Gagarimabu v Broken Hill Proprietary Co Ltd [2001] VSC 517

Supreme Court of Victoria|2001-12-21|Before: Bongiorno J

In this group proceeding the plaintiff, on his own behalf and on behalf of a large number of group members as defined in the statement of claim, seeks the enforcement of an agreement made in June 1996 in settlement of earlier actions brought against the present defendants arising out of alleged pollution caused by the operation of the Ok Tedi Mine in the Western Province of Papua New Guinea. The relief claimed in this proceeding includes declarations, orders for specific performance and mandatory injunctions.

By a summons issued 7 December 2001, the plaintiff sought urgent injunctive relief of an interlocutory nature consequent upon its coming to the notice of his solicitors that the second defendant was in the process of entering agreements with people, some of whom are group members in this action, which would, or might, have the effect of requiring those group members to opt out of this proceeding. In accordance with orders made by Justice Hedigan on 27 August this year, any member of the group who wishes to opt out of the proceeding must do so prior to 7 January 2002.

On that day I made an order to the effect that the second defendant be restrained until Wednesday, 12 December, from directly or indirectly procuring the entry into or execution of agreements known as mine continuation agreements in forms similar to those which had been exhibited to an affidavit filed on the plaintiff's behalf. I also made certain ancillary orders as to the filing of further material and adjourned the plaintiff's summons to Wednesday, 12 December.

I should note that on the Friday and the following Monday, the plaintiff gave the usual undertaking as to damages in respect of the order which I made directed to both defendants.

On Wednesday, 12 December, the matter returned to this court. As I was by then on circuit in Mildura, the matter came before Justice Ashley who, being unable, himself, to deal with it due to other commitments, continued my order until Tuesday, 18 December. The undertakings as to damages in favour of both defendants were continued.

On that day, the plaintiff's summons was again before me, now supported by a number of affidavits to which were exhibited a large number of documents including a number of mine continuation agreements each referrable to a particular geographical area into which, for administrative convenience, the area in respect of which this action is concerned has been divided. Each area contains a number of villages, many of which are inhabited by persons who would fit the description of group members as that term is defined in the plaintiff's statement of claim.

By the time the matter came back on 18 December the second defendant had also filed a number of affidavits to which had been exhibited a number of documents including the five executed mine continuation agreements relating to communities in the geographical areas known as Highway, North Ok Tedi, Lower Ok Tedi, Middle Fly and South Fly.

The second defendant's witness who produced these documents, Mr Martin Francis Panning, deposed that they were finalised and executed between 21 November 2001 and 7 December 2001.

By the time the matter came on, on 18 December, the plaintiff had given notice to the defendants of an amended summons seeking considerably wider interlocutory relief than that which had been sought in the summons of 7 December. There being no objection to the filing of this amended summons, I gave the plaintiff leave to do so at the commencement of the hearing on Tuesday.

On Tuesday and Wednesday of this week, I heard argument on the plaintiff's amended summons from Mr Jonathon Beach QC who appeared with Mr E. Heerey for the plaintiff and from Mr John Middleton QC who appeared with Mr C. Jose on behalf of the second defendant. Mr Hargrave QC who appeared with Ms M. Sloss for the first defendant addressed no argument to the court but I assume, as was the case on the first occasion, that the first defendant took the same position as and adopted the arguments of the second defendant.

During the course of the hearing it became clear that the plaintiff wished to further amend its application by contracting somewhat the relief sought in the amended summons and changing the details of it. I directed Mr Beach to provide details of the amended relief which he sought to the defendants as soon as possible and to file amended documents with my Associate. I have now seen the plaintiff's draft further amended summons and minutes of orders which he now seeks and there being no consent nor opposition from the defendants to the filing of that further amended summons, I have granted leave that it be filed.

That further amended summons seeks final relief by way of declaration and injunction relating to the mine continuation agreements and interlocutory relief by way of injunction pending the final resolution of the applications contained in the summons.

The draft orders envisaged not only interlocutory injunctions but also directions and a hearing of the further amended summons on 7 February 2002, a date no doubt inserted by reason of comments which I made during the hearing on Tuesday and Wednesday to the effect that the court might be able to accommodate a further hearing in respect of the matter on or about that date.

Although I heard the matter on Tuesday and Wednesday of this week, I was unable to give it consideration or deliver a judgment until today, by reason of my having had a prior commitment on circuit in Ballarat yesterday. Accordingly, I now deliver this judgment, mindful of the fact that what it lacks in detail and elegance must be set against the fact that the parties at least know what their rights and obligations with respect to this matter will be over the next few weeks.

Mr Beach, for the plaintiff, submitted that there are two issues before the court to be determined on the plaintiff's applications. The first is whether the second defendant has so interfered with the process of this court by procuring people to enter into mine continuation agreements as to be in contempt of court, thus entitling the plaintiff to injunctive relief to prevent any further interference with the court's process and to prevent the second defendant benefiting in any way from any behaviour amounting to contempt from which it has already engaged.

The second issue raised by the plaintiff's application, says Mr Beach, is the question as to whether s.33V Supreme Court Act 1986 operates so as to deprive the mine continuation agreements of any effect unless and until they are approved by this court as agreements by which a group proceeding has been settled. Thus, says Mr Beach, pending the determination of these issues, the second defendant should be restrained from putting any of the provisions of the mine continuation agreements into effect, whether by court action or otherwise, to the detriment of some of the plaintiffs in this proceeding.

To understand Mr Beach's submission, it is necessary to refer briefly to some of the provisions of the mine continuation agreements. I do so by reference to that agreement exhibited to Mr Panning's affidavit as MP2 which relates to the geographical area known as Highway. It differs from the others only in relation to the recital of certain facts, not in respect of any of its operative provisions.

The parties to the Highway Mine Continuation Agreement are the second defendant and each of the members of 29 communities whose names are set out in it. There follow ten recitals which may be summarised as declarations of intention by the parties to the agreement of a joint willingness to continue the operation of the Ok Tedi Mine notwithstanding the inability of the second defendant to find a system of permanently storing tailings and waste that is technically and economically viable.

So far as Mr Beach's case is concerned, the principal effects of this agreement are that it finally releases both defendants from all demands and claims arising directly or indirectly from the operation of the mine, and, relevantly, arising from the settlement agreement the subject of this litigation. It requires each member of the community who is a party to that settlement agreement to opt out of this proceeding by 7 January 2002 and to release specifically the defendants from each and every claim made.

It provides financial and other benefits for the relevant communities in consideration of these releases, but provides that if this Court grants any of the relief presently sought by the plaintiffs or awards damages against the defendants, then the second defendant's obligation to make payments under the mine continuation agreement ceases.

Each of the mine continuation agreements is subject to a condition precedent (expressed to be solely for the benefit of the second defendant) to the effect that the agreement is of no force or effect unless, before 31 December 2001, the national parliament of Papua New Guinea has enacted the Mining (Ok Tedi Mine Continuation 9th Supplemental Agreement) Act referred to in the mine continuation agreements as the Mine Continuation Act.

In the course of the hearing on Tuesday or Wednesday, I was told by counsel that this Act had in fact been passed by the Papua New Guinea legislature, had been assented to by the Governor General and required only the certification of the Speaker of the House to become law. This was expected to occur shortly, notwithstanding that there are apparently two separate challenges to the constitutional validity of the Act now before the Supreme Court of Papua New Guinea.

Of particular concern to the plaintiffs on this application however is not so much the fact that the Act may soon become law, but rather that by Clause 3 of the mine continuation agreements the second defendant may waive compliance with the condition precedent set out in that clause so as to bring the mine continuation agreements into effect even if the legislative process in respect of the mine continuation Act is not completed by 31 December.

Although such waiver must be by notice in writing, it can be effected at any time by the second defendant so as to bring the mine continuation agreement into full effect immediately.

Upon the mine continuation agreements coming into effect, says Mr Beach, the second defendant would be entitled to maintain that it had acquired a complete release of all claims made against it in this proceeding in respect of all of those group members on whose behalf each of the mine continuation agreements had been executed. This would give the second defendant a basis for seeking immediate injunctive relief against those group members in any court to which they were amenable - notably the National Court of Papua New Guinea.

It would be possible for the second defendant to obtain an injunction, commonly called an anti suit injunction, against group members preventing them from continuing to prosecute this proceeding.

The relevance of the Mine Continuation Act to the mine continuation agreements for present purposes is that when it is passed, s.8 of it will provide a deemed authority for any person who executes a mine continuation agreement purportedly on behalf of any other person or community, notwithstanding that no actual authority exists.

Thus a combination of executed mine continuation agreements and the passing of the Mine Continuation Act into law in Papua New Guinea could place the second defendant in the position of being able to have any group member of this proceeding upon whose behalf anyone else purported to sign a mine continuation agreement, restrained from prosecuting it further.

In his argument Mr Middleton QC for the second defendant characterised the plaintiff's application as an attempt by one person to utilise the process of this court to derail a government scheme sought to be put into effect by the independent State of Papua New Guinea.

He points to the recitals in the mine continuation agreements, to statements by the Prime Minister of Papua New Guinea and to the Second Reading Speech in respect of the Mine Continuation Act. All of those documents demonstrate that the defendants, particularly the second defendant and the government of Papua New Guinea, are at one in their desire to continue mining operations at Ok Tedi in accordance with the mine continuation agreements and the legislation to which I have referred.

Mr Middleton points to the evidence put on by his client to the effect that there has been extensive consultation between the second defendant and members of the communities to which the mine continuation agreements relate.

Notwithstanding this, affidavits filed on behalf of the plaintiffs assert that such consultation has not resulted in anything like the consensus contended for in this proceeding by the second defendant. Whatever the truth may be, there is clearly a significant factual dispute in this area of this case, which goes to the question of the actual authority of the signatories of the mine continuation agreements to bind group members in this proceeding.

Mr Beach contends that the actions of the second defendant in procuring the execution of the mine continuation agreements in all the circumstances constitutes an attempt by it to undermine the due administration of justice in this State by usurping the function of this Court to decide the dispute between the plaintiff and it in this group proceeding according to law.

Mr Middleton says that such activity as the second defendant has engaged in is no more than an exercise by it of its legal rights according to the law of Papua New Guinea. He says that the parliament of Papua New Guinea is clearly entitled, subject to its constitution, to pass a law regarding the operation of the Ok Tedi mine. The legislation merely removes by an Act of Parliament any doubt that the view of the majority of the people in those communities that have signed mine continuation agreements is that the mine should continue. Thus it was entitled, as a sovereign parliament, to make it clear that all members of those communities, whether they are in actual agreement or not, are to be bound by the mine continuation agreements.

For present purposes it is necessary only that there be a serious issue to be determined in respect of the plaintiff's allegations for the foundation of an interlocutory injunction to be laid. The arguments each way are complex, they require a consideration not only of a complicated set of facts, but also of complex legal questions including questions of private international law, as to whether this Court should enforce a foreign statute containing a provision such as that to which I have referred.

I am satisfied that there is a serious issue to be tried or determined in respect of the plaintiff's allegations that the second defendant has acted so as to illegally interfere with the due process of this court in respect of the plaintiff's claim.

The second matter put forward by Mr Beach as affecting the validity or effectiveness of the mine continuation agreements is the provision in s.33V Supreme Court Act 1986 to the effect that a group proceeding can be settled or discontinued only with the leave of this court.

Mr Middleton contends that the mine continuation agreements do no more than bind those who are parties to them to opt out of this proceeding. He points to s.33J(5) Supreme Court Act 1986 which provides that once a person has opted out of a group proceeding, he must be taken never to have been a group member. It cannot be said, says Mr Middleton, that an agreement whereby a person who is a group member in a group proceeding agrees to opt out of that proceeding is in any way a settlement of that group proceeding.

Mr Beach points to some of the consequences of the mine continuation agreements, namely that they provide releases to the defendants in consideration of the conferring of certain financial and other benefits. He says that these are the indicia of settlement. Thus the agreements must be subject to the control of this court.

Although reference was made to some authorities which are concerned with the interpretation of legislative provisions relating to group proceedings, there has been no definitive determination as to the width of the effect which s.33V has. Contentions of the parties as to its effect raise a serious issue to be determined even if that issue is principally a question of law. Were it the only issue raised on this application it might have been possible to dispose of it now. However, I have neither heard a full argument in respect of it nor have I been able to give consideration to the possible ramifications of an interpretation one way or the other.

Accordingly, at this point I determine that that question raises a current serious issue to be tried so as to support an interlocutory injunction.

The question then remains as to where the balance of convenience lies in respect of the plaintiff's application. I am able to say at this point that I will be able to hear the plaintiff's application finally commencing on Monday 11 February 2002 with a time allocation of five days. This fact is not insignificant in determining the balance of convenience insofar as the granting of interlocutory relief is concerned.

Mr Middleton pointed to the fact that any restraint on the implementation of the mine continuation agreements, even for a short while, will impinge upon the rights of third parties such that their interests will be adversely affected if interlocutory relief is granted. This is undoubtedly so.

However, it seems to me that in the overall context of this matter, being concerned as it is with the continuation of mining activity over the next ten years, a delay of a few weeks will not produce significant harm or inconvenience to those third parties.

So far as the second defendant itself is concerned, Mr Phillips, its solicitor has deposed that interruption to the process of continuing the mine could cause considerable damage to the second defendant and other stake holders. He points particularly to the possibility of dis-affection between his client and communities which support his client should the agreements not be able to be put into effect.

Whilst if this is so it is unfortunate it does not, in my opinion, constitute sufficient cause to deny the plaintiff the interlocutory relief which he seeks. I determine that the balance of convenience is in favour of the grant of interlocutory injunctions.

With respect to the anti suit injunction sought by the plaintiff, Mr Middleton proffered an undertaking to the effect that his client was prepared to give seven days notice to the plaintiff's solicitors of any application it proposed to make in the Courts of Papua New Guinea to enforce Clause 13.1 of any of the mine continuation agreements.

This clause contains a provision which requires the parties bound by the mine continuation agreements to opt out of this proceeding. However, the undertaking proffered says nothing as to whether the second defendant might seek to enforce those parts of the mine continuation agreements which release both defendants in respect of the claims made upon them in this proceeding.

Accordingly, it does not go far enough, in my opinion, in protecting the status quo pending the resolution of the plaintiff's applications to make a grant of interlocutory injunctions inappropriate.

In accordance with these reasons the plaintiff is entitled to an interlocutory anti suit injunction restraining the second defendant from seeking to enforce the mine continuation agreements pending resolution of the pending applications.

A greater difficulty is the question as to whether there should be an interlocutory injunction prohibiting the second defendant from acting upon or giving effect to Clause 13.1 of the mine continuation agreements so as to entitle it to demand that those parties it says are bound by those agreements execute opt out notices before 7 January 2000.

Mr Beach concedes that the second defendant would be entitled to encourage or exhort those persons who are group members for the purpose of this proceeding to opt out of it.

If his contentions are correct, however, it could not command that they do so. In his amended minutes of orders he has drafted an injunction which is confined in its terms to making such a demand or from otherwise acting upon or giving effect to Clause 13.1. In the circumstances I consider it appropriate that an injunction should go in that form.

The plaintiff also seeks the continuation of the injunction which I made on 7 December to the effect that the second defendant be restrained from procuring the entry into or the execution of any further mine continuation agreements. I consider that this injunction should also go for the same reasons as I am prepared to grant the anti suit injunction.

As far as undertakings as to damages are concerned, Mr Middleton submitted that they should be required in respect of third party rights and that they should be secured. Having regard to the limited time these injunctions will be in place and the lack of any concrete evidence or even allegation of significant financial loss by the defendants, I do not regard it as appropriate that they be required in anything other than the usual form in respect of both defendants.

In his proposed minutes of orders Mr Beach also proposes orders as to discovery and I will hear the parties on that matter now.

Mining (Ok Tedi Mine Continuation 9th Supplemental Agreement) Act 2001

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Judgment (57 paragraphs)

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