Federal Court of Australia

FZR24 v Commonwealth of Australia (No 2) [2026] FCA 1573

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) (the Act), the settlement comprised of the settlement deed and Settlement Distribution Scheme at Annexure RG-1 of the affidavit of Rebecca Joy Geyer sworn on 5 February 2026, pursuant to which the Commonwealth will pay the applicant $28,210,000 to be distributed in accordance with the Settlement Distribution Scheme, be approved.

2.    To the extent necessary, pursuant to r 9.71 of the Federal Court Rules 2011 (Cth) (the Rules), the settlement in respect of the applicant in proceeding SAD 136/2024 arising from the settlement referred to in paragraph 1, be approved.

3.    Pursuant to s 33ZF of the Act, Shine Lawyers be appointed as the Administrator of the Settlement Distribution Scheme.

4.    The Administrator of the Settlement Distribution Scheme has liberty to apply in respect of any matter arising from or in relation to the administration of the Settlement Distribution Scheme upon 3 days’ notice to each other party.

5.    Pursuant to ss 33V(2) and 33ZF(1) of the Act, deductions from the settlement, totalling $11,172,367.25, be approved and paid as follows (using terms defined in the deed):

(a)    $1,799,287.21 to the applicant’s lawyers, for the “Applicant’s Costs”;

(b)    $8,949,402.66 to the applicant’s lawyers, for costs of the “Other Transferred Proceedings” (other than as provided for in subparagraph c below);

(c)    $300,957.38 to Litigation Disbursement Funding Australia and Western Funds Management Pty Ltd, in relation to the funding of disbursements that occurred in the applicant’s proceeding prior to transfer to this Court, and the “Other Transferred Proceedings”;

(d)    $27,720.00 to the costs assessor, for the “Costs Assessor’s Costs”;

(e)    $20,000.00 to the applicant, for the “Reimbursement Payment”;

(f)    $75,000.00 to the Administrator, for the “Administration Costs”.

6.    Upon payment of the settlement sum of $28,210,000 to the applicant’s solicitors, the proceedings stayed by order on 11 December 2024, being those proceedings identified in Annexure A to these orders, is dismissed.

7.    Upon completion of the administration of the Settlement Distribution Scheme, this proceeding be dismissed.

8.    All costs orders in this proceeding and the proceedings identified in Annexure A to these orders are vacated.

9.    Pursuant to ss 33AF and 37AG(1)(a) of the Act, on the ground that it is necessary in order to prevent prejudice to the proper administration of justice, and until further order:

(a)    Exhibits CRA-1 and CRA-2 to the affidavit of Craig Richard Allsopp filed on 5 May 2026;

(b)    the fifth affidavit of Erin Louise Shriner affirmed on 6 February 2026;

(c)    the eighth affidavit of Erin Louise Shriner affirmed on 10 June 2026;

be kept confidential and not be disclosed to any person without the leave of the Court.

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

REASONS FOR JUDGMENT

O’SULLIVAN J:

1    There are two interlocutory applications before the Court.

2    The first, dated 5 February 2026 and filed by the applicant, FZR24, seeks Court approval of an agreement to settle a representative proceeding pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) (settlement approval hearing) and certain other interlocutory orders including an application pursuant to r 9.71 of the Federal Court Rules 2011 (Cth) approving a settlement in respect of the applicant in Heidari v Commonwealth of Australia & Ors (SAD 136/2024), who is a group member in the present proceeding.

3    The second, dated 6 February 2026 and filed by the respondent, the Commonwealth of Australia, seeks certain confidentiality orders over certain documents relating to the proposed settlement.

4    I heard the two interlocutory applications on 11 June 2026 and reserved my decision. During the hearing, I invited the parties to provide further information to my chambers and after consideration of that information, and given the length of time the proceedings had been on foot, I made orders on 18 June 2026, ahead of publishing reasons.

5    In those orders, amongst other things, I approved the settlement, approved the settlement in respect of the applicant in Heidari and refused the application for confidentiality.

6    These are the reasons for making those orders.

Factual and procedural background

7    On 20 April 2001, the applicant arrived at Ashmore Reef, Western Australia by boat. He was detained pursuant to s 189 of the Migration Act 1958 (Cth) due to not having a valid visa to enter Australia and was therefore an unlawful non-citizen.

8    From 1 May 2001 to 11 April 2003, the applicant was in immigration detention at the Woomera Detention Centre and from 11 April 2003 to 5 September 2005, he was detained at the Baxter Detention Centre.

9    The Commonwealth operated Woomera and Baxter through the cross-respondents, Australasian Correctional Services Pty Ltd and G4S Australia Pty Ltd. Woomera was operated by ACS until the facility closed in about April 2003. Baxter commenced operation in September 2002 and was operated by ACS until January 2004. G4S assumed the management and operation of Baxter in January 2004 and continued to operate it until the facility closed in August 2007.

10    As from in or about 2012, the applicant and other former detainees commenced individual proceedings against the Commonwealth in relation to their detention at the Woomera and/or Baxter Detention Centres in either the District Court of South Australia or the Supreme Court of South Australia. Their claims shared similar allegations that the Commonwealth was negligent or committed intentional torts while they were in detention.

11    One of those proceedings was the matter of Saadat v Commonwealth & Ors (SCCIV-18-470) which was fixed for hearing in February 2019 before the Supreme Court. This was not a test case, but it was understood that trials in the other proceedings should not proceed pending judgment in Saadat as it would be instructive. That trial commenced on 6 April 2021 and continued through to 20 December 2022, with judgment delivered on 9 May 2025: Saadat v Commonwealth & Ors [2025] SASC 59 (Stanley J).

12    A callover was held in the District Court in August 2023, at which time the parties were informed that it was estimated the last of the parties’ individual proceedings would not be listed until at least 2029 (including the applicant and the group members’ proceedings).

13    Subsequently, the applicant and a number of other plaintiffs applied to the Supreme Court in October 2023 to transfer their proceedings in the District Court and Supreme Court to this Court pursuant to ss 5(1) and 8(1) of the Jurisdiction of Courts (Cross Vesting) Act 1987 (SA).

14    The proceedings were transferred in tranches. On 30 January 2024, Kourakis CJ made orders transferring 29 matters in the District Court and Supreme Court to this Court for the reasons given in Firuzibahksh & Ors v Commonwealth & Ors [2024] SASC 11. The remaining matters were transferred in subsequent tranches, the last of which was transferred pursuant to orders made by Stein J on 4 July 2024.

The proceedings in this Court

15    On 14 November 2024, the Court made orders that the summons issued in the proceedings filed in the District Court and transferred to this Court, be treated as an originating application.

16    On 11 December 2024, the Court made orders granting the applicant leave to amend his originating application to commence a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) and made orders staying the 37 other individual proceedings transferred to the Court.

17    On 7 January 2025, the applicant filed an amended originating application and amended statement of claim. The Commonwealth filed its defence and cross-claimed for contribution and indemnity against the cross-respondents on 21 March 2025.

18    On 11 June 2025, the Court made an order setting the matter for trial commencing 4 May 2026 to run for an estimated 13 weeks.

19    In December 2025, the parties attended a mediation conducted by the Hon. Wayne Martin AC KC and Judicial Registrar Colbran of this Court. The parties agreed to settle the proceeding subject to Court approval and executed a settlement deed on 23 December 2025.

20    On 9 February 2026, the Court made orders:

(a)    that the trial listed for 4 May 2026 be vacated;

(b)    pursuant to ss 33X, 33Y and 33ZF of the FCA Act, in relation to notifying group members;

(c)    pursuant to ss 33ZF, 37P(2) and 54A of the FCA Act and Div 28.6 of the FCR, in relation to costs; and

(d)    suppressing the proposed settlement and related material until 4:30pm (ACST) on 11 May 2026 (suppression orders).

21    In accordance with s 33V of the FCA Act, the settlement approval hearing was listed for 11 May 2026. Subsequently, that date was varied to 11 June 2026 and the suppression orders made on 9 February 26 were extended to 4:30pm (ACST) that day.

The application for confidentiality orders

22    If an application has been made for a substantive suppression order, the Court has the power, pursuant to s 37AI of the FCA Act, to make an interim suppression order, and in such circumstances determine the application as a matter of urgency.

23    By an application dated 6 February 2026, the Commonwealth sought substantive suppression orders covering the material filed in relation to the application for approval of the settlement until the conclusion of the s 33V settlement approval hearing. The Court proceeded to grant the suppression orders on 9 February 2026.

24    The Commonwealth now seeks orders extending the suppression over the proposed settlement material until 12 October 2026, or until the final determination of the settlement approval application, (whichever is later).

25    That application is brought principally on the basis that the suppression is necessary to prevent prejudice to the administration of justice in circumstances where there are related proceedings outstanding in the District Court. The Commonwealth submits that disclosure of the proposed settlement terms to non-parties who still have proceedings pending against the Commonwealth, but who are not group members, may serve to create unrealistic expectations as to the value of those related proceedings so as to adversely affect any future mediations and negotiations in those matters.

26    The Commonwealth refers to the reasons of Button J in AYX18 (by his litigation representative AYY18) v Minister for Home Affairs [2024] FCA 974 where her Honour considered an application for confidentiality over the terms of settlement at [35]-[36]:

[35]     … Were the Applicant not a minor, the Court’s approval would not have been required and no question of whether the Deed should remain confidential would arise.

[36]     … I consider that the administration of justice is served if parties to future mediations — in particular, the proceedings within this cohort — can have confidence that the Court may be willing to facilitate the resolution of such proceedings, including by orders for confidentiality as to the terms of the proposed settlement. In addition, dissemination of the terms of the settlement reached with the Applicant would tend to undermine the Respondents’ position in future mediations of proceedings in the cohort, making it less likely that such mediations will be successful in resolving the dispute. That would be inimical to the administration of justice.

27    The applicant opposes the respondent’s application for suppression. The applicant submits that AYX18 is distinguishable from the present case because the settlement in that case was between an applicant and respondent and the application for confidentiality was made jointly, whereas this is a class action case where a settlement has been entered between a representative applicant and the Commonwealth, which is subject to the Court’s approval.

28    The applicant submits further that the Commonwealth’s need for confidentiality to allow it to negotiate in other proceedings, in circumstances where there is a global settlement sum, subject to a deduction for costs, should be given only a modicum of weight in circumstances where non-parties do not know what fraction of the global sum each of the individual group members received.

29    I accept the applicant’s submission. The principle of open justice demands that the confidentiality orders be discharged and for that reason, the application for continuing confidentiality is dismissed.

The settlement approval application

30    The applicant seeks orders for approval of the settlement provided for in the settlement deed.

Principles

31    Section 33V(1) of the FCA Act provides that a representative proceeding may not be settled without the approval of the Court. The Court will approve a settlement if it considers the settlement to be fair and reasonable as between the parties, and as between the group members: Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330; (2017) 343 ALR 476 at [81]-[85] (Beach J).

32    The factors to be considered in determining whether a settlement is fair and reasonable are well-settled and include:

(a)    the complexity and likely duration of the litigation;

(b)    the reaction of the class to the settlement;

(c)    the stage of the proceedings;

(d)    the risks of establishing liability;

(e)    the risks of establishing loss or damage;

(f)    the risks of maintaining a class action;

(g)    the ability of the respondent to withstand a greater judgment;

(h)    the range of reasonableness of the settlement in light of the best recovery;

(i)    the range of reasonableness of the settlement in light of all the attendant risks of litigation; and

(j)    the terms of any advice received from counsel and/or from any independent expert in relation to the issues which arise in the proceeding.

See Williams v FAI Home Security Pty Ltd (No 4) [2000] FCA 1925; 180 ALR 459 at [19] (Goldberg J); Caason Investments Pty Limited v Cao (No 2) [2018] FCA 527 at [12]-[13] (Murphy J).

33    In considering whether a proposed settlement is fair and reasonable, the Court must consider whether the settlement is “within the range of reasonable outcomes”: Webb v GetSwift Limited (No 7) [2023] FCA 90; 414 ALR 500 at [15]-[16] (Murphy J) and the cases cited therein.

The parties’ submissions and consideration

34    The applicant notes that some of the group members’ claims have been pending as far back as 2012. So too, the Commonwealth and cross-respondents have waited a long time to resolve this dispute.

35    Against that background, the applicant submits that the proposed settlement would bring certainty and finality to a factually complex dispute, which, if it were to proceed to trial, would carry significant cost implications. It is for those reasons the applicant submits that the proposed settlement falls within the range of reasonable outcomes: Webb at [15]-[16].

36    The Commonwealth supports the proposed settlement for similar reasons.

37    Having considered the material placed before the Court, I accept the applicant’s submissions.

Deduction to settlement sum on account of costs

38    The settlement sum is subject to deductions for the costs of administering the settlement, the costs of the class action and earlier proceedings, the costs of the costs assessor and a reimbursement payment to the lead applicant.

39    The applicant seeks orders that deductions from the settlement sum totalling $11,172,367.25 be approved and paid in accordance with the terms sought.

The assessment of costs of the class action and earlier proceedings, the costs of the costs assessor and reimbursement to the lead applicant costs

40    By his report dated 4 May 2026, the appointed costs assessor, Roland Patrick Matters, concluded that the sum of $10,519,514.99 (inclusive of GST) incurred by Tindall Gask Bentley Lawyers (before the applicant and group members’ proceedings were reconstituted) and Shine Lawyers (after acquiring the applicant and group members’ files) up to 30 March 2026 was reasonable.

41    The deductions sought under the applicant’s proposed orders incorporate additional amounts totalling $229,174.88 for legal costs incurred between 31 March 2026 and 31 May 2026, and costs that were estimated to be incurred between 1 June 2026 and 11 June 2026 (being the date of the settlement approval hearing).

42    The applicant and the group members have been informed of their estimated net receipts and have raised no objections to the proposed deduction for costs. It is for reasons given, in the confidential opinion of counsel, that the net payment to the group members falls within a reasonable range.

43    As to the proportionality of those costs, the Commonwealth, rightly, refers to the reasons of Mortimer CJ in McDonald v Commonwealth of Australia [2025] FCA 380; (2025) 309 FCR 584 where her Honour emphasised the Court’s protective role as to group members in a class action. In that case, her Honour: at [421] was critical of the excessive rates charged by the applicant’s solicitors:

… The high fees charged for these tasks illustrate the failures and flaws in the method and approach adopted by [the firm] in the past.

(square brackets provided)

44    The applicant notes that the costs incurred by Tindall Gask Bentley and Shine represent approximately 37% of the $28.21 million settlement sum and submits that percentage is reasonable considering the complexity of the proceedings and the significant net recovery available to the applicant and group members. The applicant refers to the observations of Beach J in Blairgowrie: at [181]:

[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.

See also his Honour’s observations in Foley v Gay [2016] FCA 273 at [24].

45    In that sense, the applicant submits the circumstances are distinguishable from those which are described in McDonald: at [421], and that where the costs assessor has concluded the costs are reasonable, a deduction for those costs should be approved.

46    The Commonwealth raised queries about the quantum of costs and the costs assessor’s assessment. Those queries were properly raised, and the applicant provided explanations as to the calculation of the proposed costs deductions and the matters considered by the costs assessor. Ultimately, the Commonwealth did not seek to take its concerns further, though it maintained some concerns as to the transparency of the approach taken by the costs assessor. Nonetheless, I am satisfied with the approach taken and in all the circumstances, I accept the applicant’s submissions and consider that the costs are reasonable.

The administration of the settlement

47    The applicant proposes that Shine administer the settlement and seeks an order approving a $75,000 deduction for the estimated cost of the administration (inclusive of the costs of independent legal advisors to conduct any reviews sought by group members). It is submitted this is the most efficient course considering Shine’s familiarity with the proceeding and its existing relationship with the applicant and group members.

48    The respondent raised no objection to that estimate, and I am satisfied that Shine should administer the settlement.

The remaining deductions from the settlement sum

49    The remainder of the deductions sought are in the sums of:

(a)    $300,957.38 to be paid to Litigation Disbursement Funding Australia and Western Funds Management Pty Ltd in relation to the funding of disbursements that occurred in the applicant and group members’ proceedings prior to their transfer to this Court;

(b)    $27,720.00 to the costs assessor; and

(c)    a $20,000.00 reimbursement payment to the lead applicant.

50    I am satisfied those deductions are reasonable.

Conclusion

51    It is for these reasons that the orders were made.

Associate:

Dated:    21 October 2026

SCHEDULE OF PARTIES