (orders 18-23).

Opt Out and Registration

47    By the Class Deadline, approximately 67,000 group members had registered their claims in accordance with the orders of 13 March 2024, or were otherwise deemed to have registered pursuant to those orders by reason of their having executed a funding agreement with the Funder or a conditional legal costs agreement with MB (Registered Group Members).

48    On 11 July 2025, the Court made orders including an order deeming as “Registered Group Members” 260 late registrants, as if they had registered their claims in accordance with the orders made on 13 March 2024.

49    Order 1 of the orders made on 31 October 2025 (after the proposed settlement had been announced) deemed as “Registered Group Members” a further 50 late registrants, as if they had registered their claims in accordance with the orders made on 13 March 2024.

50    There are presently 68,002 Registered Group Members, being group members who have registered their claims, or are otherwise deemed to have registered, pursuant to the orders made on 13 March 2024, 11 July 2025 and 31 October 2025. Of these, there are 46,367 who have executed funding agreements with the Funder and a conditional legal costs agreement with PFM and 8,529 who have executed a conditional legal costs agreement with MB in relation to the proceeding.

Costs in the LACERA appeals

51    Following the making of the LACERA Appeal Orders, which dismissed the LACERA appeals from the carriage motion decision with costs, it was agreed that LACERA would pay Mr Impiombato’s costs of the appeals in the amount of $70,000 (LACERA Appeal Costs). That amount was subsequently paid by LACERA and has since been held on trust by PFM, pending the resolution of this proceeding.

UK Proceeding

52    A first-stage trial to determine issues of liability in the UK Proceeding was heard between October 2024 and March 2025.

53    On 14 November 2025 (after the Settlement Deed in relation to the present proceeding was entered into), Justice O’Farrell delivered judgment in respect of the first-stage trial in the UK Proceeding.

54    The judgment in the UK Proceeding is discussed in the Confidential Counsel Opinion at [154]-[158].

Settlement Deed and settlement distribution scheme

55    The terms of the proposed settlement are contained in the Settlement Deed dated 9 September 2025. The parties to the Deed are the applicants, BHP Ltd, the applicants’ lawyers (PFM and MB), the Funder and two of its related entities.

56    The Deed provides for the settlement sum to be paid into a “Settlement Distribution Fund”, to be administered by a “Scheme Administrator” to be appointed by the Court and distributed in accordance with the proposed settlement distribution scheme (SDS) (clauses 8(a)-(b), 9(b)-(d)).

57    Copies of the Settlement Deed and proposed SDS are annexed to Mr Myers’ affidavit dated 27 November 2025.

58    For the purposes of the approval application, the key terms of the SDS are as follows:

(a)    Subject to the Court’s approval, PFM and MB will be appointed the Scheme Administrator and trustees of the Settlement Distribution Fund (clauses 2.1 (definitions of “Scheme Administrator”, “Trustee”), 3.1, 4.1).

(b)    Group members’ pro rata distributions under the scheme will be calculated using the confidential distribution methodology and formula contained in Schedule B to the SDS (clauses 6.1-6.3, 8.1-8.6).

(c)    In accordance with the orders made on 31 October 2025, Registered Group Members have already received notices of their estimated distributions and have had the opportunity to correct the trade data held by PFM and MB or seek a review of their estimated distributions (clauses 5.1, 5.2).

(d)    If the SDS is approved, the Scheme Administrator will send group members a Final Assessment Notice containing the calculation of their distribution (clause 6.4). These assessments are intended to be final, noting that Registered Group Members have already received an estimate of their distribution and the opportunity to seek a review (clauses 6.5, 8.7).

(e)    Any Registered Group Member with a distribution of less than $10 will not receive a distribution under the scheme (clause 6.3).

(f)    The Scheme Administrator is required to undertake scans to identify whether Registered Group Members are subject to targeted financial sanctions in a range of jurisdictions, or are owned or controlled by such persons, with those group members being ineligible to receive a payment under the scheme (clauses 7.4-7.10).

(g)    Subject to the Court’s approval of the relevant amounts, payments are to be made from the settlement sum to PFM, MB, the Funder and the applicants (as reimbursement for their time and expense), and funds are also to be set aside for settlement administration costs, tax liabilities, and related expenses (clauses 8.1-8.2).

(h)    Registered Group Members will then be paid their individual distributions (clauses 9.1-9.2).

(i)    Remaining funds will be used to pay the settlement administration costs and defray any tax liabilities (clause 10.1).

(j)    Any residual funds in the Settlement Distribution Fund will then be distributed to Registered Group Members on a pro rata basis, if it is economic to do so, or otherwise donated to charity (clauses 10.2-10.8).

(k)    On completion of the scheme, the Settlement Administrator will provide a report to the Court (clause 16.5).

59    The applicants seek an order that the LACERA Appeal Costs be paid into the Settlement Distribution Fund and distributed with the settlement sum in accordance with the SDS.

Applicable principles

60    In Webb v GetSwift Limited (No 7) [2023] FCA 90; 414 ALR 500, Murphy J stated:

15    The applicable principles in relation to settlement approval under s 33V of the FCA Act are now well-established. The Court’s fundamental task is to determine whether the settlement is fair and reasonable and in the interests of the group members who will be bound by it, including as between the group members inter se: see for example, Australian Securities and Investments Commission v Richards [2013] FCAFC 89 at [7]-[8]; Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323; 335 ALR 439 at [68]-[77]; Camilleri v The Trust Company (Nominees) Ltd [2015] FCA 1468 at [5]; Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330 at [81]; Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 at [12]; McKenzie v Cash Converters International Ltd (No 3) [2019] FCA 10 at [23]-[24]; Smith v Commonwealth of Australia (No 2) [2020] FCA 837 at [6]-[12]; and Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634 at [85]-[88].

16    In undertaking that task, the Court:

(a)    assumes an onerous and protective role in relation to group members’ interests, in some ways similar to Court approval of settlements on behalf of persons with a legal disability;

(b)    must be astute to recognise that the interests of the parties before it, and those of the group as a whole (or as between some members of the group and other members), may not wholly coincide;

(c)    relatedly to the second point, should be alive to the possibility that a settlement may reflect conflicts of interest or conflicts of duty and interest between participants in the common enterprise which has conducted the representative proceeding;

(d)    should understand that at the point of settlement approval, the interests of the parties will ordinarily have merged in the settlement. It is likely that they both will have become “friends of the deal”. As a result, both sides may not critique the settlement from the perspectives of any group members who may suffer a detriment or obtain lesser benefits through the settlement; and

(e)    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.

17    The Class Actions Practice Note (GPN-CA) at [15.5], sets [out] the factors that are ordinarily required to be addressed in the material filed in support of an application for settlement approval. These factors, drawn from the remarks of Goldberg J in Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 459 at [19], are to be approached as a guide, insofar as they are relevant to the circumstances of the case and not as … mandatory requirements: Caason at [13]; Davison v Commissioner of Police, NSW Police Force [2021] FCA 1324 at [47].

61    Importantly, although the Court assumes a protective role in relation to group members’ interests, the Court’s task is not to second-guess or “go behind” the tactical or other decisions made by the applicant’s legal representatives. Rather, it is to satisfy itself that those decisions were within the reasonable range of decisions, having regard to the circumstances that were known or knowable to the applicant’s legal representatives, and a reasonable assessment of the attendant risks: see Blairgowrie Trading Ltd v Allco Finance Group Ltd (receivers and managers appointed) (in liquidation) (No 3) [2017] FCA 330; 343 ALR 476 at [82]-[83]; Ingram as trustee for the Ingram Superannuation Fund v Ardent Leisure Limited (Settlement Approval) [2024] FCA 836 at [15].

Consideration

Fairness and reasonableness of the proposed settlement

62    The issue of the fairness and reasonableness of the proposed settlement is addressed in detail in the Confidential Counsel Opinion. For the reasons there set out, counsel express the opinion that the settlement reached in the proceeding is fair and reasonable and in the interests of group members: see [7], [73].

63    I note that the counsel who expressed that opinion were briefed to appear at trial for the applicants and had been involved in the preparation of the applicants’ case for several years. They are, therefore, very familiar with the issues and evidence in the case and well placed to provide an assessment of the various issues and risks associated with the litigation. The opinion is detailed, logically structured and well expressed. I have considered it carefully. On the basis of that opinion, I am comfortably satisfied that the settlement sum of $110 million is fair and reasonable and in the interests of group members.

64    The proposed releases given by the applicants on behalf of group members under the Deed are made: (a) in favour of BHP Ltd, its related bodies corporate, and its current and former directors and officers; and (b) in respect of the common claims that were, and could have been, made in the proceeding (clauses 1 (definition of “Related Parties”), 4(c)(i), 4(d), 5). I am satisfied that these releases are properly given by the applicants. They are within the scope of the applicants’ representative capacity and the common claims that are the subject of the proceeding. I note also Mr Myers’ evidence, which I accept, that the release of BHP Ltd’s related parties was necessary to secure the settlement.

Fairness and reasonableness of the proposed distribution scheme

65    The Confidential Counsel Opinion also deals with the distribution of the settlement sum as between Registered Group Members (see [184]-[189]). I have considered this aspect of the opinion carefully and am of the view that the proposal is fair and logical and has appropriate regard to the matters discussed in the opinion. I am satisfied that the proposed settlement and the proposed distribution scheme are fair and reasonable as between Registered Group Members.

66    Pursuant to the Opt Out and Registration Orders, the Opt Out and Registration Notices were distributed to group members (see Mr Myers’ affidavit dated 28 October 2025 at [27]-[31]). The notices contained a “soft class closure” notification of the kind recently considered by the High Court in Lendlease Corporation Limited v Pallas [2025] HCA 19; 423 ALR 23; see also Parkin v Boral Limited (Class Closure) [2022] FCAFC 47; 291 FCR 116. The notices stated that group members needed to register before the Class Deadline and warned of the potential consequences of not doing so, including that an application could be made at settlement approval preventing those who did not register from obtaining a benefit from the settlement (see Mr Myers’ affidavit dated 28 October 2025 at [28]).

67    I consider it fair and reasonable that the settlement distribution be confined to those group members who have registered, and for all group members who have not opted out to be bound by the settlement. Group members have had several opportunities to register and were warned of the risks of not doing so. The risks included that they may not be able to participate in any settlement but may nevertheless be bound by that settlement. In my view, group members were provided with a sufficient opportunity to register.

68    As detailed above, on two subsequent occasions, the Court has made orders deeming certain persons who registered late to be Registered Group Members.

69    The Notice of Proposed Settlement invited unregistered group members who wished to obtain a benefit from the settlement to file a notice of objection by 28 November 2025. Four persons have filed notices of objection: see Mr Myers’ affidavit of 4 December 2025 at [43]-[50]. All four objections are in substance requests to participate in the distribution. The estimated distribution to those four group members is de minimis. I consider it appropriate in the circumstances for those group members to be deemed Registered Group Members. I will include an order to this effect in the orders.

70    Apart from those four objections (which are in substance participation requests), there is no other objection to the proposed settlement.

71    A particular issue that arises in this case concerns distributions to persons who may be the subject of targeted financial sanctions. Under clause 9(h) of the Settlement Deed, it is proposed that group members who are the subject of targeted financial sanctions in certain jurisdiction (referred to as “Prohibited Persons”), or group members for whom there is insufficient information to determine whether they are Prohibited Persons (referred to as “Unknown Persons”), will not receive any payment under the proposed settlement.

72    The proposed SDS prescribes a process for the Scheme Administrator to identify and generate a list of Prohibited and Unknown Persons – by conducting what are described as “Sanction Scans” – and prohibits the Scheme Administrator from making any payment to them from the settlement. Any payments that the Prohibited and Unknown Persons would have received under the settlement are deemed forfeited and required to be redistributed to other group members in accordance with the scheme.

73    In Stallard v Treasury Wine Estates Limited [2025] VSC 368 (Stallard), McDonald J approved as fair and reasonable a settlement distribution scheme which contained a similar regime to that proposed in the SDS here, prohibiting the payment of monies from the settlement to persons the subject of targeted financial sanctions. His Honour found (at [65]) that the exclusion of such persons from the distribution scheme in that case was “appropriate” and the making of a distribution to them could result in the administrator “breaching the law”.

74    The Sanctions Scans process proposed in the SDS is broader than in Stallard. It extends to persons who are the subject of targeted financial sanctions in jurisdictions other than Australia, and to Registered Group Members owned or controlled by such persons, rather than only the Registered Group Members themselves.

75    I am satisfied that the SDS, including those provisions, is fair and reasonable in the circumstances of this proceeding because:

(a)    it is appropriate for the process to cover each jurisdiction that is identified in the SDS to enable BHP Ltd and the Scheme Administrator to comply with relevant sanctions laws, and there is evidence that coverage of specified overseas regimes should not significantly increase the burden, length, or cost of the process;

(b)    for the purposes of compliance with Australia’s sanctions regime, it is appropriate for the Sanctions Scans process to include checks as to whether Registered Group Members are owned or controlled by designated persons; and

(c)    the agreed Sanctions Scans process reasonably balances the need to undertake sanctions checks (to ensure that payments from the Settlement Distribution Fund are lawful) against other interests of group members.

76    The applicants seek an order appointing PFM and MB as the Scheme Administrator under the SDS. This is not a case where it would be cost-efficient or in the interest of group members for the settlement administration to be the subject of a competitive tender process. PFM and MB are firms with significant experience in conducting settlement administrations, they already hold the necessary group member trade data to calculate their final settlement distributions, and they have already calculated and notified Registered Group Members of their estimated distributions. Transferring the administration of the settlement to a third party now would likely only increase costs, which would ultimately be borne by Registered Group Members.

77    Subject to considering the proposed deductions from the settlement sum for legal costs and disbursements and for funding expenses, I consider the proposed settlement and the proposed settlement distribution scheme to be fair and reasonable and in the interests of group members.

Proposed deductions

78    The applicants seek approval for deductions to be made from the settlement sum on account of legal costs and disbursements and funding expenses.

79    The form of orders proposed by the applicants includes an order approving the “Applicants’ Costs and Disbursements” of $23,310,736 (incl. GST) (to be paid to PFM and MB in specified amounts) and the “Funder Entitlements” of $31,689,263 (incl. GST). (I will omit cents in stating dollar figures in these reasons.) This form of order may not convey that a substantial portion of the amount identified as Funder Entitlements represents a reimbursement for legal costs and disbursements which the Funder has already paid. Thus, the total amount paid or payable for legal costs and disbursements is in fact much greater than the orders might suggest.

80    The key figures for legal costs and disbursements are set out in the applicants’ submissions in reply. Although the applicants initially sought a confidentiality order in respect of those figures, during the course of the hearing, and in response to questions from the Court, the applicants said that they did not press the claim for confidentiality over those figures. Similarly, during the course of the hearing, the Funder indicated that it did not press a claim for confidentiality over the amount paid or payable for or in relation to ATE insurance.

81    The position as regards the proposed deductions for legal costs and disbursements and funding expenses can be summarised as follows. It is proposed that $55 million be deducted from the settlement sum on account of these matters, with that figure applied as follows:

(a)    $48,163,291 (incl. GST) for legal costs and disbursements, comprising fees charged by PFM and MB and disbursements (including expert witness fees and counsel fees);

(b)    $6,836,708 (incl. GST) for funding expenses, comprising:

(i)    $4,098,500 (incl. GST) charged by Amtrust for preparation of the AmTrust deeds of indemnity and the ATE insurance premium and paid or payable by the funder; and

(ii)    $2,738,208, being a funding commission.

82    As explained in the materials and at the hearing, a decision was taken by PFM, MB and the Funder that Registered Group Members would receive at least 50% of the settlement sum. This meant that the deduction for legal costs and disbursements and funding expenses was in effect capped at $55 million, despite PFM, MB and the Funder potentially being able to claim a greater total amount. A commercial arrangement was reached between PFM, MB and the Funder as to the allocation of the $55 million as between them. The result is the breakdown that I have set out above.

83    At the hearing, I raised a concern that the amount to be deducted on account of legal costs and disbursements may be excessive. In response to this concern, I was taken to Ms Harris’s reports, in which she expressed the view that a slightly greater amount than that sought to be deducted was reasonable. In her Revised Report, Ms Harris provides the following summary of her conclusions at [1]-[2]:

1.    In answer to the question posed in the Reference, it is my opinion that the reasonable legal costs and disbursements of the Applicants for work done up to and including 31 October 2025 are $49,865,959.63 if only one adjustment is made to accommodate duplicated work and are $49,514,618.41 if a second adjustment is made to accommodate work arising from the fact that two firms were managing Group Members.

2.    The table below summarises the actual costs incurred and my allowances:

Table 1 – Summary of Allowances (GSTi)

84    The above figures relate to work done up to and including 31 October 2025. In Ms Harris’s Supplementary Report, she expresses the view that the reasonable legal costs and disbursements of the applicants for work from 1 November 2025 up to and including the hearing of the settlement approval application are $398,590 (incl. GST). Adopting the lower of the two figures set out in Table 1 above ($49,514,618) and adding $398,590 for the further work up to and including the hearing of the approval application produces a total of $49,913,208 (incl. GST), being the amount that Ms Harris considers to be the reasonable legal costs and disbursements. This is greater than the amount sought to be deducted for legal costs and disbursements ($48,163,291 (incl. GST)).

85    In expressing her view as to the reasonableness of the legal costs and disbursements, Ms Harris took into account the novelty, complexity and difficulty of the litigation. At [27]-[28] of her Revised Report, Ms Harris states:

27.    The [Legal Professional Uniform Law 2015 (Vic)] provides that novelty, complexity and difficulty are factors relevant to an assessment of solicitor/own client costs.

28.    I have taken the following into account in applying the solicitor/own client test, as relevant factors under s 172 of the [Legal Professional Uniform Law 2015]:

a.    The matter settled close to the scheduled trial date of 9 September 2025, with all primary evidence filed.

b.    The number of unusual and protracted applications, namely the multiplicity applications and appeals, the BHP stay application based on the unavailability of the named individuals and the strike out applications and appeals based on the jurisdictional issues of the group member composition.

c.    The complexity of the factual matters underlying BHP’s knowledge of the risk of the dam failure.

d.    The complexity and length of the Applicants’ expert evidence, including the need to incorporate alternative loss methodologies in the Applicants’ expert evidence to accommodate the issues regarding the group composition.

e.    The multiple amendments of the statement of claim, including as a result of the findings regarding group composition.

f.    The substantial volume of documents reviewed, and unusually, the significant level of discovery given by the Applicants.

g.    The consideration of the evidence in the Brazilian criminal and civil proceedings, including the need to translate documents in Portuguese.

h.    The interrelationship of the UK proceedings and the steps taken to obtain documents in those proceedings.

i.    The need to seek documents in the control of third parties, arising from the corporate structure of the Fundao Dam operation.

86    The applicants also rely on Mr Myers’ affidavit dated 27 November 2025 at [135]. Although some parts of that paragraph are confidential, other parts are not. In the parts that are not confidential, Mr Myers states:

135.    Based on my experience, this proceeding was unusually complex and difficult, even in the context of shareholder class action proceedings, and it raised several substantial novel issues. I agree that the factors identified by Ms Harris added to that novelty, complexity and difficulty. I have already addressed several of those factors in this affidavit and make the following further observations:

(a)    At the time the settlement was agreed, the proceeding had been on foot for more than 7 years, far longer than the typical class action proceeding. In April 2023, Professor Morabito released an empirical study titled “Empirical perspectives on twenty-one years of funded class actions in Australia” (2023 Morabito Study), a copy of which is annexed at CM-14:646-682. In that study, he found (at page 27) that the median duration of funded class actions in Australia, that were ultimately resolved through a judicially-approved settlement, was 1,226 days (approximately 3 years, 4 months). The [median] duration of unfunded class actions was 808 days (approximately 2 years, 3 months).

(b)    To the novel and protracted interlocutory applications and appeals referred to by Ms Harris, I would add the hearings, applications and appeals arising from the dispute regarding the group definition. As set out in my summary of the procedural history of the proceeding, the litigation was almost entirely occupied by interlocutory disputes from the commencement of the proceeding in 2018 until around mid-2024, when BHP Ltd substantially completed its discovery and the Applicants sought leave to make the pleading amendments arising from that discovery in the 2FACSOC.

(c)    In addition to the materials from the Brazilian criminal and civil proceedings referred to by Ms Harris, a significant portion of the 380,000 documents discovered by BHP Ltd were in Portuguese. This complicated both the Applicants’ review of that discovery and preparations for trial, as it was necessary for the parties to engage in protracted conferral regarding the exchange of agreed or competing English-language translations for tender at trial.

(d)    The Applicants’ review of the discovery, and the refinement of the case based on that discovery, was made more difficult by the protracted and piecemeal way in which the documents were produced by BHP Ltd over an extended period and in numerous tranches.

…

(h)    Although the Applicants gained some efficiencies from their access to materials from other related proceedings – including the ADR Proceeding, the UK Proceeding, and the Brazilian criminal proceedings – it was necessary to incur time and costs monitoring those proceedings. As to the scale of the UK Proceeding, which concerned many of the same underlying factual allegations as in this proceeding, I refer to the reports annexed at paragraph 75 regarding the parties’ costs in this UK Proceeding.

87    Notwithstanding the facts and matters referred to by Ms Harris and Mr Myers, I remain concerned about the quantum of the legal costs and disbursements claimed by the applicants. However, ultimately, I do not consider this to adversely affect Registered Group Members because I am satisfied that the overall proposed deduction of $55 million is fair and reasonable (having regard to the nature and protracted procedural history of the proceeding and notwithstanding the earlier estimates or assurances given by PFM, MB and the Funder) and that any reduction in the amount payable on account of legal costs and disbursements would be properly claimable by the Funder as an increase to the funding commission. (The amount allocated for the funding commission is relatively modest in percentage terms compared with other cases.) Thus, even if the amount proposed to be allocated to legal costs and disbursements were to be reduced, the total deduction would remain the same, at $55 million. As indicated above, the way in which the proposed deduction of $55 million is to be allocated as between PFM, MB and the Funder is the subject of a commercial arrangement between them. I do not consider it necessary or appropriate for the Court to ‘second guess’ that commercial arrangement in circumstances where it makes no practical difference for Registered Group Members (as I am satisfied that the overall deduction is fair and reasonable in the circumstances).

88    I note also that the Notice of Proposed Settlement included a statement that, under the proposed SDS, “the Joint Applicants and Registered Group Members will receive 50% of the total amount of the Settlement Sum, being at least AU$55,000,000 (before any interest which accrues on the settlement amount paid by BHP Ltd)”. This indicated that up to 50% of the settlement sum may be applied to legal costs and disbursements and funding expenses. As noted above, apart from four group members seeking to participate in the settlement, no one has objected to the proposed settlement.

89    For these reasons, and notwithstanding my misgivings about the amount of the legal costs and disbursements, I consider it appropriate to approve the proposed deductions for legal costs and disbursements and for funding expenses.

90    The applicants’ proposed orders include a common fund order to the effect that all Registered Group Members are to pay to the Funder a pro-rata percentage of the Funder Entitlements (as defined in the SDS) from any distribution received from the settlement. The Court has power under s 33V(2) of the Act to make such an order at the stage of settlement of a representative proceeding: Kain v R&B Investments Pty Ltd [2025] HCA 28; 99 ALJR 1138 at [10] per Gageler CJ, [35], [74] per Gordon, Steward, Gleeson and Beech-Jones JJ, [123] per Edelman J. Both the Opt Out and Registration Notice and the Notice of Proposed Settlement made clear that the applicants intended to seek a common fund order. It is appropriate that the legal costs and disbursements and the funding expenses be borne equally (pro-rata) by Registered Group Members. In circumstances where there are both funded and unfunded Registered Group Members, it is fair and reasonable that legal and funding expenses be shared equally (pro-rata) between them, given that they will share in the benefit secured by those expenses. I therefore consider it appropriate to make a common fund order as sought by the applicants and the other orders sought by the applicants that have the effect that the legal costs and expenses are shared equally (pro-rata) between Registered Group Members.

91    I consider the proposed deduction for reimbursement of the applicants for their time and expenses (a total of $40,000) to be reasonable for the reasons given in the applicants’ submissions.

92    I also consider the proposed deduction for administration costs ($623,770 incl. GST) to be reasonable for the reasons set out in the applicants’ submissions. I note that in her Supplementary Report, Ms Harris expresses the view that that amount is reasonable.

93    The applicants’ proposed orders include an order that Ms Harris’s reports be adopted. The reports of Ms Harris are clearly expressed and comprehensive. Ms Harris’s Revised Report is a substantial document, comprising 227 paragraphs over 48 pages (not counting annexures). Subject to my earlier comments, the opinions Ms Harris expresses appear to be soundly based. I consider it appropriate to adopt Ms Harris’s reports.

Conclusion

94    I will therefore make orders substantially in the terms proposed by the applicants, with the addition of an order to the effect that the four objectors be deemed to be Registered Group Members.

Associate:

Dated:    15 December 2025