Halikos Hospitality Pty Ltd & Ors v INPEX Operations Australia Pty Ltd [2019] NTSC 10

[4]

EQUITY - Estoppel by representation - Whether plaintiffs proceeded with development in reliance on promise or assurance by defendant that defendant would take and pay for 225/150 rooms over a 15 year period or that it was committed to taking and paying for rooms in the development - no promise or assurance established - No reliance established - Judgment for the defendant

Halikos Hospitality Pty Ltd & Ors v INPEX Operations Australia Pty Ltd [2019] NTSC 10 | Case summary | Zoe

[9]

[1] The plaintiffs are companies that form part of the Halikos Group, a Darwin based group of companies involved in property development, management, construction and related activities. (The plaintiffs are collectively referred to in the parties' submissions and these reasons as "Halikos" except where it becomes necessary to distinguish among them.)

[2] John Halikos (the founder of the Halikos Group) and Shane Dignan (Managing Director) are the directors and shareholders of the Halikos companies. Mr Halikos owns 51% of the shares in the second plaintiff, Halikos Pty Ltd (HPL), and Mr Dignan owns 49% of the shares in that company. HPL is the parent company of the first plaintiff Halikos Hospitality Pty Ltd (HH) and the fourth plaintiff, Halikos NT Pty Ltd (HNT). HPL is engaged in property development and financing. Mr Halikos and Mr Dignan are the directors of HH. HH is the hospitality arm of the Halikos Group and provides accommodation and other hospitality services, including operating hotels and serviced apartments in and around Darwin. Geoffrey Weeks is the Executive General Manager of HH. HNT is engaged in owning and leasing property and property development. The third plaintiff, Halikos Investments Pty Ltd (HI), is a company engaged in property development and financing property development. HI is wholly owned by Mr Halikos, and is the trustee of the Halikos Family Trust. All of the dealings between Halikos and INPEX the subject of these proceedings were conducted on behalf of Halikos by Mr Dignan and Mr Weeks.

[3] The defendant, INPEX Operations Australia Pty Ltd, is the agent and operator appointed by joint venturers to construct and operate the onshore and offshore processing facilities for the Ichthys LNG Project at Bladin Point, near Darwin ("the Ichthys Project"). (The defendant is referred to in the parties' submissions and these reasons as "INPEX".)

[4] INPEX's head office is in Perth, Western Australia. Its ultimate parent company is INPEX Corporation, which is based in Tokyo, Japan.

[10]

[5] Evidence was given about the structure of the Ichthys Project and INPEX's operations by way of background. INPEX contracted with JKC Australia LNG Pty Ltd ("JKC") to construct the onshore facilities for the Ichthys Project in the Northern Territory, and JKC has subcontracted this work to various subcontractors.

[6] INPEX has several business units, each with separate responsibilities. These include:

(a) the Onshore Construction division which is responsible for the construction of the onshore facilities;

(b) the Operations division which is responsible for the operation of the offshore and onshore facilities after the construction phase is finished; and

(c) the Corporate Co-ordination division which manages INPEX's general business services, human resources and external affairs including dealings with government, media and public relations.

[7] In the period from 13 February 2014 until 15 October 2014, Hitoshi Okawa san was a director and company secretary of INPEX. Mr Christopher Wheeldon was the General Manager, Construction and Mr Sean Kildare was the General Manager, INPEX Darwin office. Mr Kildare was part of the Corporate Co-ordination division, answering to Atsushi Sakamoto san, also a director of INPEX, who held the position of Onshore Project Director.

[8] Uncontradicted evidence was given that INPEX has various requirements for the authorisation and approval of proposed contracts. At the times relevant to these proceedings these included the preparation of a decision note for key decisions, followed by a recommendation for award ("RFA") or recommendation for variation ("RFV"). These then had to be assessed by senior officers who made a recommendation. For contracts over US$30 million, the recommending officers had to include the President Director of INPEX, Ito san. For contracts over US$500,000 (or for variations which took the contract value over the contract ceiling specified in the original RFA) the RFA or RVA had to be approved by the Contracts Committee and then embodied in a formal written document executed by a director or directors of INPEX. For contracts or variations over US$10 million, relevant joint venture partners also had to approve. For contracts over US$40 million, approval of the parent company, INPEX Corporation was necessary.

[9] The joint venture agreement required a tender process to be conducted for proposed contracts over US$10 million, unless joint venture approval had been obtained. Prior approval from the General Manager Contract & Procurement was required to "sole source" a contract (that is, to award it to a party without a tender).

[10] It is not disputed that on 15 February 2012, Halikos and INPEX entered into an agreement whereby Halikos agreed to provide to INPEX not less than forty apartments in a particular building (not H105, the building at the centre of this dispute) for a five year period from 1 May 2012 until 30 April 2017 ("the Accommodation Agreement"). The term of the Accommodation Agreement was for five years (from 1 May 2012 to 30 April 2017). The rates payable were set out, and it was agreed that they would be increased annually by 6%. The Accommodation Agreement contained the following clause (clause 3):

[16]

[19] There is a great deal of affidavit evidence from Mr Weeks and Mr Dignan from Halikos, and from officers of INPEX including Mr MacDonald (Accommodation Package Manager); Mr Bajars (General Manager, Onshore Operations); Mr Walker (Director Operations); Mr Wheeldon and Mr Davies (Mr Wheeldon's deputy) about communications between Mr Weeks and Mr Dignan and various INPEX personnel in 2012 and 2013 concerning the possibility of Halikos providing further accommodation for INPEX and for contractors and sub-contractors on the Ichthys Project. This included some reference to "the Mitchell Street Project". There is a great deal of dispute about who said what, much of which it is not necessary for me to determine. Much of the dispute revolves around whether Halikos was put on notice that there would be a tender process for any accommodation contract for the operational phase of the Ichthys Project and also whether Halikos told INPEX that it would not be proceeding with the development of H105 unless it had a commitment from INPEX.

[20] Mr Dignan and Mr Weeks depose that Mr Dignan told Mr Wheeldon (and Mr Davies) that Halikos wanted to build a hotel on 105 Mitchell Street, but that it needed a commitment from INPEX before doing so. Mr Wheeldon and Mr Davies deny this.

[21] Mr Wheeldon and Mr Davies both say that in discussions in September or October 2013 they told Mr Dignan and Mr Weeks that any contract for accommodation for the operations phase of the Ichthys Project would be put out to tender, and also that Mr Dignan told them that Halikos was going to build a hotel at 105 Mitchell Street. Messrs Dignan and Weeks deny this.

[22] I accept the evidence of Mr Wheeldon and Mr Davies that Halikos was told that any contract for accommodation for the operations phase would be put out to tender and that Mr Dignan told them that Halikos was going to build a hotel at 105 Mitchell Street and did not say that Halikos would only do so if it got a commitment from INPEX. Their evidence is consistent with the following documentary evidence that preceded and followed these discussions.

[23] On 22 April 2013, Mr Weeks sent an email to Mr Walker from INPEX in which he said:

[31]

[32] Towards the end of 2013, Mr Weeks, Mr Dignan and Mr Wheeldon had discussions about the prospect of Messrs Weeks and Dignan meeting Okawa san and Sakamoto san. Mr Wheeldon says that Messrs Weeks and Dignan asked to meet Okawa san. Messrs Weeks and Dignan both say that it was Mr Wheeldon's suggestion. It is of no real importance but, given that the initiative (indeed pressure) to "get things moving" had been coming from Halikos, I consider it likely that it was Messrs Weeks and Dignan who requested the meeting. This is also consistent with later correspondence referred to below.

[33] On 6 December 2013, Mr Weeks, Mr Dignan and Mr Wheeldon met at Ducks Nuts. Again, the parties have different accounts of that meeting. Mr Wheeldon deposed that Mr Dignan asked him to provide him with an email confirming that INPEX needed additional rooms. Mr Wheeldon replied that he couldn't do that because the onshore construction unit of INPEX (his area of responsibility) did not need the rooms. He said he was still struggling to get numbers from the major contractor JKC. He told Mr Dignan that there was a process to be followed and that without JKC involvement there would be no need for rooms for the construction phase. He said that operations might be interested in the proposed development at 105 Mitchell Street. He also said that the project (ie the Ichthys Project, not necessarily INPEX) would always need rooms.

[34] Mr Dignan gave a very different version of this meeting. He said that Mr Wheeldon asked him to put together a letter - to be sent to Perth that day - setting out Halikos's proposal regarding developing 105 Mitchell Street, and "to put in that letter a reference to the fact that Halikos was going to start the project" because it would "assist him internally". He also said that, at some stage during the meeting, when Mr Weeks was out of the room, he asked Mr Wheeldon "if the purpose built building for INPEX at 105 Mitchell Street was something that INPEX still wanted," and that Mr Wheeldon shook his hand and said, "Yes, we will definitely be taking it." He said that Mr Wheeldon told him to keep progressing with designing and planning the development at 105 Mitchell Street.

[35] I consider that Mr Dignan's account of the meeting is highly improbable. It is not consistent with any of the objective evidence of communications between the parties before and after 6 December. No plausible reason has been suggested as to why Mr Dignan would ask Mr Wheeldon if INPEX still wanted the building. (He had not had a response to the draft agreements he had sent and Mr Wheeldon had still not given him information about projected numbers.) There is even less reason to suppose, given the state of play evident from the email correspondence, that Mr Wheeldon would respond to such a question by shaking Mr Dignan's hand and saying, "We'll definitely be taking it." Nor is there any plausible suggested reason why Mr Wheeldon would have "internal" reasons to want Mr Dignan to say Halikos was going to start the development - particularly if (as Mr Dignan deposed) Mr Dignan had told him that was not going to happen without a commitment from INPEX. It simply doesn't make sense and I find that it did not occur.

[36] Mr Wheeldon's account of the conversation is consistent with the state of play revealed by the email correspondence. Halikos was pushing for an agreement with INPEX for the provision of additional accommodation, or failing that a non-binding "gentlemen's agreement" or, failing that, for a letter stating that INPEX would require 65 apartments (see [39] and [40] below). I find that Mr Dignan and Mr Weeks asked Mr Wheeldon to arrange a meeting with Okawa san.

[37] That same day (6 December 2013), Mr Dignan sent a letter to Mr Wheeldon in the following terms:

[46]

[41] On 10 January 2014, Mr Weeks and Mr Dignan met with Mr Wheeldon and Mr Kildare in Halikos' H Hotel Board room to do a "test run" of Halikos' presentation re the 105 Mitchell Street project. All parties present agreed that Mr Weeks and Mr Dignan presented a power point presentation and Mr Kildare and Mr Wheeldon made comments and suggestions. However, there is disagreement between the deponents as to what else was said.

[42] Mr Dignan deposed that they emphasised that H105 would be "a dedicated purpose built building for INPEX for the project". Mr Kildare agreed that Mr Weeks said the building would be "purpose built" - which he understood to mean for accommodating the construction, FIFO, business and corporate travelling market as opposed to tourists - but did not recall anything being said about "purpose built for INPEX".

The second sentence on page 1 of the presentation reads: "We believe this purpose built complex will provide INPEX with a plausible solution to an issue arising of late surrounding suitable accommodation in Darwin now and into the future."

Under the heading "Benefits" it states: "The complex would be accommodation dedicated to the project."

[43] Mr Dignan also deposed, "Whilst the first slide (headed "Introduction") suggested that Halikos was about to commence constructing 105 Mitchell, I clearly stated that Halikos would not start construction without a written commitment from INPEX." Mr Weeks gave evidence to the same effect: he used the words "written contract". I do not accept that evidence. It is at odds with the written material.

The first page of the presentation begins with the sentence: "The Halikos Group is about to commence construction of a dual hotel and residential complex at 105 Mitchell Street which will consist of mix of one and two bedroom suites."

The following dot point appears under the heading "Summary": "105 Mitchell has a Development Approval to commence immediately and finance approval has been granted allowing us to meet your pending accommodation requirement in 2015 and beyond."

[44] Mr Dignan also deposed, "Chris Wheeldon said that we should, in the presentation, refer to using clause 3 of the Accommodation Agreement as a variation mechanism for the additional accommodation when we presented to INPEX's directors". I do not accept that evidence either. It is fairly clear from the email from Mr Weeks to Mr Wheeldon of 7 October 2013 enclosing the two draft agreements (referred to at [28] above) that the idea of a variation to the Accommodation Agreement purportedly pursuant to clause 3 of that agreement originated with Halikos.

[45] Mr Kildare deposed that he asked about the state of readiness of the project and that Mr Dignan told them Halikos had all the approvals, the financing was all sorted, a construction schedule was ready, pre-commitments were being completed, that Halikos would commence demolition in early April 2014 after the wet season and that they would then start construction, which would take about 15 to 18 months. He deposed that neither Mr Dignan nor Mr Weeks said that construction was conditional upon INPEX making a commitment to take accommodation in H105. I accept that evidence: it is consistent with the general tenor of the written presentation.

[47]

[46] The requested meeting took place in Perth on 17 January 2014. Present were Mr Dignan, Mr Weeks, Okawa san, Sakamoto san, Mr Wheeldon and Mr Kildare. This is the meeting that both parties rely upon on the issue of whether Mr Kildare and Mr Wheeldon had ostensible authority to bind INPEX to the alleged Additional Accommodation Variation. This meeting is also crucial to the estoppel and misleading or deceptive conduct claims.

[47] It is common ground that the Halikos parties took a bound presentation booklet to the meeting in lieu of the power point presentation shown to Mr Wheeldon and Mr Kildare at the "test run" presentation in Darwin on 10 January. It is also common ground that Mr Weeks and Mr Dignan gave the presentation.

[48] Mr Kildare deposed that Shane Dignan said that Halikos would commence construction by April as soon as possible after the wet and that it would take approximately 15 to 18 months to build: he did not make any qualification to that. Mr Kildare deposed that there was some discussion about INPEX's accommodation requirements: that Okawa san said that the Project needed to better manage its accommodation requirements in Darwin so as to overcome the negative publicity from tourism and local industry; that Sakamoto san said he did not believe INPEX needed further accommodation of this type; and that Mr Wheeldon interjected that further accommodation was needed because the workforce was going to increase.

[49] Mr Kildare deposed further that first Sakamoto san and then he (Mr Kildare) said that INPEX would not underwrite or commit to one building and Okawa san and Mr Wheeldon expressed agreement. He deposed that he said words to the effect that if Halikos wanted to build a building like H105 it was up to them - their decision and their risk. He then suggested that Halikos and INPEX could consider moving to a more flexible concept and that a broad accommodation services arrangement would be more suitable than a dedicated building.

[50] Mr Kildare agreed that Mr Dignan raised the possibility of a variation to the existing Accommodation Agreement as an alternative to a completely new agreement.

[51] Mr Kildare deposed that Okawa san:

(a) asked Mr Weeks and Mr Dignan to provide an alternative proposal for a broader accommodation service agreement rather than for one specific building;

(b) said that INPEX needed to have a better understanding of its accommodation requirements before it could review, assess and agree to a proposal from Halikos (and that Sakamoto san agreed);

(c) asked Chris Wheeldon to determine whether there would be an increase in accommodation numbers for Onshore Construction outside the Howard Springs Accommodation Village;

(d) told Chris Wheeldon that if he justified an increase in the accommodation numbers this would have to be detailed in a decision note and the appropriate processes (which he outlined) completed before INPEX could commit to any proposal;

(e) said that Chris Wheeldon would take on the role of lead negotiator with Halikos for a broader accommodation service agreement;

(f) said that any proposal received from Halikos would have to go through INPEX's internal contracts review process, leading up to a formal decision by the Ichthys Executive Committee; and

(g) told Mr Weeks and Mr Dignan that he (Mr Kildare) could assist from a relationship management perspective, and specifically with relevant stakeholders, such as politicians and business groups.

[52] Mr Kildare deposed that he re-iterated/summarised all of this at the end of the meeting and that Mr Weeks and Mr Dignan indicated that they understood.

[53] Mr Wheeldon deposed that he could not recall in detail who said what at the meeting but he did recall that:

(a) someone (he can't recall who) said something to the effect that if the proposal led to an agreement the easiest method should be used to document it and that the Accommodation Agreement should be looked at to see if it could be used for any agreement if the proposal proceeded;

(b) someone from INPEX said that INPEX did not see the need for a building;

(c) at no stage during the meeting did either Mr Weeks or Mr Dignan say what Halikos wanted from INPEX;

(d) after the presentation there was a general discussion among those present to the effect that:

INPEX did not need a building;

INPEX could not get accurate information from JKC about its manpower and accommodation requirements and what INPEX needed was a third party to assess and report on the accommodation being used by all personnel on the project in Darwin not just INPEX personnel and for that third party to control and co-ordinate accommodation for all personnel on the Project across all accommodation developers in Darwin;

that Halikos may be the preferred party to undertake that third party position; and

that if they went this route it would need to include an agreement by all parties, INPEX, JKC and subcontractors or it would not be effective and would not proceed.

[54] Okawa san deposed that his recollection of the meeting was of listening to and looking through the presentation and of hearing Mr Weeks saying that Halikos could provide accommodation dedicated to INPEX personnel. He also said that he recalled Mr Weeks talking about the idea of a broader accommodation service agreement. He deposed that he (Okawa san) told Messrs Dignan and Weeks that there would be internal processes to go through, that they would need to check what the accommodation requirements were for the Project, and that it was not clear yet if the Project had a need for additional accommodation. He also told them that if Halikos' proposal was the solution to the issue of the NT Government's concerns about accommodation, and if the Project required additional accommodation, their proposal was a good idea. He (Okawa san) also said that INPEX needed to do the proper market research to review their manning plans, what accommodation they already had, what accommodation was available and then compare them so they could see if there was a gap. He asked what would be the simplest way to put a solution into effect if the analysis showed there was not enough accommodation for the number of workers and Mr Dignan said that one option would be to enter into a variation of the existing Accommodation Agreement. (There was no detailed discussion of this.) Okawa san responded to the effect that if that was the simplest, "Let's do that". At the end of the meeting he said he preferred to pursue the broader accommodation services agreement rather than construction of the new building. He also said that Chris Wheeldon should take the lead in the discussion with Halikos and commence internal research to check the Project accommodation requirements (referring to INPEX, JKC and the subcontractors). He told Mr Kildare to support Mr Wheeldon.

[55] Sakamoto san also gave a general overview of the meeting without recalling too many specifics of what was said. In his first affidavit, Sakamoto san deposed that when they went to page 33 of the presentation which said that the development application had been approved and the demolition of the existing building was to commence on 31 January 2014, either Mr Weeks or Mr Dignan said words to the effect that they wanted endorsement from INPEX for the proposal by then. In his second affidavit he deposed that that was a mistake. They said words to the effect that they wanted something from INPEX by then.[3] At the time of the meeting, he did not understand what they wanted. He said something about two weeks being too short for INPEX to make a decision. He also recalled that he said that Onshore had secured all the accommodation it needed and did not need any additional accommodation. He recalled that Okawa san asked Mr Wheeldon to research the bed requirements for INPEX but could not recall whether he asked him to research the requirements for JKC and subcontractors. He commented that Mr Wheeldon was the contract holder of the Accommodation Agreement with Halikos and the one managing that contract and so was the appropriate person to continue discussions with Halikos.

[56] Several of the INPEX witnesses deposed that Mr Kildare's position in the company, as part of the Corporate Co-ordination division, not the Construction division, was made known to Mr Dignan and Mr Weeks at the meeting.

[57] Mr Dignan and Mr Weeks give a different version of events at the meeting. Mr Dignan denied a number of things which the INPEX witnesses (or some of them) said occurred at the meeting. He denied:

(a) that Sakamoto san said INPEX did not need further accommodation;

(b) that anyone at the meeting said that INPEX would not commit to one building;

(c) that anyone said that if Halikos wanted to build a building like 105 Mitchell it was up to them - their decision and their risk;

(d) that either Mr Wheeldon or Okawa san had mentioned the possibility of a broader accommodation agreement at the meeting;

(e) that Okawa san said he wanted an alternative proposal for a broader accommodation agreement rather than one for a specific building, or that he wanted to pursue such an agreement rather than the construction of a new building;

(f) that anyone at the meeting mentioned that a broad accommodation agreement would be more suitable than a dedicated building;

(g) that Okawa san asked Mr Wheeldon to justify an increase in accommodation numbers;

(h) that Okawa san asked Mr Wheeldon to determine whether there would be an increase in the accommodation numbers outside the INPEX village;

(i) that Okawa san said it was not clear whether the Project required additional accommodation;

(j) that there was any mention of onshore manning and accommodation requirements;

(k) that either he or Mr Weeks said they wanted an endorsement for the proposal;

(l) that there was any mention of the need to review, assess and agree a proposal from Halikos or for INPEX to undertake further internal analysis, or of any decision note, internal contract review process or formal decision by the executive committee; and

(m) that there was any mention of the respective roles of Okawa san and Mr Kildare.[4]

[58] Mr Dignan also deposed that certain things did happen at the meeting. He said that:

(a) during the presentation he explained that Halikos had development approval and finance pre-approvals in place, so that work on H105 could start as soon as INPEX committed to the building and the additional accommodation;

(b) later in the presentation he stated that Halikos would not go ahead with the redevelopment of 105 Mitchell without a binding written agreement and commitment from INPEX;

(c) everyone from INPEX was nodding and smiling and commenting that they were "impressed with the building and the location" and other similar comments;

(d) he and Mr Weeks said that Halikos wanted a four year agreement for 148 rooms at H105;

(e) Okawa san asked Mr Wheeldon whether the agreement could be done straight away by a variation, and that Mr Wheeldon and Mr Kildare both said that using clause 3 of the Accommodation Agreement and a variation would mean a more streamlined approach which would avoid the need for a tender process;

(f) following that Okawa san nodded, smiled and said, "I am happy," and, "I agree with what is proposed," and, "This is what INPEX wants," and, "Halikos and INPEX should move forward on this basis;"

(g) Mr Kildare said, "This is definitely what INPEX needs," and "This could fix INPEX's issues." He also said, "INPEX needs to get this deal done so we can tell everyone that we are fixing the accommodation problem."

(h) Mr Wheeldon said he had already run the numbers and that INPEX needed the accommodation that Halikos was proposing: he said, "INPEX needs every bit of accommodation it can get for the project," and, "This is going to be great for INPEX," and, "INPEX is so lucky to have Halikos in Darwin";

(i) Okawa san asked Mr Wheeldon to find out and finalise how much more accommodation was needed over the 148 rooms at H105 and then to negotiate what was required under clause 3 of the Accommodation Agreement;

(j) after Mr Kildare said what a great job Halikos was doing, Okawa san said, "I want a broader, longer term accommodation solution covering the Construction, Commissioning and Operations phases of the Project;"

(k) Okawa san also said, "I want the 148 rooms in 105 Mitchell but also need more," and accordingly that the accommodation would not necessarily be in just that one building;

(l) Okawa san then said, "Chris and Sean,[5] you are to finalise the additional accommodation needed as soon as possible and then come back to Halikos";

(m) towards the end of the presentation, he again stated that a written agreement and commitment from INPEX would be required before building work commenced.

[59] In his affidavits, Mr Weeks gave very similar evidence. He added an additional detail. He deposed that Okawa san said, "The agreement should be for longer than 4 years so it covers Construction, Commissioning and Operations. It should be for 15 years."

[60] Mr Weeks did disagree with Mr Dignan in relation to one aspect of the meeting. He said that Okawa san did talk about a broader general accommodation provider agreement. He attributed these statements to Mr Okawa:

(a) "I also want a broader general accommodation provider agreement."

(b) "I want Halikos to take the accommodation burden off INPEX, so that we can concentrate on the Project rather than being a landlord."

(c) "It will be Halikos' role to source the accommodation, deal with maintenance issues and to provide INPEX with statistics or other information as required."

[61] Mr Weeks emphasised that while Okawa san did say that Mr Kildare was to assist Mr Wheeldon, he did not say that assistance was limited to relationship management or say that Mr Kildare had only a limited role because this was an onshore construction issue. Mr Weeks also deposed that towards the end of the meeting Okawa san said to Mr Wheeldon, "Chris, you are responsible for finalising the amount of accommodation we need. I then want you to finalise the agreement and get things moving."

[62] I accept that the meeting happened generally as outlined in the evidence of the INPEX witnesses. Although the recollections of the witnesses differed in matters of detail; some remembered more detail than others; and some recalled details which others did not, those accounts are broadly similar.

[63] I reject the following parts of the evidence of Mr Dignan and Mr Weeks.

(a) I do not accept that Mr Dignan said that Halikos would not go ahead with the redevelopment of 105 Mitchell Street without a binding written agreement from INPEX (or anything to that effect).

(b) I do not accept that either Mr Dignan or Mr Weeks proposed that INPEX enter into a four year lease of the 148 rooms in 105 Mitchell.

(c) I do not accept that Mr Wheeldon said that he had already run the numbers and that INPEX needed the accommodation that Halikos was proposing, or that he said that INPEX needed every bit of accommodation it could get for the project.

(d) I do not accept that either Mr Kildare or Okawa san said anything to the effect of, "I am happy," "I agree with what is proposed," "This is what INPEX wants," or, "Halikos and INPEX should move forward on this basis."

(e) I do not accept that Okawa san said, "I want the 148 rooms in 105 Mitchell but also need more."

(f) I do not accept that Okawa san said anything to the effect that Mr Wheeldon or Mr Kildare should finalise how many more rooms were needed over and above the 148 in H105 and get back to Halikos.

(g) I do not accept that Okawa san said, "The agreement should be for longer than 4 years so it covers construction, Commissioning and Operations. It should be for 15 years," or anything to that effect.

(h) I do not accept that Okawa san said, "Chris, you are responsible for finalising the amount of accommodation we need. I then want you to finalise the agreement and get things moving," or anything to that effect.

[64] The statements attributed to Okawa san and Mr Wheeldon are inherently improbable particularly in light of other evidence to the effect that any agreement for accommodation for the operations phase would be put out to tender, and in light of the evidence about the quite complicated internal procedures for entry into contracts required by INPEX of which both Okawa san and Mr Wheeldon were well aware. The evidence I do not accept is also inconsistent with the written presentation and other objective documentary evidence both before and after the meeting.

[65] In the email correspondence before the meeting, Halikos was pressing Mr Wheeldon to provide numbers and Mr Wheeldon did not have them, and in an email on 6 December 2013 to Mr Weeks, Mr Wheeldon declined to commit to taking 65 rooms - or even to provide a letter stating that INPEX required that many.

[66] The written presentation is also not consistent with the evidence of Mr Dignan and Mr Weeks about what occurred at the 17 January meeting.

(a) The presentation booklet contained a copy of the letter of 6 December 2013 from Halikos to Chris Wheeldon (referred to above) which contained this representation: "We are about to commence construction of a dual hotel and apartment complex - 105 Mitchell Street which will consist of approximately 64 Hotel Suites and 68 2 Bedroom Apartments."

(b) The following appears on page 14 of the booklet:

[79]

[77] Given the general consistency of the evidence of Mr Wheeldon and Mr Kildare with the objective documentary evidence, and the relative inconsistency of the evidence of Mr Dignan and Mr Weeks with that objective evidence, where there is no such objective evidence of what occurred and there is a conflict between the evidence of Mr Kildare and/or Mr Wheeldon and that of Mr Dignan and/or Mr Weeks, I have preferred the evidence of Mr Kildare and Mr Wheeldon.

[78] Mr Wheeldon, Mr Kildare, Mr Dignan and Mr Weeks gave evidence of a number of meetings and discussions that were held between 28 January and 13 February 2014. It is not necessary to set out that evidence in detail. In summary, I accept the evidence of Mr Wheeldon and Mr Kildare that:

(a) either Mr Wheeldon or Mr Kildare told Mr Weeks and Mr Dignan that INPEX did not need the apartments in H105 but said that other personnel working on the Project might;

(b) Mr Wheeldon advised Mr Weeks and Mr Dignan that he was working on obtaining revised future workforce numbers but did not yet have them and that INPEX would analyse the accommodation numbers for the Project but that this would take some time;

(c) Mr Wheeldon told Mr Weeks and Mr Dignan that if the analysis of the accommodation requirements justified the appointment of an accommodation services provider, a decision note on the additional accommodation requirements and the appointment of a service provider would have to be generated and circulated to all relevant departments within INPEX and that that process would take time.

[79] I do not accept the evidence of Mr Dignan that on 6 February 2014, Mr Wheeldon told him, "INPEX Legal are happy for this agreement to be completed under the existing contract and clause 3 to allow for ease of signing," or that Mr Wheeldon said that because Legal were happy, and because the parties could just use clause 3 of the existing agreement to make the new agreement a 'variation', as they had done in the past,[6] INPEX did not need to go out to tender, or that Mr Wheeldon told him that INPEX wished to avoid going to tender due to the delays that a tender may cause.

[80] I do not accept the evidence of Mr Dignan that around this time (ie 6 February 2014) Mr Wheeldon asked Halikos to send him, as soon as possible, a draft of the variation to the Accommodation Agreement that contained a minimum of 250 apartments. I accept the evidence of Mr Wheeldon that as at 6 February 2014, he did not have numbers for the accommodation requirements for the Project and was not in a position to tell Mr Weeks the accommodation numbers required by the Project.

[81] On 7 February 2014, Mr Weeks sent an email to Mr Wheeldon which stated he was sending through a draft variation agreement. (I do not accept, however, that this was in response to a request from Mr Wheeldon.) The email stated:

[101]

[97] Mr Dignan and Mr Weeks met with Mr Kildare on 13 February 2014. Mr Weeks deposed that at that meeting he gave Mr Kildare a hard copy of the revised draft variation agreement and had a copy of the draft open on his computer. He deposed that Mr Kildare reviewed that document and asked that Mr Weeks make a number of changes to it, which he did on the spot. Mr Kildare then said words to the following effect: "I agree with Chris [Wheeldon] that using a variation is the right way for us to finalise this deal. I am happy with the variation document. It is correct and is all that is required. The RFA for the first agreement [the Accommodation Agreement] was fully signed off and that is all that's needed for the variation.". Mr Weeks said that, from those statements, he understood that a final agreement had been reached between Halikos and INPEX for Halikos to provide to INPEX the additional accommodation described in the revised draft variation agreement, for the period set out in that document and on the terms contained in that document. (The draft variation agreement relied on by Halikos as incorporating the terms of the Additional Accommodation Variation (with some exclusions discussed at [228] to [130] below) is referred to in the statement of claim, and these reasons as "the Variation Document".)

[98] Mr Weeks deposed that he had understood from earlier discussions with Mr Wheeldon that Mr Wheeldon had said he was happy with the revised draft variation agreement previously sent to him (on 12 February) and that INPEX's legal team had signed off on the variation. He also understood, from the meeting on 17 January 2014, that no RFA or other INPEX internal sign-offs were required. Instead, Okawa san had told them (at that meeting) that they needed to go and get the agreement done, and that is what they had done.

[99] Mr Weeks went on to depose that after this, Mr Dignan asked that INPEX provide a letter confirming that Halikos was to secure the additional accommodation INPEX had agreed it would take, and said that he wanted a commitment in writing before he would start work on H105. He deposed that Mr Kildare asked Mr Dignan, in an obliging manner, what he needed the letter to say and that he (Mr Weeks) pulled up a draft that he and Mr Dignan had prepared earlier. He said that Mr Kildare reviewed the draft letter and dictated some changes which Mr Weeks made to the letter as he spoke. He then printed the letter and gave it to Mr Kildare to read. He deposed that Mr Kildare then said that INPEX could send that letter to Halikos. He deposed that Mr Kildare said that Mr Wheeldon had the authority to sign the letter, but given he was on leave, Mr Davies (Mr Wheeldon's deputy) had the authority to sign it, and that he telephoned Mr Davies and made arrangements for Mr Davies to sign the letter and email it to him and to Mr Weeks and Mr Dignan.

[100] Mr Dignan's evidence was to the same effect.

[101] Mr Kildare's evidence about that meeting was very different. He deposed that at the beginning of the meeting, Mr Weeks repeated what he had said the previous day: that Halikos was having difficulty speaking with other accommodation providers and it was preventing them from putting forward their proposal to INPEX and that Halikos could not complete a proposal for accommodation management unless INPEX provided a letter setting out its interest in a broad accommodation agreement. He deposed that he (Mr Kildare) said that anything INPEX provided in writing was subject to final approvals from INPEX and that Mr Weeks said, "Yes," and that he understood that. He (Mr Kildare) said that he had discussed the matter with Mr Wheeldon and that Mr Wheeldon had agreed to provide a letter, but that the letter had to be subject to all final approvals from INPEX. He deposed that Mr Weeks pulled up a draft letter on his computer. After he had a quick read of the document, Mr Kildare pointed to the screen after the sentence that begins "In the interim," and said that this was "subject to" either final approvals or a final contract. (He could not recall which exact words he used, except "subject to".) Mr Weeks said words to the effect of, "Yes, yes, yes - understood." Mr Kildare was not given a hard copy of the letter at the meeting. Mr Kildare then telephoned Mr Davies and made arrangements for him to sign the letter in the absence of Mr Wheeldon.

[102] Mr Kildare deposed that they did not discuss any draft variation agreement at the meeting; he was not given or shown a copy of any draft variation agreement; and one was not put up on the screen. The only document put up on the screen was the draft letter.

[103] Mr Kildare deposed that when he later saw the signed letter, it did not contain the change he had requested.

[104] I accept the evidence of Mr Kildare, and find that the meeting occurred substantially as he deposed. This is partly for the reason set out at [77] above, and partly because the evidence of Mr Weeks and Mr Dignan is inherently implausible. Mr Kildare occupied a relatively junior position in the INPEX hierarchy and he was attached to the "Corporate Co-ordination" division so that the accommodation requirements for either the construction or operational phases of the Ichthys Project did not fall within his area of responsibility. Whether or not Halikos knew about INPEX's internal requirements for entering into a contract, Mr Kildare certainly did. Given those matters, it is inconceivable that he would purport to finalise the terms of an agreement with Halikos which would involve a commitment by INPEX to pay many millions of dollars over a 15 year period and which concerned a different division of the company from the one in which he was employed.

[105] I do not accept Mr Weeks' evidence that Mr Wheeldon had told him he was happy with the revised draft variation agreement previously sent to him (on 12 February) and that INPEX's legal team had signed off on the variation. There is no evidence at all that the revised draft variation agreement had even been sent to INPEX's lawyers. Mr Wheeldon went on leave the following day, and it is unlikely in the extreme that even if the lawyers had seen the revised draft variation agreement they would have "signed off" on it so quickly and no reason why Mr Wheeldon would have told Mr Weeks that they had.

[106] Mr Weeks' evidence that Mr Kildare said, "I am happy with the Variation Document. It is correct and is all that is required. The RFA for the first agreement [Accommodation Agreement] was fully signed off and that is all that's needed for the variation," is likewise implausible. Mr Kildare knew that a contract of this nature required a decision note to be prepared, circulated and signed by the appropriate people, an RFA to be prepared and other processes to be gone through within INPEX. There is no reason at all why he would tell Mr Weeks and Mr Dignan that this was not necessary. This evidence of Mr Weeks is also inconsistent with later documents and other communications passing between Mr Weeks and Mr Dignan and INPEX personnel in which Mr Wheeldon sought information for preparation of a decision note[12] and Mr Dignan said in an email to Okawa san that he was "totally unaware that the internal decision note had not yet been completed" and that "we do understand that this is required";[13] as well as the evidence that Mr Dignan had discussed the progress of the decision note with Mr Wheeldon.[14]

[107] Further, the letter of 13 February itself does not purport to annex the Variation Document and does not signal unambiguously that it is intended to bind INPEX. There is other evidence that Mr Dignan wanted to extract from INPEX a letter that would commit INPEX to taking the rooms and apartments referred to in the Variation Document. Mr Dignan instructed Halikos' solicitor, Mr Henschke, to draft such a letter and he did so in the following terms:

[110]

[111] Mr Kildare deposed that he had never provided any comments on the draft variation agreement and had not discussed the terms of the draft variation agreement with Mr Wheeldon. The email of 17 February provides some objective support for Mr Weeks' (and Mr Dignan's) evidence that Mr Kildare did make suggested changes to the draft variation document, and it is possible that he did so either on 13 February or at another time and that Mr Kildare is mistaken about that. (The changes that were made to the recitals are such that INPEX would have been likely to want in any final draft.) Nevertheless, I am satisfied on the balance of probabilities that the meeting on 13 February occurred substantially as deposed to by Mr Kildare. Crucially, I accept Mr Kildare's evidence about Mr Weeks' explanation as to why Halikos wanted the letter; his evidence that he requested the words "subject to" either final approvals or a final contract be inserted (which was not done); and that he made it clear to Mr Dignan and Mr Weeks that anything INPEX provided in writing was subject to final approvals from INPEX.

[112] Neither Mr Kildare nor Mr Wheeldon responded to the email of 17 February. (Nor had anyone in INPEX responded to any of the previous draft variation agreements they had been sent.) Mr Wheeldon deposed that he ignored the Variation Document attached to the email. At that time he had not completed the analysis of the accommodation requirements for the project and did not know whether a proposal for an appointment of an accommodation service provider would be supported within INPEX because he had not commenced the decision note procedure.

[113] Towards the end of February 2014, Mr Wheeldon and Mr Weeks had a telephone conversation. Again the evidence of each of them concerning the content of that conversation is diametrically opposed. Mr Wheeldon deposed that after he read the email of Mr Weeks dated 13 February 2014 and the attached letter, he telephoned Mr Weeks and said words to the general effect that the letter should not have been signed and that he disagreed with the letter.

[114] Mr Weeks has denied this. He deposed that Mr Wheeldon telephoned him and said that he had received updated figures from JKC that the additional accommodation it required outside the INPEX Village, together with that needed by INPEX, was more than the 225 apartments and hotels provided in the Additional Accommodation Variation and that he would be asking Halikos to also try and find that additional accommodation beyond the 225 that had already been agreed. Mr Weeks deposed that he asked Mr Wheeldon what that meant in terms of the Variation and where it was up to in terms of being signed; and that Mr Wheeldon said that there were no problems with the Variation, that the Variation Document would be signed and that INPEX was a big company and that documents took time to be signed.

[115] Mr Weeks also deposed that he said to Mr Wheeldon for the first time in that telephone conversation that if he had to speak to other developers, he would need INPEX's authorisation. He said that up to that point, although numbers in excess of about 250 apartments had been mentioned, the numbers were in the range of what Halikos could comfortably provide from its existing stock, together with H105. He deposed that Mr Wheeldon authorised him to speak to other developers.

[116] I do not accept the evidence of Mr Weeks that in a telephone conversation towards the end of February 2014, Mr Wheeldon said that there were no problems with the Variation, and that the Variation Document would be signed. Whatever the state of the Halikos parties' knowledge of INPEX's internal procedures, Mr Wheeldon knew them. He knew that there was no guarantee that the Variation Document would be approved in its present form or at all. He had not yet started the decision note process. It is therefore most unlikely he would have told Mr Weeks that it would be signed.

[117] On 24 February 2014, Mr Wheeldon sent two emails to Mr Weeks forwarding an email exchange and a graph prepared by JKC showing the Ichthys Project personnel (JKC staff and subcontractors) staying outside the Village. From that, Mr Weeks would have learned that JKC were projecting that from about February 2014 until about July 2016 there would be over 1,000 Ichthys Project personnel staying outside the INPEX Village, with the numbers peaking at over 3,000 for the period April to September 2015.

[118] Mr Wheeldon deposed that in February 2014, after he returned from leave, he had a discussion with either Mr Weeks or Mr Dignan in which he told them that he had spoken to Operations and they may be interested in a proposal for an accommodation service provider, but it had to await the tender process which would be undertaken by Operations. Mr Dignan and Mr Weeks deny that this conversation took place. I accept the evidence of Mr Wheeldon in relation to this. It is consistent with the later request by INPEX Operations for expressions of interest in the provision of accommodation by a tender process.

[119] On 25 February, Mr Weeks and Mr Kildare discussed a media release about H105. Mr Kildare sent an email to Mr Weeks on that date providing the following comments for the purpose of that media release.

[128]

[128] The document attached to this email was headed "Accommodation Services Provider Agreement". It was in substantially the same terms as the Variation Document relied on by Halikos as the agreement said to have been entered into on 13 February except that it had an "issue date" of 14 March 2014 whereas the Variation Document relied on had an "issue date" of 13 February 2014. (The first operative clause in both begins: "Halikos agrees to provide a combination of not less than 225 additional Apartments and Hotel rooms" and goes on to set out the term and the rates applicable. Both purport to be "made on the 13th day of February 2014"; both are unexecuted.)

[129] In his evidence, Mr Weeks said that the reference in the email to meeting with Okawa san "to finalise the discussions and proceed" was a reference to the discussions in relation to the media release - rather than the agreement between Halikos and INPEX. I reject that evidence. The plain meaning of the email is that Mr Weeks wished to have a meeting with Okawa san to "finalise the discussion" in relation to the proposed agreement for Halikos "to provide a combination of not less than 225 additional Apartments and Hotel rooms" - ie the pleaded agreement. There is no other reason why Mr Weeks would have attached an electronic copy of what he refers to in the email as "a document for" the Accommodation Services Provider Agreement (and not as "the agreement") - especially one with a different issue date from the one Halikos claims was finalised on 13 February. The email goes on to talk about sending the amended press release to Mr Weeks (not Okawa san).

[130] So read, Mr Weeks' email of 18 March 2014 is inconsistent with Halikos' claim that, as at that date there was a concluded agreement between Halikos and INPEX in the terms pleaded which had been made on 13 February.

[131] Also on 18 March 2014, Mr Weeks sent a further email to Mr Kildare attaching a revised draft media release. This draft media release was in very similar terms to the draft sent to Mr Kildare on 14 March (including the reference to being the "primary Accommodation Services Provider for the Ichthys project" and the reference to Halikos being "in negotiations with other Developers to manage and operate their properties"). It contained a space for Mr Kildare to add his comments. The covering email seemed to indicate that Mr Weeks intended that the draft media release would be settled by Mr Weeks and Mr Kildare. It said:

[132]

[132] Mr Kildare, however deposes that he told Mr Weeks he would send the draft to Perth for review and approval by INPEX media management and discuss it with Okawa san and that he also told Mr Weeks that the media release was a draft only which would be used at a later date after an agreement had been executed. Mr Weeks denied that this conversation occurred. I accept the evidence of Mr Kildare that that conversation did occur substantially as he deposed.

[133] Mr Dignan deposed that he and Mr Weeks met with Okawa san in Perth on 21 March 2014 at which time Mr Weeks gave Okawa san a copy of the letter of 13 February and "the draft document formally recording the Variation for execution". He deposed that Okawa san said words to the effect that this agreement was "what INPEX wanted" and "this satisfies the request I made on 17 January 2014 that INPEX and Halikos agree a longer, broader arrangement that covered the Construction, Commissioning and Operations phases".

[134] Okawa san deposed that he had been shown a calendar appointment for a meeting with Geoff Weeks at the INPEX offices in Perth on 21 March 2014, but could not recall what was discussed during this meeting.

[135] Given the findings I have made about what occurred (and did not occur) at the meeting on 17 January 2014, I do not accept Mr Dignan's evidence of what Okawa san said at the meeting on 21 March 2014. Mr Dignan also deposed that, at that meeting, Okawa san gave the go ahead to issue a media release. I consider that highly unlikely. It should be noted that no media release was issued.

[136] Mr Dignan also deposed that in speaking to Okawa san he made reference to the provision of accommodation that "had already been agreed" and that Okawa san did not say no agreement had been reached. I also consider this unlikely.

[137] Mr Weeks also gave evidence about this meeting and deposed to references being made to "the agreement" and "the deal" in conversations with Okawa san. Again, I consider this unlikely.

[138] Mr Weeks also deposed:

[137]

[139] On 24 March 2014, a meeting took place with then Chief Minister Adam Giles. Mr Dignan, Mr Weeks and Mr Kildare give differing accounts of what occurred at that meeting. Mr Dignan and Mr Weeks both say Mr Kildare was not present.

[140] Mr Kildare deposed that at that meeting they discussed broader issues of accommodation and tourism in Darwin, that the Chief Minister asked how INPEX and Halikos were going with negotiations, and that he (Mr Kildare) said, "Fine." He deposed that Mr Weeks asked Mr Giles if he was interested in participating in a joint press release or issuing one of his own.

[141] Mr Weeks and Mr Dignan deposed that they told the Chief Minister that Halikos had entered into a 15 year agreement with INPEX to provide accommodation and that Halikos was constructing 105 Mitchell Street dedicated to INPEX's project accommodation requirements.

[142] Mr Giles also deposed to what occurred at that meeting. He could not remember whether Mr Kildare was present or not. He said that during the meeting Mr Dignan and Mr Weeks told him that an agreement had been entered into between Halikos and INPEX for additional accommodation for the Ichthys Project and that this would be in a new purpose-built building.

[143] The Chief Minister's then Chief of Staff, Mr Ron Kelly, also deposed to what occurred at the meeting on 24 March. He said that Mr Dignan and Mr Weeks told him that an agreement had been entered into between INPEX and Halikos for additional accommodation.

[144] I do not know what to make of this evidence. It may be that Mr Dignan and Mr Weeks did tell Mr Giles that an agreement was already in place. If so, it was likely in the absence of Mr Kildare. However, I have found that as at the date of the meeting, there was no concluded agreement in place for the provision of additional accommodation by Halikos to INPEX of the kind pleaded. (This does not exclude the possibility that Mr Dignan and Mr Weeks told the Chief Minister that there was such an agreement.)

[145] On the evening of 24 March 2018, Mr Dignan, Mr Weeks, Mr Kildare, Mr Giles, Mr Kelly and Mr Gary Barnes (the then Chief Executive of the Department of Chief Minister) attended a dinner together at Hanuman restaurant. Mr Dignan deposed that Mr Kildare organised the dinner; Mr Kildare deposed that Mr Dignan organised it.

[146] Mr Kildare deposed that he did not speak to Mr Dignan or Mr Giles at the dinner except to exchange pleasantries. He said he did not discuss any Accommodation Agreement Variation and did not mention negotiations with Halikos. Chief Minister Giles proposed a toast to the economic health of the Northern Territory and INPEX's role in that and he (Mr Kildare) responded in general terms without any reference to any specific building or asset owned by Halikos or to any proposal for a broader accommodation services agreement. He also said that he did not hear everything that was said at the dinner because the restaurant was very noisy.[16]

[147] Mr Dignan deposed that at the dinner Mr Kildare said words to the effect that, "Halikos Hospitality has been appointed as the INPEX accommodation service provider for the next 15 years," and, "Halikos is constructing a purpose-built building for INPEX which will alleviate the impact on Darwin hotel accommodation," and, "It is a great outcome for INPEX to enter into a 15 year agreement with Halikos, a local company."

[148] Mr Weeks also deposed that Mr Kildare said words to that effect and also that he said that the 15 year agreement covered Construction, Commissioning and Operations; that the agreement was for 225 hotel rooms and apartments; that the purpose-built building was being built at 105 Mitchell Street; and that INPEX had given Halikos a letter to secure the apartments and it was now up to Halikos to get the apartments.

[149] Mr Giles deposed that from his perspective, based on his discussions with Mr Kildare, Mr Dignan and Mr Weeks, the purpose of the dinner was to congratulate INPEX and Halikos for making their agreement. He deposed that during the dinner, Mr Kildare said that an agreement had been entered into between INPEX and Halikos to provide accommodation for INPEX workers for 15 years and that the accommodation would be provided in a new building to be built by Halikos at 105 Mitchell Street.

[150] Mr Kelly deposed that during the dinner there was discussion about "the agreement reached between INPEX and Halikos". He could not remember precisely what Mr Kildare said in his toast except that he said words to the effect that "the long term deal between Halikos and INPEX was good for everyone and it would relieve the pressure on tourist accommodation in Darwin". He also deposed that the Chief Minister "made a toast and said congratulations to INPEX and Halikos on their deal," and that someone said that INPEX would take the accommodation in 105 Mitchell Street plus other properties as numbers were expected to exceed capacity.

[151] Mr Gary Barnes did not give evidence about what occurred at the dinner.

[152] Mr Giles also deposed that in about March 2014, he frequently spoke with Mr Kildare, and that during one of those conversations Mr Kildare told him that an agreement had been entered into between INPEX and Halikos for additional accommodation. Mr Giles deposed that Mr Kildare told him that the agreement was that Halikos would build a new apartment complex at 105 Mitchell Street, which INPEX would rent for its workers for 15 years. I do not accept this evidence. All of the objective evidence points to there being no such agreement at that time, and I do not accept that Mr Kildare told Mr Giles there was.

[153] Nor do I accept the evidence of Mr Dignan, Mr Weeks or Mr Giles about what happened at the dinner on 24 March. Nor, in so far as it conflicts with the evidence of Mr Kildare, do I entirely accept the accuracy of the evidence of Mr Kelly. It is entirely possible that the construction of 105 Mitchell Street was discussed at the dinner and that someone said words to the effect that on the projected numbers of workers employed by JKC and the sub-contractors, that building would be filled as well as other properties as numbers were expected to exceed capacity. Such indeed was the expectation at the time based on the numbers supplied to Mr Weeks by Mr Wheeldon. (See above.) I do not accept that this was said in the context of anyone saying that there had been a concluded agreement between Halikos and INPEX for INPEX to take and pay for 225 apartments and rooms. It is also entirely possible that there was talk of H105 being "purpose built" for the Ichthys Project. The Halikos promotional material in the presentation given to Okawa san and Sakamoto san on 17 January says as much, and there can be little doubt that Halikos went ahead with the construction of H105 in the expectation (no doubt encouraged by the figures supplied by Mr Wheeldon) that there would be plenty of demand for accommodation of that kind from workers on the Ichthys Project. That is a very different thing from being purpose-built to lease to INPEX. It is also possible (indeed likely) that it was said that the development of H105 "was good for everyone and would relieve the pressure on tourist accommodation in Darwin". However, given the other evidence, I consider that Mr Kelly is mistaken when he says that this was said in the context of a discussion about a "deal" between INPEX and Halikos.

[170]

[161] It should be noted that:

(a) none of the draft media releases say anything about an agreement between INPEX and Halikos for Halikos to supply and INPEX to pay for not less than 225/150 apartments and rooms over a 15 year period;

(b) there is no reference in any of them to Halikos building H105 for INPEX or INPEX agreeing to take all of the apartments in H105 (and when one of the media releases seemed to suggest as much, Mr Weeks sent an email denying that that was the case);

(c) the final draft (attached to Mr Giles Affidavit) refers to an "Accommodation Services Agreement" and an earlier draft talks about INPEX appointing Halikos Hospitality as its "accommodation services provider";

(d) the drafts refer to Halikos' portfolio of 1100 apartments and rooms not to H105 alone; and

(e) the drafts refer to the fact that Halikos was working with other developers to supply rooms.

[162] All of these factors point to the draft media releases being about the proposal which was then being negotiated, for the parties to enter into an "Accommodation Services Agreement". It is common ground that such an agreement was never finalised. That, the fact that none of these media releases was ever issued, and the fact that the draft media release talks about an agreement being "signed" when at that time nothing had been signed, all support Mr Kildare's evidence that the purpose of these drafts was to have a media release prepared to be issued once an agreement had been finalised.

[163] These drafts do not support Halikos' contention that the media releases were intended for immediate issue and were intended to refer to an agreement said to have been made on 13 February, for Halikos to supply, and INPEX to pay for, not less than 225 (later reducing to 150) additional apartments and rooms, including all of the rooms in H105. Nor is there any credible explanation as to why, if that were the case, the parties should wait until 24 and 25 March to announce the agreement to Government and prepare media releases announcing the agreement which were never issued.

[195]

[167] Mr Wheeldon deposes that the document was given to him in response to his request for the information for a decision note.

[168] Mr Dignan deposes that the document was prepared at the request of Mr Wheeldon. He refers to it as "information" and deposes that "it was not prepared as a presentation or proposal". He deposes, "In particular, it was not prepared to convince INPEX to take accommodation in 105 Mitchell. Instead, I had it prepared simply to help Chris Wheeldon out by giving him the information that he said he needed for his internal processes."

[169] I accept the evidence of Mr Wheeldon that the proposal was given to him in response to his request for information for a decision note (noting that the preparation of a decision note before a decision is made to enter into a contract is one of INPEX's "internal processes".)

[170] The following should be noted about the proposal.

(a) Firstly, it plainly is a proposal and not just "information" as asserted by Mr Dignan.

It is headed "Halikos Hospitality Pty Ltd Darwin Accommodation Proposal" and describes itself as a "presentation" in the section signed by Mr Weeks: Enclosed in this variation document presentation, Halikos Hospitality demonstrates its ability to provide the additional accommodation and undertake the additional responsibilities and duties as the project Accommodation Services Provider.

It contains a "sales pitch" at the end of the section on the current and future inventory_: No other company can provide the quantity and quality of accommodation required for the Ichthys Project. Halikos Hospitality is the "One Stop Shop"._

Although the language is hard to understand and, in places, devoid of meaning, it is generally cast in the future tense.

The section headed "Document Overview" contains proposals about the mutual obligations to be assumed by both INPEX and Halikos under an Accommodation Service Provider Agreement which appear in the documentation for the first time.

(b) The description in the proposal of what occurred at the meeting on 17 January 2014 supports the evidence of the INPEX witnesses about what occurred at that meeting and does not support the evidence of Mr Dignan and Mr Weeks. (The INPEX personnel gave evidence that at the 17 January meeting, Okawa san asked Mr Wheeldon to determine numbers and timing of ex-village accommodation requirements in the Darwin area - as stated in the Proposal. Mr Dignan and Mr Weeks denied this and deposed that Mr Wheeldon said he already had the numbers.)

(c) The proposal refers to the letter of 13 January 2014, now said to confirm the existence of the pleaded agreement, as a "letter of intent".

(d) The proposal includes the statement: "This variation secures a minimum requirement of additional apartments and rooms for the construction, commissioning, and operational phases of the project," not an assertion that "the minimum requirement of additional apartments and rooms" had already been the subject of a concluded agreement reached some months before.

(e) The proposal refers to the attached draft as "the Variation Document", not an "agreement".

(f) Mr Dignan is correct in saying that the proposal was not prepared to convince INPEX to take accommodation in 105 Mitchell. Like all of the documentation in this case before 9 July 2014, it appears pitched at a proposed "Accommodation Services Provider Agreement". (Presumably, if an agreement was concluded for Halikos to be the primary accommodation services provider for the Ichthys Project, it would preferentially provide that accommodation form its own inventory, including H105.)

[171] This proposal is not consistent with the claim by Halikos that at the date the proposal was made it already had a binding agreement with INPEX in terms of the pleaded Additional Accommodation Variation (ie to provide INPEX with 225/150 rooms over a 15 year period).

[172] On 11 April 2014, Mr Weeks wrote to Mr Wheeldon:

[213]

[178] Mr Dignan deposed that at a meeting on 26 May 2014, he told Mr Kildare that he was becoming concerned that Halikos had still not received the final signed Variation document and that Mr Kildare said, "You've got your letter. It's as good as money in the bank"; also that INPEX was an honourable company, Halikos had no need to worry about the agreement, and he would follow up with Mr Wheeldon. It may be that a meeting occurred: Halikos appears to have been constantly pushing for its Variation Document to be signed. It may also be the case that Mr Kildare said he would follow the matter up with Mr Wheeldon. However, I do not accept that Mr Kildare said, on that date or any other, anything to the effect that Halikos could rely on the letter of 13 January 2014 as binding INPEX to an agreement to take and pay for 225/150 rooms over a 15 year period. Nor do I accept that Mr Wheeldon made any such statements.

[179] Mr Dignan deposed that during a drive to Winnellie Point to inspect some office accommodation on 20 June 2014, he asked Mr Wheeldon what was the hold up with the signature on the formal documentation regarding the variation and that Mr Wheeldon told him (among other things) that there were no issues, that the decision note had been done and that Legal and Operations were all on board. Since the other evidence (supported by later documentation) is to the effect that Legal and Operations were not "all on board", I do not accept Mr Dignan's evidence that Mr Wheeldon told him they were. Mr Dignan deposed that several times over this period, Mr Wheeldon said words to the effect of, "Don't worry about it. You have your letter." Mr Wheeldon denied this and I do not accept Mr Dignan's evidence that this occurred.

[180] The evidence of Mr Dignan and Mr Weeks was not internally consistent and coherent. In cross-examination, it was put to both Mr Weeks and Mr Dignan that various documents emanating from them referred to negotiations or otherwise used language which indicated that there was as yet no concluded agreement after 13 February 2014, the date on which Halikos contends that the Additional Accommodation Variation was entered into. In answer, Mr Weeks gave evidence that there were two proposed agreements - the Additional Accommodation Variation (entered into on 13 February 2014) and a broader "services provider agreement", which was never finalised, for the provision of services and additional accommodation over and above the 225 accommodation units the subject of the Additional Accommodation Variation. Mr Dignan gave similar evidence, distinguishing between the Additional Accommodation Variation and what he referred to as "the over and above".

[181] Mr Weeks began by saying that he believed that no decision note or RFA was necessary for the Additional Accommodation Variation because that was being done as a variation to the Accommodation Agreement. Mr Dignan gave evidence to the same effect. Both of them explained away all references to a decision note in the documents as referring to the broader accommodation services agreement that was being negotiated, despite the fact that most, if not all, of that correspondence referred to "the variation" to the Accommodation Agreement.

[182] Mr Weeks gave evidence that after receiving the email from Mr Wheeldon of 7 May, he spoke to Mr Wheeldon who told him that the decision note had already been approved. In cross-examination, Mr Weeks said that he understood this to mean a decision note in relation to the broader agreement that was being negotiated. It was pointed out to him that the email of 7 May 2014 said (in part): "the manning curves from JKC will be formally submitted to us 15th May at which time the DN can be submitted for approval through the company" - that is to say that the decision note would not be submitted for approval until after 15 May. Mr Weeks then changed his evidence. He said the earlier evidence had been a mistake and that Mr Wheeldon had told him the decision note would be approved. I do not accept the evidence of either Mr Weeks or Mr Dignan that they believed that no decision note was necessary for the Additional Accommodation Variation.

[183] On 3 July 2014, Mr Dignan sent an email to Mr Wheeldon saying (inter alia):

[228]

[187] Mr Dignan deposes that on 10 July 2014, he made a phone call to Mr Kildare as he was becoming worried that he still had not received a signed copy of the Variation Document, and wanted to arrange a meeting with Mr Kildare, Mr Wheeldon and Okawa san, who was in (or was coming to) Darwin. Mr Dignan says that Mr Kildare told him Okawa san was unavailable to meet, but that "105 is committed to INPEX" and not to worry. Mr Dignan may have made a phone call to Mr Kildare on that date but I do not accept that Mr Kildare said anything to the effect that there was a binding agreement for INPEX to lease H105.

[188] On 11 July 2014, Mr Wheeldon had a meeting with Mr Dignan. Mr Wheeldon deposes that at that meeting Mr Dignan said he would try and split the draft variation document and Mr Wheeldon said something like, "Try and split it and let's see what it looks like." Mr Wheeldon deposes that Dignan said he wanted to push the accommodation draft variation document forward to get a number for H105, and that he (Mr Wheeldon) said that any proposed agreement needed to be in a decision note and had to go through the contract approval process. He deposed that he also told Mr Dignan that Mr Kildare was taking over as it was getting quite political and Mr Kildare and Okawa san would be more involved.

[189] Once again, Mr Dignan gives a very different version of what occurred at that meeting. Mr Dignan deposed that Mr Wheeldon agreed that Halikos and INPEX were already committed to the 225/150 apartments and hotel rooms, including in 105 Mitchell, and that INPEX's only concerns were with the accommodation over and above this, and that there was "no issue" with the Variation as INPEX was committed. Mr Dignan deposed that he said to Mr Wheeldon that separating the variation into two parts should simplify the procedure of sign off for INPEX until its internal issues had been resolved, and that Halikos would step aside as the accommodation service provider for INPEX until the issues with JKC had been resolved. Mr Wheeldon agreed, asked Mr Dignan to send him (another) copy of the Variation Document, and said that he would send Mr Dignan "a confirmation". They talked about how construction was going for H105 and Mr Wheeldon said, "You just need to make sure you have the accommodation available under the agreement," "Hurry up and get it built," and "Don't worry about us - you just worry about getting it built on time."

[190] For all of the reasons already outlined, I do not accept the evidence of Mr Dignan about what occurred at that meeting. I find that it occurred substantially as deposed to by Mr Wheeldon.

[191] On 11 July 2014, following that meeting, Mr Dignan sent an email to Mr Wheeldon saying (inter alia):

[261]

[207] Again, this email exchange is in terms of a proposal.

[208] On 19 August 2014, Mr Dignan and Mr Weeks met with Mr Kildare. (Mr Wheeldon was on leave.) I accept the evidence of Mr Kildare that at that meeting:

he said that he was not aware of the status of the process of the decision note or the Variation Document being reviewed and asked him whether he had spoken to Mr Wheeldon about it;

he told them that INPEX's internal processes took time and that INPEX was committed to the process and was working through the process, though he was not aware of where in the process it was up to;

he also said that Mr Wheeldon was the person who was negotiating and that it was his responsibility to see it through the internal processes;

Mr Dignan asked why the media statements had not gone out, and Mr Kildare told him that INPEX would not be making any media statements until they had an agreement in place, and it had not been signed yet;

Mr Dignan responded that he was not being treated fairly;

Mr Kildare told him that INPEX was an honourable company and that he was not aware of any problems with the process but he also said that INPEX would not be rushed and that it would only proceed when the internal due diligence and review process was completed;

Mr Dignan said that he had received legal advice about the letter of 13 February 2014 and had been told Halikos already had a contract with INPEX;

Mr Kildare responded with, "If you think you already have a deal, then why are you continuing to pursue the signing of the draft variation?"

Mr Dignan said/mumbled that he just wanted the paperwork neat and tidy;

Mr Kildare said that he would speak to Mr Wheeldon and Okawa san and check the status of the documentation.

[209] On 20 August 2014, Mr Dignan sent a letter to Okawa san enclosing yet another draft variation agreement, this time signed by Mr Dignan on behalf of Halikos. On the second page it recited: "THIS VARIATION AGREEMENT is made on the day of 2014." It added back clauses 5 to 8 which had be omitted from the version emailed to Mr Wheeldon on 14 August.

[210] The covering letter said (inter alia):

[265]

[211] The covering email enclosed the letter of 13 February 2014 and the (rather strange and ambiguous) email from Mr Wheeldon to Mr Weeks and Mr Dignan of 21 July 2014. The underlined portion of the letter is inconsistent with Halikos' contention that the deal had been finalised on 13 February 2014 - before the "more than six months of work". It is also noteworthy that the letter speaks of the many hours of work having culminated in "a mutually agreeable" (not "agreed") document only now ready to be signed.

[212] Once again, Halikos received no response to the letter or the further draft variation.

[213] On 9 September 2014, Mr Dignan and Mr Weeks met with Okawa san and Mr Kildare at the INPEX offices in Perth. Once again, the evidence of the INPEX personnel (Okawa san and Mr Kildare) differs from that of Mr Dignan and Mr Weeks. I accept the evidence of Mr Kildare that:

Mr Dignan said they had worked very hard on this; they had done everything INPEX asked them to do, that they wanted to work with INPEX and saw INPEX as a valued client, and also that negotiations on the Variation Document had been completed and Halikos wanted to see the agreement executed as soon as possible;

he asked what else had to be done for the Variation Document to be signed;

he said that construction on H105 was on schedule and everything was going well;

Okawa san said that there was an internal review process for the draft Variation Document which would ultimately lead to a decision being made by Ichthys Excom; that if the recommendation from the Ichthys Excom review came to him and said INPEX should sign it then he would support it, but if Ichthys Excom said that INPEX should not sign it, then he would not;

Mr Weeks said that Halikos had been talking with Mr Wheeldon and Mr Kildare, they had seen the numbers and they knew that INPEX needed the accommodation;

Okawa san responded that it was the Onshore Construction team's role to determine what the additional accommodation requirements would be;

Okawa san also said that Mr Kildare was here to assist with the process if required, it was an Onshore Construction matter and not his responsibility to manage this issue.

[214] I do not accept the evidence of Mr Dignan that:

Okawa san said that he could not execute the document that day but that "INPEX does require the additional accommodation for the Project"; or that

Okawa san said that he shared Halikos' concerns that it had taken seven months, but that "this is merely an internal process;" or that

he said that both companies should "continue their good relationship" and "continue to move to execute the document in good faith;" or that

Mr Kildare said, "Shane, you have two letters from us now! What more do you need?"

[215] In relation to this meeting, Mr Dignan deposed:

[298]

[230] Halikos does not explain why these recitals would not have become part of the Additional Accommodation Variation in the same way as Recital B and the operative clauses, given the way the Additional Accommodation Variation is said to have been formed with no alleged discussion about excluding parts of the Variation Document. The reason why Halikos chose not to plead these recitals as part of the Additional Accommodation Variation, however, is apparent. Halikos's case - discussed above - is that Halikos was negotiating with INPEX in relation to two separate agreements; one for the provision of additional accommodation (the Additional Accommodation Variation) which they say was concluded on 13 February 2014 and a second "wider accommodation services agreement" which was never finalised.

[231] The Variation Document contains provision for the document to be executed for and on behalf of Halikos by Mr Dignan and for and on behalf of INPEX by a Director and a Director/Secretary. It was not executed.

[232] In summary, the terms of the Additional Accommodation Variation are said to be as follows:

(a) From the date of entry into the agreement until 28 February 2019, Halikos was to provide 225 additional apartments (consisting of 150 apartments and 75 hotel rooms) "furnished and equipped with the furniture and items detailed in Schedule 1" for the prices set out in clause 1. (The Variation Document did not contain a Schedule 1.)

(b) From 1 March 2019 to 20 February 2029, "the number of Apartments and Hotel rooms shall not be less than 150".

(c) The rate payable was to increase by 6% per annum.

(d) Up until 28 February 2015, INPEX was only obliged to pay for such rooms as are occupied by its employees and sub-contractors. Thereafter, the obligation was to pay for "not less than 225 additional Apartments and Hotel rooms" (until 28 February 2019) and "not less than 150 additional Apartments and Hotel rooms" (from 1 March 2019 to 28 February 2029).

[233] Halikos pleads further that at the 13 February meeting, "Mr Kildare settled, confirmed that he was happy with, organised the signing of, and confirmed the authority of the person signing in the absence of Mr Wheeldon, a letter from INPEX to [Halikos] dated 13 February 2014 and instructed Halikos to secure the accommodation as required by the Additional Accommodation Variation.[23] The 13 February 2014 letter reads as follows:

[302]

[235] The amended statement of claim does not allege that the 13 February 2014 letter is part of the Additional Accommodation Variation. Halikos pleads that by that letter, "INPEX confirmed the finalisation of" the Additional Accommodation Variation and "gave a direction to HH to secure the accommodation provided for in that variation".[24]

[236] Halikos relies on the following post-contractual conduct by INPEX as confirming the entry into the Additional Accommodation Variation:[25]

(a) a representation by Mr Wheeldon during a telephone conversation with Mr Weeks on 24 February 2014 that the Variation Document would be signed;[26]

(b) a statement by Okawa san to Mr Dignan and Mr Weeks at a meeting on 21 March 2014, that he welcomed the variation and the agreement reached between Halikos and INPEX, thanked the Halikos Group and confirmed that the Variation Agreement was what INPEX wanted and that it was consistent with his instruction given at the 17 January 2014 meeting;[27]

(c) statements by Mr Kildare at a dinner on 24 March 2014 that Halikos had been appointed to provide accommodation services to INPEX for 15 years; that Halikos was constructing H105 as a purpose-built building for INPEX for that purpose; that INPEX and HH had entered into an agreement; that INPEX had given Halikos a letter to secure the apartments and it was now up to Halikos to get the apartments";[28]

(d) participation by Mr Kildare in the preparation of a joint media release which stated amongst other things that Halikos had signed a major deal with INPEX to provide short and long-term accommodation in Darwin's CBD and quoted Mr Kildare as referring to the construction of H105 as a "key consideration" in signing the agreement and "settling" a media release by the Chief Minister announcing a 15 year agreement;[29]

(e) statements by Mr Kildare to Mr Dignan on 26 March 2014 to the effect of, "You're a panicker. Don't worry, everything is on track," and in April 2014 to the effect that Mr Dignan was to relax as he had the 13 February 2014 letter and needn't worry;[30]

(f) further statements by Mr Kildare at a meeting on 26 May 2014 to the effect that:

(i) the Variation Document was just "doing the rounds" and he was not aware of any problem with it being signed off;

(ii) INPEX was an honorable company and would stick to the agreement;

(iii) INPEX Operations was "on board" so there was no need for Mr Dignan to worry;

(iv) Halikos had the 13 February 2014 letter which was "as good as money in the bank";

(v) Halikos had Mr Kildare's full support;

(vi) no-one from INPEX had said that the accommodation was not required; and

(vii) INPEX would fill 105 Mitchell;[31]

(g) similar comments made by Mr Wheeldon to Mr Dignan and Mr Weeks at meetings on 20 June and 11 July 2014;[32]

(h) further statements to similar effect by Mr Kildare to Mr Dignan and Mr Weeks on 21 July 2014;[33]

(i) a statement by Mr Kildare to Mr Dignan, in a telephone call on 10 July 2014 to the effect that INPEX was committed to H105;[34]

(j) the failure by INPEX to respond to letters from Halikos confirming that Halikos had secured the additional 225 apartments and hotel rooms;

(k) an email from Mr Wheeldon to Mr Dignan sent on 21 July 2014 in which Mr Wheeldon wrote, "The original signed letter should suffice for the first agreement .. .";[35]

(l) a statement by Okawa san to Mr Dignan and Mr Weeks at a meeting on 9 September 2014 that both companies should "continue to move towards execution of documents in good faith";[36]

(m) a request by Cornelis van der Linden, Project Deputy Director - Onshore of INPEX that "the agreed rate by which the consumer price index (CPI) increased on an annual basis under the Additional Accommodation Variation be reduced";[37]

(n) a statement by Mr Kildare to Mr Weeks in a telephone conversation on 30 October 2014, to the effect that at a meeting of key INPEX Project personnel earlier that day, INPEX's legal counsel had stated that INPEX was both legally and morally obligated to comply with the Additional Accommodation Variation;[38]

(o) statements by Mr Kildare and Mr Wheeldon to Mr Weeks from time to time in the period from 13 February 2014 to about 14 October 2014, to the effect, "Thank God we have secured the additional accommodation with Halikos".[39]

[237] Halikos claims that INPEX repudiated the Variation Agreement on 15 October 2014 or alternatively on 20 November 2014, and seeks damages for breach of contract.

[238] INPEX has denied the existence of any binding agreement of the kind pleaded.

(a) INPEX denies that the 13 February meeting occurred in the manner pleaded by Halikos. INPEX pleads that the meeting occurred in the manner outlined in evidence by Mr Kildare[40] and I have found this to be the case.[41]

(b) INPEX also pleads that there was no intention to create legally binding relations by the signing of the 13 February 2013 letter. It relies on:

(i) the fact that no representative of INPEX engaged in any conduct or made any statement to the effect that there was an immediately binding agreement made on or 13 February 2014;

(ii) the fact that no representative of INPEX was authorised to make a immediately binding agreement on that date and that Halikos knew that;

(iii) the fact that no version of a draft variation agreement was given, shown or sent by Halikos to INPEX on 13 February 2014; and

(iv) the email of 17 February 2014 from Mr Weeks to Mr Wheeldon and Mr Kildare which attached a revised draft variation, described as "a final draft" which would be finalised for signing when Mr Weeks and Mr Wheeldon returned from leave.[42]

(c) INPEX pleads further that neither Mr Wheeldon, Mr Kildare nor Mr Davies had any authority to bind INPEX to a contract of the kind pleaded by Halikos (which would last for 15 years and involve expenditure of over $300 million) other than by following a set procedure which involved such a proposed transaction:

(i) first being recommended by the holders of several senior positions within INPEX, including directors of relevant business units, and the recommendation being made in a form of document entitled "Recommendation for Award" (RFA);

(ii) then being approved by the Contracts Committee;

(iii) then being approved by senior INPEX officers, including, from time to time, Project Director, Deputy Managing Director, Managing Director and President Director for Australia;

(iv) if involving INPEX incurring expenditure of US$40m or more, then being approved by INPEX Corporation;

(v) then being approved by the other joint venture participant in the Project; and

(vi) then being entered into by a formal contractual instrument which was duly executed by one or more authorised officers of INPEX.[43]

(d) INPEX pleads that Halikos was aware that it was necessary for internal procedures to be carried out before INPEX could enter into a binding agreement and was aware of the details of all of these steps except that set out in (iv) as a result of information given to its governing minds during the negotiations for and entry into the Accommodation Agreement in 2012.[44]

[312]

[245] INPEX contended that Mr Wheeldon and Mr Kildare did not have actual or ostensible authority to enter into the alleged Variation Agreement on the basis of the following reasoning.

(a) It is not seriously contended that either of them had actual authority to bind INPEX to the Variation Agreement.

(b) The most senior people within INPEX with whom Halikos dealt were Okawa san and Sakamoto san.

(c) The evidence is that neither Okawa san nor Sakamoto san had actual authority to bind INPEX to the alleged agreement. They therefore had no authority to hold out Mr Kildare or Mr Wheeldon as having that authority.

(d) In any event, neither Okawa san nor Sakamoto san held out Mr Wheeldon or Mr Kildare as having any such authority. It was plain after the 17 January meeting that the dealings Mr Kildare and Mr Wheeldon were expected to have with Halikos fell well short of any authority to bind INPEX.

(e) Halikos knew that Mr Wheeldon and Mr Kildare did not have authority to bind INPEX to the alleged agreement. It was a feature of Halikos' conduct that whenever they sought to materially progress discussions towards concluding an agreement, an approach to Okawa san was made. Halikos' dealings with Mr Wheeldon and Mr Kildare were characterised by their informal and personal nature and typically limited to ascertaining from them what would be required in order to persuade or encourage INPEX to conclude a binding agreement.

(f) Halikos knew, from its prior dealings with INPEX that INPEX had internal processes such as a decision note/RFA, and that no individual officer would be empowered to bind INPEX or execute a written agreement without those processes being completed.

(g) Mr Wheeldon's position within INPEX was Project Manager - Construction. Mr Kildare was part of the Corporate Co-ordination division with the title General Manager, INPEX Darwin office. These are not positions which would ordinarily carry with them the authority to bind the company to a multi-million dollar contract to be performed over 15 years.

[246] I find that neither Mr Kildare, nor Mr Wheeldon had ostensible authority to enter into the pleaded agreement. First, the pleaded factual basis for the existence of ostensible authority in Mr Wheeldon and Mr Kildare has not been established. I have rejected the evidence of Mr Weeks and Mr Dignan that at the 17 January meeting in Perth:

(a) Mr Wheeldon said that he had already run the numbers and that INPEX needed the accommodation that Halikos was proposing, or that he said INPEX needs every bit of accommodation it can get for the project;

(b) Mr Kildare or Okawa san said, "I am happy," "I agree with what is proposed," "This is what INPEX wants," or, "Halikos and INPEX should move forward on this basis;"

(c) Okawa san said, "I want the 148 rooms in 105 Mitchell but also need more;"

(d) Okawa san said that Mr Wheeldon or Mr Kildare should finalise how many more rooms were needed over and above the 148 in H105 and get back to Halikos;

(e) Okawa san said, "The agreement should be for longer than 4 years so it covers construction, Commissioning and Operations. It should be for 15 years;"

(f) Okawa san said, "Chris, you are responsible for finalising the amount of accommodation we need. I then want you to finalise the agreement and get things moving."

[247] I have accepted the evidence of the INPEX witnesses that the discussion at the 17 January meeting centred around the accommodation needs of the Ichthys Project (which included workers for the head contractor JKC and sub-contractors); and that Okawa san asked Mr Wheeldon to check the Project accommodation requirements (referring to INPEX, JKC and the subcontractors) and to begin negotiating a broader accommodation services agreement with Halikos, not limited to the provision of accommodation in a single building. No such agreement was ever concluded.

[248] Second, Okawa san did not have actual authority to bind INPEX to the alleged agreement and neither did Sakamoto san. They therefore had no authority to hold out Mr Kildare or Mr Wheeldon as having that authority - even if they had purported to do so, which they did not.

[249] Third, both Mr Dignan and Mr Weeks were well aware, at least in broad outline, of the processes that needed to be followed before anyone in INPEX was authorised to bind INPEX to any agreement. They were familiar with the decision note and RFA procedures as a result of the procedures followed before the making of the original Accommodation Agreement in 2012.

[250] I have rejected the evidence of Mr Weeks and Mr Dignan that either Mr Wheeldon or Mr Kildare said that there was no need for a decision note or an RFA or that the internal processes of INPEX had already been satisfied because the agreement was proceeding by way of a variation of the Accommodation Agreement, relying on clause 3 of that agreement. It is probable that Mr Weeks and Mr Dignan initially thought that they could circumvent INPEX's ponderous processes and go straight to an agreement made with a known individual (probably Okawa san given who they were always keen to refer things to) by casting the new agreement as a variation of the existing Accommodation Agreement. However, the evidence is that they were disabused of this well before 13 February 2014. There is abundant evidence that the proposal put by Halikos was to be the subject of a decision note prepared by Mr Wheeldon; that INPEX's other internal processes needed to be adhered to; that this would take time and involve a number of senior people within INPEX and that Mr Weeks and Mr Dignan were told this, both orally and in writing a number of times. I have rejected the evidence of Mr Dignan and Mr Weeks that they believed all such references in the documents were to the need for a decision note in relation to the "broader" accommodation services agreement (or "the over and above") and did not apply to the proposal for INPEX to take 225/150 rooms over a 15 year period which was the main (indeed the only) subject matter of the draft variation agreements which Halikos kept sending to INPEX.

[251] Fourth, I reject the contention by Halikos that INPEX equipped Mr Wheeldon and Mr Kildare with the positions and titles of senior executives and armed Mr Kildare and Mr Wheeldon with the ability to send the 13 February letter. Mr Wheeldon was Project Manager - Construction. Mr Kildare was the General Manager of the Darwin office. I agree with the contention by INPEX that these are not positions which would ordinarily carry with them the authority to bind the company to a multi-million dollar contract to be performed over 15 years.

[252] No particulars have been provided about how INPEX is said to have armed Mr Davies with the ability to sign the 13 February letter. If it is nothing more than providing him with a work station and the ability to access a pen and some company letterhead, that would not suffice to equip him with ostensible authority to sign a multi-million dollar 15 year term agreement. Otherwise every junior clerk in every company would have such ostensible authority.

[253] The finding that Mr Wheeldon and Mr Kildare did not have ostensible authority to enter into the pleaded agreement means that Halikos' claim in contract must fail.

[314]

[254] Although not strictly necessary to decide given that finding, I also agree with the submission by INPEX that there was in fact no intention by those participating in the events of 13 February 2014 to enter into binding legal relations as a result of what occurred on that date. For there to be a binding contract, both parties must have had an objective intention, at the time the "agreement" was made, to enter into a contractual (that is, a legally binding) relationship. Objective intention refers to what reasonable people in the position of the parties with their knowledge of surrounding circumstances, would have understood by the relevant communications.[49]

[255] So far as what actually occurred at the meeting on 13 February 2013 is concerned, Mr Dignan and Mr Weeks gave evidence which broadly supported Halikos's pleaded version of events and Mr Kildare gave evidence that broadly supported INPEX's pleaded version of events. I have made findings of fact (above) that the meeting occurred, broadly speaking, as deposed to by Mr Kildare. I have rejected the evidence of Mr Weeks that before 13 February Mr Wheeldon had said he was happy with the version of the Variation Document sent to him on 12 February and that INPEX's legal team had signed off on the variation. I have likewise rejected the evidence of Mr Weeks and Mr Dignan that, at the meeting on 13 February, Mr Kildare said, "I agree with Chris [Wheeldon] that using a variation is the right way for us to finalise this deal. I am happy with the variation document. It is correct and is all that is required. The RFA for the first agreement [Accommodation Agreement] was fully signed off and that is all that's needed for the variation."

[256] However, even if one were to assume, in Halikos' favour, that Mr Wheeldon and Mr Kildare made statements to this effect, that would not assist Halikos' contract claim. I agree with the submission by counsel for INPEX that it is inherently unlikely that INPEX, a subsidiary of a large, multinational corporation and operator of a commercial joint venture, objectively intended to bind itself legally to a long-term contract supposedly worth (on Halikos' case) hundreds of millions of dollars by one of its employees telling Halikos that he was "happy with that agreement" and "happy with" and arranged for the signing of the 13 February letter, the contents of which letter were conspicuous for the absence of any language to suggest that a legally binding agreement had been made.

[257] The subjective belief or intention of a particular party is irrelevant, but it is equally unlikely that Mr Dignan and Mr Weeks would have entertained any belief that such statements would have had the effect of binding INPEX to a 15 year multi-million dollar agreement.[50] More to the point, reasonable people knowing the background dealings between Halikos and INPEX, and the scope and terms of the proposed agreement as set out in the Variation Document, would not have understood those statements (had they been made) as evincing an objective intention to enter into a multi-million dollar contract over a period of 15 years. This is particularly so given that the surrounding circumstances known to the parties included that Mr Wheeldon had not yet ascertained the numbers of accommodation units that would be required by the participants in the project, that it had not yet been ascertained whether JCK and its sub-contractors would be interested in participating in the proposed arrangement.

[315]

[258] In the alternative to the claim in contract, Halikos has pleaded a claim based on conventional estoppel.

[259] Halikos pleads that on or about 13 February Halikos and INPEX adopted the mutual assumption that they had entered into a binding legal relationship with each other in terms of the Additional Accommodation Variation (and each knew that the other had done so) and thereafter conducted their relationship on the basis that they would be bound by the terms of that agreement. Halikos pleads that, accordingly, INPEX is estopped from denying that INPEX and Halikos had entered into a legal relationship in the terms of the Variation Agreement and that INPEX is bound by those terms.

[260] The matters relied upon as leading to the mutual assumption were (in summary):

(a) discussions between Mr Dignan and Mr Weeks and various INPEX personnel between August 2012 and 2013 in which they discussed Halikos constructing a purpose built accommodation building for INPEX; and

(b) negotiations between Mr Dignan and Mr Weeks for Halikos and Mr Wheeldon, Mr Kildare and Okawa san to vary the Accommodation Agreement "to make that agreement a bigger, broader scale and longer-term solution to INPEX's accommodation requirements ... such that Halikos would provide additional accommodation for a longer period to meet INPEX's longer term requirements".[51]

[261] The matters relied on by Halikos as supporting the allegation that the parties conducted themselves after 13 February 2014 on the mutual assumption that they had entered into a binding agreement are those things relied upon in the contract claim as post-contractual conduct by INPEX confirming the entry into the Additional Accommodation Variation[52] as well as its own actions in terminating existing leases over parts of 105 Mitchell Street, demolishing the existing structures and building H105.[53]

[262] Halikos pleads that by the conduct that amounted to a repudiation of the Additional Accommodation Variation, INPEX departed from the mutual assumption and Halikos has suffered detriment as a result.[54]

[263] In its amended defence, INPEX denies that Halikos and INPEX adopted the pleaded mutual assumption. In doing so it relies on an email dated 17 February 2014 from Mr Weeks to Mr Wheeldon and Mr Kildare, attaching a draft Variation Document that was dated 13 February 2014 and bore an issue date of 14 February 2014 and stating "in effect, that the instrument was a final draft which was not itself sufficiently complete for agreement and execution, but would be finalised sufficient for agreement and execution later, meaning if approved and authorised by INPEX".[55] INPEX also denies the balance of the pleaded conventional estoppel claim.[56]

[264] The applicable principles are set out in Waltons Stores (Interstate) Ltd v Maher:

[317]

[265] For the same general reason that the contract claim fails, Halikos' claim based on conventional estoppel must fail. Halikos has failed to establish the factual basis of its claim. The correspondence makes it abundantly clear that the parties did not adopt a mutual assumption that they had entered into a binding agreement.

[266] I have found that:

(a) Mr Wheeldon did not represent to Mr Weeks on 24 February 2014 (or at any other time) that the Variation Document would be signed;

(b) Okawa san did not represent to Mr Dignan and Mr Weeks on 21 March 2014 (or at any other time) that an agreement had been reached, or that he approved of the terms of the Variation Document;

(c) Mr Kildare did not state, at a dinner on 24 March 2014, that Halikos had been appointed to provide accommodation services to INPEX for 15 years; that Halikos was constructing H105 as a purpose-built building for INPEX for that purpose; that INPEX and Halikos had entered into an agreement; that INPEX had given Halikos a letter to secure the apartments and it was now up to Halikos to get the apartments;

(d) the draft media releases to which Mr Kildare contributed were intended for future use after an Accommodation Services Agreement had been finalized and this was made clear to Mr Weeks and Mr Dignan;

(e) neither Mr Kildare nor Mr Wheeldon made statements to the effect that Halikos could rely on the letter of 13 February in lieu of a signed agreement;

(f) neither Mr Wheeldon, Mr Kildare nor Okawa san represented to Mr Weeks or Mr Dignan that the "internal procedures" within INPEX were a mere formality, that there was already a binding agreement in place; that INPEX Operations was "on board" so there was no need for Mr Dignan to worry; that INPEX was committed to H105; or that the parties should "continue to move towards execution of documents in good faith";

(g) nor was there a request by Cornelis van der Linden, Project Deputy Director - Onshore of INPEX that "the agreed rate by which the consumer price index (CPI) increased on an annual basis under the Additional Accommodation Variation be reduced"; rather he told Mr Weeks and Mr Dignan that no-one would agree to a 6% per annum increase.

[321]

[271] Finally Halikos pleads a claim based on misleading and deceptive conduct on behalf of the second plaintiff based on the same alleged conduct (discussions, telephone calls, meetings and correspondence). This too is denied by INPEX.

[272] The essence of the claim by the second plaintiff (and the related claims of the third and fourth plaintiffs) is an allegation that Mr Dignan and Mr Weeks made known to INPEX that it was proposing to build H105 as a purpose built building for INPEX and that it would only go ahead with the development if INPEX made a binding commitment (the precise nature of which is, on the pleadings and the evidence unclear). Halikos pleads that, by words and conduct, INPEX represented that it had made a such a commitment (either to "take H105" or in terms of the pleaded Additional Accommodation Variation) and that in reliance on those representations and conduct by INPEX, Halikos terminated existing leases, closed down an existing business, demolished the existing buildings at 105 Mitchell Street and constructed H105and that the various plaintiffs have suffered detriment as a result.

[273] I do not accept that Mr Dignan and Mr Halikos had, subjectively, decided that they would only go ahead with the development of H105 if they got some kind of binding pre-commitment from INPEX, but even if they did have such a subjective intention, they did not communicate it to INPEX. In the presentation that Mr Dignan and Mr Weeks made to Okawa san and Sakamoto san on 17 January 2014 they unequivocally stated that they were going ahead with the development. They made similar representations in other documents referred to above.

[274] Nor do I accept that INPEX made any representations by way of oral representations, correspondence or conduct that it would lease all of the rooms in H105 or that it considered itself bound by any agreement to take 225 or 150 rooms and apartments as set out in the Variation Document. I do not accept that INPEX personnel made the oral representations pleaded to the effect that INPEX would take H105 or was committed to H105, and Halikos cannot point to any written representations to that effect.

[275] The meeting of 17 January 2014 forms a key plank in this claim too. The findings of fact in relation to this meeting set out at [61] and [62] above, and summarised in connection with the dismissal of Halikos' claim in contract at [245] and [246] above, are likewise fatal to the misleading and deceptive conduct claim.

[276] As I have found that each of Halikos' claims must fail, there is no need for me to consider the issues raised in the pleading of damages.

At a glance

Court

Decision date

Before

Source

Judgment (378 paragraphs)

Parties

Cases Cited (5)