Federal Court of Australia

Equity Financial Planners Pty Ltd v AMP Financial Planning Pty Ltd (No 4) [2026] FCA 115

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to ss 33V and 33ZF of the Federal Court of Australia Act 1976 (Cth), paragraph 9(l) of the orders dated 6 September 2024 (Settlement Orders) be varied by substituting “$1,006,000.00” with “1,815,000.00 (GST inclusive)” as the amount of “Administrator’s Costs” approved as a deduction from the Resolution Sum as outlined in the Settlement Distribution Scheme (approved by paragraph 1(b) of the Settlement Orders and amended by the orders dated 1 October 2024 and 10 February 2025).

2.    The Administrator must give electronic notice to each of the group members of the making of these orders and provide a copy of the Court’s reasons by 5 pm on 18 February 2026.

3.    Any group member who has a sufficient interest may apply to vary or revoke order 1 provided that the application together with a supporting affidavit is filed and served by 4 pm 3 March 2026.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from transcript)

MCELWAINE J:

1    The present application arises from the inherent uncertainty of accurately predicting likely future costs and disbursements. For reasons that I published on 6 September 2024, I made orders pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (FCA Act) the effect of which was to approve a Settlement Deed and a Settlement Distribution Scheme to resolve a representative proceeding brought on behalf of authorised representatives of AMP Financial Planning Pty Ltd concerning the effect and operation of the Buyer of Last Resort Policy: Equity Financial Planners Pty Ltd v AMP Financial Planning Pty Ltd [2024] FCA 1036 (primary reasons).

2    The headline approved Resolution Sum was $100 million. From that I approved many deductions to derive an anticipated fund to be distributed to Group members of $61,313,000. The Scheme provides for the appointment of a Scheme Administrator, comprising Andrew Ross and Ben Mahler of KordaMentha. One of the approved deductions was the amount of $1,006,000 for the costs of administering the Scheme. That amount was based on the estimates then provided.

3    The costs of administering the Scheme have increased beyond the estimate. The order that I made approved of the administration costs “subject to any further order of the Court varying this amount”. The Scheme also makes provision at cl 9 for the Administrator to request an increase upon application to the Court. The Administrators now apply for a variation to increase the amount to $1,815,000 (inclusive of GST), which is an increase of $809,000 from the approved amount. The application is supported by the affidavit of Ben Mahler made on 13 February 2026.

4    In addition to the reservation of power to vary in the orders in the Scheme, it is settled that ss 33V and 33ZF of the FCA Act enable further orders to be made to approve an increase in administration costs: McDonald v Commonwealth (No 4) [2025] FCA 1450, Mortimer CJ. The role of the Court is protective of the interests of all Group members, and as her Honour explained by reference to the decision of O’Bryan J in Reilly v Australia and New Zealand Banking Group Ltd (No 6) [2024] FCA 965 at [20], the Court must be vigilant in assessing such applications to ensure that only reasonable costs and disbursements are charged and incurred in the administration of a settlement scheme.

5    Ben Mahler explains in some detail the basis for the present application and has helpfully co-authored the interim Costs Report as at 31 January 2026. I have carefully considered his evidence and I am satisfied that I should accept it, and for the following reasons I am also satisfied that the application is soundly based, adequately explained and that overall the increase is fair and reasonable. I find the following facts from his evidence.

6    The estimates that were provided for the administration costs approved pursuant to the orders were based on a fee proposal prepared in April 2024. That estimate was $1,057,000. There was however an error in the rounded-up fee proposal, which I accept occurred as a result of a typographical error (which is unusual for an accounting practice) in stating that fee at $1,006,000, which accounts for $54,000 of the claimed increase.

7    Significant additional costs have been incurred in the assessment of Group 1 and Group 2 member claims. Interim settlements totalling approximately $23.8 million have been paid to Group 1 members, representing approximately 90% of their total settlement payments. The assessment of the Group 1 member claims has progressed more slowly than was anticipated due to the volume of documentation received, inconsistencies in documents provided and significant engagement with the individual Group members to clarify and to determine their claims. Likewise, the assessment and determination of Group 2 member claims has progressed significantly more slowly than anticipated. For example, on average since April 2025 the independent barristers have determined approximately 20 causation discount assessments per month, which is significantly less than the estimated time. There has also been an approximate doubling of the time taken by the independent barristers to review and determine the Group 2 member claims. In statistical terms, the original estimate was two hours to review and assess each claim with approximately 90 assessments being completed per month. In fact, on average it has taken between three and four hours to assess each claim, with an average of 20 assessments being completed per month. These increases are plainly beyond the control of the Administrators.

8    The result has been a significant increase in the fees and future estimated fees of the independent barristers from the original estimate of $301,400 (including GST) to $385,000 (including GST).

9    When the fee estimates were initially prepared, they were on a GST exclusive basis. After the orders were made the Administrators received legal advice that the trust for the Scheme cannot be registered for GST purposes, which has resulted in an effective increase in administration costs of 10%. That amounts to an increase of approximately $106,000.

10    The actual costs incurred in the initial phases of the Scheme administration were estimated at $69,300 (including GST) whereas the amount actually incurred was $203,281 (including GST) an increase of $133,981.

11    The estimated timelines have increased. Originally, it was anticipated that interim payments would be made to Group 1 members in May 2025 and final payments to all Group members in August and September 2025. The revised date for finalisation of payments is now mid-2026. The reason for the delay is that the Group 2 member claims cannot be finalised until satisfaction of the Group 1 member claims.

12    The detail as to why is revealed when one examines the increase in the estimate for the KordaMentha fees. To date the fees paid or incurred comprise $1,240,440. The forecast additional fee is $574,560, resulting in the revised estimate of $1,815,000. As explained by Ben Mahler approximately 14% of the increase is attributable to GST and the balance is explained by the additional complexities that have arisen during the administration. In summary:

(a)    the number of Group member queries has exceeded 500. For many individuals this process has been emotional and stressful, which I noted in my primary reasons. As such it is entirely understandable why it has taken more than the estimated time to resolve individual claims;

(b)    difficulties have arisen in determining the quantum of Group member claim values. The information provided by the Group members has not been consistent, with many applications failing to justify components of the claimed sums. The documentation provided by the Group members has not been consistent or standardised. For some Group members, documents have been provided at various dates which are inconsistent with the intended buy out option dates;

(c)    in some cases the responses from Group members have not been consistent with information provided in their claim documents;

(d)    there have been continuing costs of the Scheme administration, directly related to the increase in its length;

(e)    the initial registration and set up costs were higher-than-expected to incorporate all requirements of the Scheme;

(f)    legal issues arose in respect of one claimant, the result of which was that additional advice was required;

(g)    unanticipated time was devoted to managing the taxation affairs and continuing bookkeeping and service provider requirements for the fund, with the consequence that the original estimate of one financial year has not been adhered to;

(h)    additional management was required for bank accounts and term deposits to maximise the interest return;

(i)    unanticipated time was incurred in liaising with the independent barristers to provide updates; and

(j)    the Administrators have been required to provide monthly updated status reports to Group members.

13    Of the future estimates for the KordaMentha fees, it should be noted that the Administrators have to date paid $842,859 comprising full payment to all external parties and the firm has not issued invoices for work undertaken between 1 July and 31 December 2025 in the amount of $384,789 (including GST). The anticipated fees of the firm include a 15% discount to the usual hourly rates, which has also been applied to that work in progress.

14    There has been an increase in anticipated third party costs. Corrs Chambers Westgarth lawyers were engaged by the Administrators for assistance. The revised estimate for the firm’s fee is $95,000 including GST. The firm has been paid $51,517 as at 31 January 2026, and a further invoice of $12,791 is outstanding. The firm has provided a future estimate of approximately $30,000 (including GST) for future assistance until the conclusion of the Scheme administration. Of that, approximately $15,000 is related to this application.

15    The result is set out in a summary of the cost increases from the Costs Report:

16    I am satisfied that the Administrators have proceeded diligently in their work. Commencing in October 2024, they have established the necessary architecture for the Scheme, completed initial payments in November 2024 to the funder and for class-action legal costs, issued initial notices in December 2024, the registration of Group members was completed by 10 January 2025 which leaves for completion finalisation of Group 1 claims, any appeals and determination of the Group 2 claims and the closure of the Scheme in mid-2026.

17    There is an upside to the delay in administering the Scheme. The balance of the Resolution Sum was invested in term deposits. The original estimate for interest earned was $1,773,000. The revised estimate is now $2,992,000. The Scheme did not explicitly identify interest earned on deposits. The increase in the administration fees is more than fully offset by the additional interest. Further, the original estimate of the net Resolution Sum available for distribution to Group members was $61,313,000. The revised estimate, inclusive of the additional costs of the administration and interest, is now $61,722,000. Accordingly, the increased costs have not been at the direct expense of the Group members. The precise calculation is:

18    I am satisfied in accordance with these findings that there is an adequate explanation for the increase in administration costs, those costs are fair and reasonable and the overall outcome is not detrimental to the Group members. I will therefore make the order sought by the Administrators.

Associate:

Dated:    17 February 2026