Brownley v Minara Resources Ltd
[2006] WASC 93
BROWNLEY & ORS -v- MINARA RESOURCES LTD [2006] WASC 93
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 93 | |
| Case No: | CIV:1313/2005 | 26 APRIL 2006 | |
| Coram: | MASTER SANDERSON | 25/05/06 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | AMY BROWNLEY ELVIS STOKES EDITH POLAK ANTHONY MEREDITH DION MEREDITH NEIB ABORIGINAL CORPORATION AS TRUSTEE FOR THE WONGATHA ABORIGINAL CHARITABLE TRUST MINARA RESOURCES LTD (ACN 060 370 783) |
Catchwords: | Practice and procedure Application to strike out parts of statement of claim Application to stay pleadings as champertous Turns on own facts |
Legislation: | Nil |
Case References: | Clairs Keeley (a firm) v Treacy & Ors (2003) 28 WAR 139 Clairs Keeley (a firm) v Treacy & Ors (2005) 29 WAR 479 Clairs Keeley (a firm) v Treacy & Ors [2005] WASCA 86 Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd (2005) 63 NSWLR 203 Akot Pty Ltd v Rathmines Investments Pty Ltd [1984] 1 Qd R 302 Amey v Fifer [1971] 1 NSWLR 685 AttorneyGeneral ex rel Rhondda Urban District Council v Pontypridd Waterworks Co [1908] 1 Ch 388 Bandwill Pty Ltd v SpencerLaitt (2000) 23 WAR 390 Banfield v WellsEicke [1970] VR 481 Carlton Cricket & Football Social Club v Joseph [1970] VR 487 Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 City of Gosnells v Duncan (1994) 12 WAR 437 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (Codelfa / Eastern Suburbs Railway case) (1982) 149 CLR 337 Day v William Hill (Park Lane) Ltd [1949] 1 KB 632 Dempster v National Companies & Securities Commission (1993) 9 WAR 215 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Dorajay Pty Ltd v Aristocrat Leisure Ltd [2005] FCA 1483 Edmeades v Thames Board Mills Ltd [1969] 2 All ER 127 Ernst & Young (Reg) v Tynski Pty Ltd (2003) 47 ACSR 433 Ex parte Goddard; Re Falvey (1946) 46 SR (NSW) 289 F Goldsmith (Sicklesmere) Ltd v Baxter [1970] Ch 85 Freeman v McManus [1958] VR 15 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Howard v The Ministry of Consumer Affairs (Now the Ministry of Fair Trading) & Anor, unreported; SCt of WA; Library No 940428; 19 August 1994 Kimberley Downs Pty Ltd v Western Australia, unreported; SCt of WA; Library No 6414; 25 August 1986 McKechnie v Campbell (1996) 17 WAR 62 Newmont Pty Ltd v Laverton Nickel NL [1983] 1 NSWLR 181 Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 Project 28 Pty Ltd v Barr [2005] NSWCA 240 QPSX Ltd v Ericsson Australia Pty Ltd (No 3) (2005) 219 ALR 1 Re Tottenham v Tottenham [1896] 1 Ch 628 Rose v New South Wales Native Title Services Ltd [2005] VSCA 157 Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 Stevenson v Yasso [2006] QCA 40 Templeton v Leviathan Pty Ltd (1921) 30 CLR 34 Walton v Gardiner (1993) 177 CLR 378 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- ELVIS STOKES
EDITH POLAK
ANTHONY MEREDITH
DION MEREDITH
First Plaintiffs
NEIB ABORIGINAL CORPORATION AS TRUSTEE FOR THE WONGATHA ABORIGINAL CHARITABLE TRUST
Second Plaintiff
AND
MINARA RESOURCES LTD (ACN 060 370 783)
Defendant
Catchwords:
Practice and procedure - Application to strike out parts of statement of claim - Application to stay pleadings as champertous - Turns on own facts
(Page 2)
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
First Plaintiffs : Mr C L Zelestis QC & Mr S K Dharmananda
Second Plaintiff : Mr C L Zelestis QC & Mr S K Dharmananda
Defendant : Ms G A Archer
Solicitors:
First Plaintiffs : Corrs Chambers Westgarth
Second Plaintiff : Corrs Chambers Westgarth
Defendant : Blake Dawson Waldron
Case(s) referred to in judgment(s):
Clairs Keeley (a firm) v Treacy & Ors (2003) 28 WAR 139
Clairs Keeley (a firm) v Treacy & Ors (2005) 29 WAR 479
Clairs Keeley (a firm) v Treacy & Ors [2005] WASCA 86
Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd (2005) 63 NSWLR 203
Case(s) also cited:
Akot Pty Ltd v Rathmines Investments Pty Ltd [1984] 1 Qd R 302
Amey v Fifer [1971] 1 NSWLR 685
AttorneyGeneral ex rel Rhondda Urban District Council v Pontypridd Waterworks Co [1908] 1 Ch 388
Bandwill Pty Ltd v SpencerLaitt (2000) 23 WAR 390
Banfield v WellsEicke [1970] VR 481
(Page 3)
Carlton Cricket & Football Social Club v Joseph [1970] VR 487
Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398
City of Gosnells v Duncan (1994) 12 WAR 437
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (Codelfa / Eastern Suburbs Railway case) (1982) 149 CLR 337
Day v William Hill (Park Lane) Ltd [1949] 1 KB 632
Dempster v National Companies & Securities Commission (1993) 9 WAR 215
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Dorajay Pty Ltd v Aristocrat Leisure Ltd [2005] FCA 1483
Edmeades v Thames Board Mills Ltd [1969] 2 All ER 127
Ernst & Young (Reg) v Tynski Pty Ltd (2003) 47 ACSR 433
Ex parte Goddard; Re Falvey (1946) 46 SR (NSW) 289
F Goldsmith (Sicklesmere) Ltd v Baxter [1970] Ch 85
Freeman v McManus [1958] VR 15
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Howard v The Ministry of Consumer Affairs (Now the Ministry of Fair Trading) & Anor, unreported; SCt of WA; Library No 940428; 19 August 1994
Kimberley Downs Pty Ltd v Western Australia, unreported; SCt of WA; Library No 6414; 25 August 1986
McKechnie v Campbell (1996) 17 WAR 62
Newmont Pty Ltd v Laverton Nickel NL [1983] 1 NSWLR 181
Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537
Project 28 Pty Ltd v Barr [2005] NSWCA 240
QPSX Ltd v Ericsson Australia Pty Ltd (No 3) (2005) 219 ALR 1
Re Tottenham v Tottenham [1896] 1 Ch 628
Rose v New South Wales Native Title Services Ltd [2005] VSCA 157
Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455
Stevenson v Yasso [2006] QCA 40
Templeton v Leviathan Pty Ltd (1921) 30 CLR 34
Walton v Gardiner (1993) 177 CLR 378
(Page 4)
1 MASTER SANDERSON: This is the defendant's application to stay the plaintiffs' action and further to strike out certain paragraphs of the statement of claim. The application was in three parts. The first related to the capacity in which the first plaintiffs sued. The defendant submitted that the first plaintiffs were engaged in representative proceedings and had not satisfied the criteria for maintaining such proceedings. At the commencement of the hearing a minute of proposed amendments to the amended statement of claim ("the minute") was tendered by counsel for the plaintiffs. These further amendments assuaged the concerns of the defendant and according the issue fell away. The two remaining points were then argued.
2 To put this application in context, it is necessary to say something about the background facts. These facts are uncontroversial and emerge from the evidence filed by the parties and from the pleaded statement of claim. In 1997 the defendant entered into negotiations with the Bibila Lungutjarra Native Title Claimant Group (the "Bibila people") and the Goolburthunoo Native Title Claimant Group (the "Goolburthunoo people") as part of the process of developing a laterite nickel and cobalt project at Murrin Murrin. The defendant negotiated an agreement with the Goolburthunoo people, recorded in a deed dated 8 July 1998 (the ancillary agreement): see annexure LMW12 to the affidavit of Lucas Mark Wilk sworn 15 December 2005.
3 The ancillary agreement was signed by the first plaintiffs who were collectively defined in cl 1.1(15) as the "Native Title Parties". Recital A of the ancillary agreement notes that the first plaintiffs together represent the Goolburthunoo people and are signatories to native title claims WC96/5, WC96/7, WC96/11, WC96/12 and WC96/72. By cl 1.1(8) of the ancillary agreement the Goolburthunoo people were defined to mean:
"the Aboriginals associated with and/or resident in the Project Area or who are shown on the Register of Native Title Claims with the Native Title Tribunal as claiming to be holders of the Native Title Claims as listed and referred to in 'Annexure C' to this Document."
4 Pursuant to cl 6.1 of the ancillary agreement Anaconda (the defendant's predecessor) was to make annual payments of $1 million to the "NEIB Trust". The NEIB Trust was defined in cl 1.1(16) to mean:
"… the charitable trust to be established by the North East Independent Body and which:
(Page 5)
- (a) is established for the principal objects of furthering the social, economic, business development, educational and cultural welfare of the aboriginal people of the North-Eastern Goldfields region of Western Australia;
(b) terms, constitution and structure have been approved by the Native Title Parties;
(c) satisfies the requirements of a trust under Sections 55, 56 and 57 of the Native Title Act."
5 The "North East Independent Body" referred to the in definition quoted above was defined in cl 1.1(17) of the ancillary agreement. The expression is defined to mean:
"… the regional body established to represent the interests of the aboriginal people of the north eastern goldfields of Western Australia and which is a prescribed body corporate as referred to in Sections 55, 56 and 57 of the Native Title Act."
6 Clause 6.2 of the ancillary agreement deals with a circumstance where the NEIB Trust was not established by 30 June 1998. It is in the following terms:
"If the NEIB Trust is not established by 30 June 1998 then:
(1) an independent charitable trust established to satisfy the criteria and objects stated in 1.1(14)(a) [sic] of this Document will be established on terms determined by an independent arbitrator appointed by and acceptable to the Native Title Parties, Anaconda and the NEIB; and
(2) all annual payments under clause 6.1 of this Document will be paid by Anaconda to that trust."
7 It is common ground that by 30 June 1998 the NEIB Trust had not been established: see par 35 of the minute. Indeed, the North East Independent Body had not been incorporated by that date.
8 On 14 August 2003 Anaconda's lawyers wrote to the plaintiffs' solicitors giving notice that Anaconda was rescinding the ancillary agreement: see page 184 of annexure LMW15 of Mr Wilk's affidavit. On 10 November 2004 the first and second plaintiffs executed an agreement (the Funding Agreement) with IMF (Australia) Ltd ("IMF") and
(Page 6)
- Insolvency Litigation Fund Pty Ltd ("ILF") with respect to funding these proceedings: see page 205 of annexure LMW21 to Mr Wilk's affidavit.
9 Turning then to the minute par 4 is in the following terms:
"4. The Second Plaintiff:
(a) is a body corporate, incorporated under the Aboriginal Councils and Associations Act 1976;
(b) was established by the native title claimant groups comprising the Wongatha Native Title Claim referred to in paragraph 3 above;
(c) was established to represent the interests of the aboriginal people of the north eastern goldfields of Western Australia including to become a registered native title body as set out in its objects; and
(d) is trustee of a trust for the benefit of the aboriginal people of the north eastern goldfields region of Western Australia and known as the Wongatha Aboriginal Charitable Trust."
"22. The Second Plaintiff:
(a) by reason of the facts pleaded in paragraphs 4(b) and (c) above, is the body contemplated by the Deed and referred to therein as 'North East Independent Body' and 'NEIB', established to represent the interests of aboriginal people in the north eastern goldfields of Western Australia; and
(b) is entitled to the benefit of the covenants and agreements in the Deed expressly or impliedly for the benefit of the North East Independent Body.
23. The Wongatha Charitable Trust referred to in paragraph 4(b) above:
- (a) is a charitable Trust;
(b) was established by the Second Plaintiff;
(c) was established for the principal objects of furthering the social, economic, business development, educational and cultural welfare of the aboriginal people of the north eastern goldfields region of Western Australia;
(d) was established on terms approved by the First Plaintiffs;
(e) satisfies the requirements of a trust under section 55, 56 and 57 of the Native Title Act 1993."
11 By par 30 of the minute the second plaintiff alleges it has suffered loss, inter alia, as a consequence of the defendant not making payment of the sum of $1 million per annum as the second plaintiff says it is required to do under cl 6.1 of the ancillary agreement. There is then pleaded an alternative claim. This is to be found in par 34 through to par 39 of the minute. These paragraphs are in the following terms:
"34. It was a term of the Deed that if the NEIB Trust was not established by 30 June 1998 then:
(a) an independent charitable trust established to satisfy the objects described in paragraph 23(c) above would be established on terms determined by an independent arbitrator appointed by and acceptable to the First Plaintiffs, the North East Independent Body and the Defendant; and
(b) all payments described in paragraph 26 above would be paid into that trust.
35. The Wongatha Aboriginal Charitable Trust was established after 30 June 1998.
36. No other trust has been established in the manner contemplated by the terms of the Deed described in paragraph 34 above.
37. By letter from the Plaintiffs' solicitors to the Defendant's solicitors dated 1 December 2004, the Plaintiffs
- demanded that the Defendant agree to the appointment of an independent arbitrator for the purposes described in paragraph 34 above.
- 38. By letter from the Defendant's solicitors to the Plaintiff's solicitors dated 6 December 2004, the Defendant refused to comply with the Plaintiffs' demand described in paragraph 37 above.
39. The First Plaintiffs and the Second Plaintiff are ready, willing and able to perform their respective obligations in connection with the establishment of the trust contemplated by the terms of the Deed described in paragraph 34 above."
12 In the prayer for relief the second defendant seeks a declaration that the Wongatha Aboriginal Charitable Trust is the NEIB Trust contemplated by the Deed and that as trustee of that Trust the second plaintiff is entitled to the payments to be made under cl 6.1. As an alternative an order is sought that an arbitrator be appointed to settle the terms of a new charitable trust contemplated by cl 6.2 of the Deed.
13 The defendant says that the second plaintiff should not be a party to this action and seeks to have struck out from the minute those paragraphs which relate to the second plaintiff. The defendant bases its application on two grounds. At first they say that the second plaintiff is not the "NEIB Trust contemplated by the ancillary agreement". The say that to fit such a description the Trust would either have had to have been established prior to 30 June 1998 or would have had to have been established after the appointment of an arbitrator as contemplated by cl 6.2(1) of the ancillary agreement. As neither of these two requirements were satisfied the second plaintiff cannot satisfy the requirements of the ancillary agreement and is not properly a party to these proceedings.
14 As counsel for the second plaintiff pointed out this really is a question of the construction of the ancillary agreement. As I have reached the conclusion that it is not appropriate to strike out the paragraphs complained of and remove the second plaintiff as a party to these proceedings it is not appropriate that I say too much about my views as to the proper interpretation of the ancillary agreement. But a number of things can be said. Clause 1.1(16) which defines the NEIB Trust has no temporal qualification. It is true that cl 6.2 says that if the NEIB Trust is not established by 30 June 1998 then some other independent charitable
(Page 9)
- trust "will be established". But once again, there is no temporal qualification. The alternative trust cannot be established prior to 30 June 1998 but just when such a trust is to be established is not specified. It is therefore, in my view, arguable that, as pleaded in the minute, the second plaintiff satisfies the criteria which would allow it to be recognised as the NEIB Trust.
15 The defendant's second complaint can be expressed in this way. Clause 1.1(16)(a) of the ancillary agreement requires that the Trust had to be established for the principal objects of furthering the social, economic, business development, educational and cultural welfare of the aboriginal people of the north eastern goldfields region of Western Australia. However, the Trust established has objects which relate solely to the Wongatha people. This is evident from cl 3 of the deed of settlement of the Wongatha Aboriginal Charitable Trust and from cl 2 of the Wongatha Aboriginal Charitable Trust amendment deed. These documents are respectively annexures LMW13 and LMW14 to the affidavit of Mr Wilk. The defendant submits that there is no evidence to establish that the Wongatha people and the Aboriginal people of the north eastern goldfields area are different descriptions of the same people.
16 Once again, this submission seems to me to involve construction of the deed. Once again, it is inappropriate if I say too much on this issue. But it is clear that the defendant's submissions seem to assume that the word "all" is to be read into both cl 1.1(16)(a) and cl 1.1(17) before the words "aboriginal people". Counsel said as much in her written submissions: see par 104. Whether or not that is the proper interpretation of the clauses is a matter for trial.
17 In summary, then, I am not satisfied that there is any grounds for striking out references to the second plaintiff in the proceedings.
18 The remaining question is whether or not the fact that the action is being funded by a third party litigation funder warrants a stay being granted on the basis that the arrangement is champertous and an abuse of the Court's process. This involves a consideration of what are generally known as the Clairs Keeley cases: see Clairs Keeley (a firm) v Treacy & Ors (2003) 28 WAR 139; Clairs Keeley (a firm) v Treacy & Ors (2005) 29 WAR 479; Clairs Keeley (a firm) v Treacy & Ors [2005] WASCA 86. The defendant relied upon the first of these cases, and in particular the judgment of Pullin J, to argue that the four elements which led to a stay in the first Clairs Keeley case were present in this case. First, it was said that the litigation funder had no "bona fide community of pecuniary interest or
(Page 10)
- religion or principles or problems in common with the respondents". Notwithstanding this lack of interest the litigation funder is maintaining the action. Secondly, the funding agreement involves an aggravated form of maintenance known as champerty. The defendant maintained that the litigation funder by taking a substantial percentage of the proceeds of any successful action is distorting the purpose of the proceedings. Thirdly, the litigation funding agreement ensures that the plaintiffs bear no risk at all – the litigation funder is liable to pay the solicitor's costs and the costs of the defendant if the plaintiffs fail in their action. Relying again on what was said by Pullin J, this aspect of the litigation – the risk that a party pursuing the litigation will suffer a financial penalty if they lose – is absent. Finally, it was said that although the litigation funding agreement itself suggests otherwise, it is to be implied that control of this litigation rests with the funder and not with the plaintiffs.
19 It must be said that arguments such as the one put by the defendants are very difficult to resolve. It should also be said that the approach of the Full Court in this State has not met with universal approval in other States. In fact, in the New South Wales Court of Appeal in Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd (2005) 63 NSWLR 203 at 226 and 229 it received quite pointed criticism. However, there is no doubt that the various Clairs Keeley decisions represent the law in this State and I must follow that approach. (It is worthy of note that the High Court gave leave to appeal in the Fostif matter and the appeal was argued on 4 April 2006. Doubtless the proper approach to applications to stay proceedings on the grounds of champerty will be clarified by the Court's decision).
20 In my view, a proper analysis of the Clairs Keeley decisions leads to the conclusion that what is of critical importance is the level of control that the litigation funder has over the litigation. In this case, the terms of the funding agreement leave the plaintiffs in control of the litigation: see cl 13 of the Investigation and Funding Agreement being part of annexure LMW21 to Mr Wilk's affidavit. It is also worthy of note that the plaintiffs appointed their own independent solicitors well before the involvement of the funder: see affidavit of Christopher Alan de Courcy Ryder sworn 18 April 2006 par 2. In my view, the affidavits make it plain that the plaintiffs' interests are not subservient to those of the litigation funder and that they are not a mere cipher. They are in a contractual position where they can make informed decisions about the litigation.
21 In relation to control, what the defendant is suggesting is that it is possible to go behind the clear wording of the agreement itself and
(Page 11)
- conclude that the litigation funder controls the proceedings. In my view, in this case, there is no warrant for that conclusion. As a matter of law, control rests with the plaintiffs. On that basis, I am not satisfied that it would be appropriate to grant a stay of these proceedings.
22 The proper order then is that the defendant's application be dismissed. I will hear the parties as to costs.
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