Dagi v Broken Hill Proprietary Company Limited; Gagarimabu v Broken Hill Proprietary Company Limited [2000] VSC 486

5. I have throughout the management of the relatively small number of group proceedings commenced in the Supreme Court of Victoria been cautious about advancing their preparation whilst doubts exist as to the legal efficacy of the Rule. The group proceeding No. 5003 of 2000 was commenced by the plaintiff against the Broken Hill Proprietary Company Ltd. and Ok Tedi Mining Ltd. (hereinafter called "BHP" and "O.T.M.L." respectively). It is virtually a companion proceeding to No. 5002 of 2000 between Rex Dagi and the same two defendants BHP and O.T.M.L.. The proceeding by the plaintiff Dagi is not afflicted with the doubts that presently hang over the group proceeding. Nevertheless, both proceedings are concerned with the same issue namely what is the meaning and effect of the agreement and terms of settlement that were entered into, coupled with releases, in compromise of earlier proceedings brought in the Supreme Court of Victoria by both Mr Dagi and Mr Gargarimabu, and other persons, against the first and second defendants in respect of, inter alia, the discharge into the Ok Tedi and Fly Rivers of ore-tailings, waste products and what were said to be dangerous and poisonous substances emanating from or used in connection with the mining operations of the defendants at the Ok Tedi copper mine. The claim basically was founded in nuisance and breach of duties of care, claimed to cause damage.

8. In June of 1996 the defendants, the plaintiffs and others entered into an agreement for the purpose of settling those proceedings and resolving the issues between the parties. The plaintiff Gagarimabu claims that the agreement was made between him and group members on the one hand and the defendants, and certain other persons named in the agreement on the other. The agreement is claimed to be conditional upon the execution of terms of settlement which were themselves in writing and executed on 7th June 1996. The statement of claim in the group proceeding claims that the action is brought by Gagarimabu for himself but also as representing certain parties to the agreement made with BHP and O.T.M.L. in June 1996, the names of whom are set out in seven schedules to the statement of claim. It did not seem to be much in dispute in the matter before me that most of the signatories to the agreement were clan leaders in Western Papua New Guinea and the execution by whom of the relevant documents in June 1996 appears to have been viewed as binding members of the clan and the clan leaders. This occasions no surprise, as one might have expected that the defendants when settling the proceeding would be seeking to bind all the persons living on or about the rivers, on which much of their subsistence depended, to the agreement which was then made to settle the proceeding. Claims made both in the previous proceeding and this proceeding are to the effect that the second defendant had conducted mining operations at the Ok Tedi copper mine since May 1984 and that since 1987 BHP had managed and controlled the mining operations of the second defendant. BHP owns 52 per cent of the shares in the second defendant. The plaintiff in the group proceeding claims that under the terms of the agreement the defendants and others including the plaintiff were obliged to make public announcements of the resolution of the issues in approved form and that BHP publicly announced its commitment to reduce the environmental impact of the mine project on the land and the lives of the people in the development area. It is claimed that the parties confirmed support for an independent inquiry into tailings' disposal announced by the Papua New Guinea Government earlier and that BHP would implement any technical and economically feasible tailings' retention scheme recommended by an independent inquiry. It is claimed that by the agreement the first and second defendants committed themselves to implementing the obligations dealt with by them in the public statements and alleges that, notwithstanding the availability of an economically and technical feasible tailings' option (the tailings' pipeline and storage system), the defendants have failed to commit to that implementation which has never come about. Reliance was also placed on alleged admissions by the first defendant about the environmental impact, and on a number of documents.

11. Essentially, the claim is that since no mitigatory management system was put in place, 100.000 tonnes per day of tailings from the mine enters into the river systems and will continue unabated until the end of the life of the mine in the year 2010. It is alleged that, not only is there damage being done to the plaintiffs but that widespread environmental damage to the river system is occurring. As a consequence, it is alleged that the plaintiff and the group members suffered loss and damage as specified in the particulars given in paragraph 21 of the statement of claim. On this basis the plaintiff claims that the group members are all of those who had entered into the relevant agreements and that there are questions of law and fact common to the claims within the meaning of Order 18A.07 to this effect:

(a) Was there a term or terms of the agreement as pleaded in paragraphs 16 and 17 of the plaintiff's statement of claim?

(b) Are BHP and O.T.M.L. in breach of the agreement?

(c) Have the plaintiff and group members suffered loss and damage as a consequence of the breach?

17. The relief claimed, however, is (i) for a declaration of breach and a declaration that the defendants are obliged to implement a tailings' pipeline or storage system; (ii) a claim that the first and second defendants specifically perform the agreement by implementing the system; (iii) alternatively a mandatory injunction requiring them to implement a tailings' pipeline and storage system or equivalent waste management option at the Ok Tedi copper mine; and (iv) damages in addition to or in lieu of specific performance.

20. The substance of BHP's defence is concerned with the terms of the settlement and releases forming part of it. It denies the agreement to resolve the issues and alleges that it at all times denied any liability. It places emphasis on part of the public statements of relevant directors of O.T.M.L. that confirmation of support for the independent inquiry into the tailings' disposal that had been announced by the Government was confirmed, including statements that the first defendant had agreed to implement any technically and economically feasible tailings' retention scheme which was recommended by the inquiry and received all necessary approval from the landowners. It contends that the independent inquiry never proceeded and that the plaintiffs' selection of statements is incomplete and inaccurate. It does not deny that clause 5.2 of the agreement concerned commitment to implementing the tailings' option recommended by the inquiry or the review to be conducted by the State, provided that BHP bona fide considered the option to be economically and technically feasible. It also relies upon the fact that that part of the agreement as to BHP's commitment to implementation of the tailings' option was subject to unexpected or unforeseen circumstances which might render that option economically or technically unfeasible, and subject to "obtaining all necessary leases and other approvals required from the landowners and the State."

23. It appears that much of the defence is connected with the necessities that the conditions claimed to be required to be fulfilled as a condition of embarking upon the tailings' option were never fulfilled, and that no leases were obtained from relevant landowners to enable it to be fulfilled. It also relies on the fact that no tailings' option was ever recommended by any independent inquiry which was never conducted by the State. It also contends that the plaintiffs executed a release in favour of the defendants discharging and releasing them from every defined released claim and covenanting not to commence or bring etc. any action or proceeding relating to the released claim, the definition of which it contends drew in this proceeding. As a consequence of this, it is alleged that the plaintiff is not entitled to bring or maintain this proceeding.

26. It does not appear to be disputed between the parties that by reason of the relevant Act and the so-called Re-stated Eighth Supplemental Agreement the plaintiff and other group members were paid and received compensation for loss and damage suffered by the residents of the relevant communities in respect of disturbance to their land and the Ok Tedi area. Thus BHP claims that the plaintiff has not suffered harm and if so, it is not recoverable. Finally, the first defendant contends that the Court has no jurisdiction to grant the injunctive relief, or alternatively should decline jurisdiction or refuse injunctive relief.

29. By its defence O.T.M.L., the second defendant, contends that it is not in the interests of justice for this proceeding to continue as a group proceeding under Order 18A. It contends that the statement of claim does not sufficiently identify the group members for whom the proceeding is brought and moreover that it is embarrassing, because it includes the defendants. It also claims that the agreement, the terms of settlement and the release have the effect contended for by the first defendant. It claims that the obligations that fell upon it were all subject to the carrying out of an independent inquiry, never done, and that thereby no statement or finding was ever made, and that no technically and economically feasible tailings' potential disposal scheme could or was embarked upon. It also relies upon the failure of any independent inquiry to make any recommendations and that none of the necessary approvals from the State and landowners had been received. Moreover, it contends that the option was not technically and economically feasible. It also relies upon much the same arguments in relation to the agreement, the Act and the Eight Supplemental Agreement and the release, contending that the present claim is a released claim. It also relies upon the payment and acceptance of compensation as discharging any liability.

32. I turn first to the applications made in the Dagi proceeding (5002 of 2000). This was the first in time of the two proceedings that have been brought with respect to the settlement of the earlier proceeding (itself a representative but not a group proceeding) in which Mr Dagi was the plaintiff. The earlier litigation in Dagi was complex, with different actions concerning the same subject matter, broadly described by me as being concerned with the defendant's management of its mining operations at Ok Tedi in West Papua New Guinea, in particular with disposal of the tailings claimed to lead to degradation of the Fly and Ok Tedi River systems and of the adjacent land. This disposal is alleged to have amounted to about 100,000 tonnes per day. The plaintiffs were said to be subsistence dwellers on the banks of the river system and the adjacent land. Those proceedings, as I have already indicated, were resolved by two agreements said to be interdependent, neither to come into effect until both came into effect.

35. The plaintiff Dagi in proceeding 5002 of 2000 is the only plaintiff in that proceeding by which he seeks to enforce his entitlement under the agreement which he contends has been breached by the defendants. Of course, as is already apparent from what I have stated, the parties and the terms of settlement of the earlier proceedings were those who claimed to be damaged by the defendants' activities. Subject to some irregularities in respect of which it is not necessary to make any finding, they have been identified by way of schedules to the agreement. Mr Burnside, senior counsel for the plaintiffs, stated that they involved hundreds of clan leaders (representing thousands of claimants). It was also put that the defendant had an even greater interest in making sure that the specified persons were bound by the releases which were part of the settlement. It is apparent that the schedules merely identified the clan leaders (and even if not named, the clan members) of the members of the group for the purpose of the group proceeding, as I have already noted.

38. The Dagi proceeding is one brought by him on his own behalf to enforce his rights. But he makes the same claim as the plaintiff in the group proceeding, and the members of the group, that no tailing disposal option has ever been implemented at all although the compensation component has been implemented at least in part. The defence in the Dagi proceeding is essentially the same, namely that the obligation to implement the tailing disposal system was dependent upon the occurrence of other events and on criteria which have not occurred or been met. It is also contended in the Dagi proceeding that the claim has been released by the specific terms of the agreement and cannot be sued upon, even if the tailings' disposal system has wrongfully not been implemented, which the defendants deny.

41. It is this aspect which led to the first application by summons dated 9th August 2000 by Dagi to strike out paragraphs of the defences. Those paragraphs (which I do not set out in full) rely on the releases as stifling the Dagi proceeding. Mr Burnside contended that the releases could not be seen as detached from the other obligations of the settlement, namely the remedial tailings' aspect, so that that obligation was "sterilized" by the release, all these aspects in his argument being part of the agreement to settle. He said it would be unthinkable for the Court to construe the release given as part of the settlement so as to derogate or render nugatory the other on-the-ground obligations assumed by the defendants. Such a construction, he said, would be absurd and contrary to the presumed intention of the parties to settle the dispute.

44. There was some debate between the parties before me as to whether this application to strike out paragraphs of the defence was made under Rule 23.01 (under which evidence might be called) or under Rule 23.02 which involves a strike-out application based purely on the pleadings, no evidence being admissible. The plaintiff's written submissions suggested that the latter was the case. Mr Burnside first stated the application was under Rule 23.02 not 23.01, but claimed the Court could look at the documents referred to in the pleading. He recanted this concession and claimed that he relied on Rule 23.01 as well, although he did not intend rely on any evidence, anyway. In the result, having regard to the view which I have formed and will shortly express, nothing turns on these technicalities.

47. The real point is whether the plaintiff Dagi's argument is valid for the present purpose, namely strike out, on the basis that no reasonable construction of the release could lead to the dilution of the defendant's obligation to remedy the tailings' degradation by appropriate disposal. The defendants contend the issue is all a matter for the trial, namely whether the claim made and the claimed damage fall within the terms of the release.

50. It is true that the definition in the Terms of "released claim" must be considered in the context of the application which I now address. That does draw in formidable issues as to construction, in this uncommon context. It is also true that, as a commencing point at any rate, the inclination of the mind is to favour that the right and left hands cannot simultaneously act against each other to common purpose. Submissions concerning this are more potent in relation to arguments concerning damages for breach. In support of these submissions, Mr Burnside referred to the decision of Goldberg, J. in Workout Gym Pty. Ltd. v. Crackerjack Investments Pty. Ltd.[2]. His Honour's reproduction of the applicable principles in this type case is beyond criticism but given the circumstances there prevailing (rectification) I am not much aided by his decision, having regard to the factual matrix here. As I have already indicated, the defence argument is that this debate must be left to the trial. Mr Archibald Q.C. for the first defendant submitted that the adduction of evidence might make the point of paragraph 20 of his client's defence good. That is, on the basis of well-known, and authoritative principles (which I decline to refer to in specie, so fundamental as they are that they hardly admit of reiteration), namely that the contention must be reasonably arguable, not hopeless. He simply put it that the issue of what was the extent of any enforceable obligation against his client under the release, or the terms, is a matter for another day, in particular, the conclusion as to whether the obligation of his client precedes other issues of contrary obligation. This is another way of saying that the ambit and the meaning of the release clauses are critical to the issue. It was thus put that the impact of evidence bearing upon the subject matter and the presumed obligations on either side was vital, and inevitable. The release clause could not be looked at either separately, only in conjunction with the other parties' obligations and in complete context. This context, he argued, included the definition of "release". He also put it that the settlement involved many matters, including arguably damages for the future, after the date of the release.

53. Mr Scerri, Q.C. for the second defendant, adopted these arguments but placed much emphasis on the prevailing legal principle, that is, that if his client's case was arguable, then the application must fail. He relied on the terms of the settlement, clause 5.2, which placed no obligations on his client, who had no obligation to build a remedial pipeline, only to implement a tailings' obligation recommended by an independent inquiry, which had never occurred. Nor was there any independent inquiry or review, he claimed, a necessary trigger to the obligation to implement the tailings' option. This, he argued, did not even take account of the other condition, that the option had to be economically and technically feasible, another critical issue of fact. There were, he claimed, four waste management options, only one of which had been adopted. These matters were all for trial, he argued, including the critical one concerning on whose land the tailings might be disposed. Thus, it was not a simple issue of the building of a pipeline. There were feasibility and proprietary issues, totally unresolved, including the necessity for all necessary releases and approvals to be obtained from affected landowners (clause 5.2). There was no pleading, he said, that landowners or the State had gained or given such approval to any tailings' optional alternative scheme. It would seem that an examination of the Releases' terms draws in issues on the so-called Re-stated Eighth Supplemental Agreement and the relevant Act.

56. I favour a laconic exposition of my reasons for decision on this application. The principles are well known. The Court must be of opinion that there is no arguable view of the facts and/or the law, to the contrary of the plaintiff's application. I am unable to arrive at that state of satisfaction of mind. This is not only founded upon necessarily unresolved disputes on issues of fact but also on questions of construction of the key documents. These were not formulated as commercial documents but were meant to deal with past events and contentions about past and future conduct. Thus I conclude that the application to strike out parts of the identified defences in the Dagi proceeding must be dismissed.

59. I now turn to the plaintiff's summons concerning inadequate particulars in the same proceeding. As sometimes happily occurs on such disputes when at court, the parties in effect publicly laid their disagreement to rest. This they did in relation to paragraphs 7 and 16. It thus becomes unnecessary for me to make any orders concerning particulars in that respect.

62. As to paragraphs 20 and 22, the particularisation of which the plaintiff continued to complain, I am of the opinion that the effect of the Request is to seek by way of particulars the text of the second defendant's argument rather than any facts. I note that Mr Scerri stated that the release covers all claims made by the plaintiff. Thus I make no orders on the second summons.

65. I now consider the two applications, heard together, made by the first and second defendants by summonses of 25th August 2000, made pursuant to Rule 18A.13. Both summonses seek, inter alia, an order that this proceeding not continue as a group proceeding under Order 18A. Before considering the substance of the arguments I note that Mr Scerri for the second defendant in effect wanted the applications adjourned. Firstly he wished to cross-examine the deponent Gordon, the solicitor acting on behalf of the plaintiff, secondly he desired to file further material which was going to take some weeks to obtain. Mr Burnside opposed those applications. Mr Archibald for the first defendant did not support any application to adjourn, putting it that the defendants' applications did not depend on evidence, stating that the difficulties could be seen and on the present material, were married to the conceptual problems, so as to lead to the conclusion that the group proceeding should be terminated now. He stated:

"The notice and procedure issues are for later, if the proceeding survives as a group proceeding."

Mr Burnside argued that the issue of whether the proceeding ought continue as a group proceeding was anterior to and separate from the second stage concerning notice and opt outs. I have read all of the affidavit material filed thus far, some of which deals with some of the issues here, as well as matters concerning bringing to the attention of members of the group of their right to opt out of the proceeding. Some of the material is also concerned with a matter addressed in argument before me, broadly as to whether or not a group proceeding should be considered futile as the efficacy of any orders obtained would depend upon the willingness and capacity of the Court of Papua New Guinea to implement and enforce them. I decline to adjourn the applications at this time, or permit cross-examination.

70. Mr Archibald for the first defendant accepted that the group proceeding was brought by the plaintiff on his own behalf and group members who were parties to the agreement referred to in the statement of claim and named in the schedules. He pointed out that not all of them were named and referred to the agreement in Exhibit 18 of Mr Gordon's affidavit of 7th June 2000. He argued that the perception of those who were actually parties to the settlement agreement (and therefore in the group) was by no means clear. It might be said that the schedules lack for something on the score of clarity as to what persons the clan leaders were representing. It appeared otherwise to be said that the approximately 600 identified persons represented 30,000 others. It might be said that this situation is by no means commonplace, but it is also likely to be a feature of group proceedings where that there is a large number of persons within the group (unless they opt out) who are not known. The problem is arguably more difficult in this case because of issues of distance, language, the fact that most of them are likely to be simple subsistence folk living on the rivers and in addition there is a complex contract claim. I note that the defendants were not concerned with this feature when they settled.

73. Mr Archibald argued that the statement of claim pleaded a breach by the defendants of an obligation owed to all of the claimants, that is, jointly. He submitted it was not a joint and several obligation, putting it that his client had only one set of obligations, owed to all. He pointed to the fact that the claimants all claimed damage to their land. Thus, when a breach is said to consist of a failure to observe obligations that are jointly owed to the other parties, all those who are affected must join in to enforce the breach. He said this was all the more so when specific performance was claimed as relief. If any party declined to join, that party had to be joined as a defendant. In this context, he put it that the precise location of the land upon which the plaintiff proposed the pipelines and tailings' disposal or storage system be constructed was not specified, but before specific performance and/or a mandatory injunction could be ordered by the Court, all requisite governmental and other regulatory approvals, and the consent of the owners of the land on which the facility is to be constructed, would have to be sought and obtained by the plaintiff. He suggested (and Mr Scerri did so also) that some of the persons or clan members upon whose land the plaintiffs proposed "tailings' pipeline and storage system or equivalent waste management option" would be or might be within the class of potential group members. Thus some members of the class of potential group members would include persons whose land would not be the subject of such works and some might be. Before relief by way of specific performance and/or a mandatory injunction was claimed, all group members whose land was potentially subject to the construction works were necessary parties, to be bound by any judgment given by the Court. Thus they should not be permitted to opt out. This argument in part looked ahead to the next stage, although in terms of the matters I should now address as to whether the proceeding should be permitted to proceed as a group proceeding, it is a matter that can fall for consideration.

76. It was also suggested that persons who were opposed in principle to the pipeline were others who had to be considered. The essential feature of this argument was to some extent that there would be conflicting potential group members with different interests, who would reasonably require separate representation, not feasible under a group proceeding of this kind. Reliance was placed on Rule 9.03(1) which provides as follows:

"Except by order of the Court or as provided under any Act, where the plaintiff claims any relief to which any person is entitled jointly with him, all persons so entitled shall be parties to the proceeding and any person who does not consent to be enjoined as a plaintiff shall be joined as a defendant."

It was put that the effect of the Rule was to require that all of the persons who were entitled jointly with the plaintiff to the relief claimed be joined as parties to the proceeding, with the object of ensuring that all of them will be bound by any judgment of the Court. That is, the argument founded on the Rule was linked with the earlier submissions to which I have referred. Mr Archibald relied on the statements of Megarry, V-C, in Tito & Ors v. Waddell & Ors[3] to the effect that no order for specific performance, even in a limited form, should be made at the suit of one co-owner in proceedings to which any other co-owner is not a party. The Vice-Chancellor further stated[4], concerning the applicable law:

"First, a plaintiff who seeks specific performance can obtain it only if there is before the court every other person entitled to joint with him in enforcing the contract. Second, if that is not the case he cannot cure the defect by seeking a form of order which leaves the views of those whom he ought to have brought before the court to be ascertained after he has involved the defendant in contesting an action for specific performance.'

82. Mr Archibald drew attention to some differences in the way in which the group had been identified in Mr Gordon's affidavit and the pleading itself. He contended that the description and identity of the group members and their whereabouts, in compliance with Rule 18A.24 had not been satisfied. He also argued that there were people who were parties to the previous litigation who did not fall within the group because they are not members of the clan, instancing one Shackles. He criticised the form of the notice seeking consent as well, as though it were a representative action under s.35. Mr Archibald put it that it was clear that in order to have settled the previous proceeding consents from the clans had to be obtained. Thus it was a case that could be brought under ss.34 and 35 of the Supreme Court Act, without all the difficulties of the baggage and impediments of an action under Rule 18A. This, he said, was unjust. Mr Archibald pressed that the proceeding was capable of being managed as a representative proceeding under the Supreme Court Act without having to fall under the "dubious aegis" of Order 18A.

85. It was also argued that most of the potential group members lived in the western province of Papua New Guinea with all of the difficulties produced by that - isolation, varieties of dialects, poor roads and want of appropriate communication facilities. The submission set out in pages 5 and 6 of the first defendant's outline of submissions are better addressed, in my judgment (and, as I thought, so did he, from statements made by him in court) in any hearing held as to the further stage of this proceeding, if there is to be a further stage.

88. Mr Archibald drew attention to the history of legal challenge to Order 18A, there adverting to the Court of Appeal's consideration (on my reference) in Schutt Flying Academy Australia Pty.Ltd. v. Mobil Oil Australia Ltd.[5]. He noted that Phillips, J.A. had expressly reserved his position on the jurisdictional limits of the Supreme Court of Victoria offering no opinion as to whether it would be possible for a plaintiff by purporting to represent those beyond the jurisdiction to bind them to the result of the proceeding. That question was not called upon for decision in Schutt. It is an issue in this case because nearly all the group members are persons resident West Papua New Guinea. He also drew attention to the statement of Ormiston, J.A. to the effect that "he could not see why a properly constituted group proceeding should not lead to generally enforceable orders, at least in this country". (Counsel's emphasis.) I note, however, that the group members in this proceeding were all "connected" with this State as being parties to the settlement of the Victorian proceeding and were paid compensation by the defendants, who have registered offices in Victoria.

91. Mr Scerri in his submission argued that the Order 18A procedure cannot be used to bind the residents of a foreign country to a judgment made by the Supreme Court of Victoria and if it purported to do so Order 18.was invalid. There was also developed a submission about the futility and undesirability of the Court involving itself in a process that will yield no outcome that would bind or be able effectively to deal with the consequences of persons involved being residents of Papua New Guinea, where, he claimed, there seems to be no realistic prospect of the individual being bound to or held to the outcome of a case constituted upon this footing.

94. Reliance was also placed upon the statements of Ormiston, J.A. in Schutt[6] where his Honour made some comments concerning the futility of proceedings unless the rules of private international law would recognise the ultimate order. The argument advanced by Mr Scerri was that the proceeding here should not be embarked upon because of the uncertainty that the courts of Papua New Guinea would enforce the result, whatever it is. There were also some references to the judgment being regarded as an invasion of sovereignty or inappropriate interference with the rights of its people. That was said to relate to appropriation of land to enable BHP to perform any order of this Court, if that were a particular measure to be implemented.

97. Mr Scerri added some dimension to Mr Archibald's submissions, drawing my attention to the fact that an earlier proceeding of which Mr Gagarimabu was plaintiff had been commenced in 1995, was a proceeding by 375 plaintiffs of whom he said to be a clan leader. Mr Scerri sought to distinguish the present proceedings from others in which even difficult situations had been thought to be capable of management. He claimed this was a case of a single contract with common obligations and that there could be no doubt all those involved have to be part of the proceedings to enable them to be bound. He too raised the spectre of the differing interests within the parties of the existing group including those whose land "was going to be taken" with a 110 kilometres pipeline, and for a storage area of indeterminate size, or those who were against storing the tailings on the ground or, on the other hand, in the river. It was, therefore, possible in this sort of proceeding to have disparate groups with legitimate interests being separately represented, that principle espoused by courts as a general rule. Mr Scerri, however, while supporting the arguments of Mr Archibald that now was the appropriate time to dispose of the proceeding as a group proceeding, submitted that otherwise it should be adjourned until the evidence of other matters were heard, including cross-examination and filing of further material. I have already indicated that I have concluded that I do not propose to follow that course at this time. Mr Scerri also expressed concerns about the application of the common law of res judicata, even in the case of final determination, if a person purportedly represented argued that his case had not been put.

100. Mr Burnside in reply criticised the approach of the other parties, that is, to emphasize problems and imagined procedural difficulties, with little regard to the interests of justice, the criterion that informs the appropriate test. Mr Burnside argued that the right here was not joint, but it was joint and several, relying upon the submission that the action seeks to enforce Clause 1(2), a clause which in effect provides that the representation and warranties to be given or made were joint and several and may be relied upon and enforced by any or all of them. He therefore argued that the contract and promises sought to be enforced by the plaintiff expressly recognised the right of any party or parties to enforce it separately on their own behalf or collectively. He also submitted that the arguments founded upon Order 9 Rule 3, requiring all necessary parties to be joined, was subject to Order 9 Rule 5. Even if this were not so, the claim is not defeated. Thus he contended either as a matter of the contract or the Rules, it is not necessary that every one of the contracting parties had to be a party to the litigation. He contended that the following matters were relevant to the test of the interests of justice. (1) Each of the represented parties is known, that is the clan and village of each is known. (2) Each of the represented parties was a party to the settlement of the claim, identified in the schedules to the agreements which the action seeks to enforce. (3) At the time of settlement, the first and second defendants specified the jurisdictional governing law to be the law of the State of Victoria. (4) The existence of the proceedings can be brought to the notice of the represented parties effectively and adequately.

103. He put it that the alternative to a representative action is a large number of individual actions, all seeking to enforce the same agreements and the same circumstances. He argued that having regard to the terms of the agreement it would necessarily be part any of the orders by way of specific performance that any requirement to construct a tailings' treatment system would itself be subject to the conditions of the agreement, that is, that the option was economically or technically feasible. Thus he argued that the rights of affected landowners would not be adversely affected because the relief by way of the agreement was subject to their rights. He claimed that no proposal that might have an effect on the land of some of the members of the group could go ahead, without their approval being given, not because of the group proceeding but because of the obligations assumed under the agreement. He accepted that there were real complexities with respect to the nature of relief but that would have to be dealt with by way of evidence. He also submitted that if it emerged that there was a sub-group within the group represented by the plaintiff, the Court had power under Rule 18A to order separate representation for that sub-group if the Court thought that was required. Alternatively any order for specific performance could be fashioned so as to uphold any necessary protection. He argued that the Court here and the courts in New Guinea would be capable of fashioning appropriate relief by way of specific performance and that the affidavits showed that there is a regime in Papua New Guinea which allowed Australian judgments to be registered. He submitted there is no reason to believe on the present material that the Court in Papua New Guinea will refuse to support and enforce a judgment of this Court, if it was satisfied that the orders were obtained in a properly conducted hearing. Mr Burnside referred to the lease compensation agreement mitigation scheme, referred to in the second defendant's defence[7], as an example that the defendants can obtain agreement from traditional landowners on parts of the river construction works related to tailings' agreement. In effect, he was saying that they themselves gave a prevision of the way in which specific performance might be achieved. He argued that the management of specific performance (that is the tailings' treatment option) is a matter for evidence at the trial so that if the Court thought that the requirements of cl.5(2)(b) had already been satisfied, obstacles would be cleared from the path of performance of the obligations. He submitted it could not reasonably be a barrier to the use of Order 18A to concentrate on identifying potential difficulties at this stage. Even if that were so, similar difficulties would be sought to be identified if a representative proceeding under s.35 of the Supreme Court Act were pursued (as Mr Archibald has suggested) or if every party to the agreement was individually named as a plaintiff.

106. He argued that Order 9 Rule 3 should be read in conjunction with Order 18A and should be regarded as having been satisfied where the group includes people who would in an alternative context be regarded as necessary parties. This really was an argument that inclusion in the group made them plaintiffs for the purpose of satisfying the requirements of Order 9 Rule 3. Thus, he said, even if all contracting parties had to be part of the action, the use of the Order 18A procedure satisfied that requirement. He also said that in any event Order 27 conferred sufficient powers to fashion the appropriate order. That would achieve the purposes of Order 9 Rule 3, which was passed long before Order 18A. He relied upon Order 18A, Rule 3(2)(b)(i) which provides that a group proceeding may be commenced, whether or not the proceeding is concerned with separate contracts, to reinforce his argument that the group may be concerned with the same contract. Thus he was resorting essentially to the terms of the agreement to rebut the suggestion that the obligations were joint and not joint and several. In effect Mr Burnside submitted that alarmist submissions had been made. The group here was easily identified, namely, they were the parties to the agreement identifiable through the clan leaders who executed it. Thus he submitted that the matters specified in Order 18A(3) were all satisfied, namely there were seven or more people with claims against the same person arising out of the same similar or related circumstances and giving rise to a common question of fact. Thus he characterised the defendants' argument as seeking to persuade the Court to terminate it as a representative proceeding, even though it was properly constituted as a representative proceeding. He also accused the defendants of inherently contradictory submissions in that the suggestion that impossibility of notification to every member of the group for the purpose of opt out would mean it would be impossible to establish a representative action under the Supreme Court provisions because the same persons cannot be contacted to consent to join in.

109. Mr Burnside, in dealing with the argument concerning the want of certainty of enforcement, argued that the same doubts applied whether Order 18A was used or some other procedure. Mr Burnside also contested that the Courts of Papua New Guinea were in effect more likely than not to enforce a judgment legally obtained in the Supreme Court of Victoria. He claimed that they were well familiar with the principles relating to res judicata. He relied on the affidavit of Ms Royale Thompson as to the existence of a procedure for registering in Papua New Guinea judgments of this Court.

112. I proceed to my conclusions. I am on this occasion dealing only with the defendants' present applications under Order 18A(13) for a direction that this proceeding not continue as a group proceeding. The Rule is in the following form

"18A.13 (1) The Court may, on application by the defendant, order that a proceeding no longer continue under this Order where it is satisfied that it is in the interest of justice to do so because - (a) the costs that would be incurred if the proceeding were to continue as a group proceeding are likely to exceed the costs that would be incurred if each group member conducted a separate proceeding; or (b) all the relief sought can be obtained by means of a proceeding other than a group proceeding; or (c) the group proceeding will not provide an efficient and effective means of dealing with the claims of group members; or (d) it is otherwise inappropriate that the claims be pursued by means of a group proceeding. (2) If the Court dismisses an application under this Rule, the Court may order that no further application under this Rule be made by the defendant except with the leave of the Court. (3) Leave for the purposes of paragraph (2) may be granted subject to such conditions as to costs as the Court thinks fit."

116. All parties accept that I have a discretion as to this, to be exercisable in the interest of justice. I state now that I do not intend to make any order terminating this proceeding as a group proceeding and I will articulate my reasons shortly.

119. There is power to do so and it is occasionally, but rarely, done. Clearly, a failure to comply with Order 18A's formal technical requirements might lead to this, although in such cases the problems might be met by appropriate amendments. The threshold requirements, which Order 18A establishes in order for a proceeding to be commenced and continued to be maintained as a group proceeding, are dealt within Rule 18A.03, a Rule in effect modelled upon s.33C in Part IVA of the Federal Court of Australia Act, that part providing fundamental requirements which have to be complied with to enable a group proceeding to be commenced and maintained, what I have thus far called the "threshold requirements". See Wong v. Silkfield[8]; King v. GIO Australia Holdings Ltd.[9]. Strictly speaking, I daresay, the Federal Court decisions are not binding on this Court when considering the interpretation and construction of Order 18A but since there are no material differences the views expressed must be highly persuasive.

122. It would not be common, I believe, for a court to be in a position to satisfy itself so early in a proceeding that an injustice would occur if it were not terminated at the outset, unless it could perceive on the basis of the material filed that some or all of the threshold requirements had not been complied with. The provision of affidavits affords a reasonable factual matrix in respect of such matters, but otherwise so much is unknown. In this case, more is known perhaps than is usual, because of the history of the former proceedings and their settlement, the claimed failure to implement the terms of which has lead to this proceeding. The threshold requirements set out in Rule 18A.03(1) have not been the subject of specific submissions before me. In any event, it appears to me that I am able to conclude from the plaintiff's pleading that the threshold requirements of Rule 18A.03 are satisfied. As I suggest, this flows from the nature and form of the settlement of the previous proceedings.

125. As it appears to me, the two principal arguments for early discontinuance of the proceeding were (a) that the necessary parties to the enforcement of a joint obligation were not before the Court under this procedure which was thereby fatally flawed, in the legal sense; (2) that this Court could not be confident, much less certain, that any order obtained and made by this Court in respect of the relief claimed would or could be enforced by the Supreme Court of Papua New Guinea. These submissions are put as threshold submissions but are not founded on the legal-technical requirements of Rule 18A.03(1).

128. The defendants' submissions must be considered also in the context of the purpose of 18A, indeed of all forms of class actions and group proceedings, that is to extend the ordinary adversary jurisdiction process permitted by this Court's Rules (which are designed to facilitate the commencement and prosecution of civil proceedings) so as to draw in claims by groups with a common interest and subject matter against defendants. This process is designed to overcome the problems of unstructured representative proceedings, or multiple individual suits by individual plaintiffs, to enable the Court to cope with multi-party litigation and litigants, without diluting the necessary delivery of just outcomes. This does not necessitate the pronouncement of universal principles, the attempt at which is not only likely to be inapposite but also of little practical application. The fundamental features that must underpin a proceeding under Order 18A are derived from the language of the Rule. No party put the argument that the nature of the proceeding could not fall within the definition of a group proceeding within the meaning of the Rule. This is not surprising in this case because there is a remarkable feature of the proceeding - the plaintiffs are a specific and identifiable group, namely the parties to an agreement to compromise an earlier proceeding in this Court. They claim that the obligations imposed by that agreement upon the first and second defendants have not been performed. Thus, they are not merely an amorphous group that fall within the descriptors in Order 18A. They are the group with whom the defendants settled, basically represented by named clan leaders.

131. Before turning to consider the specific principal submissions made by the defendants in support of their application for an order for discontinuance, I should state that I have considered many of the decisions and reasons of the Federal Court of Australia with respect to representative proceedings commenced pursuant to the relevant part of the Federal Court of Australia Act. They have been of much assistance but with respect to discontinuance applications founded on matters other than the threshold requirements most cases turn on their own facts.

134. As with s.33C of the Federal Act, the requirements in Rule 18A.03 are threshold requirements which must be satisfied in order for a proceeding to be commenced and properly brought as a group proceeding. See Wong v. Silkfield[10] and King v. GIO Australia Holdings[11] It is now clear since the decision of the High Court of Australia in Wong v. Silkfield that the purpose of the relevant part of the Act was not to narrow access to representative proceedings, which must now include group proceedings as created by Order 18A, or any amendment to the Supreme Court Act of Victoria. It would seem also to be beyond doubt that the Court must be able to conclude from the plaintiffs' pleading that at commencement the requirements of Order 18A.03 are satisfied. See Silkfield v. Wong (above); Philip Morris (Aust) Ltd. v. Nixon[12]; Femcare Ltd. v. Bright[13]; Johnson Tiles Pty. Ltd. v. Esso Australia Ltd.[14] and Cameron v. Qantas Airways Ltd.[15].

137. These requirements were not the subject of argument here. This was, as I apprehend, because it accepted that the pre-history of the earlier proceedings and their compromise on terms put it beyond doubt that the threshold requirements of the Rule had been satisfied. Examples of cases in which the Federal Court considered s.33N of the Act (see Order 18A(13) of the Rules here) are Gold Coast City Council v. Pioneer Concrete (Q) Pty.Ltd.[16]; Gui Sen Huang v. Minister for Immigration[17]; Schanka v. Employment National (Administration) Pty.Ltd.[18].

140. In any event, the successful negotiation of the passage through the threshold requirements is but a commencing point in group proceedings. They clearly may later be terminated under Rule 18A.13 (see Wong v. Silkfield). The inherent compromises involved in the establishment of class actions-group proceedings may be productive of judicial responses and perspectives of some variation.

143. The order for discontinuance at such an early stage would, in my view, ordinarily only be made when the opposing considerations of injustice were so powerful and persuasive as to lead to the firm conclusion that the order for discontinuance should be made.

146. I next deal with the principal submissions made. The submissions made by the defendants were that I should exercise the discretionary power conferred by Order 18A(13) on the Court to terminate this proceeding as a group proceeding at this point of time, because it was impossible for all of the necessary parties to be joined in a group proceeding, alternatively that it could even at this point be perceived that there would be potential group members with conflicting interests, requiring separate representation. As I have already indicated, these arguments are founded on Rule 9.03 of this Court's Rules to have joined in a proceeding all parties jointly entitled to the relief sought. It was also argued that it should not be satisfied that any orders made will be enforced by the Court of Papua New Guinea. However, in my opinion, it is too early in the proceeding to know the answer to the difficulties that are readily envisaged by the defendants. In the first place, orders for specific performance of the key agreements and/or mandatory injunctions to compel the performance are not the only forms of the relief sought. Damages for non-performance are alternatively claimed. As damages are claimed, I would not be prepared to exercise my discretion to order the proceeding not to continue as a group proceeding because of the difficulties contended for by the defendants. I am of the opinion that the claim for damages is not burdened with the problems identified in submissions, and I reject the application on that basis. In those circumstances, it would be premature to strike out the claims for specific performance and injunction. It may well transpire that all of the necessary parties, on this proposition, are part of the group. In any event, the Court has power to order separate representation of any sub-group, if the Court is of the view that that is required in the whole of the circumstances. The existence of the necessity to examine the circumstances possibly arising of the sub-group does not lead to the conclusion that the group proceeding cannot continue. I have not overlooked the matters raised by the defendants in this respect, particularly with regard to those landowners whose rights might be affected by the remedial tailings' options (if the tailings are put on land) or those who have objections on other legitimate grounds. Thus, as is known by all, Order 18A procedures involve the giving notice of opt-out rights so that those who do not wish to be included may decline to do so. The giving of such notices, if it occurs, will provide information to the Court. At this point of time, it is particularly important to keep in mind the rights of all parties to the proceeding, including group members. As I have referred to earlier in these reasons, the phenomenon of class actions and group proceedings involves considerable modification of commonplace legal rights to enable the bringing of a collective proceeding, so long as it conforms to the requirements. I do not overlook here that the key threshold requirements have been met in this case. The group can be identified with more clarity than in many cases. Notwithstanding the issue of other possibly affected occupiers or owners of land, the claims being made by the plaintiff (and the group members represented) are not difficult to comprehend. It appears that there is a substantial common issue of fact. The criterion to this may often be elusive and will likely depend in most cases on the facts and circumstances pleaded in each case. I also note that no argument was addressed to the contrary before me to suggest that there was no common issue, the principal thrust of the defence contentions being as I have described. There are clearly further matters to be considered which will, in my judgment, best be addressed at the next stage. In my view, the Rule was intended to confer on the Court very wide powers to do or refrain from doing whatever is appropriate and necessary in the interest of achieving justice in a representative proceeding of this kind. This is not a case in which the pleadings failed to posit an arguable case and no defendant has put the case in that way. The defences clearly raise considerable and important issues that impact upon the claimed obligations but those are matters for another day. On an application for discontinuance at this point, the Court should not be quick to conclude that the problems identified, if they be such, are likely to be fatal to the group proceeding. It is not necessary at this point of time in the proceeding to show that litigation of the common issue would be likely to resolve wholly or to a significant degree, the claims of all group members. See Wong v. Silkfield Pty. Ltd.[19] overruling the contrary view of the Federal Court of Australia.

149. Moreover, there is a not inconsiderable dispute as to the correctness of the defence submissions. The plaintiff argues that the right here was joint and several, arising from the representations and warranties given as part of the settlement documentation. Thus the argument is put that the rights might be enforced collectively or by any party to the promise individually. The statements made in Tito v. Waddell were made in the context of that case, although the principle was by no means novel. I note that Megarry, V.C. in that case referred off the question of damages for assessment.

152. In so far as Order 9.03 is concerned, I do not find it necessary to decide that matter for the present purpose, as all of the relevant parties will be before the Court on the issue of damages. That claim could not be defeated by the failure to have all of the parties joined, in any event. Furthermore, it may be that the better view is that the procedure provided in Order 18A fulfils the requirements of Order 9.03 in the case of a group proceeding. That is, the group members are all plaintiffs for the purposes of compliance with Order 9.03 and 9.05. I do not find it necessary or, for that mater, possible to have any concluded view as to whether the rights of the affected landed owners would be adversely diminished or destroyed by enforcement of the compromise, if the claimed obligations were unconditionally created by its terms. There was argument advanced that no such effect could lawfully occur without the approval of those landowners, that right arising out of the agreement itself. The approach to, and solution of, these conundrums await the evidence.

155. Whilst it is not possible at this time for the Court, absent some substantial evidence, to understand and cope with the detail of the claimed difficulties of enforcement, at this point of time it could not be fairly concluded that neither this Court nor the Courts of Papua New Guinea would be unable to fashion appropriate relief. In so far as the arguments addressed to the issue raised, particularly by the second defendant, that it was unlikely that the Court in Papua New Guinea would enforce any judgment of this Court, I am not persuaded by the material at this time that this is the position. The affidavits of Mr Deklin and Ms Royale Thompson raise doubts about a number of aspects. But in my view it cannot be reasonably claimed that the proceeding as a group proceeding should be discontinued on that ground at this point of time. Ms Thompson's affidavit which was a defence affidavit clearly identifies a regime of judgment registration. Nor have I ignored one of the matters raised by Mr Scerri rearticulating legal concerns that the Courts of Papua New Guinea may not acknowledge the doctrine of res judicata or apply it in a way that prevented injustice. However, some Papua New Guinea authority to the contrary of that view was referred to me, Mr Scerri claiming that I should not look at it because the question of what foreign law was was an issue of fact. I do not need to make any decision about that aspect at this point of time.

158. It must be emphasized that the management of a group proceeding such as this proceeding is an ongoing process, that is, features may be added and more clearly emerge as other stages of the case proceed. At any time, the Court may of its own motion exercise the powers given under Rule 18A.13 or seek to fashion remedies, fair to all parties, in an effort to bring the matter to trial on the real issues. The process of management continues, including the possible exercise of the power to exclude some represented group members from the action or to discontinue the proceeding as a group proceeding at a later time. See, not only the statements of the High Court of Australia in Wong v. Silkfield but what was said by Brennan, J. (as he then was) in Carnie v. Esanda Finance Corporation[20]:

"However, it is precisely because of the flexible utility of the representative action that judicial control of its conduct is important, to ensure not only that the litigation as between the plaintiff and defendant is efficiently disposed of but also that the interests of those who are absent but represented are not prejudiced by the conduct of the litigation on their behalf. The self-proclaimed carrier of a litigious banner may prove to be an indolent or incompetent champion of the common cause in the courtroom. As Vineloot J. said in the course of his judgment in Prudential Assurance Co. Ltd. v. Newman Industries Ltd. (37), the court must be satisfied that 'the issues common to every member of the class will be decided after full discovery and in that light of all the evidence capable of being adduced in favour of the claim'. I would add that if, for any reason, the court is not satisfied that the interests of the absent but represented class are being properly advanced, the court should exclude the represented persons from the action (38). That power can be exercised at any time before the judgment is perfected." (Emphasis added.)

See also Zhang v. Minister for Immigration, Local Government & Ethnical Affairs[21]

163. The pleadings appear to be settled. That view is based only upon the absence of any current attack on them. Having now dealt with the application for discontinuance, the management of the matter will proceed to the next stage which will involve the presentation of argument and any appropriate evidence with respect to the issue of the giving of notice of the right to opt out and any other matters notified to me by the parties in open court. Any party wishing to take any other step should give me some notice of it and issue the appropriate summons or initiating process.

(a) the plaintiff's summons in 5002/2000 is dismissed;

(b) the defendants' summonses in 5003/2000 are dismissed.

I will hear the parties on costs, if required.

172. Subject to any other order made by the Court, after any applications, the next step will be the hearing of the plaintiff's application for leave to deliver notifications of the right to opt out and any associated requirements. Subject to the provision of an appropriate date, all parties must file affidavits on the applications. It will not be sufficient to rely on previous affidavits. If they are to be relied on, they must be exhibited to fresh affidavits. In a word, all material must be in the next application, so that all parties know what constitutes the material relied on. The Court will appoint a date for the filing of affidavits and written submissions that is suitable to all parties. It will not be possible to schedule a date prior to February 2001.

[1] [2000] VSCA 103.

[3] (1977) 1 Ch. 107 at 323-4.

[8] [1999] HCA 48; (1999) 73 A.L.J.R. 1427.

[9] (2000) F.C.A. 617 (unreported, Moore, J. 12th May 2000) (p.12).

[10] [1999] HCA 48; (1999) 73 A.L.J.R. 1427.

[11] [2000] FCA 617 (Moore, J. unreported, 1215/2000).

[12] [2000] FCA 229; (2000) 170 A.L.R. 487 at paras 125, 128 and 1387.

[13] [2000] FCA 512; (2000) 172 A.L.R. 713 at paras 12 and 132.

[14] [1999] FCA 56; (1999) A.T.P.R. 41-679.

[15] (1999) A.T.P.R. 41-251.

[16] (1997) A.T.P.R. 44-076.

[17] (1997) 50 A.L.D. 134.

[18] (1998) 86 I.R. 283.

[19]. {1999] HCA 48 and [1999] HCA 48; (1999) 73 A.L.J.R. 1427.

[20] [1995] HCA 9; (1994-1995) 182 C.L.R. 398 at 408.

[21] [1993] FCA 489; (1993) 45 F.C.R. 384.