Is there an actionable loss?
76 The applicants plead that the Site Nomination Deed provided the benefits which the Ngapa (Lauder) and neighbouring traditional owners "stood to gain" from the nomination of the Southern Site.
77 The benefits under the Site Nomination Deed comprised:
(i) an "upfront" payment of $200,000 to the NLC "for the Traditional Aboriginal Owners and other Aboriginals concerned in relation to the Potential Site" (cl 4.3.1);
(ii) the funding by the Commonwealth of "education and training scholarships" to a total value of $1 million for "Traditional Aboriginal Owners and other Aboriginals concerned" (cl 4.4.1) with the value of any individual scholarship limited to $20,000 per year and $60,000 over the duration of the scholarship (cl 4.4.3); and
(iii) the payment by instalments of a further $11 million to the trustees of a charitable trust to be established in accordance with the requirements of Schedule One to the Site Nomination Deed (cll 4.1.1 and 5.1).
78 Clause 5.1.5 provided expressly that all payments under cl 5.1 were to be paid to the trustees of the charitable trust and to be held in accordance with the charitable trust.
79 Schedule One to the Site Nomination Deed provided that the trustee would be a "specialist corporate trustee" satisfactory to the Commonwealth, the NLC and the Muckaty Land Trust, but that other trustees may also be appointed with the agreement of all three parties.
80 Schedule One also specified that the deed establishing the charitable trust had to be consistent with a number of requirements, one of which was the clause as to purpose:
Purpose
The Trust will be established and maintained for the purposes of relieving poverty of, advancing education for, and other purposes beneficial to, affected Traditional Aboriginal Owners and other Aboriginals concerned in relation to the Selected Site and Access Road Area, and such other charitable purposes as the trustees may from time to time determine.
The trustees will be empowered to establish and maintain suitable and appropriate services, facilities, enterprises, property, infrastructure and other like benefits which collectively benefit the affected Traditional Aboriginal Owners and other Aboriginals concerned or their funds, authorities or institutions listed as charities under the relevant taxation legislation.
Particular purposes of the trust will be:
- to advance the health, education and welfare of affected Traditional Aboriginal Owners and other Aboriginals concerned, to provide services, facilities, infrastructure, enterprises and like benefits on Aboriginal Land held by the Land Trust;
- to improve and increase economic opportunities for and to initiate and support the development of economic enterprises by affected Traditional Aboriginal Owners and other Aboriginals concerned with a view to alleviating poverty and promoting other charitable purposes among them.
- purposes incidental to the above.
Should these purposes fail, the trust deed will require that the trustees apply the funds for the benefit of other charities.
81 The applicants plead that, by its actions, the NLC "destroyed their financial interests" in the sum of $12 million for which the Site Nomination Deed provided. They claim, by way of relief, payment of that sum plus interest, in addition to aggravated or exemplary damages.
82 A fundamental difficulty for the applicants is that they do not plead any basis by which they as individuals could have received the $12 million or even part of that sum. In fact, their own pleading is inconsistent with them having an entitlement to payment of the $12 million. Paragraph [26] of the 2SC pleads:
Pursuant to a site nomination deed dated 18 June 2007 the Ngapa (Lauder) traditional owners (re the nominated site and an adjacent portion of the haulage road), Milwayi traditional Aboriginal owners (re a portion of the haulage road), and members of neighbouring groups stood to gain the sum of $12 million (with $11 million held in a charitable trust, and $1 million in the form of education scholarships) if the site was ultimately endorsed through Ministerial declaration by the Commonwealth. There was also an upfront payment of $200,000 which the NLC disbursed to members of local descent groups known as the Ngapa (Lauder), Ngapa (Foster), Wirntuku, Milwayi and Yapayapa groups in March and April 2008 (after consultations held on 18 March and 1 April 2008).
Particulars
...
83 Paragraph [26] in the proposed 3SC is in slightly modified form but the changes are not material for present purposes.
84 Thus, in relation to $11 million of the $12 million, the applicants' own pleading indicates that it was not contemplated that any part of that sum would be paid to them or, for that matter, to the Ngapa (Lauder). Instead they plead that that sum was to be paid to a charitable trust. This pleading is consistent with the terms of the Site Nomination Deed itself. It contemplated, and indeed required, that the $11 million be paid to a charitable trust established for the purpose. Furthermore, the Deed provided expressly that the Commonwealth was not bound to pay any of the benefits under the Deed until a charitable trust in accordance with the requirements of Schedule One, or otherwise to the Commonwealth's satisfaction, had been established (cl 4.1.1). It also provided expressly that all of the progressive payments of the $11 million would be paid to trustees of the charitable trust to be held in accordance with the trust (cl 5.1.5). In addition, the Site Nomination Deed set out purposes with which the purposes of the charitable trust had to be consistent.
85 Some features of charitable trusts are well known. They are purpose trusts and do not need to have any ascertainable human beneficiaries: Attorney-General (NSW) v Perpetual Trustee Co Ltd [1940] HCA 12; (1940) 63 CLR 209 at 222. In this respect they differ from private trusts whose objects are individuals, either named or answering a description, whether presently or at some future time: ibid. Thus, in BSH Holdings Pty Ltd v Commissioner of State Revenue [2000] VSC 302; (2000) 2 VR 454 at 456, Hansen J said that "[a] charitable trust does not have a beneficiary". It is the Attorney-General, on behalf of the Crown, who has the power and duty to enforce the proper performance of charitable trusts.
86 The NLC referred to the summary concerning charitable trusts in Re Crown Forestry Rental Trust: Latimer v Commissioner of Inland Revenue [2004] UKPC 13; [2004] 4 All ER 558:
[29] Their Lordships would begin by stating some general principles. It is of the essence of a charitable trust that it is a trust for the promotion or advancement of social purposes rather than a trust for individual beneficiaries. Of course, individuals may benefit from the application of trust moneys, but they are not, as individuals, the beneficiaries of the trust and may not enforce its terms. If the purposes of the trust are charitable, they may be enforced by the Attorney-General; if they are not charitable then, with certain anomalous exceptions, they are not enforceable and the trust is not valid.
87 The NLC submissions emphasised that the applicants will not be beneficiaries of the contemplated charitable trust and could not enforce its terms.
88 Accordingly, the submission of the NLC was that none of the applicants had an entitlement, let alone a prospect, of receiving directly the payment of the $11 million (or part of it) seems sound.
89 The applicants' counsel sought to avoid these difficulties by a number of submissions made in the alternative:
(a) the evidence concerning the charitable trust was incomplete because the NLC had not disclosed whether a charitable trust had been established and, if so, its form.
This particular submission seemed to suppose that the Court was being asked to express a conclusion on the evidence. That is not so. The difficulty for the applicants is that, on their own pleading, the $11 million was to be held in a charitable trust, and there is no pleading of material facts to support a claim that some portion of that amount, whether direct or indirect, was to be paid to them as individuals;
(b) it cannot be concluded that the intention of the Site Nomination Deed was that there be established a charitable trust in the legal sense.
Again, it is to be remembered that it is the applicants' own pleading which is in question. They have pleaded that the money was to be paid to a charitable trust without any suggestion that they were using that term in other than its well understood legal sense. Moreover, the terms of the Site Nomination Deed are strongly suggestive of a charitable trust in the legal sense being intended by the parties to the Deed;
(c) the provisions in the Site Nomination Deed with respect to the charitable trust constituted no more than "an agreement to agree" which was unenforceable.
This was a somewhat surprising submission given that the entity to pay the money was the Commonwealth. However, even if there was no enforceable agreement with respect to the charitable trust, it would not follow that the applicants would have the entitlement to some or all of the payment of $11 million;
(d) clause 15.6 of the Site Nomination Deed provided for the severability of provisions found to be invalid.
The unstated premise seemed to be that the provisions in the Site Nomination Deed concerning the establishment of a charitable trust could be found to be invalid, but that the Commonwealth's obligation to pay $11 million together with scholarship benefits of $1 million remain extant and that, somehow or other, those monies would then be paid to the NLC. Then, so the argument ran, in accordance with s 35(4) of the ALRA, the NLC would be bound to pay the monies within six months of receipt to, or for the benefit of, the traditional owners.
There is a short answer to this submission. Neither the 2SC nor the 3SC pleads material facts to support it. In particular, there is no pleading of any basis upon which the obligation of the Commonwealth to pay the $11 million could be severed from the obligation to pay that amount to a charitable trust. The inter-relationship of the terms in the Site Nomination Deed concerning payment and the establishment of a charitable trust suggests that drafting any such pleading would be difficult: compare Brew v Whitlock [1967] VR 803 at 807. That is to say, it is not readily apparent how the obligation for the monies to be paid to a charitable trust could be struck out but the obligation to make the payment nevertheless survive. Furthermore, the applicants do not plead any facts to support a claim that, despite their own pleading and the terms of the Site Nomination Deed, there was a prospect of the $11 million being paid by the Commonwealth directly to the NLC in the event that the provisions concerning the charitable trust failed;
(e) the NLC's submission that the applicants have not suffered any actionable loss should fail because it is contingent upon a charitable trust having been established, and there is no evidence that that occurred.
In my view, whether or not the charitable trust was actually established is immaterial. What is pertinent is that the applicants themselves plead that a charitable trust was to be the entity to which the payment of $11 million was to be paid;
(f) even if a charitable trust in the legal sense was contemplated, the fact that "beneficiaries" cannot sue to enforce it is different from the question of whether they can sue for the lost opportunity of receiving benefits from such a trust.
One may accept that that is so. But the applicants' pleading is not based on loss of opportunity or loss of a chance. Their plea is for payment of the whole of the $12 million. There is no pleading of any facts to support their own personal lost opportunity to receive benefits from the charitable trust and, for the reasons which I will state below, there is no reasonable prospect of the applicants establishing that they, as individuals, ever had such an opportunity;
(g) the applicants have "standing" to sue "for the destruction of their financial interests and economic loss - namely, the loss of a chance to receive benefits of $12 million or $17 million respectively, and to require a trust to be established on appropriate terms".
The question of the applicants' standing is different from the question of whether they have suffered actionable loss. I note again that the applicants do not plead their claim as a loss of opportunity or loss of chance claim; and
(h) the applicants as potential trustees are appropriate persons to sue for "recovery" of the amounts contemplated by the Site Nomination Deed.
There is no pleading of any material facts to support this contention and, in any event, the issue is not one of the applicants' standing.
90 The applicant have not pleaded a claim for damages on the basis of a loss of opportunity or chance. Their omission to do so is not a mere matter of form. The proper identification of the loss said to give rise to the cause of action is a matter of substance and, because of that, should be properly pleaded. As was observed by Gummow A-JC in Tabet v Gett [2010] HCA 12; (2010) 240 CLR 537 at [53]:
Where the act or omission complained of does not amount to interference with or impairment of an existing right, some care is needed in identifying the interest said to have been harmed by the defendant and said to be sufficient to attract the protection of the law in this field.
91 In any action for damages for negligence or breach of statutory duty, it is necessary for an applicant to prove some injury or harm. The loss of the opportunity to obtain a commercial advantage or benefit may be a form of actionable damage. Brennan J stated the principle in Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 at 364:
As a matter of common experience, opportunities to acquire commercial benefits are frequently valuable in themselves, not only when they will probably fructify in a financial return but also when they offer a substantial prospect of a financial return. The volatility of the market for speculative shares testifies to both the valuable character of commercial opportunities and the difficulty of assessing the value of opportunities which are subject to serious contingencies. Provided an opportunity offers a substantial, and not merely speculative, prospect of acquiring a benefit that the plaintiff sought to acquire or of avoiding a detriment that the plaintiff sought to avoid, the opportunity can be held to be valuable. And, if an opportunity is valuable, the loss of that opportunity is truly "lost" or "damaged" for the purposes of s 82(1) of the [Trade Practices Act 1974 (Cth)] and for the purposes of the law of torts.
(Emphasis in the original)
92 In those cases in which applicants seek to recover damages for the lost opportunity to obtain a commercial or financial benefit, they must establish, on the balance of probabilities, that they had the opportunity and that they have suffered its loss, that is, that they had a substantial prospect of obtaining a benefit which is no longer available to them by reason of the alleged negligence or breach of statutory duty of the respondent. When such a loss is proven, an assessment of the damages may take account of degrees of probability concerning the extent of the loss: Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 643.
93 In Badenach v Calvert [2016] HCA 18; (2016) 257 CLR 440, the plurality (French CJ, Kiefel and Keane JJ) summarised the position as follows:
[38] It has been explained that to speak of loss as the loss of a "chance" distorts the question of causation. It involves the application of a lesser standard of proof than is required by the law … It confuses the issue of the loss caused with the issue of assessing damages which are said to flow from that loss. In that assessment a chance may be evaluated.
[39] The respondent's case on causation is not improved by seeking to equate the chance spoken of with an opportunity lost. It may be accepted that an opportunity which is lost may be compensable in tort. But that is because the opportunity is itself of some value. An opportunity will be of value where there is a substantial, and not a merely speculative, prospect that a benefit will be acquired or a detriment avoided.
[40] It remains necessary to prove, to the usual standard, that there was a substantial prospect of a beneficial outcome. This requires evidence of what would have been done if the opportunity had been afforded. …
[41] The onus of proving causation of loss is not discharged by a finding that there was more than a negligible chance that the outcome would be favourable, or even by a finding that there was a substantial chance of such an outcome. The onus is only discharged where a plaintiff can prove that it was more probable than not that they would have received a valuable opportunity. …
(Emphasis added and citations omitted)
94 This means that if the applicants wished to claim damages for a loss of a valuable opportunity, they had to frame their pleading accordingly so as to identify the valuable opportunity said to have been lost. This would have included pleading, in accordance with rr 16.02 and 16.03 of the FCR, the material facts to support a claim of the loss of an identified valuable opportunity. The applicants have made no attempt to frame either the 2SC or the 3SC in this way.
95 In my view, the matters which the applicants have pleaded, together with the terms of the Site Nomination Deed, indicate that the applicants have no reasonable prospect of establishing that they, as individuals, ever had a valuable opportunity which has been lost by the actions of the NLC. The difficulties in their way are multiple. First, there is the acknowledgement by the parties to the Site Nomination Deed that nothing in it required the Minister to approve or declare an area of land under the 2005 Act. Secondly, it was open to the Minister to approve and declare land under the 2005 Act other than the site nominated by the NLC (cl 3.1.1 of the Site Nomination Deed). The same was true under the 2012 Act.
96 In effect, the applicants claim damages for the loss to them as individuals of $12 million said to result from the NLC's agreement to the terms of the settlement of the Jangala Action by which the Commonwealth bound itself not to act upon the nomination of the Muckaty Station site. They do so in circumstances in which the Commonwealth had no obligation to declare that site as the site for the Repository, in which the Commonwealth had expressly reserved for itself the ability to nominate other sites, in which, even if the Southern Site was chosen as the site for the Repository, the contemplated payment of $11 million was to go to a charitable trust and not to the applicants, and in which it was contemplated that the trustees would achieve the purposes of the trust, not by payment to individuals, but by the establishment and maintenance of "suitable and appropriate services, facilities, enterprises, property, infrastructure and other like benefits" which would collectively benefit the affected traditional Aboriginal owners and other Aboriginals concerned "or their funds, authorities or institutions listed as charities under the relevant taxation legislation".
97 In these circumstances, there is no reasonable prospect of the applicants ever establishing that they, as individuals, had a valuable opportunity of the kind to which Sellars v Adelaide Petroleum and Badenach v Calvert refer.
98 The applicants' pleading and submissions, to which these reasons have been directed concern, in the main, the sum of $11 million. However, regard must also be had to the amount of $1 million to be available in the form of scholarships for education and training. It is to be noted that the Site Nomination Deed did not contemplate the Commonwealth paying $1 million to any person or entity (let alone to the charitable trust or the Ngapa (Lauder)) for this purpose. It provided only that the Commonwealth would "fund" education and training scholarships to a total value of $1 million. Further, the value of any individual scholarship was to be limited to $20,000 per annum and $60,000 over the duration of the scholarship. Further again, cl 4.4.4 of the Site Nomination Deed, provided that the number of scholarships and the duration, value and eligibility criteria would be the subject of negotiation between the Commonwealth and the NLC.
99 It is apparent therefore that, at best, the maximum benefit which any one of the applicants could have received if provided with a scholarship was $60,000. It is theoretically possible that the applicants have lost the chance to obtain such a scholarship and the benefits it may bring. However, the applicants have not pleaded such a case. As already noted, their claim is much more ambitious, being a claim for payment of the full amount of $12 million. There is no reasonable prospect of the applicants establishing an entitlement to payment of a lump sum of $1 million, being the cap on the amount of the Commonwealth funding of scholarships.
100 I mention that no claim is brought with respect to the $200,000 "upfront" payment. As is apparent from [26] of the 2SC set out earlier, the applicants accept that that amount was in fact paid by the Commonwealth and that it has been disbursed to members of the local descent groups.
101 It may be that it was the difficulties which the applicants perceived in establishing that they personally have suffered actionable loss which led to the application of 21 May 2018 for the proceedings to be constituted as a representative proceeding on behalf of the Ngapa (Lauder) and neighbouring traditional owners. As will be seen, I consider that that application should be refused for unrelated reasons. Accordingly, it is unnecessary to consider presently whether the difficulties which the applicants as individuals have in pleading an actionable loss can be overcome by a properly framed representative action pleading.
102 These matters also make it unnecessary to consider the adequacy of the conclusory pleading that the impugned conduct of the NLC "destroyed [the] financial interests" of the applicants.