Yasmin v Commonwealth of Australia

Overview of the proceeding

1. The proceeding was brought on behalf of Indonesian children who arrived in Australia unaccompanied over a six-year period between 2007 and 2013 after having been apprehended on suspected illegal entry vessels, and who were investigated for alleged people smuggling offences under the Migration Act 1958 (Cth) (the Group Members). The applicant alleged that the Group Members were unlawfully detained or imprisoned as adults, before ultimately being removed to Indonesia. In addition to declaratory relief, the applicant sought damages for unlawful detention, negligence and contraventions of s 9(1) or (1A) of the Racial Discrimination Act 1975 (Cth).
2. The claims in the proceeding are summarised in more detail in Yasmin (No 1) at [9]-[23].

The Deed of Settlement and the SDS

1. Under the Deed of Settlement, the Commonwealth agreed to pay a Settlement Sum comprising $27.5 million by way of compensation and an amount up to $2.5 million for Administration Costs, plus an amount in respect of the Applicant's Party/Party Costs. Pursuant to the SDS and the Approval Orders, the Settlement Sum is held in an interest-bearing account administered by Australian Unity Trustees Limited (Settlement Fund).
2. Clause 1.1 of the Deed of Settlement relevantly defines the Applicant's Party/Party Costs to mean "[t]he Applicant's party/party legal costs and disbursements of the Consolidated Representative Proceeding up to the date that the Approval Orders become final within the meaning of clause 2.1(b) of this Deed, as agreed or taxed, but does not include Administration Costs". For such purposes, the "Approval Orders" are those made by the Court on 22 December 2023, which became "final" at the end of the 42-day period following the making of those orders, no appeal or application for leave to appeal having been filed. Under cl 3.1(a)(iv) of the Deed of Settlement, the Commonwealth is obliged to pay the Applicant's Party/Party Costs within 14 days after they are agreed or taxed.
3. Clause 4.1 of the Deed of Settlement provides that the Settlement Sum is to be applied and distributed in the following order:
4. payment of the Applicant's Other Solicitor/Client Costs, as approved by the Court;
5. payment of Administration Costs from time to time on an ongoing basis in accordance with the SDS, as approved by the Court;
6. payment of any other amount approved by the Court; and
7. payments to the applicant and Group Members in relation to their claims in accordance with the SDS.
8. The Applicant's Other Solicitor/Client Costs are defined in cl 1.1 of the Deed of Settlement as "[t]hat part of the Applicant's solicitor/client legal costs and disbursements of the Consolidated Representative Proceeding which exceeds the Applicant's Party/Party Costs, but does not include Administration Costs".
9. The Administration Costs are relevantly defined in cl 1.1 of the Deed of Settlement as "[t]he reasonable costs and disbursements incurred by the [Administrator]" in administering the SDS. Such costs are included within the Settlement Sum and, subject to the Court's approval, are to be deducted from the Settlement Sum as part of the administration of the SDS. In the event that the applicant seeks and the Court approves an amount more than $2.5 million in respect of Administration Costs, the excess is to be deducted from the Compensation Sum of $27.5 million.
10. The SDS contemplates that the Court may approve an amount for payment as an "Authorised Deduction" from the Settlement Sum, being a payment to any person "for legal costs or expenses, disbursements or other fees or charges incurred on behalf of or with respect to, the Applicant and/or Group Members", including any "Additional Administration Costs" in excess of the $2.5 million cap.

Costs assessment process

1. The Approval Orders provided for the parties to confer and reach agreement on matters relating to the Applicant's Party/Party Costs to be paid by the Commonwealth pursuant to the Deed of Settlement. In so far as such agreement could not be reached, the outstanding claimed costs were to be referred to a Referee to inquire into and report on the reasonableness and recoverability of those costs. The reference was also to include the reasonableness and recoverability of the Applicant's Other Solicitor/Client Costs to be deducted from the Settlement Fund.
2. One of the principal areas in dispute between the parties concerned the costs and disbursements properly recoverable in respect of services provided by Mr Singer and Ms Kaswati, a married couple based in Indonesia who had provided assistance and liaison services to KCA over the course of the proceeding. The Court made orders granting Mr Singer and Ms Kaswati leave to intervene in the proceeding and to file evidence and submissions in relation to the applicant's costs of the proceeding.
3. On 17 April 2024, the Court appointed Ms Cate Dealehr as the Referee. In her report dated 28 June 2024, the Referee concluded that the fair and reasonable amount of the applicant's total solicitor/client costs up to the date of settlement approval was $4,636,162.88, and the amount of the Applicant's Party/Party Costs was $2,894,103.38 (applying a 25% reduction of the reasonable solicitor/client costs and excluding uplift fees). These amounts reflected a significant decrease in the amounts claimed by the applicant based on several reports prepared by an independent costs consultant, Ms Kerri Rosati, who had assessed the applicant's total solicitor/client costs as approximately $6.89 million, based on which the applicant was seeking an amount of $5,158,71.36 as the Applicant's Party/Party Costs.
4. Apart from the reduction in some hourly rates for clerks and paralegals and the disallowance or reduction of some particular time entries, the most significant difference between the respective assessments arose from the Referee's disallowance of any fees payable to Mr Singer and Ms Kaswati, primarily on the basis that she regarded the relevant services as having been "volunteered" so that no disbursements were incurred by KCA.
5. A dispute arose between the parties regarding the adoption by the Court of the Referee's report.
6. In broad terms, the applicant submitted that the Referee's report should be rejected on a number of grounds, including failure to adopt a thorough, analytical and scientific approach; failure to give sufficient reasons; error of principle, misunderstanding of the facts, or manifest unreasonableness; and failure to afford procedural farness. The applicant submitted that the Court should instead adopt the reasoning and conclusions set out in the reports of Ms Rosati (save for minor adjustments). On that basis, the applicant submitted that the solicitor/client costs to settlement approval, aside from the costs related to Mr Singer and Ms Kaswati, should be assessed at $5,118,557.28, and that the Applicant's Party/Party Costs were $3,838,917.96 (using a percentage reduction of 25%).
7. The Commonwealth, on the other hand, supported the adoption of the Referee's report, including the Referee's conclusion that the fees paid to Mr Singer and Ms Kaswati were not properly recoverable as part of the applicant's legal costs. On that basis, the Commonwealth submitted that the Applicant's Party/Party Costs were $2,894,103.38, and the Applicant's Other Solicitor/Client Costs were $1,742,059.50.
8. Mr Singer and Ms Kaswati submitted that the Referee's report should not be adopted. They contended that they had been engaged by KCA as consultants and that their work was performed for the purposes of the proceeding pursuant to a conditional costs agreement entered into with KCA. They submitted that the applicant was liable to pay their fees as legal costs and disbursements pursuant to the costs agreement entered into between the applicant and KCA.
9. On the day before the hearing of the costs dispute, the parties advised the Court that they had reached agreement on proposed orders. The agreement contemplated that the Commonwealth would pay to KCA the amount that it was prepared at that time to accept as comprising the Applicant's Party/Party Costs, being the amount of $2,894,103.38 as assessed by the Referee, and that the outstanding issues as to any further costs or disbursements claimed by the applicant or the interveners would be referred for mediation.
10. Accordingly, on 9 September 2024, the Court made consent orders under which the Commonwealth was required to pay to KCA an amount of $2,894,103.38 on account of the Applicant's Party/Party Costs, excluding any disbursements relating to the fees and expenses of Mr Singer and Ms Kaswati and without prejudice to the applicant's and the interveners' rights to seek orders for additional payments to be made by the Commonwealth in respect of the total of their Party/Party Costs. The issue of the Applicant's Party/Party Costs, including any disbursements relating to the fees and expenses of the interveners, was referred to mediation before a Registrar not later than 4 October 2024. The hearing of the costs dispute was adjourned to 22 October 2024.

Settlement of the costs dispute

1. Following mediation, the parties and the interveners reached an agreement in relation to the amount of the Applicant's Party/Party Costs payable by the Commonwealth pursuant to cl 3.1(a)(iv) of the Deed of Settlement.
2. The parties and the interveners executed a settlement agreement dated 21 October 2024 (costs settlement agreement), under which the Commonwealth agreed to pay an additional amount towards the Applicant's Party/Party Costs. Thus, it was agreed that the total amount of the Applicant's Party/Party Costs is $4,794,103.38 (including GST). Subtracting the amount that was paid by the Commonwealth under the orders made on 9 September 2024, the remaining amount payable was $1.9 million (including GST), which the parties agreed was inclusive of all legal costs and disbursements incurred by the applicant and the interveners in relation to the costs dispute. The parties agreed that the payment of this remaining amount was in full and final satisfaction of the Applicant's Party/Party Costs payable by the Commonwealth in accordance with cl 3.1(a)(iv) of the Deed of Settlement.
3. Under the costs settlement agreement, the Commonwealth also agreed not to oppose any application made by the applicant or by Mr Singer and Ms Kaswati in respect of the Applicant's Other Solicitor/Client Costs, including any order directing payment from the Settlement Sum of some or all of the applicant's additional costs and disbursements or Mr Singer and Ms Kaswati's fees and expenses.
4. On 21 October 2024, the applicant entered into a separate deed of agreement with KCA and Mr Singer and Ms Kaswati in order to apportion the remaining amount of $1.9 million that was to be paid by the Commonwealth pursuant to the costs settlement agreement. Under this costs allocation agreement, $1.15 million was paid to Mr Singer and Ms Kaswati. The agreement contemplated that either the applicant or Mr Singer and Ms Kaswati could make an application to the Court for an order directing payment from the Settlement Sum of some or all of the applicant's additional costs and disbursements or Mr Singer and Ms Kaswati's fees and expenses respectively, and that the other party would not oppose any such application. Otherwise, Mr Singer and Ms Kaswati agreed to release all claims against the applicant and KCA in respect of their fees and expenses incurred in relation to the proceeding, including their legal costs and disbursements incurred as a result of the costs dispute.

The present application

1. The application currently before the Court deals with the outstanding issues relating to the costs of the proceeding up to the final approval of the settlement, as well as the legal costs and disbursements incurred since that date in resolving the dispute between the parties in relation to the quantum of the Applicant's Party/Party Costs.
2. In support of its application, the applicant relied on the following evidence:
3. an affidavit of Mr Samuel Alexander Tierney, principal solicitor of KCA, affirmed on 26 August 2024;
4. an affidavit of Mr Tierney affirmed on 21 October 2024;
5. five expert reports prepared by Ms Rosati dated 17 November 2023 (First Rosati Report), 27 November 2023 (Second Rosati Report), 30 November 2023 (Third Rosati Report), 21 August 2024 (Fourth Rosati Report) and 21 October 2024 (Fifth Rosati Report).
6. The applicant filed written submissions on 21 October 2024, in addition to its submissions dated 27 August 2024 (which were filed prior to the costs settlement and costs allocation agreements).
7. The application is supported by Mr Singer and Ms Kaswati as interveners. In addition to the material relied on by the applicant, the interveners relied on the following evidence:
8. an affidavit of the applicant sworn on 2 December 2022;
9. two affidavits of Mark Geoffrey Barrow, in his capacity as the applicant's solicitor, affirmed on 13 December 2022 and 5 November 2023;
10. an affidavit of Arabella Jorgensen-Hull, then solicitor for the applicant, affirmed on 4 October 2023;
11. an affidavit of Ms Kaswati affirmed 21 August 2024, which annexed an earlier affidavit of Ms Kaswati affirmed 15 February 2024;
12. an affidavit of Mr Singer affirmed 21 August 2024, which annexed an earlier affidavit of Mr Singer affirmed 7 April 2024;
13. an affidavit of Mr Barrow, in his capacity as the Administrator of the SDS, affirmed on 20 August 2024;
14. an affidavit of Mark Thomas Herbert, solicitor for the interveners, affirmed on 21 August 2024 (the first Herbert affidavit);
15. an affidavit of Nicola Ilyk, a solicitor at KCA, affirmed on 22 October 2024 (the Ilyk affidavit);
16. an affidavit of Mr Herbert sworn on 8 November 2024 (the second Herbert affidavit); and
17. two independent costs reports of Ms Toni Mossman dated 17 February 2023 (First Mossman Report) and 16 November 2023 (Second Mossman Report).
18. The interveners filed written submissions on 22 August 2024. At the conclusion of the hearing on 22 October 2024, leave was granted to the interveners to file further submissions and evidence in relation to their fees and expenses of the proceeding, both as a disbursement forming part of the Applicant's Other Solicitor/Client Costs and as a component of the legal costs of the costs dispute capped at $100,000. The interveners subsequently filed further written submissions on 1 November 2024 together with the Second Herbert affidavit.
19. As noted above, the Court also has before it the Referee's report dated 28 June 2024. However, in the light of the agreements reached between the parties and the interveners, none of the parties placed any reliance on the Referee's report. The applicant and the interveners maintained their position that the Court should not adopt the Referee's findings, but should instead determine the issues raised by the application on the basis of the reports provided by Ms Rosati and Ms Mossman respectively. The Commonwealth no longer opposes the applications made by the applicant and the interveners, having reached an agreement as to the amount of the Applicant's Party/Party Costs that it is liable to pay under the Deed of Settlement.
20. In so far as the Referee's report was directed to the assessment of the Applicant's Party/Party Costs, it has since been superseded by the costs settlement agreement entered into between the parties. In the circumstances, it is unnecessary to consider the general principles on the adoption or rejection of reports by referees appointed by the Court: see Gulf Conveyor Systems Pty Ltd v Gulf Integrated Systems Solutions Pty Ltd [2020] FCA 1245 at [12]-[21] (Katzmann J). Nor is it necessary to address the various criticisms of the Referee's report that were made by the applicant and the interveners. While I have had regard to some aspects of the Referee's report, as discussed below, the expert reports of Ms Rosati and Ms Mossman are of more direct assistance in determining the present application.
21. The issues for determination are confined to the approval of the Applicant's Other Solicitor/Client Costs to be deducted from the Settlement Sum, and the approval of a further amount to be deducted from the Settlement Sum in respect of the legal costs and disbursements incurred by the the applicant and interveners in resolving questions about the costs of the proceeding.

Applicable principles

1. The Court has a supervisory role in relation to legal costs that are proposed to be charged to group members by way of deduction from a settlement: see Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (2017) 252 FCR 1 at [90] (Jagot, Yates and Murphy JJ); Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323; 335 ALR 439 at [11] (Murphy J); Modtech Engineering Pty Ltd v GPT Management Holdings Ltd [2013] FCA 626 at [26]-[37] (Gordon J); Lenehan v Powercor Australia Ltd [2020] VSC 82 at [7]-[22] (Nichols J). Such oversight is an important aspect of protecting the interests of group members. As Murphy J explained in Petersen Superannuation Fund Pty Ltd v Bank of Queensland Ltd (No 3) [2018] FCA 1842; 132 ACSR 258 at [88]: In class actions the requirement for judicial supervision of legal costs proposed to be charged is obvious because: (a) the applicant's solicitor is in a more dominant position vis-a-vis a class member than in a solicitor-client relationship in individual litigation; (b) class members are commonly not told about the mounting costs as they are incurred and they suffer a significant information asymmetry in that regard; (c) it is not necessary for class members to retain the applicant's solicitor and commonly they do not, yet they are usually made liable for a pro rata share of the costs; (d) even where class members retain the applicant's solicitor they do not provide instructions as to the running of the class action and have no control over the quantum of costs, yet they are usually made liable for a pro rata share of the costs; (e) class members are unlikely to pay much attention to legal costs because they are usually only payable upon success and from the successful outcome; (f) it is usually not until after settlement is achieved that class members are told the total costs claimed, but they are not told (and it is commonly very difficult to accurately estimate) what their pro rata share of the costs will be; and (g) the Court has a protective role in relation to class members' interests.
2. These considerations are particularly relevant in the present case, where many of the Group Members do not speak English and reside in overseas locations, mostly in remote areas of Indonesia.
3. The requirement for judicial oversight of legal costs was recognised in cl 4.1 of the Deed of Settlement, which expressly contemplated that amounts to be deducted by way of legal costs, including in particular the Applicant's Other Solicitor/Client Costs, are subject to approval by the Court. This condition was an important consideration when making the Approval Orders: see Yasmin (No 1) at [57], [86]-[90]. At that time, I stated (at [86]): The Deed of Settlement provides for the Commonwealth to pay the applicant's party/party costs, as agreed or assessed. The applicant's other solicitor/client costs in excess of the party/party costs are to be deducted from the Compensation Sum, subject to the approval of the Court. In this way, the Deed of Settlement accommodates the need for judicial supervision of the solicitor-client costs to be charged by the applicant's solicitors and borne by the Group Members: see, e.g., Petersen Superannuation Fund Pty Ltd v Bank of Queensland Limited (No 3) [2018] FCA 1842 at [87]-[89] (Murphy J); Kelly at [11] (Murphy J).
4. Thus, instead of scrutinising the legal costs to be deducted from the Settlement Sum in the course of approving the settlement of the proceeding, the reasonableness of those legal costs falls to be assessed before any proposed deduction can be made from the amount to be distributed to Group Members.
5. In approving the amounts sought by the applicant and the interveners to be deducted from the Settlement Sum in respect of the legal costs and disbursements incurred in the course of the proceeding, the Court must be astute to prevent any "unfair advantage" by the solicitors in their charges: Redfern v Mineral Engineers Pty Ltd [1987] VR 518 at 523 (Tadgell J), referred to in Modtech at [26] (Gordon J). The Court should be satisfied that "the arrangements in relation to legal costs meet any relevant legal requirements, contain reasonable and proportionate terms relative to the commercial context in which they were entered, and that the costs and disbursements are in accordance with the terms of the relevant agreements and are otherwise 'reasonable'": Earglow Pty Ltd v Newcrest Mining Ltd [2016] FCA 1433 at [91] (Murphy J), referring to Courtney v Medtel Pty Ltd (No 5) [2004] FCA 1406; 212 ALR 311 at [61] (Sackville J). In general, the Court will "only allow the deduction of costs from the settlement sum in an amount that the Court is satisfied is fair and reasonable (viewed from the perspective of the group members, being those likely bearing the ultimate burden of the costs from an inclusive settlement sum)", and an assessment of whether costs are fair and reasonable includes consideration as to whether they are duplicative or excessive: Bellamy's Australia Ltd v Basil [2019] FCAFC 147; 372 ALR 638 at [13] (Murphy, Gleeson and Lee JJ).
6. In order to satisfy itself as to the reasonableness of legal costs in the context of settlement approval, it is common for the Court to rely on expert evidence from an independent costs consultant: see Earglow at [92] (Murphy J). That is not to suggest that such evidence is necessary in every case: cf. Lifeplan Australia Friendly Society Ltd v S&P Global Inc (formerly McGraw-Hill Financial Inc) [2018] FCA 379 at [40], where Lee J regarded such evidence as "next to useless" in determining the reasonableness of legal costs sought to be recovered from a settlement fund, noting that he was "yet to see a cost assessor retained by a solicitor who has formed the robustly independent view that the fees charged by his retaining solicitor were unreasonable". With that in mind, there may be utility in the appointment of a referee to inquire into the reasonableness of legal costs and provide a report to the Court: see Lifeplan at [41] (Lee J). In the present case, however, the reference established under the Approval Orders has ultimately proven to be unproductive, for reasons that I will address below.
7. In Blairgowrie Trading Ltd v Allco Finance Group Ltd (in Liq) (No 3) [2017] FCA 330; 343 ALR 476 at [180], Beach J distinguished his role in relation to the approval of legal costs from that of a taxing registrar or master, and stated: [S]ubject to the question of proportionality, if unchallenged expert opinion is put before the Court which sets out a commercial and reasonable methodology consistent with the terms of any retainer and which demonstrates that it has been accurately and thoroughly applied to sufficient and probative source records of the solicitors, then it is no part of my function to: (a) reject that evidence as to whole or part without very good reason; or (b) apply one's own subjective view of what the legal work is "really worth", divorced from the reality of the commercial context within which the work was carried out and the expenses incurred.
8. The amount of any legal costs to be deducted from the settlement sum should be proportionate to the litigation and its expected benefit: see Blairgowrie at [181] (Beach J); Earglow at [99] (Murphy J); Caason Investments Pty Limited v Cao (No 2) [2018] FCA 527 at [148]-[152] (Murphy J); Petersen at [128]-[135] (Murphy J). As Murphy J stated in Caason at [148], "[c]lass actions are to be conducted for the benefit of the applicants and class members rather than for service providers such as lawyers (or funders)". Nevertheless, an assessment of proportionality is not to 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": Blairgowrie at [181] (Beach J)
9. In the present case, the applicant and KCA entered into a conditional costs agreement (CCA) on 14 May 2020 in respect of the representative proceeding. The CCA is governed by the Legal Profession Act 2006 (ACT) (LP Act), which relevantly provides in s 300(1) that the following factors must be considered in conducting an assessment of legal costs: (a) whether or not it was reasonable to carry out the work to which the legal costs relate; and (b) whether or not the work was carried out in a reasonable way; and (c) the fairness and reasonableness of the amount of legal costs in relation to the work, except to the extent that section 300A (Assessment of costs by reference to costs agreement) or section 300B (Assessment of costs by reference to scale of costs etc) applies to any disputed costs; and (d) if the costs agreement contained provision for an uplift fee under section 284 (Conditional costs agreements involving uplift fees), whether the uplift fee was justified in the circumstances. …
10. Section 300(2) of the LP Act provides that, in considering what is a fair and reasonable amount of legal costs, the Court may have regard to any and all of the following matters: (a) whether the law practice and any Australian legal practitioner or Australian registered foreign lawyer acting on its behalf complied with this Act; … (b) any disclosures made by the law practice under division 3.2.3 (Costs disclosure); (c) any relevant advertisement about - (i) the law practice's costs; or (ii) the skills of the law practice or of any Australian legal practitioner or Australian-registered foreign lawyer acting on its behalf; (d) the skill, labour and responsibility displayed on the part of the Australian legal practitioner or Australian-registered foreign lawyer responsible for the matter; (e) the retainer and whether the work done was within the scope of the retainer; (f) the complexity, novelty or difficulty of the matter; (g) the quality of the work done; (h) the place where, and circumstances in which, the legal services were provided; (i) the time within which the work was required to be done; (j) any other relevant matter. Example for par (j) any applicable scale of costs
11. As the applicant submitted, relevant factors to be considered in approving legal costs incurred in a representative proceeding as fair and reasonable include (see Modtech at [37] (Gordon J)):
12. whether the work was undertaken efficiently and appropriately;
13. whether it was undertaken by practitioners of the appropriate level of seniority;
14. whether the charge out rate was appropriate having regard the level of seniority of the practitioner and the work undertaken;
15. whether the task was appropriate, having regarding the nature of the work and time to complete; and
16. whether the ratio of work and the interrelation of work undertaken by the solicitors and the counsel retained was reasonable.
17. Such factors will commonly be the subject of expert evidence from an independent costs consultant or a report by a referee appointed by the Court.

Evidence on the application

1. In relation to the fair and reasonable costs of the proceeding, the applicants and the interveners relied primarily on the First Rosati Report, the Third Rosati Report and the Fifth Rosati Report, together with the First Mossman Report and the Second Mossman Report dealing with the fees and expenses incurred by Mr Singer and Ms Kaswati.
2. Ms Rosati is a legal costs consultant and the principal of DGT Costs Lawyers. She was engaged by KCA to provide an opinion as to the reasonableness of the applicant's costs of the proceeding. Ms Rosati was provided with an extensive set of materials in relation to the proceedings, including costs agreements, pre-billing guides, electronic files, affidavits, court documents, judgments and orders, summaries of KCA's professional costs, and copies of invoices.
3. The approach adopted by Ms Rosati in assessing whether costs were fairly and reasonably incurred is addressed in the First Rosati Report, which considered the professional fees incurred up to 17 April 2023 and disbursements. Ms Rosati stated that she considered what work had been performed, the reasons for performing that work, and how the work had been carried out, including: (a) the resources utilised by the law practice and how they were utilised. Such factors as the work done by partners, solicitors and paralegals, the use of team structures and the use of counsel are relevant; (b) whether there was an appropriate degree of reliance on counsel; (c) whether an appropriate level of expertise was assigned to the tasks required to be carried out; (d) whether work has been performed that does not directly relate to the proceedings or was strictly administrative in nature; (e) whether billing and time recording practices themselves increased costs; and (f) whether there was any duplication of work.
4. Ms Rosati explained the methodology that she had applied in order to provide an opinion as to a reasonable amount for costs as follows, stating that she had: (a) considered the terms of the costs agreement and the costs information provided by KCA to the Applicant (and other representatives in the AHRC complaint); (b) considered the hourly rates charged by KCA and counsel; (c) reviewed and considered the files of KCA maintained for this Proceeding; (d) considered the KCA time records and itemisation of disbursements and invoices provided by KCA; (e) considered the costs information provided by [Mr Singer and Ms Kaswati] (summarised by Ms Mossman); (f) applied the legislative tests in the [LP Act] detailed above to consider whether the costs and disbursements were reasonable in amount, or reasonably incurred having regard to the circumstances in which the work was undertaken, including whether the work was undertaken efficiently and appropriately, whether the work was undertaken by a person at the appropriate level of seniority, whether the task and charge were appropriate having regard to the nature of the work, the time taken, and the ratio of work and interrelation of work undertaken by the solicitors and counsel retained; (g) when applying these considerations, have had regard to judgments in other matters relating to the approval of legal costs in representative proceedings, including that in Modtech Engineering Pty Limited v GPT Management Holdings Limited (No.2) [2013] FCA 1163 and Wills v Woolworths Group Limited [2022] FCA 1545; and (h) formed an opinion as to the fair and reasonable amount for costs and disbursements.
5. In the Third Rosati Report, Ms Rosati addressed the reasonableness of the applicant's professional costs and disbursements incurred in relation to the proceeding to 24 November 2023. The Fifth Rosati Report addresses the costs and disbursements that were incurred from 25 November 2023 until 15 December 2023, as well as the costs and disbursements incurred after settlement approval in resolving the outstanding issues in relation to the costs of the proceeding.
6. In the Fifth Rosati Report, Ms Rosati summarises the total amount that she considers to be the fair and reasonable costs of the proceeding on a solicitor/client basis, inclusive of GST and any uplift fees (where applicable). Category of costs Fair and Reasonable Costs Costs Incurred up to 17 April 2023 KCA - professional costs up to 17 April 2023 $2,175,081.54 KCA - 25% uplift on professional costs $543,770.38 Counsels' Fees to 17 April 2023 $1,688,142.80 [Mr Singer and Ms Kaswati's] costs $1,726,021.16 General disbursements $148,683.49 My costs for preparation of my first report $59,455.00 $6,341,154.37 Costs Incurred 18 April 2023 to 24 November 2023 KCA Professional Fees - 18 April to 24 November 2023 $192,932.00 25% Uplift Fee on KCA Professional Fees to 24 November 2023 $48,233.00 Counsels' Fees to 24 November 2023 $109,656.85 General Disbursements to 24 November 2023 $35,135.28 My costs for preparation of my third report $4,850.00 $390,807.13 Costs Incurred 25 November 2023 to 15 December 2023 KCA Professional Costs - 25 November 2023 to 15 December 2023 $55,004.00 25% Uplift Fee on KCA Professional Costs to 15 December 2023 $13,751.00 Counsels' Fees to 15 December 2023 $46,990.00 General Disbursements to 15 December 2023 $19,766.14 $135,511.14 Costs Incurred 6 January 2024 to 14 October 2024 KCA Professional Costs - 5 January 2024 to 14 October 2024 $84,452.00 25% Uplift Fee on KCA Professional Costs to 14 October 2024 $21,113.00 Counsels' Fees - 5 January 2024 to 14 October 2024 $74,563.50 General Disbursements - 5 January 2024 to 14 October 2024 $1,623.85 $181,752.35 Estimated costs 15 October 2024 onwards Estimated KCA Professional Costs $10,200.00 25% uplift fee on KCA estimated Professional Costs $2,550.00 Estimated Counsels' fees $30,690.00 Estimated General Disbursements $2,500.00 My costs for preparation of my fifth report $6,050.00 $51,990.00

Total $7,101,214.99

1. Ms Rosati's assessment of the fair and reasonable amount of the applicant's legal costs and disbursements includes an amount of $1,726,021.16 in respect of the fees and expenses of Mr Singer and Ms Kaswati. This amount was derived from Ms Mossman's assessment of the reasonable amount for the work undertaken by Mr Singer and Ms Kaswati in the proceeding, as set out in the First Mossman Report and the Second Mossman Report.
2. Mr Singer is an Australian citizen who holds permanent residency in Indonesia, and is married to Ms Kaswati. They live mainly in Bandung in Indonesia, but also spend a significant amount of time in Perth, Western Australia. Mr Singer and Ms Kaswati have had a longstanding involvement with the applicant and other Group Members, and have been engaged for more than a decade in efforts to pursue claims on their behalf through Australian legal and political processes.
3. In late 2013, Mr Singer and Ms Kaswati discussed the applicant's circumstances with Mr Barrow of KCA, following which they arranged for the applicant to meet with KCA in Indonesia. KCA were subsequently engaged to act for the applicant in relation to proceedings seeking to quash his criminal conviction in Australia, and commenced work in relation to a potential common law claim against the Commonwealth. In that context, Mr Singer and Ms Kaswati agreed to provide services and assistance to KCA in connection with the claims advanced by the applicant and Group Members in the proceeding.
4. Mr Singer accepted that their agreement was not recorded in a formal signed document, but denies that he and his wife were acting as "volunteers". He understood the terms of the agreement as that "[w]e were to be paid $200 per hour for the work we had performed and reimbursed for our expenses as costs in the proceeding if there was a successful outcome". This agreement was reflected in emails that were exchanged between KCA and Mr Singer from time to time, and the provision of spreadsheets in which Mr Singer and Ms Kaswati summarised the time spent and expenses incurred by them.
5. Throughout the proceeding, and prior to its commencement, Mr Singer and Ms Kaswati provided wide-ranging assistance including by locating and communicating with Group Members, meeting with and providing information to KCA, travelling to and from various locations in Indonesia, making arrangements for interviews with Group Members, distributing information to Group Members, and reviewing court documents. Mr Singer and Ms Kaswati have also since been engaged by the Administrator to assist with the administration of the SDS.
6. In his affidavit affirmed on 20 August 2024, Mr Barrow stated that the work performed by Mr Singer and Ms Kaswati had been invaluable in the conduct of the proceeding, in circumstances where the Group Members generally live in remote and rural islands throughout Indonesia, and speak a variety of dialects. In emails between Mr Singer and KCA in around July 2017, it was agreed that Mr Singer and Ms Kaswati would be paid an hourly rate for their time and would be reimbursed their expenses in the event that the proceeding was successful. Mr Singer subsequently provided KCA with time sheets and logs of expenses. On 10 May 2020, Mr Singer and Ms Kaswati provided a spreadsheet of their time spent and expenses incurred since 1 January 2017, which was included in the estimated disbursements disclosed in the conditional costs agreement that was entered into between the applicant and KCA on 14 May 2020. Mr Barrow described the work that was performed by Mr Singer and Ms Kaswati, including locating Group Members, arranging and assisting with interviews in Indonesia, assisting in taking instructions from Group Members, gathering evidence and assisting in the preparation of affidavits, and assisting with travel plans and logistics.
7. Mr Barrow expressed his belief that the engagement of Mr Singer and Ms Kaswati to perform such work led to savings in both time and costs. He stated in his affidavit: Even if it were possible for KCA to have achieved it without [Mr Singer and Ms Kaswati], I consider that it would have taken more time (and at a higher rate) than had the work been performed by the [interveners], based on my direct experience of the work they undertook. In particular, Mr Barrow stated that "without the benefit of the work undertaken by [Mr Singer and Ms Kaswati] I believe that it would have been far more expensive to locate group members and take their instructions and evidence", and "I consider the disbursements incurred on behalf of [the applicant] in the conduct of the proceeding for the benefit of all group members would have been far greater had it not been for the involvement of [Mr Singer and Ms Kaswati]".
8. The reasonableness of the fees and expenses of Mr Singer and Ms Kaswati are considered in the First Mossman Report and the Second Mossman Report. Ms Mossman was of the view that Mr Singer and Ms Kaswati played a pivotal role in the litigation by providing an important point of contact with the Group Members, and that it would have been difficult for solicitors in Australia to undertake much of the work that was undertaken by Mr Singer and Ms Kaswati. Having considered documentation relating to the work undertaken and expenses incurred by Mr Singer and Ms Kaswati, Ms Mossman considered that a reasonable hourly rate for their services was $200 per hour, which was above the scale rate for a clerk or paralegal and at the bottom end of the range for a law graduate or articled clerk. Although neither Mr Singer and Ms Kaswati are legally qualified, Ms Mossman considered that many of the tasks undertaken by them over the relevant period "would usually fall within the ambit of what it considered to be legal work, with much of it being generally undertaken at either junior solicitor or paralegal level" (such as taking instructions, explaining the process, assisting with the preparation of evidence, and arranging conferences and meetings). Ms Mossman ultimately concluded that a reasonable amount for the work undertaken by Mr Singer and Ms Kaswati in the proceeding is $1,726,021.16, which was a reduction of the amount claimed by them of $2,404,501.25.

Applicant's Other Solicitor/Client Costs

1. Ms Rosati has assessed an amount in respect of the professional fees and disbursements of KCA that is, in her view, fair and reasonable. Putting to one side the fees and expenses of the interveners, the Referee did not significantly differ from Ms Rosati in respect of the reasonable amount of the applicant's total solicitor/client costs. Bearing in mind that my role is not that of a taxing registrar, there is no good reason not to accept Ms Rosati's assessment, which "sets out a commercial and reasonable methodology consistent with the terms of any retainer and which demonstrates that it has been accurately and thoroughly applied to sufficient and probative source records of the solicitors": see Blairgowrie at [180] (Beach J).
2. I am satisfied that it is appropriate to treat the fees and expenses charged by Mr Singer and Ms Kaswati as disbursements forming part of the applicant's total solicitor/client costs in the proceeding. The evidence before the Court supports a finding that Mr Singer and Ms Kaswati were engaged by KCA to provide assistance in relation to the proceeding in the form of support to and liaison with the applicant and other Group Members in Indonesia. Those services were necessary and, if they had not been provided by Mr Singer and Ms Kaswati, would have been obtained from other persons such as clerks or paralegals.
3. Further, it is implicit in the costs settlement agreement that a proportion of the additional amount of $1.9 million that the Commonwealth agreed to pay in respect of the Applicant's Party/Party Costs can be attributed to the amount that was claimed for services provided by Mr Singer and Ms Kaswati. That is because the amount of $4,794,103.38 that was ultimately agreed as the Applicant's Party/Party Costs is significantly higher than the amount that was being sought by the applicant if the costs related to Mr Singer and Ms Kaswati were ignored: see above at [17(a)].
4. As the Referee excluded the fees and expenses charged by Mr Singer and Ms Kaswati, she did not assess the reasonableness of those fees. The only evidence before the Court on the reasonableness of the amounts payable to Mr Singer and Ms Kaswati is the opinion of Ms Mossman. Although the amount that is to be paid to Mr Singer and Ms Kaswati is significant, it represents a substantial commitment of time and effort by them over an extended period, which has been instrumental both in the commencement of the proceeding and its progression to settlement. In the circumstances, I accept the evidence of Ms Mossman as to the fair and reasonable amount payable in respect of the services provided by Mr Singer and Ms Kaswati in relation to the proceeding, and find that $1,726.021.16 is properly recoverable in respect of those services.
5. Accordingly, based on Ms Rosati's reports, I find that the applicant's total solicitor/client costs to settlement approval are $6,867,472.64. Taking into account the agreed amount of the Applicant's Party/Party Costs, this leaves an amount of $2,073,369.26 as the Applicant's Other Solicitor/Client Costs to be deducted from the Settlement Sum.
6. It remains for me to form a view as to whether the amount of the applicant's solicitor/client costs, at least in so far as it is proposed to deduct those costs from the Settlement Sum, is reasonable and proportionate to the nature of the settlement.
7. On the reasonableness of the Applicant's Other Solicitor/Client Costs, the applicant submitted that the amount sought to be deducted from the Settlement Sum "is relatively modest, taking into account the complexity of the proceeding (both legally and logistically), the work done, and the costs structure put in place". I accept that the claims raised in the proceeding were novel and complex, and that there were significant practical and logistical challenges in obtaining instructions and gathering evidence in support of the claims. The work involved in commencing and prosecuting the proceeding to settlement was time consuming and costly.
8. The applicant submitted that the amount proposed to be deducted from the Settlement Sum for the Applicant's Other Solicitor/Client Costs is proportionate, representing approximately 7.4% of the total amount of the Compensation Sum of $27.5 million. In support of that submission, the applicant referred to recently approved class action settlements under which the solicitor/client costs deducted from the settlement fund ranged from 16% to 23% of that fund.
9. In drawing any such comparisons, however, it should be recognised that the Settlement Sum in the present case was not inclusive of all legal costs, and that the Commonwealth agreed to pay the Applicant's Party/Party Costs in addition to the Compensation Sum and the Administration Costs. Thus, the amount to be deducted from the Settlement Sum is only the approved amount of Applicant's Other Solicitor/Client Costs, representing the difference between the applicant's total solicitor/client costs and the Applicant's Party/Party Costs payable by the Commonwealth. In one sense, this is more favourable to the Group Members than an "all-in" settlement sum in the same amount. However, it makes less relevant any comparison with legal costs in other approved settlements as a proportion of the settlement sum. A more accurate comparison with the other examples to which the applicant referred might be to take the proportion of the applicant's total solicitor/client costs in relation to the aggregate amount payable by the Commonwealth comprising the Settlement Sum plus the Applicant's Party/Party Costs, which would represent a percentage of around 19.7%.
10. I therefore do not agree with the applicant's submission that the proportionate amount of the Applicant's Other Solicitor/Client Costs to be deducted from the Settlement Sum is "substantially smaller than other recent class actions" or "well below the amount charged to group members in other recent cases". As the applicant's submissions accepted, "the relatively small amount (as a percentage) to be distributed from the Settlement Sum reflects the Commonwealth's agreement to pay the Applicant's party/party costs separately". This makes it difficult to reach a conclusion on proportionality based on direct comparisons with cases involving "all-in" settlements, without making appropriate adjustments so that one is comparing apples with apples. The settlement in the present case might have been equally capable of being expressed as a total amount payable by the Commonwealth of $35 million inclusive of all legal costs, subject to the approval of total solicitor/client costs to be deducted from the settlement fund. The fact that the settlement was disaggregated into separate amounts payable in respect of compensation, administration costs and party/party costs should not be used to disguise what might otherwise be regarded as a disproportionate amount in respect of solicitor/client costs, by confining the analysis to the amount representing the gap between solicitor/client and party/party costs.
11. Nevertheless, even looking at the overall proportion of the applicant's solicitor/client costs to the total amount paid by the Commonwealth, the solicitor/client costs to settlement approval can be regarded as proportionate to the nature and size of the settlement. The percentage of approximately 20% is consistent with solicitor/client costs approved in other class action settlements. Further, the parties have now agreed that the Applicant's Party/Party Costs are $4,794,103.38, which represents a reduction of about 30% on the total solicitor/client costs as assessed by Ms Rosati. While this is higher rate of reduction than the 25% that was applied by the Referee, it is consistent with the opinion given by Ms Rosati in the First Rosati Report that "a typical reduction for party/party costs is somewhere between 20% and 35% of the actual incurred solicitor/client costs". Taking into account the scope and complexity of these proceedings, I consider that the proposed amount of $2,073,369.26 for the Applicant's Other Solicitor/Client Costs is both reasonable and proportionate.
12. I also observe that the amount sought for the Applicant's Other Solicitor/Client Costs is in line with the estimate provided at the time of the settlement approval, when it was anticipated that an application would in due course be made for approval of a deduction of up to $2.2 million in respect of such excess solicitor/client costs: see Yasmin (No 1) at [57].
13. I therefore approve the payment from the Settlement Sum, pursuant to cl 4.1(a) of the Deed of Settlement, of an amount of $2,073,369.26 for the Applicant's Other Solicitor/Client Costs.

Approval of "Authorised Deduction" in respect of legal costs incurred in relation to the costs dispute

1. As set out above, cl 4.1 of the Deed of Settlement contemplates that the Court may approve the payment of amounts from the Settlement Sum prior to its distribution among the Group Members. The SDS includes such approved payments as "Authorised Deductions", the definition of which covers payments for legal costs or expenses, disbursements or other fees or charges incurred on behalf of or with respect to the applicant or Group Members.
2. More generally, s 33V(2) of the FCA Act confers power on the Court to make such orders as are just with respect to the distribution of any money paid under a settlement. This power is sufficiently broad to support orders ensuring that Group Members share the burden of the reasonable legal costs, fees and other expenses incurred by the applicant in achieving a successful outcome in the proceeding.
3. The applicant seeks approval of an Authorised Deduction of $333,742.35 in respect of legal costs and disbursements incurred after 5 January 2024 in connection with the dispute about the final costs orders in the proceeding. This amount relates to the legal costs in the proceeding incurred after the settlement approval, and can be distinguished from the Administration Costs in relation to the ongoing administration of the SDS.
4. The Fifth Rosati Report assessed the costs and disbursements incurred from 5 January 2024 to 14 October 2024 at $181,752.35, and estimated the costs from 15 October 2024 to 22 October 2024 as $51,990. Accordingly, the total costs incurred by the applicant from 5 January 2024 are $233,742.35.
5. In addition, the applicant and interveners also seek approval for payment of an amount of $100,000 in respect of the legal costs incurred by the interveners in relation to the costs disputes. Unlike the legal costs and disbursements charged by KCA, which were the subject of the expert reports of Ms Rosati and Ms Mossman, the quantum of the fees sought in respect of the interveners' legal representation has not been assessed by an independent costs consultant. However, the interveners relied on the first Herbert affidavit, the second Herbert affidavit and the Ilyk affidavit, which described the nature of the work performed by the interveners' legal representatives since February 2024 and attached invoices in respect of their costs and disbursements. The total amount of the costs invoiced by the interveners' legal representatives is $137,246.46, of which only $100,000 is claimed by the interveners from the Settlement Fund.
6. The applicant submitted that the legal costs in relation to the costs disputes were incurred for the benefit of the applicant and Group Members, particularly in relation to the claims about the amount of the Applicant's Party/Party Costs that was payable by the Commonwealth in addition to the Settlement Sum. In so far as the resolution of those disputes resulted in the payment of a greater amount by way of Applicant's Party/Party Costs, this effectively reduced the amount claimed as a deduction from the Settlement Sum in respect of the applicant's solicitor/client costs. The applicant's claim for a higher amount of Applicant's Party/Party Costs was ultimately successful, in that the Commonwealth agreed to pay an additional $1.9 million towards those costs. Accordingly, the applicant submitted that the legal costs of $233,742.35 in resolving the costs disputes were reasonable and proportionate to the outcome that was achieved.
7. Similarly, the applicant and the interveners submitted that the legal costs incurred by the interveners were ultimately for the benefit of Group Members, particularly to the extent that they contributed to the negotiation of a higher amount payable by the Commonwealth for the Applicant's Party/Party Costs. As mentioned above, it is implicit in the costs settlement agreement that the Commonwealth accepted that fees and expenses incurred by Mr Singer and Ms Kaswati were covered by the Applicant's Party/Party Costs, and the associated costs allocation between the applicant and the interveners recognised that the majority of those fees and expenses were payable by the Commonwealth. Such an outcome reduced a liability that would otherwise have been borne by the applicant and Group Members.
8. The definition of the Applicant's Party/Party Costs in the Deed of Settlement is temporally limited to costs and disbursements of the proceeding up to the date that the Approval Orders become final. The Applicant's Other Solicitor/Client Costs are defined as "[t]hat part of the Applicant's solicitor/client legal costs and disbursements of the Consolidated Representative Proceeding which exceeds the Applicant's Party/Party Costs, but does not include Administration Costs". It might be possible to regard the legal costs and disbursements incurred by the applicant after settlement approval as forming part of the Applicant's Other Solicitor/Client Costs, which are subject to Court approval under cl 4.1(a) of the Deed of Settlement, rather than as Authorised Deductions to be approved under cl 4.1(c) of the Deed of Settlement and cl 36(c) of the SDS. As the parties have adopted the latter approach, I will follow that course.
9. It was inevitable that legal costs and disbursements would be incurred in resolving the disputes between the parties about the payment of costs pursuant to the Deed of Settlement and the approval of costs as deductions from the Settlement Fund. The resolution of the dispute in relation to the Applicant's Party/Party Costs was broadly for the benefit of the applicant and Group Members, resulting in a significant additional payment of costs by the Commonwealth and thereby reducing the potential burden of other solicitor/client costs on the Settlement Fund. Accordingly, I consider that is appropriate for the legal costs and disbursements incurred in the proceeding since settlement approval to be paid from the Settlement Sum.
10. In so far as the legal costs and disbursements incurred by the applicant since 5 January 2024 have been assessed by Ms Rosati, I accept that those amounts are fair and reasonable. Further, I consider that the amounts are both reasonable and proportionate, in the light of the additional payment that the Commonwealth ultimately agreed to pay towards the Applicant's Party/Party Costs.
11. In relation to the legal costs and disbursements incurred by the interveners, I accept that the interveners' legal representation contributed to the successful resolution of the dispute in relation to the Applicant's Party/Party Costs, and was otherwise properly incurred for the benefit of the applicant and Group Members. I consider that the amount of $100,000 claimed in respect of the interveners' legal costs and disbursements is reasonable and proportionate, without needing any independent expert opinion in support of that conclusion. In that regard, I have taken into account the evidence about the nature and extent of the work performed by the interveners' legal representatives, and I note that the amount claimed represents a discount of about 27.5% on the costs actually incurred.
12. Accordingly, I approve the payment from the Settlement Sum, pursuant to cl 4.1(c) of the Deed of Settlement and cl 36 of the SDS, of an Authorised Deduction of $333,742.35 in respect of the legal costs and disbursements of the proceeding that were incurred after settlement approval in relation to the costs disputes.

Conclusion

1. For the reasons set out above, I will make orders pursuant to ss 33V and 33ZF of the FCA Act in the terms sought by the applicant, approving the payment from the Settlement Sum of $2,073,369.26 for the Applicant's Other Solicitor/Client Costs and $333,742.35 for an Authorised Deduction in respect of legal costs. I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Horan.