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A taxation partner and scheme administrator was criticised for threatening to resign if he and a law firm did not receive an increase in their share of a class action settlement.
Andrew Chen, a taxation and accounting partner with Findex, said he would resign, and group members of the Tyro class action would likely suffer if his share in the $5 million settlement sum did not increase to $63,500 – an upsurge of 65 per cent from $38,500.
In the same application, Bannister Law Class Actions – the firm for the applicants– requested an increase of 75 per cent for work performed in connection with the settlement’s administration.
At the time of the Federal Court’s judgment, there was money left over because some group members were not contactable, others did not wish to receive payment, and others provided incorrect details.
Justice Nicholas Owens of the Federal Court said Chen’s threat to resign was “extraordinary”, particularly because a “significant reason” in favour of appointing Findex as scheme administrator was the fact it had agreed to cap its fees at $38,500.
An increase of close to 70 per cent for both Chen and Bannister Law was “a significant and substantial change” to the approved scheme.
Justice Owens was not persuaded that there was any aspect of the work that should not have been anticipated at the time of approval.
A submission by Chen that there would be a greater cost benefit to allocating the leftover sums to Findex and Bannister Law than the group members – which would have been a little over $100 each – was also rejected by Justice Owens as lacking justification.
In light of the threat, Justice Owens ordered that Chen not be permitted to resign without obtaining leave from the court.
“Here, in effect, the scheme administrator sought to present the issue for the court as a binary choice: either the requested increases with a modest impact on group members were granted or, if they were not, then group members would suffer a greater financial detriment by reason of the need to retain a new scheme administrator who lacked the incumbent’s familiarity with the scheme.
“There is, however, an obvious third possibility: that the scheme administrator complete the role to which he was appointed for the amount he agreed to charge,” Justice Owens said.
Any leftover sum was ordered to be paid to the Moriarty Foundation, an Indigenous charity that enables Aboriginal families and communities to “unlock children’s potential” through locally led programs of Indi Kindi and John Moriarty Football.
The case: Spozac Pty Ltd as trustee for the LDB Family Trust t/as Not Just Cakes v Tyro Payments Ltd (No 3) [2025] FCA 488
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
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