Davey on behalf of the Gudanji, Yanyuwa and Yanyuwa-Marra Peoples v Northern Territory of Australia

Purpose of affidavit 10 The applicants seek to rely on the affidavit with respect to a claim for compound interest, relevantly as part of an award of compensation for loss (para 74(1) of their points of claim on quantum). They plead at para 75: In relation to [74(1)], the Applicants claim compound interest at the 'risk free' rate, being the rate explained in the Houston report, because: (1) it is supported by the economic principles of intemporal choice and opportunity cost outlined in the Houston report; or (2) the Claim Group may have made a profitable use of the compensation had the compensation been paid earlier, indicated by the evidence of Martyn Gray (Schedule 2 item 23). (emphasis added) 11 The affidavit of Mr Kimmings is said to be relied upon and relevant to the alternative claim made by the emphasised words. Schedule 2 to the points of claim is said to '[list] the applicants' filed written evidence in chief referred to in these points of claim'. There is no reference in the schedule to any evidence of Mr Kimmings, whether filed or anticipated to be filed. No particulars have been provided of that subparagraph (the evidence of Martyn Gray referred to in para 75(2) is of a different nature, does not include the matters addressed by Mr Kimmings and is touched on further below).

Absence of notice, including by pleading 12 According to senior counsel for the Northern Territory, there was no prior notice given to it that an affidavit of the nature of Mr Kimmings' affidavit was being contemplated or prepared, and no indication prior to its receipt that the applicants were investigating the matters referred to in it or might seek an extension of time in which to file further evidence. No explanation of the delay in providing the affidavit was given at the time the affidavit was served. 13 Nor do the points of claim anticipate such evidence or provide information about it. No material facts have been set out. The plea is at no more than a general level: the Claim Group 'may' have made profitable use of the compensation had it been received. 14 In correspondence upon receipt of the affidavit with the applicants' solicitors, the solicitors for the Commonwealth and the Northern Territory raised the failure on the part of the applicants to plead material facts. The Commonwealth in particular pointed to the difficulty that it is unable to assess what material facts are sought to be adduced by the affidavit and asking for clarification on that point. The solicitors for the applicants responded to the effect that the material facts are those pleaded at [75(2)], and that the matter is sufficiently pleaded.

What does the affidavit purport to address? 15 Mr Kimmings states that he provided business advisory services to the Mawurli and Wirriwangkuma Aboriginal Corporation (MAWA) between 1998 until 2015. He resumed providing some of those services in 2019. He is familiar with the operations of MAWA and entities related to MAWA. He states that MAWA was incorporated under the (then) Aboriginal Councils and Association Act 1976 (Cth) (since replaced by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act)) in order to represent Aboriginal interests in the 'Carpentaria Shipping Services Joint Venture' (which I will refer to as the CSS joint venture). MAWA's objectives are set out in its Rule Book, and include the relief of poverty for the members of the Gurdanji, Yanyuwa, Mara and Garrawa Aboriginal language groups (referred to in the Rule Book as the Aboriginal Language Groups), provision for their general social welfare and establishment of public facilities generally for their use. It is a not for profit entity. It has published general reports under the CATSI Act. 16 In his affidavit Mr Kimmings addresses a number of matters including: (a) the involvement of a trustee company, MAWA Riinbi Pty Ltd, in the 'Carpentaria Shipping Services Joint Venture' (CSS joint venture) (the beneficiary of the trust being MAWA), including its interest in CSS joint venture party Carpentaria Shipping Services Pty Ltd (CSS), acquired through a loan to MAWA Riinbi from a $1 million grant made to MAWA by ATSIC; (b) that CSS won an open tender to provide shipping service to Mount Isa Mine Ltd; (c) the role of other companies related to MAWA that provide crew and logistics to the joint venture; (d) the involvement of MAWA in Malandri Properties Pty Ltd which has interests in the Malandri Store and accommodation at Borroloola, and in Mawa Malandri Pty Ltd which has interests in the Malandri Store and Post Office at Borroloola; (e) the manner in which the loan from MAWA to MAWA Riinbi was written off, with MAWA to be given profit distributions from the MAWA Riinbi trust in return; (f) the application of grant funds by MAWA Riinbi to finance its share of a working capital loan and ship construction loan, and the agreements by which such loans were repaid; (g) a put and call option and other 'self-funding' by which MAWA increased its equity interest in the CSS joint venture; and (h) other expenditure through grants and capital contributions by MAWA relating to the Malandri store complex and Malandri store partnership, which apparently included the use of accumulated and retained profits from the CSS joint venture. 17 Mr Kimmings also provides a table said to be based on copies of MAWA's audited financial statements for each of the financial years ending 1995 to 2021, which is said to reflect MAWA's distributions received by MAWA in relation to the CSS joint venture and the Malandri store, net income and net accumulated assets. Copies of the accounts were attached (the affidavit numbers some 575 pages). 18 Mr Kimmings states in the affidavit that in the 2021 financial year, the directors of MAWA included David Harvey, Timothy Lansen and Warren Timothy, and that the members of MAWA included Jackie Green, Ronnie Raggett, Dinah Norman and Mavis Timothy. He states that all are members of the Aboriginal Language Groups referred to in the MAWA Rule Book. 19 I observe that each of these people has already given evidence on behalf of the applicants. Most gave evidence on country and were cross examined. Mr Harvey gave evidence that at one point he was the Deputy Chairman of MAWA.

The explanation for delay 20 Mr Kelly explained in his affidavit that the applicants identified 'in August 2022' that MAWA may hold evidence relevant to the applicants' claim for compound interest. Mr Kelly said that the applicants had difficulties in locating the financial statements of MAWA that Mr Kimmings refers to in his affidavit (the applicants' solicitors had therefore identified the role of MAWA prior to filing the points of claim). 21 Mr Kelly deposes to various communications with the coordinator of MAWA and MAWA representatives in August 2022 and September 2022 seeking information about how MAWA invested or applied its money during its operations. He states that he was referred to Mr Kimmings in September 2022. During October 2022 and November 2022 Mr Kelly sought documents from MAWA and attended a board meeting to explain his request for financial documents. He states that in November 2022 MAWA indicated it would provide its financial documents. In December 2022 Mr Kimmings provided the following financial documents from MAWA: (a) a document summarising MAWA's Income and Expenditure between 1995 and 2010; (b) draft annual operating Income and Expenditure Statement and Balance Sheet for the year ended 30 June 2012 incorporating comparative figures for 2011; (c) draft annual operating Income and Expenditure Statement and Balance Sheet for the year ended 30 June 2013 incorporating comparative figures for 2012; (d) draft annual operating Income and Expenditure Statement and Balance Sheet for the year ended 30 June 2015 incorporating comparative figures for 2014; and (e) audited financial statements for the year ended 30 June 2016, 30 June 2017 and 30 June 2018. 22 Mr Kelly sought audited financial statements from 1995 to 2015 and 2019 to 2021. Mr Kelly understood that Mr Kimmings would retrieve the 1995 to 2015 financial statements, and he followed this up between December 2022 and March 2023. Mr Kimmings told him the statements from 2019 onwards would not be prepared until 2023. 23 In March 2023 Mr Kelly asked Mr Kimmings to provide an affidavit about MAWA's involvement in the joint venture and its finances and he agreed to do so. Also in March 2023 Mr Kelly took steps to obtain financial statements from MAWA's former accountants, Mr Hepworth and Mr Smith. 24 In April 2023 Mr Kimmings provided the audited financial statements for 2018 to 2021. 25 At around that time, Mr Kelly also saw on the website of the Office of the Registrar of Indigenous Corporations (ORIC) that MAWA had lodged a number of audited financial accounts. During April 2023 Mr Kelly obtained accounts from ORIC for the years ending 2009 to 2014. A solicitor from the NLC asked ORIC to retrieve earlier copies from ORIC archives. On 24 April 2023 the solicitor was able to provide a complete set of the accounts to Mr Kimmings. According to Mr Kelly, Mr Kimmings could then complete his affidavit.

Potential relevance of the material has been known since at least Timber Creek 26 The issue of the potential to seek compound interest on or as part of a compensation award has been recognised for some years. It is not a potential claim head that only recently came to the attention of the applicants. Counsel for each of the applicants, the Northern Territory and the Commonwealth referred to the various reasons in the Timber Creek decisions. For ease of reference, and having regard to the need to publish these reasons urgently, I will extract the relevant paragraphs to which they referred.

Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900 27 Senior counsel for the Commonwealth referred to the reason of Mansfield J, in Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900: [253] Accordingly, were the circumstances such as to have demonstrated that the Claim Group would have applied the funds received by way of compensation, if received at or about the time of the compensable acts, as working capital in a business or trade and that business or trade would have been successful to a significant degree, in my view, the Court could award compound interest on the market value of the acquired property. For the reasons discussed shortly, I am not satisfied that that is the case, and I do not propose to proceed on the basis that the Claim Group would have made the most beneficial use of the money available to it, and without detriment to that form of investment in the longer term, from the time of the compensable acts to the present time: cf Wallersteiner v Moir (No 2) [1975] 1 QB 3; Talacko v Talacko [2009] VSC 579. 28 Senior counsel for the applicants referred to [264(2)] and senior counsel for the Northern Territory referred to his Honour's reasons at [264(1)] and [264(3)]: [264] The Court's attention was drawn to the following dealings in native title in the general area: (1) The Bradshaw Partnering Indigenous Land Use Agreement (July 2003) (Bradshaw ILUA) provided for payments and other benefits, including the payment of at least $370,000 in compensation for the construction and use of the Army Bridge and access road over Victoria River by the Commonwealth Department of Defence. The initial payment was distributed by the NLC in accordance with cl 6.1.4 of the ILUA, which provided that the NLC must ensure that the payment is distributed to, or at the direction of the traditional owners. The evidence of Alan Griffiths and Josie Jones was that, once distributed, the funds had been completely expended by allocation with the Claim Group. The Bradshaw ILUA also makes provision for ongoing benefits by employment, training business opportunities for the traditional owners and Aboriginal businesses, and makes provision for a Bradshaw Liaison Officer. (2) The traditional owners have taken up those opportunities through Bradshaw & Timber Creek Contracting & Resource Co Ltd (Bradshaw Contracting), which was established in 2008 to be an Aboriginal-run company that would provide services to the Bradshaw Field Training Area. 1. Any profit goes back into the business of the corporation and there has never been distribution to individuals or communities. 2. Bradshaw Contracting has built up into a successful business. In the 2013-2014 financial year, Bradshaw Contracting turned over $1 million. (3) In 2009 the Northern Territory made a substantial payment to the Gunmaru Aboriginal Corporation under an agreement to acquire native title in respect of the house blocks on Wilson Street. The funds were paid to the Corporation for distribution to the Nungali- Ngaliwurru people. Josie Jones gave evidence that, once distributed, the funds she received were expended. 29 Counsel for the Commonwealth referred to [275]-[278] and counsel for the applicants referred to [276]: [275] I am not persuaded, to the extent that it was advanced by counsel for the Applicant, that the evidence before the Court of native title holders and traditional Aboriginal owners engaging in commercial activity, referenced to their interests in land, is sufficient to support a finding that the native title holders would either have invested the money on a compound basis at either "superannuation" or "risk-free" rates or in any enterprise or enterprises which would have longer term been productive of economic earnings at such levels. In my view, the lay evidence was to the effect that on previous occasions where the Claim Group had collectively considered how funds should be applied, they had elected to distribute the funds for individuals or families to use. There was little, if any, evidence to suggest that once distributed, those individuals had sought to invest or otherwise use those funds to generate income for commercial or investment purposes or that those funds were otherwise currently available or proposed to be used for such purposes. [276] I accept that there was some evidence of commercial activity which supported the use of the land for commercial purposes. That is no doubt an evolving skill. But there is no evidence that those activities have been profitable, at least not yet, in a way that generates profits at levels equivalent to the sorts of outcomes which would justify the imposition of compound interest, even for a period of the time between the compensable acts and this judgment. [277] In short, I am not persuaded that the Claim Group, if they had received the market value of the lots where their native title rights were affected by the compensable acts, would have used those monies by investing them without any expenditure, accumulating the interest year by year, to the present time. I am also not satisfied that they would, alternatively, have used the monies so received to undertake a commercial activity which would have been profitable to the same or a greater degree. [278] It is more likely that, even if the monies received were invested, the Claim Group would have applied the interest received toward activities for their benefit. That would have been appropriate, provided the application of those monies was properly for the benefit of their community, whether for educational or social benefits or whether for short term or longer term commitments. It involves no criticism of the Claim Group that I have reached the conclusion I have reached. Indeed, there would have been (and there is still) no reason why the monies if received progressively from about 1980 or to be received by this judgment must all be invested and the capital sum not diminished. Obviously, there are constraints upon the application of capital (or interest), but that is a matter for future consideration.

Northern Territory of Australia v Griffiths [2017] FCAFC 106; (2017) 256 FCR 478 30 Counsel for the applicants referred to [209] of the reasons of the Full Court in Northern Territory v Griffiths [2017] FCAFC 106; (2017) 256 FCR 478: [209] It is noteworthy that the Claim Group argument dealt with the point of principle alone. That is to say, there was no contention that, if it were appropriate for the primary judge to examine what the Claim Group would have done with the compensation monies had they been paid earlier, then the primary judge came to the wrong conclusion on the facts. That conclusion on the facts may not have been the conclusion we would have reached. It may have been open to regard the operation of Bradshaw Contracting as evidence sufficient to justify compound interest at least for a limited period in the recent past. But a court of appeal should not interfere with a primary judge's findings of facts unless they are demonstrated to be glaringly improbable or contrary to compelling inferences: Robinson Helicopter Company Inc v McDermott (2016) 90 ALJR 679; 331 ALR 550 at [43] per French CJ, Bell, Keane, Nettle and Gordon JJ. The findings of the primary judge do not fall into those categories.

Northern Territory v Griffiths [2019] HCA 7; (2019) 269 CLR 1 31 Counsel for the Commonwealth referred to [110] of the majority judgment in Northern Territory v Griffiths [2019] HCA 7; (2019) 269 CLR 1: Decisions below and contentions in this Court [110] The trial judge rejected (256) the Claim Group's contention that equity dictated an award of compound interest. His Honour did not consider that the authorities on which the Claim Group relied supported the proposition that, in circumstances like the present, equity regards the fact that the Claim Group had not received their entitlement to compensation for a considerable period as a sufficient basis for an award on a compound interest basis. The trial judge noted (257), however, that there was no authority which would preclude the Court from granting compound interest if persuaded that such an award was an appropriate means of securing fair compensation or compensation on just terms. Accordingly, his Honour held (258), it was necessary to decide whether, if the Claim Group had been compensated as at the date of the compensable acts, they would have made such a use of the compensation as to warrant an award of compensation on a compound interest basis to compensate the Claim Group for the damage suffered by reason of that loss of opportunity. But his Honour was not persuaded (259) that the Claim Group would have invested the moneys without expenditure, accumulating interest year by year, to the present time, or that they would have used the moneys to undertake any sort of commercial activity that would have been profitable to the same or a greater degree. Thus, his Honour held (260) that the appropriate interest calculation was simple interest at the Practice Note rate. [footnotes 258-259 of this passage reference Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900 at [253], [275]-[277]] 32 Counsel for the applicants and the Commonwealth referred to [133] of the reasons of the majority: [133] As has been observed, it is possible that there may be circumstances in which, by analogy with an award of damages at common law for loss of use of money, it would be just to award interest on a native title compensation claim on a compound interest basis (297). The Native Title Act provides that regard may be had to the rules applicable to compulsory acquisition of land, which, as has been seen, in effect import the rule in Pigott's Case. But the Native Title Act does not dictate that the rules applicable to compulsory acquisition of land are the only considerations to which regard may be had. Thus, as the trial judge posited (298), if the evidence established that, upon earlier payment of the compensation, the Claim Group would have put the compensation to work at a profit, or perhaps used it to defray costs of doing business, it may be that an award of compound interest would be warranted to compensate for the lost opportunity of investment or those costs, by analogy with damages awarded at common law to compensate for expenses incurred or opportunity costs arising from moneys paid away or withheld as a result of breach of contract or negligence (299). But, for the present, that point need not be decided. As the trial judge found (300), there was sparse evidence that the Claim Group would have invested the compensation at a profit and no suggestion that the Claim Group incurred costs that could have been avoided with the aid of an earlier payment of the compensation.

Consideration 33 A number of points arise from the extracts of the Timber Creek line of decisions. First, on Mansfield J's postulation, endorsed by the High Court, if the claim group established that it would have put the compensation to work at a profit, then an award of compound interest may have been warranted. That threshold would appear, as the Commonwealth submitted, to require evidence beyond speculation or supposition. 34 Second, as appears from [264(1)] and [264(3)] of Mansfield J's reasons, the witnesses Josie Jones and Alan Griffiths were available and gave evidence about the use of funds and (relevantly in that case) the 'Bradshaw ILUA'. 35 Third, the type of evidence that Mr Kimmings purports to give may well be relevant to a claim for compound interest. I accept that some of the proposed evidence may be of a similar nature to that referred to by Mansfield J at [264(2)] in the first instance decision. I am prepared to proceed on the basis that it may otherwise have been admitted, had there been notice (including by identification of material facts), compliance with case management processes, a good explanation for delay, an opportunity for discovery of source documents and cross-examination, and absent significant prejudice. I will now turn to these matters. 36 It is not in issue that a decision as to whether evidence that is produced late may be tendered requires the exercise of a discretion that takes into account a number of matters, including the importance of the proposed evidence, the prejudice to other parties and whether there is an explanation for the delay: see generally Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [103] (Gummow, Hayne, Crennan, Kiefel and Bell JJ), speaking in the context of a late amendment to pleadings; and as referred to in the context of late evidence in Capic v Ford Motor Company of Australia Limited (Late Evidence) [2020] FCA 1117 at [24] (Perram J). 37 All of these matters fall to be weighed having regard to case management principles reflected in Part VB of the Federal Court of Australia Act 1976 (Cth) and in particular s 37M and s 37N. Parties are required to bring forward their cases frankly, prior to the final hearing. The case management system is designed to enable both the parties and the Court to be informed of the case each party intends to advance and to identify the real issues in dispute prior to trial. 38 In this case, I am not satisfied that there has been a satisfactory explanation for the delay in providing Mr Kimmings' affidavit, having regard to the particular circumstances. It is clear that Mr Kelly was investigating the role of MAWA from at least August 2022. It is unclear why its role came to his attention only then. Nor is it disclosed whether anyone else from the legal team at the NLC was aware of the role of MAWA at that time. Accepting that Mr Kelly only appreciated in August 2022 that MAWA might have relevant information, to suggest that delay was caused by the need to await audited financial accounts diminishes the relevance of the following: (a) the affidavit deals with matters beyond the audited accounts, including the various transactions in which MAWA has been involved, and there is no suggestion that Mr Kimmings was not in a position to provide at least this evidence earlier than 29 May 2023 - he had been communicating with Mr Kelly since September 2022; (b) even though it took some time to locate all of the audited accounts, they were available through ORIC and at the very latest they were all available in April 2023; (c) despite this, and in the face of a pending trial and the obvious need to seek an extension of time to rely on any new affidavit, there is no explanation as to what happened in the weeks between the complete set of audited accounts being given to Mr Kimmings and provision of the affidavit; (d) Mr Kimmings had access to a number of the audited accounts from December 2022; (e) despite it being apparent from at least 2 March 2023 that Mr Kimmings was prepared to provide an affidavit (and it not clear why no formal request was made earlier), no effort was made to inform the Northern Territory or the Commonwealth that steps were being taken with respect to preparing evidence that might be relevant to the claim to compound interest, or the likely need for there to be supplementary discovery and additional evidence - nor was there any offer to provide some of the information, even if at that stage it may have been incomplete; and (f) despite the fact that it must have been obvious that there was a pressing need to apply for an extension of time to file the affidavit, no application for an extension of time was filed or anticipated. 39 The delay is to be viewed against the backdrop of both the absence of prior disclosure about the affidavit to the Northern Territory and the Commonwealth, and the fact that the points of claim do not set out the material facts relied upon and do not particularise the claim in any way. Further, the difficulty created by the absence of reference to material facts and particulars is heightened in circumstances where the applicants do not use the language of Mansfield J in the pleading to the effect that had it been received earlier, the claimants would have put the compensation to work at a profit. Instead, they plead that they may have done so - that is, that the possibility is sufficient to give rise to a claim. Senior counsel for the Commonwealth observed that the inadequacy of the pleading of the claim for compound interest (or a claim by analogy with a Hungerfords type claim) has made it difficult to assess the purpose of the affidavit or make informed decisions about whether to cross examine, and if so, on what matters. It was submitted that it is not enough to put on evidence by affidavit and point to the reasons in Timber Creek and say, in effect, that 'our case is like that'. That does not meet the requirement of frank disclosure, a requirement that should be met by proper pleading of material facts. There is force in those submissions. 40 In my view there is significant prejudice to the Northern Territory which weighs heavily against the grant of an extension of time to rely upon the affidavit. The prejudice arises from the nature of the evidence and the absence of any opportunity to properly test it. I infer from their nature that the history of MAWA's activities and the transactions referred to by Mr Kimmings would be reflected at least in part in documents. The financial arrangements referred to by Mr Kimmings are not without a level of commercial and financial complexity, involving a number of different entities. The Northern Territory would ordinarily be entitled to seek discovery of relevant documents, to seek to issue subpoenas to third parties as appropriate, to retain a forensic accountant (or similar) to assess the accuracy of the audited financial statements and other documents, and importantly, to cross examine the witnesses who have an involvement with MAWA about those matters. It can no longer do so, without the trial in effect being derailed. Witnesses who may have given relevant evidence under cross-examination have already given evidence. To the extent the applicants submitted that the Northern Territory's prior knowledge of MAWA's existence mitigated prejudice, I do not agree. It was not for the Northern Territory to speculate as to whether the applicants would rely on any evidence relating to MAWA and to then make its own inquiries based on such speculation. 41 I am aware of the potential significance of evidence of the nature of that which the applicants now seek to tender. I have given that significance careful consideration. Although the applicants may well face other hurdles with respect to their claim for compound interest (and this remains to be seen), I do not make this decision lightly. However, in my view the very late attempt to rely on the affidavit (particularly in the face of programming orders), the absence of a good reason for various parts of the lengthy delay, and the significant prejudice to the Northern Territory persuade me that Mr Kimmings' affidavit should not be received. 42 Finally, and separately, I note that the reference to evidence of Martyn Gray in the points of claim was to evidence 'to be filed'. Evidence was purportedly provided by an affidavit of Martyn Grey filed 4 October 2022 that included a summary table he prepared relating to records said to be held by the NLC of dealings in Aboriginal land. The Northern Territory and Commonwealth have had notice of its contents since around that date. Its tender was rejected on the basis of a hearsay objection and I was not satisfied that a direction should be made under s 50(1) of the Evidence Act 1995 (Cth), having regard to the nature of the various documents and these proceedings. However, the potential remains for some or all of the source documents to which Mr Gray referred to be separately tendered. It is not necessary to address this issue further at this point.

Order 43 There will be an order upholding the objection. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.