Johnson v Wilson Security Pty Ltd

Johnson v Wilson Security Pty Ltd [2026] FCA 447 is a Federal Court decision about approving the settlement of a representative employment proceeding. The underlying claims were brought on behalf of a group of Wilson Security employees or former employees who worked at named Woodside-operated sites in Western Australia and were said to fall within a defined award-covered cohort. By the time the matter reached Colvin J for this decision, the key issue was no longer whether the litigation should continue to trial, but whether the Court should approve the proposed class-wide settlement and the way the money would be distributed.

The commercial setting matters. Wilson Security agreed to pay $3,050,000 under a deed of settlement dated 21 October 2025. But in a representative proceeding, that agreement does not become effective simply because the parties have signed it. Court approval is required. That means the Court must look beyond the headline figure and examine whether the compromise is fair and reasonable, whether the distribution method works, whether legal costs and administration costs are justified, and whether the people who will be bound by the settlement have been properly identified.

The case also became procedurally unusual. The representative proceedings had been conducted by Adero Law on a no-win-no-fee basis, with a later retainer allowing a 25% uplift on professional fees if successful and recording a cap of 30% of the net recovery on behalf of group members. There was no litigation funder. Mr Pita Awatere Te Tau O Te Rangi had become the representative applicant, but after the settlement deed was signed a dispute emerged between him and Adero Law about the approval application. He obtained new lawyers and independent advice.

A further opinion from Mr Lachlan Armstrong KC supported the proposed settlement. After receiving that advice, Mr Awatere Te Tau O Te Rangi no longer pressed any objection to the settlement sum itself. However, he continued to object to two parts of the approval package: the amount of legal fees sought by Adero Law and the proposal that Rory Markham of Adero be appointed administrator of the settlement scheme. At the hearing on 27 March 2026, Ms Nicole Johnson was substituted as representative applicant under a novation deed, while Mr Awatere Te Tau O Te Rangi remained a group member and was allowed to appear as an objector on those remaining issues.

The legal task came from s 33V of the Federal Court of Australia Act. A representative proceeding cannot be settled without Court approval, and the Court may make such orders as are just. Colvin J explained that this requires an evaluation of the settlement terms in the circumstances existing at the time of approval. The Court must consider whether the proposed compromise is fair and reasonable and remain alert to possible conflicts between those who may benefit from approval, including group members, the representative applicant, solicitors and any proposed administrator.

The judgment also referred to the Class Action Practice Note and the kinds of matters usually considered on a settlement approval application, including the complexity and likely duration of the litigation, the reaction of the class, the stage of the proceedings, the risks of establishing liability and loss, the range of reasonableness of the settlement in light of the best possible recovery and the litigation risks, and the terms of any advice received from counsel or experts. The Court said those matters had been addressed by the independent advice and submissions in this case.

In practical terms, the Court had to decide several separate but connected questions. First, was the $3,050,000 settlement amount a just compromise of the claims? Second, should the Court approve the settlement distribution scheme under which the money would be paid out? Third, what amount should be approved for the applicant's legal costs and disbursements? Fourth, should Rory Markham of Adero Pty Ltd be appointed administrator of the scheme? Fifth, and critically, who exactly was being bound by the settlement?

That last question became central because the deed acknowledged that there might be group members who met the pleaded class definition but were not listed in Annexure A. Yet the settlement amount was justified by reference to the value of claims of the identified people in Annexure A. The Court therefore had to confront a practical fairness problem: if unidentified non-opt-out group members later appeared, should they be able to share in a settlement sum that had been calculated only by reference to the identified cohort?

Colvin J approved the settlement and the settlement distribution scheme, but only subject to an important condition. The applicant and Wilson Security had to file a minute of consent and obtain orders amending the originating application and statement of claim so that group membership was confined to people included in the list in Annexure A to the deed of settlement. In other words, the Court approved the compromise on the basis that it applied to identified listed members, not to a wider class that might include unknown people.

The Court was satisfied that the proposed settlement amount was a just settlement of the claims of the identified group members listed in Annexure A. The reasons say the amount appropriately reflected a considered and informed evaluation of the prospects of success across the various heads of claim. It also brought into account the overall quantum if the claims were wholly successful, possible interest and penalties, and the effect that costs orders might have on what group members would ultimately recover.

The Court accepted the valuation model used to estimate the value of each identified group member's claim. That model had been prepared with the assistance of a third party consultant and revised using information obtained in disclosure from Wilson Security. Colvin J accepted that trying to calculate precise individual entitlements would have been unduly burdensome because of the number of variables involved. The model was therefore accepted as a sound and appropriate basis for negotiating settlement.

The Court also accepted the approach taken to previous lump sum adjustments that some group members had already received from Wilson Security. Because those earlier adjustments overlapped only in part with the claims in the proceeding, an assessment had been made that 50% of those lump sum amounts should be allocated to claims of the kind advanced in the case. The Court considered that approach reasonable in the circumstances.

On costs and administration, the Court approved a deduction of $87,530 for administration costs and approved a deduction of $915,000 inclusive of GST for the applicant's legal costs and disbursements, with no further deduction to be made for those costs. That is commercially significant because the approval application had originally sought legal costs of $1,143,750. The approved amount was therefore materially lower than the amount first sought. The Court also appointed Rory Michael Markham of Adero Pty Ltd as administrator of the scheme, despite the objection to that appointment.

The orders further provided that once the administrator gave the required certificate under the scheme, all remaining claims of the applicant and bound group members in the proceeding would be dismissed, and the proceeding itself would be dismissed, with that dismissal operating as a defence and absolute bar to claims relating to the subject matter of the proceeding. The orders preserved any right to enforce the deed of settlement or deed of novation in a new proceeding if needed.

The Court also made confidentiality orders. Certain material was to remain confidential until 31 December 2031, including Annexure A to the deed and heads of agreement, personal details of bound group members, counsel opinions, related correspondence, and unread parts of an affidavit. Earlier suppression, non-publication and confidentiality orders were otherwise revoked from 23 April 2026 unless further orders were sought. That part of the judgment shows the Court balancing open justice against the need to protect sensitive material and the proper administration of justice.

The most practical point for businesses is the Court's insistence on confining the settlement group to identified members. The settlement amount was justified by reference to 186 identified former employees. The Court considered it unreasonable for those identified people to bear the risk that some other person, not previously identified but still technically within the pleaded class definition, might later emerge and claim a share. That is a direct lesson in settlement design. If the money has been calculated by reference to a known list, the Court may require the legal definition of the group to match that list.

For employers, this is closely tied to record keeping. Colvin J said the identification of employees was a matter peculiarly within Wilson Security's knowledge and noted that the company had statutory obligations to maintain records of payments to employees. The Court also said there was no suggestion that Wilson Security had maintained inadequate records or failed to provide adequate disclosure, but the reasoning still highlights the risk area. If your records are poor, it becomes harder to identify the affected cohort, harder to value claims, and harder to persuade a court that the settlement is fair and final.

The decision also shows that a court may closely scrutinise legal costs even where there is no litigation funder and even where there is a retainer structure that includes an uplift and a cap. Here, the application originally sought approval for legal costs of $1,143,750, but the Court approved $915,000 inclusive of GST and ordered that no further deduction be made. Businesses should not assume that the figures proposed by the parties will simply be rubber-stamped. The Court may intervene to set a lower approved amount.

Another practical point is that objections do not necessarily derail a settlement, but they can affect timing, structure and scrutiny. This approval hearing was adjourned more than once. The Court allowed the former representative applicant to appear as an objector on the remaining issues after he had obtained independent advice and narrowed his objections. That shows the Court's concern to protect group members and manage potential conflicts, while still moving the settlement process toward a final outcome.

The judgment is a useful reminder that settlement approval is often driven by documents and process rather than broad statements of fairness. In this case, the Court looked at the deed of settlement, the novation deed, the proposed scheme, the list of identified group members, the independent opinions of counsel, the affidavit material explaining the valuation model, and the objections that had been received. Businesses involved in any large-scale settlement should expect that the quality of those materials will matter.

The Court also paid attention to how notice had been given. Because there had already been an opt-out procedure and the parties had taken detailed steps to identify those considered to be within the group, notice of the approval application was given by publication on Adero Law's website and by individual notification to each person proposed to receive payment under the scheme. That detail matters because it shows the Court looking at whether the process was practical and proportionate in the circumstances.

There is also a broader commercial lesson in the Court's treatment of unidentified group members. Colvin J said that if there were additional group members, the settlement amount ought to be increased to reflect the value of their claims. Rather than leaving that risk with the identified group members, the Court approved the settlement only on the basis that the proceeding be amended to confine the class. The Court also said that any further burden associated with the possibility of unidentified members should fall on Wilson Security. For businesses, that is a strong signal that uncertainty about the affected population can shift risk back onto the respondent business rather than being left to dilute the recovery of identified claimants.

Finally, the confidentiality orders show that even where settlement terms are confidential between the parties, the Court may tailor confidentiality carefully rather than accepting blanket secrecy. Some material remained confidential until 31 December 2031, but earlier suppression and confidentiality orders were otherwise revoked from 23 April 2026 unless further orders were sought. Businesses should therefore expect that confidentiality in court-supervised settlements may be limited and specific, not absolute.