Duke Eastern Gas Pipeline Pty Ltd and Anor, An application by

[2003] VSC 54

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7935 of 2002

IN THE MATTER -

OF AN APPLICATION BY DUKE EASTERN GAS PIPELINE PTY LTD and DEI EASTERN GAS PIPELINE PTY LTD for various orders in relation to the Nyarmin Trust

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JUDGE:	ASHLEY J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 February 2003
DATE OF JUDGMENT:	27 February 2003
CASE MAY BE CITED AS:	An Application by Duke Eastern Gas Pipeline Pty Ltd and Anor
MEDIUM NEUTRAL CITATION:	[2003] VSC 54

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Trusts – Native Title Consent Agreements entered into in 1997 – intention that moneys payable under the agreements should be paid by the plaintiffs into a Trust to be established by and for the benefit of the Aboriginal signatory groups – prolonged failure by Aboriginal signatory groups to establish a Trust – moneys payable by plaintiffs held on Trust by them for the benefit of the intended Trust – application by plaintiffs for an Order directing them to pay moneys held on Trust into Court – application not premature – Order in interests of intended Trust and ultimate beneficiaries.

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APPEARANCES:	Counsel	Solicitors
PLAINTIFFS	Mr J.C. Paterson	Minter Ellison
For the New South Wales Native Title Services and the Mirimbiak Nations Aboriginal Corporation	Mr C. Thomson
For Gwen Brown and Ernest Duren	Mr S. McNab
For Lindsay Mobourne, Russell Mullett, Regina Rose and Wayne Hood	Dr C. O'Brien

HIS HONOUR:

1. In 1998 the plaintiffs in this application, Duke Eastern Gas Pipeline Pty Ltd and D.E.I. Eastern Gas Pipeline Pty Ltd, acquired from Energy Gas Pipeline Pty Ltd (EGP) the right to build a natural gas pipeline from Longford in Victoria to Horsley in New South Wales.  Prior to the plaintiffs doing so a series of Native Title Consent Agreements had been struck between a number of Aboriginal groups with claims over land along the route of the pipeline and EGP.[1] When the plaintiffs acquired rights to the project they assumed the constructor's obligations to pay to a Trust which was to be created at the instance of and for benefit of the Aboriginal signatory groups[2] amounts which would eventually total $3,715,000.

   [1]Or the joint venturers who established  EGP as the pipeline constructor.  It matters not which is the case.

   [2]The parties to the agreements, and the Nations or groups on whose behalf they executed the agreements were as follows: Allan Carriage (on behalf of the Wadi Wadi group), Gwen Brown, Ernest Duren and a person since deceased (on behalf of the Dharawal  group), Rae Stewart (on behalf of the Monero/Ngarigo group), Nurri Arnold Williams (on behalf of the Ngunnawal group), Nancy Campbell and two persons since deceased (on behalf of the Jerrinja group); Rachael Mullett (on behalf of the Bidawal group) and Russell Mullett, Regina Rose, Leslie Thorpe, Collon Mullett, Roderick Mullett, Robert Farnham, Wilfred Carter, Wayne Hood, Lindsay Mobourne, Wallace Bull, Ray Thomas and Mr Hood (on behalf of the Gunai/Kurnai group).

1. Construction of the pipeline, it seems, is complete.  But the Trust to which I referred, 5 years after the agreements were executed, has not yet been constituted.

1. The plaintiffs, no Trust having been constituted, established a bank account with the Westpac Banking Corporation.  It is styled "Duke Energy Australia Pty Ltd – Nyalmin (sic) Trust account."  Into that account they have paid moneys falling due under the agreement.  They hold the moneys as trustee for the benefit of the Nyarmin Trust – that is, the Trust not yet constituted; or perhaps for the benefit of the ultimate beneficiaries.  The amount standing to the credit of that account now exceeds $4,217,500. 

1. There having been an inability over the passage of years to constitute the Nyarmin Trust, the plaintiffs apply for an order, preferably, that the moneys now in the Westpac account be paid into court. They seek also a declaration that the moneys at bank represent the amount payable by them to the Nyarmin Trust under the agreements. The plaintiffs rely upon R 54.02 (2)(b)(ii) of Chapter 1 as a source of power and also s.69 of the Trustee Act 1958. They say that it was never intended that they be the trustee of the property constituted by the moneys at bank. They say that they should have no role in administering the Trust which was intended to be constituted, perhaps particularly no role in determining the way in which the benefits of the intended Trust should be disbursed amongst the various claimants. They note that interest earned on the moneys at bank attracts a tax liability so long as the moneys remain there, to the disadvantage of the intended beneficiaries.

1. In December last year Beach, J. ordered that service of this process be made upon the various signatories to the agreements in 1997;  and also upon New South Wales Native Title Services and Mirimbiak Nations Aboriginal Corporation, which are said to be representative bodies for the purposes of Native Title legislation for New South Wales and Victorian Aboriginal groups respectively.   I am satisfied that the parties whom his Honour ordered should be served have been served, save in the case of signatories who have died since 1997.  Today, a number of those who were served have appeared by counsel.  Additionally, counsel has appeared for the two Aboriginal representative entities, namely New South Wales Native Title Services and Mirimbiak Nations Aboriginal Corporation.  Not all of the individuals who were served have appeared today, but that does not impact upon the validity of the proceeding. 

1. I do not doubt that, at least under Order 54,  I have the power to order payment of the moneys at bank into Court and that such an order should properly be made.  The question is whether I should make an order now.  Counsel for the two Aboriginal representative entities submitted that the application was premature. He told me that there was prospect that an agreement would be concluded in April this year which would permit the constitution of the Nyamin Trust.  This was so despite the difficulties that there have been in getting agreement between the Aboriginal groups involved in the 1997 agreements as to the way in which the Trust once constituted is to be administered; specifically as to the division of available benefits. 

1. In my opinion there should be no adjournment. It might be the case, despite the difficulties which counsel described, that an agreement will be reached in April this year between interested parties who have been very much at arm's length.  But that is not certain, and meanwhile, leaving the inconvenience to the plaintiffs to one side, and I do put it to one side, the situation is that the moneys at bank are earning (I was told) interest at 4.15%;   and charges are being incurred.  At the same time, the plaintiffs are incurring expense.  If the moneys were in court, the return would be better, and considerably so, in my experience.  Administration charges would be modest.  I think that even if the moneys were in Court for no more than a few months, it would be very much to the benefit of the ultimate beneficiaries.  I also note that, on the moneys being paid into Court, the various Aboriginal groups whose members executed the agreements could be absolutely sure that moneys would be well-protected, such moneys not being disbursed until the Senior Master was satisfied that the Nyarmin Trust had been unequivocally, fully and unambiguously constituted. 

1. An order should be made now for payment into Court.  In so concluding I dismiss an alternative proposal made by the plaintiffs, that is, that the moneys at bank be paid into an account established by the two Aboriginal representative entities, the amount therein to be held by them on trust for the yet to be established Nyarmin Trust.  The history of the matter does not suggest that adoption of the alternative proposal would be the best way of resolving the present impasse.  Remarks made recently by some of the individuals who executed the agreements, deposed to by solicitors for the plaintiffs, confirm the undesirability of adopting that course.

1. I next note that upon the material before me the money at bank is the amount payable under the agreements.  I should make a declaration to that effect.

1. I turn to ancillary submissions made by counsel for the plaintiffs.  He first submitted that out of the funds presently at bank there should be deducted, before payment into court, an amount sufficient to pay whatever income tax is payable on accrued interest.  I do not doubt that, if any tax is payable, then, once it has been assessed, the moneys presently in the account ought be the source of the tax to be paid.  But it seems to me that the proper course is that the moneys should in their entirety be paid into court and that, if and when some tax is assessed, application should be made to the Senior Master for payment out of the funds in court of that tax, and that, the Senior Master being satisfied that the tax is payable, an appropriate disbursement should then be made.

1. Second, counsel for the plaintiffs submitted that his clients should have their costs on an indemnity basis, arguing that in the ordinary course a trustee has such an entitlement.  It seems to me that it was proper indeed that this proceeding be instituted.  I have already alluded to the long period that has elapsed without the Nyarmin Trust being created.  I do not doubt that the outcome of this proceeding, that is, an order that moneys be paid into Court, will be to the benefit of the ultimate beneficiaries.  In the event, it seems to me clear that the plaintiffs should have their costs of and incidental to the proceeding on an indemnity basis and that those costs should be paid out of the trust moneys.  Again, it seems to me that the proper course is that, the entirety of the moneys at bank having been paid into court, the plaintiffs should be at liberty to present a bill of costs to the Senior Master and that he, being satisfied of the propriety of the claim made, should disburse those costs to the plaintiffs or their solicitors;  or, if he is not so satisfied, that the costs should be taxed and the amount as thereafter taxed be disbursed. 

1. Third, counsel for the plaintiffs referred to what were described in draft minutes of orders as “the plaintiffs’ costs of the establishment of the Nyarmin Trust”.  It is clear from the material that the plaintiffs have incurred considerable legal costs over a period of years in attempts to achieve the constitution of the Nyarmin Trust.  That has been a matter that the plaintiffs could encourage but not themselves achieve.  Its achievement lay with others, and still lies with others.  Whilst I am sympathetic to the position of the plaintiffs in this connection, I do not consider that their costs related thereto ought be chargeable against the fund.  On the other hand, the plaintiffs have no doubt incurred over the passage of years certain costs in establishing and administering the trust represented by the moneys now at bank.  The plaintiffs do not claim a trustee’s commission; but they should be entitled to recoup from the moneys paid into court their reasonable costs and disbursements of administering the trust over the period of years. 

1. There is one matter more.  I am very concerned that constitution of the Nyarmin Trust has been so long delayed; and am somewhat pessimistic concerning its future establishment.  In the circumstances, I shall reserve liberty to apply to the persons who executed the agreements; and also, although, being doubtful, to the two representative Aboriginal entities.

1. What should now be done is for plaintiffs' solicitors to prepare a minute of Orders consonant with these reasons, circulate it to other counsel and then provide me with agreed draft Orders. 

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