Malone v B&M Aboriginal Corporation (In Administration) (No 2)

The case before the court involved an appeal from orders made in an interpleader proceeding under Part 18 of the Federal Court Rules 2011 (Cth) concerning payments required to be made under an Indigenous Land Use Agreement (ILUA) by a petroleum exploration and production company to a nominated entity established for the benefit of families comprising a native title claim group. The successful appellants were members of one of the families comprising the native title group. The respondent company was insolvent and in administration, unable to satisfy an order for costs. The legal issues the court was required to decide included whether section 85A of the Native Title Act 1993 (Cth) was applicable to the appeal and whether a non-party costs order should be made against the directors of the respondent company who resolved to place the respondent into administration, the lawyer who purported to represent the respondent in the proceeding up until the appointment of the administrator, or the administrator of the respondent.

The court found that the circumstances of the present case were analogous to those concerning beneficiaries of a trust who properly and reasonably incur legal costs in connection with the administration of the trust. The court held that such costs are ordinarily payable out of the trust. The usual order in these circumstances is for the costs to be quantified on an indemnity basis, being an indemnity for all costs properly and reasonably incurred. The court concluded that the appropriate order was that the appellants’ costs of the appeal, quantified on an indemnity basis, be paid out of the funds being held by the Court for the benefit of the Daylight family in priority to any other distribution of those funds. The payment should be made upon the appellants providing to the Court a certificate of taxation issued by a taxing officer under r 40.32 of the FCR quantifying the appellants’ costs on an indemnity basis.

Accordingly, the court made the following orders: 1. The appellants’ costs of the appeal, quantified on an indemnity basis, be paid out of the funds being held by the Court for the benefit of the Daylight Family in priority to any other distribution of those funds. 2. In order 1: (a) the phrase “funds being held by the Court for the benefit of the Daylight Family” means that proportion of the funds paid into Court in proceeding QUD 334 of 2018 by QGC Pty Limited pursuant to the Indigenous Land Use Agreement included on the register of the National Native Title Tribunal as QI2010/006 (ILUA) for the benefit of the Daylight Family plus the interest earned on those funds; and (b) the phrase “Daylight Family” has the same meaning as used in the ILUA. 3. The payment in order 1 be made upon the appellants providing to the Court a certificate of taxation issue by a taxing officer under r 40.32 of the Federal Court Rules 2011 (Cth) quantifying the appellants’ costs on an indemnity basis.