Federal Court of Australia

McDonald v Commonwealth of Australia (No 5) [2026] FCA 1541

ORDERS

THE COURT NOTES THAT:

A.    On 14 November 2024, the Court made the first tranche of final orders in respect of the Settlement Approval Application (First Tranche Orders).

B.    On 20 December 2024, the Court made the second tranche of final orders in respect of the Settlement Approval Application (Second Tranche Orders).

C.    On 28 May 2025, the Court made the third tranche of final orders in respect of the Settlement Approval Application (Third Tranche Orders).

D.    On 29 August 2025, the Court made orders extending the Registration Date to 3 October 2025 and extending the Administration Finalisation Date to the date 42 weeks after that, or such later date as the Court may by subsequent order specify (Fourth Tranche Orders).

E.    On 24 November 2025, the Court made orders approving the Administrators’ increased costs (Fifth Tranche Orders).

F.    On 5 March 2026, the Court made orders directing the Administrators to make Eligible Claimant Payments to Eligible Claimants and Eligible Descendant Claimants, and approving payments of other costs (Sixth Tranche Orders).

G.    Unless otherwise stated, a capitalised term in these Orders bears the same meaning as defined in the Settlement Deed dated 30 August 2024, including the Scheme, made between the Applicant and the Commonwealth of Australia and dated 30 August 2024, as varied by the Orders dated 16 September 2024, the First Tranche Orders and the Third Tranche Orders.

BY CONSENT, THE COURT ORDERS THAT:

1.    Pursuant to ss 23, 33ZF and 37P of the Federal Court of Australia Act 1976 (Cth), the Administration Finalisation Date, for the purposes of clauses 1.1.1a and 2.20.1 of the Deed, is 25 January 2027, or such later date as the Court may by subsequent order specify.

2.    There be no order as to costs.

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

REASONS FOR JUDGMENT

MORTIMER CJ:

Introduction

1    On 14 November 2024, the Court made orders approving the settlement of this proceeding on the terms set out in a Deed of Settlement, including the “Settlement Distribution Scheme” at Schedule 1 to that Deed. On five subsequent occasions, the Court has made orders for the purposes of, or varying, the Deed and the Scheme: see the orders of 20 December 2024, 28 May 2025, 29 August 2025 and 24 November 2025.

2    The background to this claim, the details of the proceeding and the reasons for the Court’s approval of the settlement are set out in the Court’s principal settlement approval reasons in McDonald v Commonwealth of Australia [2025] FCA 380; (2025) 309 FCR 584. These reasons assume some familiarity with the principal reasons, and I adopt the same terminology here.

3    In short, the Deed and Scheme provide for an “Administration” by which an “Administrator” is to distribute the “Net Settlement Fund Amount” (being the court-approved settlement sum of $180,000,000 less court-approved deductions) to “Eligible Claimants” or their descendants. By cl 2.20.1 of the Deed, the Administrator is to “use best endeavours to complete the Administration by the Administration Finalisation Date”.

4    The Administration Finalisation Date was originally 14 November 2025, being the date 12 months after the settlement was approved: see cl 1.1.1.a of the Deed. As discussed in more detail below, the date has already been extended once, to 24 July 2026. The parties and the Administrator, by correspondence to my chambers dated 10 September 2026, now seek for it to be extended again, to 25 January 2027.

5    The finalisation of the Administration has been affected by delays. I consider it is now appropriate for the Court to give a public narrative of what has been occurring, so that the group members, their families and those assisting them can understand why the Court has continued to extend the Administration Finalisation Date.

Background

6    Aspects of the delay are described in McDonald v Commonwealth of Australia (No 3) [2025] FCA 1048. The application before the Court on that occasion primarily concerned the extension of the date by which registration forms for potential claimants had to be received by the Administrator. As explained at [25], the main reasons for seeking that extension were that:

(a)    a number of registration forms provided before the settlement was approved had not yet been “converted” into the appropriate form post-approval;

(b)    information in relation to the settlement was “still spreading among potential claimants by word of mouth”;

(c)    community stakeholders required more time to conduct “outreach” among potentially affected communities;

(d)    Shine Lawyers required more time to review and, if necessary, correct any deficiencies in registration forms; and

(e)    taken together, these reasons posed a risk that “far fewer group members in this proceeding will receive compensation than occurred” in the Street v State of Western Australia proceeding (WAD 237 of 2020).

7    McDonald (No 3) also concerned a related application to extend the Administration Finalisation Date, in support of which the Administrator referred to difficulties in processing registration forms owing to “issues of various kinds, such as inconsistent birth dates, lack of documentation and absent bank details”: see [55].

8    On 29 August 2025, the Court made orders extending the date by which registration forms could be received from 31 August 2025 to 3 October 2025 and extending the Administration Finalisation Date from 14 November 2025 to 24 July 2026.

9    Recent reports of the Administrator suggest that some of the issues summarised at [6] above have continued to cause delay. All the Administrator’s reports are accessible via the online file established by the Court for this proceeding. For example, in the seventh report, filed 17 April 2026, the Administrator reported as follows at [10]:

Between February 2026 and March 2026, a number of community stakeholders have come forward to the Administrators and to Shine Lawyers expressing concerns including that some claimants did not know about the Scheme, could not register, or encountered issues. The Administrators are proactively working with Shine Lawyers, the Commonwealth, and relevant community stakeholders to work through the issues raised, including how they should be resolved. In the event further directions or Orders are required from the Court, the Administrators will work with the Parties to seek those accordingly.

10    In response to those concerns, the Administrator met with representatives from Shine Lawyers, the Commonwealth, the North Australian Aboriginal Justice Agency and other community stakeholders on 30 April 2026: see the Administrator’s eighth report, filed 17 June 2026, at [12]. At [14]–[16] of that report, the Administrator describes the outcome of the meeting as follows:

At the conclusion of the Meeting, the representatives in attendance mutually agreed that NAAJA would engage with its stakeholder networks and provide the Administrators, Shine Lawyers and the Commonwealth with further, specific details about the circumstances of any alleged missed or late registrations, including:

(a)    the number of alleged missed or late registrations;

(b)    the communities affected; and

(c)    the reasons why they were unable register.

As at the date of this report, the Administrators are yet to hear back from NAAJA.

On 28 May 2026, following the Meeting, the Administrators prepared and provided fact sheets to NAAJA to assist them with answering queries from community members about the status of the Administration, and for them to distribute to other community organisations or claimants/potential claimants, as necessary. These fact sheets clearly and concisely set out that the Registration Period has ended; that there is no further ability for group members to register to participate in the Scheme; and that final payments have been made in all but a small number of cases, which we are actively seeking information (e.g. bank details) to progress.

11    In its ninth report, filed on 17 August 2026, the Administrator stated that it was still yet to hear back from NAAJA: see [13] of that report. On 8 September 2026, the Court (through my Associate) wrote to the parties and the Administrator asking the Administrator what proactive steps it had taken to meet with NAAJA again about these concerns. In response, the Administrator repeated much of what is extracted from the seventh and eighth reports above and also indicated that it had written to NAAJA again on 1 July 2026 but had not received a response. It is unclear to me whether direct approaches have been made to NAAJA, such as phone calls, or in-person visits. It is unclear to me whether the Administrator has been dealing with senior leadership at NAAJA.

12    The Court also asked the Administrator two further questions. The first concerned phone calls received by the Administrator that were diverted to voicemail but that did not receive a return call (see [11] of the ninth report). An explanation was sought about why some phone calls were not being routinely returned by the Administrator. In response, the Administrator explained some of the circumstances in which phone calls are not returned, including where the query is about the timing or quantum of a payment, or where it relates to another class action, or where the caller requests a review of a payment amount in circumstances where the review period has ended. In follow-up correspondence, the Administrator explained that calls of that nature had previously been returned during the period in which it operated a ‘call centre’ for the Scheme. The Administrator ceased operating this ‘call centre’ approximately five months after the date by which it could receive registration forms. The Administrator added that it continued to provide information about such matters through other means, such as by providing information sheets to community organisations and via its website.

13    I have set out the Administrator’s statements on these matters because they are of general relevance to the orders that the Court has made today.

14    The Court’s second question asked how long the Administrator expected it would take to finalise the outstanding payments identified at [26] of the ninth report. The Administrator’s response was as follows:

Of the 45 payments outstanding in respect of 25 Claimants:

1.    21 payments to 14 claimants are expected to be made by 18 September 2026, though some of these will be by cheque; and

2.    24 remaining payments to 11 claimants cannot be made until further details are obtained. In particular, the Administrators require next of kin details for 8 Claimants who have passed away since being determined to be Eligible, and the Administrators require either bank details or valid address details for four claimants to enable payment to be made.

The Administrators are continuing to engage with local Indigenous organisations in the Northern Territory, and the Public Guardian and Trustee for the Northern Territory, to assist with obtaining contact details for next of kin.

The parties’ proposed orders

15    On 10 September 2026, the Administrator wrote, with the consent of the parties, to my chambers with a set of proposed orders that would extend the Administration Finalisation Date to 25 January 2027 (or such later date as the Court may by subsequent order specify). In doing so, the Administrator made reference to section Y of the Scheme, which deals with the application of any uncollected residue in the Net Settlement Fund Amount, and the need to give claimants a reasonable opportunity to deposit any outstanding cheques (of which there were 126 at the time).

16    By further correspondence on 14 October 2026, the Administrator indicated that the number of undeposited cheques had since decreased to 69. The Administrator then foreshadowed the possibility of it and the parties seeking a further amendment to the Scheme:

In addition to the above, the parties and the Administrator are continuing to engage with respect to a cohort of persons who have not been able to participate in the scheme, but who, subject to further amendment, may be brought within the scheme. We expect the parties and the Administrator will meet within the next week and will be in a position to provide the court with an update once that has occurred.

Consideration

17    The only instance in which the expression “Administration Finalisation Date” appears in the operative parts of either the Deed or the Scheme is in cl 2.20.1 of the Deed. That provision requires the Administrator to “use best endeavours to complete the Administration by” that date. The amended Administration Finalisation Date of 24 July 2026 has already passed and yet the Administrator has continued to administer the Scheme. Accordingly, I do not apprehend that the parties and the Administrator consider it necessary, in a strict sense, for the Administration Finalisation Date to be extended in order for the Administrator to finalise the Administration. However, I agree with them that it is appropriate in the circumstances to do so. The material before the Court indicates there may still be a significant number of claimants who have not been able to lodge applications in circumstances where it is likely to result in them actually receiving some compensation.

18    It is in the interests of justice that the Administrator is able to reach as many potential claimants as possible, and to assist them to file claims, and receive compensation if they are eligible.

19    It is also appropriate to fix a new Administration Finalisation Date so as to focus the minds of those involved in finalising the Administration. That is not necessarily intended to be a criticism of those who have been involved to date, but rather a recognition of the realities. As I have previously observed, the administration of this settlement involves practical challenges: see, eg, principal reasons at [191]–[192]; McDonald (No 3) at [58]; McDonald v Commonwealth of Australia (No 4) [2025] FCA 1450 at [79]–[80]. That said, it might be the case that if more proactive attempts had been made to work with NAAJA, some of these communication and compliance challenges might have been reduced, and more people might have been assisted to lodge complaint documentation.

20    The Court must balance the interests of reaching as many potential claimants as possible against the need for finality and giving group members the chance to be able to get on with their lives: see principal reasons at [174].

21    I am satisfied the extension orders made today are appropriate, given the specific steps the Administrator has outlined that need to be taken to contact claimants with unfulfilled claims, and to obtain correct details or documentation for them. Once again, the Court hopes lessons are learned about more effective ways in the future that these large-scale claims involving First Nations Peoples living in remote areas can be managed, including in conjunction with community organisations.

22    The Court’s orders will also assist the parties and the Administrator as they consider whether to seek any further amendments to the Scheme and help to give momentum to the apparently stalled processes arising out of the 28 May 2026 meeting at which NAAJA was present.

23    Finally, the parties and the Administrator propose that there should be no order as to costs in relation to the making of these orders. I agree that is the appropriate order.

Conclusion

24    The settlement of this proceeding was approved by the Court nearly two years ago. The claim itself relates to a period between 1933 and 1971. Although the Court’s orders refer to the possibility of the Court specifying, by subsequent order, a later date as the Administration Finalisation Date, the parties and the Administrator are on notice as to the Court’s expectation that the settlement is to be completed in as timely a manner as possible.

25    Although the Court’s orders are made with the agreement of the parties, given the lengthy delays in finalising this Scheme, the number of claimants and their families involved, and the wider public interest in this proceeding, I considered it was appropriate for the Court to publish reasons explaining what the process had been to this point. A further benefit of publication of the challenges that have been faced is to assist the more effective and efficient conduct of such proceedings in the future.

Associate:

Dated:    16 October 2026