Johnson v Wilson Security Pty Ltd - Settlement and Distribution Scheme Approved

Original Word Document (102.9 KB) Federal Court of Australia

Johnson v Wilson Security Pty Ltd [2026] FCA 447

| File number: | WAD 229 of 2022 |

| Judgment of: | COLVIN J |

| Date of judgment: | 16 April 2026 |

| Catchwords: | REPRESENTATIVE PROCEEDINGS - application for Court approval of proposed settlement terms and scheme for distribution to group members - where scheme contemplates distribution to pay fees of lawyers for representative applicant - where partner of lawyers for representative applicant proposed to be administrator of scheme - where objection received from some members - where previous representative applicant objected to proposed amount of legal fees to be distributed and appointment of partner as administrator - where bifurcation proposed - bifurcation not ordered - proposed settlement terms and scheme approved - orders made approving scheme and specifying the amount of legal fees to be distributed to lawyers for representative applicant |

| Legislation: | Fair Work Act 2009 (Cth) s 570

Federal Court of Australia Act (Cth) s 33V

Legal Profession Act 2006 (ACT) ss 271, 272, 274, 277, 279

Legal Profession Regulation 2007 (ACT)

Legal Profession Uniform Law (NSW) |

| Cases cited: | Australian Securities and Investments Commission v Richards [2013] FCAFC 89

Botsman v Bolitho [2018] VSCA 278; (2018) 57 VR 68

Davis v Quintis Ltd (Subject to Deed of Company Arrangement) [2022] FCA 806

J & J Richards Super Pty Ltd v Linchpin Capital Group Limited (Settlement Approval) [2023] FCA 656

Kain v R&B Investments Pty Ltd [2025] HCA 28

Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323

McKenzie v Cash Converters International Ltd (No 3) [2019] FCA 10

Parkin v Boral Ltd [2022] FCAFC 47; (2022) 291 FCR 116

Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (Settlement Approval) [2023] FCA 143

Thomas v Romeo Lockleys Asset Partnership [2022] FCA 1106

Wilkinson v Wilson Security Pty Ltd (No 3) [2024] FCA 705

Wills v Woolworths Group Limited [2022] FCA 1545 |

| Division: | Fair Work Division |

| Registry: | Western Australia |

| National Practice Area: | Employment and Industrial Relations |

| Number of paragraphs: | 71 |

| Date of hearing: | 27 March 2026 |

| Counsel for the Applicant: | Mr P McCabe |

| Solicitor for the Applicant: | Adero Law |

| Counsel for the Respondent: | Mr M Felman KC with Ms R Howe |

| Solicitor for the Respondent: | Seyfarth Shaw Australia |

| Counsel for the First Interested Party: | Mr GMG McIntyre SC with Mr JF Raftos |

| Solicitor for the First Interested Party: | Argos Legal |

| Counsel for the Second Interested Party: | Mr RM Markham |

| Solicitor for the Second Interested Party: | Adero Law |
ORDERS

| WAD 229 of 2022 |

| BETWEEN: | NICOLE JOHNSON

Applicant | |
| AND: | WILSON SECURITY PTY LTD (ABN 90 127 406 295)

Respondent | |
| | PITA AWATERE TE TAU O TE RANGI

First Interested Party

ADERO LAW

Second Interested Party | |

| order made by: | COLVIN J |
| DATE OF ORDER: | 16 April 2026 |
THE COURT ORDERS THAT:

1. These orders are conditional upon the applicant and the respondent filing a minute of consent to the following orders and the making of orders to that effect:

(a) There be leave to the applicant to amend the second further amended originating application and the second further amended statement of claim to add a further condition to membership of the group to whom the proceedings relate, namely that the person was included in the list of persons in Annexure A to the deed titled 'Deed of Settlement' dated 21 October 2025 being annexure RMM5-2 to the affidavit of Rory Michael Markham sworn 15 December 2025 (Deed of Settlement); and

(b) Filing and service of documents to give effect to these orders be dispensed with.

1. Pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth), the settlement of this proceeding and the claims of the applicant and each group member on the basis set out in:

(a) the Deed of Settlement; and

(b) the deed titled 'Novation Deed' as executed by the parties a copy of which formed pages 15 to 24 of the supplementary court book on the approval application (Deed of Novation),

(together, Settlement) is approved.

1. Pursuant to s 33V and s 33ZF of the Federal Court of Australia Act, the Court authorises the applicant, nunc pro tunc, to enter into and give effect to the Deed of Settlement for and on behalf of all group members who did not file an opt out notice in accordance with s 33J of the Federal Court of Australia Act (Bound Group Members).

2. Pursuant to s 33ZB of the Federal Court of Australia Act, the persons affected and bound by the Settlement are Ms Johnson, Mr Awatere Te Tau O Te Rangi, the respondent and the Bound Group Members.

3. Pursuant to s 33V(1) of the Federal Court of Australia Act, the settlement distribution scheme attached as Annexure 1 to the approval application (Scheme) is approved.

4. Pursuant to s 33V(2) of the Federal Court of Australia Act, Rory Michael Markham of Adero Pty Ltd is appointed as Administrator of the Scheme to act in accordance with the Scheme and is given the powers and afforded the immunities contained in the Scheme.

5. The Administrator has liberty to apply in relation to any matter arising in connection with the Scheme.

6. Pursuant to s 33V(2) of the Federal Court of Australia Act and for the purposes of the Scheme, a deduction be approved for the 'Administration Costs' (as defined in the Scheme) in the amount of $87,530.

7. Pursuant to s 33V(2) of the Federal Court of Australia Act and for the purposes of the Scheme, a deduction be approved for the 'Applicant's Legal Costs and Disbursements' (as defined in the Scheme) of $915,000 (inclusive of GST) and no further deduction shall be made for Applicants Legal Costs and Disbursements.

8. Pursuant to each of s 22, s 23 and s 33ZF of the Federal Court of Australia Act, r 1.32 of the Federal Court Rules 2011 and the Court's implied jurisdiction, and with effect from the date on which the Administrator provides to the Court the certificate in accordance with the Scheme:

(a) all remaining claims of the applicant and all Bound Group Members in these proceedings are dismissed without further order; and

(b) these proceedings are dismissed without further order on the basis that the dismissal is a defence and absolute bar to any claim (either directly or indirectly) or proceeding by the applicant or Bound Group Member in respect of, or relating to, the subject matter of the proceedings, without prejudice to any right of any party to enforce the Deed of Settlement or Deed of Novation in a new proceeding.

1. Save as ordered in these orders, all costs orders in the proceeding are vacated.

2. There be no order as to costs between the applicant, Pita Awatere Te Tau O Te Rangi, Adero Law and the respondent.

3. Until 31 December 2031, pursuant to s 37AF(1)(b)(iv) and s 37AG(1)(a) of the Federal Court of Australia Act, in order to prevent prejudice to the proper administration of justice, the material listed in the schedule to these orders is to remain confidential and its publication is prohibited.

4. On or before 30 April 2026, the applicant is to upload to the Court file in these proceedings the material listed in the schedule to these orders with the confidential material redacted.

5. Until 23 April 2026, these reasons are to be kept confidential to the parties and their legal representatives.

6. Save as ordered in these orders, with effect from 23 April 2026, all previous suppression, non-publication and confidentiality orders are revoked.

7. There be liberty to the parties to apply on or before 23 April 2026 for any further suppression, non-publication or confidentiality orders.

8. The liberty reserved by order 17 may be exercised by sending an email to the case managing judge setting out the orders sought and submissions of no more than 3 pages as to the basis upon which the orders are sought.

Schedule

A.    Annexure A to the Deed and the Heads of Agreement.

B.    Personal details of any of the Bound Group Members.

C.    Copies of the opinion of Mr Patrick McCabe.

D.    Copies of the opinion of Mr Lachlan Armstrong KC.

E.    Copies of correspondence with Mr McCabe or Mr Armstrong KC in relation to the provision of their opinions.

F.    The paragraphs of the affidavit of Mr Pita Awatere Te Tau O Te Rangi that were not read on the approval application.

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

REASONS FOR JUDGMENT

COLVIN J:

1 In 2022, representative proceedings were commenced against Wilson Security Pty Ltd on behalf of a group who had been employees of the company (Group). After amendments to the application and statement of claim, the Group came to be defined as (a) those who had been employed at any time between 31 March 2015 and 27 October 2022; (b) whose employment by Wilson Security was covered by the Securities Services Industry Award; (c) who had worked at named sites in Western Australia operated by Woodside Petroleum; (d) who had undertaken work as a 'full time employee' or part time employee' as defined in the Award; and (e) who had worked on a rostered cycle.

2 The representative proceedings were conducted by Adero Law as solicitors for the representative applicant. Adero Law acted pursuant to a no-win-no-fee agreement. A subsequent retainer permitted an uplift on professional fees of 25% in the event of success and recorded an agreement by Adero Law to cap its legal fees at 30% of the net recovery on behalf of group members. There was no litigation funder.

3 Mr Pita Awatere Te Tau O Te Rangi became the representative applicant in the proceedings.

4 On 21 October 2025, Mr Awatere Te Tau O Te Rangi (as representative applicant) and Wilson Security entered into a deed of settlement (Deed). The Deed provided for payment of $3,050,000 by Wilson Security. The Deed contemplated the payment of legal costs and distributions to an identified list of group members (Settlement Group Members) pursuant to the terms of an agreed settlement distribution scheme (Scheme). The Scheme contained a list of each of the persons to whom payment was proposed to be made and the amount of the payment. The list had been prepared after detailed steps were taken by the parties to identify those persons who were within the Group as defined.

5 About a week later, orders were made for notice to be given to group members of a proposed application seeking approval of the settlement. In circumstances where there had been an opt-out procedure and the parties had taken detailed steps to identify all those who were considered to be employees within the Group, the notification of the approval application took the form of (a) publication on the Adero Law website; and (b) individual notification to each of the Settlement Group Members being the persons who were proposed to receive payments under the Scheme. The notification procedure required any objections to be provided by 5 December 2025. It contemplated a settlement approval hearing on 17 December 2025.

6 In November 2025, an application was brought for orders approving the terms of settlement recorded in the Deed and the Scheme. The application also sought the appointment of Mr Rory Markham of Adero Law as administrator of the Scheme. It also sought approval of an amount of legal costs to be paid to Adero Pty Ltd in the amount of $1,143,750 and an additional amount of $87,530 to be paid to the administrator of the Scheme.

7 The application for approval was supported by an opinion provided by Mr Patrick McCabe, an independent barrister with appropriate expertise.

8 The representative applicant was not ready to proceed on 17 December 2025 and the settlement approval hearing was deferred until 6 February 2025. Notifications were required to be given to the group members who were proposed to receive payments under the Scheme if approved.

9 A dispute emerged between Mr Awatere Te Tau O Te Rangi and Adero Law concerning the proposed approval application. Mr Awatere Te Tau O Te Rangi engaged new lawyers to provide advice to him as to his concerns. Adero Law remained on the record as the lawyers for the representative applicant. In the result, a further opinion was obtained from Mr Lachlan Armstrong KC. It also supported the proposed settlement. Having initially indicated through his new lawyers that he objected to the settlement, upon the provision of the opinion from Mr Armstrong KC, Mr Awatere Te Tau O Te Rangi did not press any objection to the approval of the settlement sum. However, there remained a concern on the part of Mr Awatere Te Tau O Te Rangi as to the legal fees sought by Adero Law and the appropriateness of Mr Markham being the administrator of the Scheme.

10 These matters produced further delay. The approval hearing was again adjourned until 27 March 2026. Orders were made for notice to be given of the adjourned hearing.

Application to substitute representative applicant

11 At the hearing on 27 March 2026, an application was brought to substitute Ms Nicole Johnson as the representative applicant. The orders were made on the basis that the parties had entered into a deed of novation (Novat ion Deed) to provide for the provisions of the Deed to apply to Ms Johnson as representative applicant in the event of substitution. Orders were also sought to make clear that Mr Awatere Te Tau O Te Rangi was to be included as a group member.

12 In circumstances where there was evidence that (a) Ms Johnson was a suitable person to be the representative applicant; (b) there remained a lack of trust and confidence as between Mr Awatere Te Tau O Te Rangi and Adero Law; (c) Mr Awatere Te Tau O Te Rangi sought to advance submissions concerning the assessment of the fees of Adero Law and opposing the appointment of Mr Markham as the administrator of the Scheme; and (d) Wilson Security had entered into the Novated Deed, I was satisfied that it was appropriate to order the substitution of Ms Johnson as representative applicant and did so. I also made the order sought concerning the status of Mr Awatere Te Tau O Te Rangi as a group member. I note that Lee J followed a similar course in similar circumstances in Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (Settlement Approval) [2023] FCA 143.

Leave for Mr Awatere Te Tau O Te Rangi to make submissions as objector

13 As has been indicated, Mr Awatere Te Tau O Te Rangi objected to approval of the part of the settlement that provided for payment of legal costs to Adero law and also to the appointment of Mr Markham as the administrator of the Scheme. He sought leave to adduce evidence and make submissions as to those two matters as an objector. I gave leave, but required Mr Awatere Te Tau O Te Rangi to identify those parts of his affidavit that were to be relied upon in circumstances where he no longer maintained an objection to the settlement amount.

Other objectors

14 There were sixteen notices of objection to the settlement received from group members in response to the notice that was given of the approval application. Of those, most took the form of an objection without grounds or an objection on the basis of materials to be provided at a later time in circumstances where no such materials were forthcoming.

15 There was a substantive objection to the settlement in which the group member concluded by stating:

I am not opposed to a settlement, but the settlement for general damages will need to be taken into consideration the economic impact, interest on monies owing, cost of litigation and administrative fees, but also the duration and effort put in by the class members. All of this would have been avoidable if the defendant had chosen to follow the minimum standards as set out by the modern awards.

16 The objection also raised concerns about the quality of record keeping by Wilson Security and the fact that there had been a previous back payment by Wilson Security.

17 As to these matters, the terms of the proposed settlement do take into account interest and costs of litigation. The effort by individual group members in pursuing the claims, though no doubt burdensome, are not compensable. As will be explained the terms of settlement take account of the terms of the Award but reflect an informed assessment of the competing contentions as to those obligations and the costs and risk associated with proceeding with the litigation being matters that could result in a worse outcome for group members.

18 One objection was to the effect that the objector had 'identified a figure consistent with the proposed outcome' but contended that the amounts must be revised 'to accurately and comprehensively account for the damages' that had resulted from the conduct of Wilson Security. The question whether the settlement amount is appropriate in all the circumstances is a matter considered below.

19 One objection was to the effect that there was no objection in principle but reserving the right to file further evidence and submissions. Another objection also stated that there was no objection to the settlement amount itself but raised concerns as to the process by which Adero Law had arrived at the settlement, particularly as to its dealings with Mr Awatere Te Tau O Te Rangi. As I have indicated, Mr Awatere Te Tau O Te Rangi no longer maintains those objections as the basis for any concern in relation to the approval of the application. However, he does press an objection to the approval of the amount of costs to be paid to Adero Law and the appointment of Mr Markham as administrator. Those matters are addressed below.

20 There was an objection raising concerns about the conduct of Adero Law in its dealings with Mr Awatere Te Tau O Te Rangi. It raised concerns as to whether the proposed settlement was consistent with the 'agreed 70/30 breakdown'. It proposed that there be further mediation. It appears that the objection may be based on the view that the settlement should relate to the full amount claimed. However, as explained below, the settlement reflects the uncertainties as to the amount that might be recovered if the case was to continue. Further, for reasons that I will provide, the costs and disbursements to be paid to Adero Law will be kept below the agreed cap of 30%.

21 Finally, there was an objection which raised an issue about a discrepancy in the amounts that had been communicated to the objector. The reason for the discrepancy has been explained. The higher amount was incorrectly calculated. The same objection raised concerns as to the way in which Mr Awatere Te Tau O Te Rangi had been treated by Adero Law.

22 To the extent that a number of these objections supported Mr Awatere Te Tau O Te Rangi and expressed concerns as to the way in which he was treated during the process that lead to the settlement agreement, they are matters on which Mr Awatere Te Tau O Te Rangi has now taken independent advice. There has also now been the provision of the independent opinion of Mr Armstrong KC. With the benefit of that further legal advice, Mr Awatere Te Tau O Te Rangi now confines his objections to the two matters I have mentioned. I consider these steps to address the concerns raised by the objectors to the extent that they concern the extent to which Mr Awatere Te Tau O Te Rangi was involved in the settlement process.

The nature of the Court's task in considering whether to approve a settlement

23 A representative proceeding cannot be settled without the approval of the Court: s 33V(1) of the Federal Court of Australia Act (Cth). In approving the settlement, the Court may make such orders as are just: s 33V(2). It is a broad power. Its exercise must be based upon an evaluation of the settlement terms based on the circumstances that exist at the time of approval. The power is not to be read by making implications or imposing limitations not found in the words: Kain v R&B Investments Pty Ltd [2025] HCA 28 at 16 and [69]-74 and 125.

24 Noting that the statutory task requires an evaluation as to what is just in the particular circumstances, the decided cases have identified matters that are likely to be relevant in considering whether to approve a settlement. The Court must consider whether the proposed compromise is fair and reasonable: Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323 at [62]- 77 and McKenzie v Cash Converters International Ltd (No 3) [2019] FCA 10 at [23]-27. The role is not unlike that which the Court assumes when approving settlements brought on behalf of those without legal capacity: Australian Securities and Investments Commission v Richards [2013] FCAFC 89 at 8. The Court must be alive to possible conflicts between the interests of those who will benefit from the approval of the settlement: Parkin v Boral L td [2022] FCAFC 47; (2022) 291 FCR 116 at [130]- 131.

25 The Court has published Class Action Practice Note (GPN-CA) that identifies the matters that usually should be addressed on such an application. They are:

(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.

26 Each of those matters has been addressed by the independent advice and submissions advanced in support of the approval application in the present case.

The overall nature of the proposed settlement terms

27 Broadly speaking, the proposed settlement terms involve the following. First, without any admission of liability, an agreed sum (inclusive of costs and interest) will be paid by Wilson Security to settle the claims of all group members who have not opted out of the proceedings. Second, the representative applicant and all group members shall release and discharge Wilson Security and its related entities from all claims that are made, or could be made (a) arising from or under, in connection with or in relation to the proceedings; and (b) in respect of, or arising out of, directly or indirectly, the same, similar or related circumstances to the claims made in the proceeding (whether known or unknown), including any claim for compensation, damages, interest, other losses, pecuniary penalties, or costs. This release and discharge is to be given by the representative applicant on her own behalf and on behalf of each group member. Third, the settlement is made on the basis of no admission of liability by Wilson Security. Fourth, there be no order as to costs in respect of the Proceedings as a whole. Fifth, the settlement terms are to be kept confidential between the parties.

28 The fact that the settlement is on the basis that there be no order as to the costs of the parties to the proceedings does not indicate that the effect of legal costs is a matter that has not been brought to account in the determination of the settlement. As I will explain, costs exposure was a matter that has been considered. In that regard, it is to be noted that, generally speaking, each party must bear its own costs of claims of the kind brought in the proceedings; see s 570 of the Fair Work Act 2009 (Cth).

29 Finally, there is an important recital to the Deed that applies to its terms as novated. It is in the following terms:

In the Proceeding, the Applicant claims relief on his own behalf and on behalf of group members as defined in cl 1.1, which includes but is not limited to the Group Members listed in Annexure A to this Deed, based on the allegations set out in the Proposed 3FASOC.

The Parties acknowledge there may be Group Members who meet the definition for group membership in the SFOA but are not listed in Annexure A. For the avoidance of doubt, Annexure A does not preclude such Group Members from inclusion in the settlement of the Proceeding.

30 There are 186 people listed in Annexure A, each identified by name and employee ID. As will emerge, the settlement amount is sought to be justified by reference to the total value of the claims of those 186 former employees of Wilson Security. The identification of those persons who were employees of Wilson Security is a matter peculiarly within the knowledge of Wilson Security. It has statutory obligations when it comes to maintaining records of the payments it has made to all of its employees. There is no proposal for a procedure to be undertaken to close the class of those who can participate in the settlement. In those circumstances, it seems to be entirely unreasonable for the identified group members to bear the risk that some other group members who have not opted out might come forward after the approval of the settlement and seek to claim a share of the settlement sum. I will address this aspect further when considering whether to approve the settlement amount.

The settlement amount

31 I have read and considered the confidential opinions of Mr McCabe and Mr Armstrong KC. I am in the unusual position of having considered many of the issues raised by the proceedings having determined similar claims by Mr Peter Wilkinson, an employee who brought his own case against Wilson Security: Wilkinson v Wilson Security Pty Ltd (No 3) [2024] FCA 705. I am satisfied that the proposed settlement amount is a just settlement of the claims by the identified group members listed in Annexure A to the Novation Deed. I consider the amount to be an appropriate reflection of a considered and informed evaluation of the prospects of success as to the various heads of claim that might be brought by those group members. It brings to account the overall quantum of the claims if they were wholly successful, the claims for interest and penalties that might be recovered and the effect that costs orders might have upon the amount that might ultimately be recovered for group members.

32 The affidavit material in support of the application explains the process used to develop a model which could provide a reasonable approximation of the value of the claims of each identified group member. The model was prepared with the assistance of a third party consultant and revised by reference to information obtained in disclosure by Wilson Security.

33 I am satisfied on the evidence that any process by which there might be an attempt to calculate individual entitlements of each member would be unduly burdensome by reason of the number of variables that would need to be ascertained in order to undertake such a calculation. I find the explanation of the model to be sound and to provide an appropriate basis upon which to have negotiated the settlement.

34 The model also deals with the fact that some group members have previously received lump sum adjustments by Wilson Security. Aspects of the rationale for those adjustments relate to matters that were not the subject of the claims made in the proceedings. However, the nature of the adjustments made were such that there was an overlap as to part of the previous payments. After consideration of the nature of the adjustments, an assessment was made that it was appropriate to allocate 50% of the lump sum amounts to claims of the kind advanced in the proceeding. Having regard to the complexities that would be involved in making precise calculations I am satisfied that this approach is reasonable in the circumstances.

35 All litigation is attendant with risks. The representative application procedure enables a group of people with related claims to share those risks. Some of aspects of the claims advanced on behalf of all group members in the present proceedings are stronger than others. Having regard to the nature of the claims, it would not be appropriate to approach the proceedings on the basis that all claims are strong.

36 As has been mentioned, the settlement process involved the identification of known employees who were within the group the subject of the representative proceedings. It involved the identification of data on which to form a view as to the nature and extent of the claim of each identified member. Therefore, in substance, the appropriateness of the settlement sum is wholly dependent upon a view that has been taken of the value of the claims of the identified group members. If there are additional group members then the settlement amount ought to be increased to reflect the value of their claims.

37 In those circumstances, in my view, the approval of the proposed settlement is only justified on the basis that it is an approval of the claims of identified group members. That outcome could be effected by a condition to the effect that the representative applicant and Wilson Security consent to an order that the application and statement of claim in the proceedings be amended so that it is confined to the identified group members. There will then be no possibility that there are any unidentified group members who have not opted out and the Novated Deed will operate accordingly.

38 In considering a settlement subject to a condition of that kind I am conscious that an amendment to the application and the statement of claim of the kind proposed will bring to an end, from the date of the amendment, representative claims brought on behalf of any member of the class who has not been identified. The amendment will restart the limitation period for any claims by unidentified group members who have not opted out. It will be up to them to pursue any claims they may have against Wilson Security. In a different case that may be a reason why there should be some form of notification of the proposed amendment. However, I do not consider that the circumstances of the present case warrant any form of public notification to determine whether there are any such unidentified group members. The cost and delay associated with some form of further public notification as a condition of approval must be weighed against the fact that the proceedings have been on foot for some time and the list of identified members has been prepared after disclosure by Wilson Security.

39 The only circumstance in which there could be such unidentified members is if Wilson Security has maintained inadequate records as to the identity of its employees or has failed to provide adequate disclosure in these proceedings or both. There is no suggestion that any of those possibilities pertain. In the circumstances it appears to be unlikely that there are any such claims. Nevertheless, any further burden associated with those possibilities should fall on Wilson Security. In effect, the settlement should be approved on the basis that Wilson Security is representing that it has identified all of the relevant employees and, save for those who have opted out, all are included in the annexure to the Deed.

The settlement scheme

40 As has been mentioned, the application for approval also seeks the approval of a Scheme by which certain steps are to be taken to distribute the settlement sum as agreed. In broad terms, those steps are as follows:

(1) Mr Markham will be appointed as administrator of the Scheme;

(2) Wilson Security will pay the settlement sum into Adero Law’s trust account;

(3) Legal costs in the proceeding in a specified amount will be deducted from the settlement sum and paid to Adero Law;

(4) A specified amount, will be deducted from the settlement sum and paid to the administrator;

(5) The individual loss claimed by each individual will be calculated according to certain specified principles (Assessment Principles);

(6) The net settlement sum amount after making the payments referred to above will be allocated to each group member pro-rata according to the individual loss claimed as calculated using the Assessment Principles;

(7) Each group member will receive a settlement statement notifying them of the payment due to them;

(8) After the settlement statements have been sent out, Adero Law will then pay the settlement entitlements to each group member; and

(9) Upon completion of payments, Adero Law will provide a certificate of the completion of the Scheme to the Court.

41 The Scheme provides for payments to be made to the group members listed in the settlement deed. They are all of the group members that have been ascertained by the parties in negotiating the settlement terms. This aspect of the Scheme also reinforces my view that the approval should be conditioned in the manner I have described so that it is clear that the settlement amount is to be distributed amongst the identified members.

42 I am satisfied that the application of the Assessment Principles and the provisions of the Scheme will provide for an appropriate allocation of the settlement amount between group members and should be approved.

The costs to be paid to Adero Law

43 The approval application also seeks approval of the amount to be paid to Adero Law. The affidavit material in support of the approval application and the record of proceedings since the bringing of the approval application establishes the following:

(1) As at the time that the application to approve the settlement was made, Adero Law's practice management software recorded that the total charge for the work undertaken in the proceedings was an amount that substantially exceeded the amount claimed;

(2) In addition to those amounts it was expected that further costs in fees and disbursements exceeding $180,000 would be incurred;

(3) Adero Law instructed an independent cost lawyer to produce a report as to whether the above costs were reasonable. The report was to the effect that an amount well in excess of those two amounts was considered to be fair and reasonable;

(4) Further costs were incurred as part of the process to brief Mr Armstrong KC to provide a second opinion;

(5) The fees paid to Mr Armstrong KC for the second opinion were $45,000; and

(6) The course of the approval application has involved a number of additional hearings, the preparation of additional submissions and affidavits and the engagement with the consequences of Mr Awatere Te Tau O Te Rangi seeking to object to the settlement (since narrowed to the questions of payments to be made to Adero Law and the appointment of Mr Markham as administrator).

44 The following issues arise in relation to the approval of the amount to be paid to Adero Law:

(1) There was a period of about 12 months when no costs retainer was in place between Adero Law and Mr Awatere Te Tau O Te Rangi. The explanation provided is that the need for entry into such an agreement was overlooked when Mr Awatere Te Tau O Te Rangi was appointed as the representative applicant in place of the original representative applicant in the proceedings.

(2) There was a correlative failure to comply with costs disclosure obligations.

(3) Mr Awatere Te Tau O Te Rangi has raised concerns about the amount claimed.

45 Mr Awatere Te Tau O Te Rangi seeks an order bifurcating the approval process. He contends that the settlement should be approved on the basis that the question of the amount of costs that Adero Law should be entitled to deduct should be referred to a Registrar of the Court who should report as referee as to whether the amount sought is reasonable. The position of Wilson Security is that it contended that the Court could proceed to approve the settlement without determining the quantum of deductions for legal costs. Its concern was that the terms of settlement be approved. However, it may be observed that the settlement terms to which Wilson Security agreed contemplated the implementation of the Scheme. In that regard, Wilson Security pointed to the terms of the Deed which expressly provide for the termination rights not to be invoked if the Court declines to make orders approving payment of the costs amounts to Adero Law.

46 In formal terms, the submissions advanced by counsel appearing for Ms Johnson as representative applicant sought approval of the whole of the proposed settlement terms, including the aspects of the Scheme that proposed the payment of specified amounts to Adero Law. However, specific submissions were not addressed to the amount of those legal costs. Rather, Mr Markham, appearing separately for Adero Law, advanced submissions concerning the proposal for bifurcation. This occurred without objection by any of the other parties, particularly senior counsel for Mr Awatere Te Tau O Te Rangi. It is a course which I allowed at the time. However, on reflection, I have concerns about receiving and relying on those submissions, especially from Mr Markham who also seeks to be appointed as administrator of the Scheme. They lack the requisite degree of independence in circumstances where they were advanced to support the approval of an amount to be deducted from the settlement sum and paid to Adero Law. Further, in certain respects, they were not confined to the making of submissions and strayed into seeking to advance matters of evidence as to the circumstances in which there was a failure to comply. With those aspects in mind, I turn to consideration of the application to approve the amounts that are proposed to be paid to Adero Law from the settlement sum.

47 I accept that there is power to bifurcate the approval process: Davis v Quintis Ltd (Subject to Deed of Company Arrangement) [2022] FCA 806 at [3]-4 referring to Botsman v Bolitho [2018] VSCA 278; (2018) 57 VR 68 at [198]-203 and J & J Richards Super Pty Ltd v Linchpin Capital Group Limited (Settlement Approval) [2023] FCA 656 at 60. The question is whether it is appropriate to do so in the present case.

48 The work that was undertaken in the present case was undertaken by lawyers practicing in the Australian Capital Territory (ACT) where legal practice is regulated by the Legal Profession Act 2006 (ACT) and the Legal Profession Regulation 2007 (ACT). There is an obligation to provide costs disclosure: s 271 and s 274 of the Act. There does not appear to be an applicable exception to that requirement of a kind that would apply in the present circumstances: see s 272 of the Act and the Regulation. If there is a failure to make the required disclosure then the person liable need not pay the costs unless they have been assessed: s 277. There is also a bar on a law practice bringing a proceeding to recover the legal costs unless the costs have been assessed: s 277(2). If there has been a serious failure to disclose then on assessment the relevant legal costs may be reduced by an amount proportionate to the seriousness of the failure to disclose: s 277(4).

49 The recovery of legal costs is provided for by s 279 of the Act. It provides that costs may be recovered under a costs agreement or if there is no costs agreement, under an applicable scale of costs. If there is neither a costs agreement nor an applicable scale, then legal costs are recoverable 'according to the fair and reasonable value of the legal services'. Therefore, the absence of a costs agreement would prevent recovery above the applicable scale (including any uplift). However, it would not prevent recovery of fair and reasonable costs measured against the applicable scale.

50 In the above circumstances, it seems to me that the following matters bear upon whether to approve the deduction of the proposed cost amount from the approved settlement sum.

51 First, this is not a case where there was a risk that the only party who might benefit from the proceedings was Adero Law. In such instances, there is a serious consequence that arises from the failure to meet the disclosure obligations. The consequence is that the group members are not made aware of the possible futility (from their perspective) of the proceedings. Further, that failure benefits the lawyers. There was a point where the costs disclosure indicated that the legal costs and disbursements to the completion of a trial might be close to the amount in dispute. However, when that possibility emerged Adero Law agreed to cap its costs at 30% of the amount recovered. Therefore, the present case is to be distinguished from the circumstances in Thomas v Romeo Lockleys Asset Partnership [2022] FCA 1106, a case also involving Adero Law.

52 Second, the amount proposed has been determined on the basis that Adero Law will forgo any right to claim the agreed uplift.

53 Third, on the evidence before the Court, the amount claimed is well below that which has been assessed by an independent costs lawyer as being reasonable.

54 Fourth, there is evidence of additional costs that have been incurred by Adero Law in relation to the settlement approval process compared to the original estimate. There is no further claim for those additional costs.

55 Fifth, having regard to applicable ACT law, the issues in relation to disclosure and whether there was a written costs agreement do not appear to provide a basis to call into question whether Adero Law can recover reasonable costs assessed by reference to the Federal Court scale.

56 Sixth, at the hearing of the application for approval, senior counsel for Mr Awatere Te Tau O Te Rangi did not point to any legal authority as to why the amount claimed was such that it was appropriate to refer the assessment to a referee. Leave was given to refer to relevant authorities with pinpoint references. The authorities provided related to the Legal Profession Uniform Law which, as has been explained, is not applicable in the ACT. Those authorities concerned whether a failure to provide the disclosure required by the Legal Profession Uniform Law would render the costs agreement void. Even if that were so, the real question in the present circumstances is whether there would still be an ability to recover reasonable costs for work done. As was observed by Beach J in Wills v Woolworths Group Limited [2022] FCA 1545 at [33]: 'even if a costs agreement is found to be void either in futuro or ab initio due to a failure to comply with the disclosure obligations, the law practice is still entitled to be paid fair and reasonable legal costs' (referring to s 199(2) of the Legal Profession Uniform Law).

57 Seventh, the amount sought is not out of proportion to the claim. Although the settlement was reached before any evidence had been filed, considerable work was still required. The settlement was reached after three mediation conferences and required the detailed consideration of the available records and the work involved in preparing the model. There has also been considerable additional work in relation to the settlement approval.

58 Eighth, there is no evidence before the Court to indicate that the amounts claimed for legal costs are not reasonable. Mr Awatere Te Tau O Te Rangi has sought the views of a cost consultant but there was no evidence before the Court as to those views. More significantly, there was no submission advanced as to why there may be particular concerns that the amount proposed to be paid to Adero Law was not fair and reasonable. On the contrary, the amount claimed is supported by an independent assessment.

59 Ninth, if the question of the amount of legal costs were referred to a referee for assessment there is the risk of adverse consequences for group members. First, there will be delay while that process occurs and payments to group members will be held up. Second, if the referee assessment concludes that the amount sought is reasonable then an issue will arise as to whether Adero Law should be entitled to its costs of that process in circumstances where its position would have been vindicated. It is possible that the Court may determine that the costs that Adero Law should be allowed to deduct should be increased to allow for those costs which would be an obvious detriment to group members.

60 Tenth, when the settlement was originally proposed for approval, Mr Markham deposed to the view that the concerns that had been raised by Mr Awatere Te Tau O Te Rangi (and supported by a number of objectors) were best dealt with by way of a separate determination as to the deductions to be made. However, since then there have been considerable developments. Mr Awatere Te Tau O Te Rangi has engaged his own lawyers. He has had an opportunity to take advice from a cost consultant. Ultimately, specific matters relating to the reasonableness of the costs incurred have not been the subject of any evidence or submissions.

61 Eleventh, the legal costs now sought are below the lowest end of the range of estimated costs, fees and disbursements as disclosed to the original representative applicant on a no win no fee basis, noting that the estimate related to the conduct of the whole of the proceedings.

62 Taking these matters into account, I am not persuaded that the approval process should be bifurcated so that there may be an assessment of the costs that might be recovered. Even allowing for the view that there is a period of the engagement of Adero Law where its entitlement to costs is constrained to what is reasonable according to the Court scale, I am not persuaded that an assessment of that kind is likely to result in an assessment that an amount less than the amount claimed is reasonable. Further, as I have mentioned, any such assessment would produce delay and may produce an outcome that leads to more costs being approved.

63 Finally, as to costs, a submission was advanced to the effect that the disbursement incurred for the second opinion obtained from Mr Armstrong KC should be approved in addition to the amount that had been proposed for costs. Having regard to the basis upon which the original amount was proposed, I am not prepared to allow this additional amount. The appropriate proportionality should be maintained.

64 Adero Law accepts the issues with respect to its retainer and disclosure. Mr Markham has provided an explanation and none of that has been disputed by the submissions and evidence relied upon by Mr Awatere Te Tau O Te Rangi. The heart of the concerns raised by Mr Awatere Te Tau O Te Rangi is the manner in which the final stage of the mediation was conducted, particularly the extent to which he was involved and, in effect, the disrespect afforded to him as the representative applicant whose responsibility was to act in the interests of all group members, a responsibility that he took seriously. However, since those concerns have been raised Adero Law have apologised to him and there has been the process of obtaining the second opinion of Mr Armstrong KC which confirms the reasonableness of the settlement terms that were agreed. Therefore, the concerns in relation to the settlement process have been addressed.

65 As to the costs claimed, the substantive question is whether the amount claimed is reasonable in all the circumstances because, in my view, there remains an entitlement for Adero Law to be remunerated to the extent that the remuneration sought is reasonable having regard to the work done. In my opinion, with due regard to the need for proportionality, the stage at which the proceedings have been resolved and the independent assessment as to reasonableness, it is appropriate to approve the payment of the sum of $915,000 (inclusive of GST) in respect of all fees and disbursements.

Appointment of Mr Markham as administrator of the scheme

66 There was no real basis for the submission advanced for Mr Mr Awatere Te Tau O Te Rangi that there should be some person other than Mr Markham as administrator of the Scheme. Mr Markham has considerable familiarity with the proceedings, the model and the Assessment Principles to be applied in determining the allocation of the net settlement sum to the identified group members. The relevant data is held by Adero Law and is accessible to Mr Markham. He has appropriate expertise. There is no reason to expect that he would not faithfully discharge his responsibilities. There is no alternate administrator proposed. The proposed costs have been assessed independently as being reasonable and no question has been raised as to that assessment.

67 Any process for consideration of an alternate administrator would result in delay and further cost. There is also the prospect that an alternate administrator who was not familiar with the proceedings and the Assessment Principles may seek additional remuneration.

68 The proposed fee for administration has been calculated on the basis of $470 per identified group member plus a disbursement of $110 that will be associated with uploading bank details to arrange payments. I consider that these fees are reasonable and should be approved.

Confidentiality orders

69 Orders were proposed by the applicant as to confidentiality. They were not the subject of detailed submissions at the hearing. I am persuaded that it is appropriate for confidentiality orders to be made that would protect the advice obtained as to the settlement and would also exclude contentious material (including legally privileged material) contained in an affidavit filed by Mr Mr Awatere Te Tau O Te Rangi. In the circumstances, I will make orders that will preserve leave to apply as to confidentiality. Out of an abundance of caution I will make orders that will facilitate any application for non-disclosure orders as to any part of these reasons.

Conclusion

70 For the above reasons, there will be orders approving the settlement and the Scheme substantially in the terms sought. There will be orders allowing the payment to Adero Pty Ltd of the amount of $915,000 (inclusive of GST) for legal costs and disbursements. There will be orders appointing Mr Markham as administrator of the Scheme and the proposed fees for the administrator will be approved. There will be confidentiality orders in the terms indicated.

71 However, all these orders will be conditional on the amendment to the second amended application and second amended statement of claim to which I have referred.

| I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin. |
Associate:

Dated: 16 April 2026