Deloitte won a bid to more than double its costs to administer the Northern Territory stolen wages settlement, but Chief Justice Debra Mortimer made it clear this was “despite some misgivings”.
In a decision handed down on Monday (24 November) afternoon, the Federal Court of Australia agreed to increase Deloitte’s administration costs from the originally estimated $1.8 million to $3.196 million, representing an increase of just over 77 per cent.
Deloitte had won a competitive tender process to administer the $180 million settlement reached between the Commonwealth and Shine Lawyers, the firm leading a class action for the Aboriginal and Torres Strait Islanders who had their wages stolen between 1933 and 1971.
At the time of the tender process, Deloitte was certain the costs could be kept between $1.52 and $1.79 million. Its competitors at Grant Thornton had a slightly higher maximum figure of $2.4 million, and McGrathNicol proposed between $5.4 and $7.6 million.
Then, in October, Deloitte’s lawyer, Michael McCarthy from Hutton McCarthy, requested more from the $6 million set aside by the Commonwealth and Shine to cover the administration costs.
By reference to evidence from Deloitte, McCarthy said it received a higher-than-expected number of registration forms. While Deloitte originally expected 20 per cent of those forms would be incomplete and require follow-up, the actual figure was closer to 50 per cent.
McCarthy also cited a “very engaged cohort”, making Deloitte’s assumption of several weeks of high-level contact but many more of low-level contact redundant. In terms of costs, this meant an increase from the proposed $151,854 for the call centre to around $923,000.
Much as she was at the October hearing, Chief Justice Mortimer was taken aback at the discrepancy in Deloitte’s figures, particularly because it “should have been obvious to anyone who had worked with cohorts of group members such as the cohort in this case”.
“It should have been obvious because of the kinds of information people were being asked to provide, the passage of time since many of the events people were having to identify, the experiences of this cohort of people about not having identity documents, access to which others in the Australian community might take for granted.
“Much of the engagement now materialising should have been obvious because the information was often having to be provided by families, rather than the individuals who had been the workers,” Chief Justice Mortimer said in her written reasons.
The Chief Justice noted that Deloitte’s original $1.8 million estimate was on the basis of 15,000 registrations. According to the most recent information available to the court, there have been just 13,216.
“In other words, the actual registrations have still not reached the threshold on which Deloitte submitted its original tender price, and yet it is still being contended the existed approved costs are inadequate,” Chief Justice Mortimer said.
Chief Justice Mortimer said it was “not a complete answer” to the court’s concerns to say the additional sums would be taken from the $6 million set aside by the Commonwealth, and therefore would not impact the workers who would benefit from the settlement.
“It is implicit in the characterisation of the task of an administrator … and to the overarching obligation for the court to conduct its proceedings as effectively and efficiently as justice allows, for those who are providing professional services to group members to be held to high standards of accountability for the remuneration they seek, by way of court order,” Chief Justice Mortimer said.
While each firm gave various representations about their experience and knowledge working with First Nations communities, there was no evidence before the court that Deloitte had sought substantive advice and contributions to ensure that its approach was appropriately informed “by a real understanding of the disadvantages facing this cohort and the severe communications challenges”.
In one section of its tender, Deloitte set out a “digitally driven” approach that assumed “easily accessible and reliable internet access and suitable up-to-date hardware and software available to claimants”, Chief Justice Mortimer observed.
“While it is correct that the other tenderers also adopted this approach, it perhaps should have been more apparent that this was not a good fit with the cohort of group members in this case, experiencing high disadvantages and living in remote communities. The court’s attention was not drawn to any of these issues when asked to consider and approve the tenders,” the Chief Justice added.
This has all led to the court being placed in an “undesirable” position.
While the court plays a supervisory role and can determine whether or not to approve increased costs, the scheme is two-thirds through the administration, and it would be contrary to the group members’ interests to refuse it at this stage, Chief Justice Mortimer said.
For the future, Chief Justice Mortimer said “much greater scrutiny” is needed, “and perhaps a greater need to test the tenders being put forward, and require more active scrutiny from the other parties”.
The case: McDonald v Commonwealth of Australia (No 4) [2025] FCA 1450.
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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