Jarraman Arts Aboriginal Corporation v Tourism Australia

NORTHERN TERRITORY DISTRICT REGISTRY NTD 15 OF 2004

AND: ABORIGINAL & TORRES STRAIT ISLANDER COMMISSION

THE COURT DECLARES THAT: 1. The document signed on 12 April 2005 by Shirley Anne Collins for herself and on behalf of the applicant and on behalf of Indigenous Business Australia as the statutory successor to the rights and liabilities of the respondent under the Aboriginal & Torres Strait Islander Commission Amendment Act 2005 (Cth) (the IBA Agreement) is binding and enforceable as between the parties to it. AND THE COURT ORDERS THAT 2. In accordance with the IBA Agreement: (a) Shirley Anne Collins do within seven days take all steps necessary to authorise the payment of the sum of $130,000 from moneys presently held in Westpac Banking Corporation deposit account no 035-302 27-4680 in the name of Mrs Shirley Anne Collins to Indigenous Business Australia; (b) Shirley Anne Collins and the applicant do within seven days of the receipt of the moneys ordered to be paid to them by Tourism Australia, Deloitte Touche Tohmatsu and Auslink Pty Ltd pursuant to Order 2 of the orders made this day in Federal Court action NTD 11 of 2004 (and being payments agreed to be made by them to the applicant pursuant to a document dated 12 April 2005 and being Heads of Agreement between them and the applicant and Shirley Anne Collins on the one part and Tourism Australia, Indigenous Business Australia, Deloitte Touche Tohmatsu and Auslink Pty Ltd on the other part) pay to Indigenous Business Australia from the said moneys the sum of $25,000; (c) within seven days of the receipt by Indigenous Business Australia of both the said sums of $130,000 and $25,000, Indigenous Business Australia do (i) present to the applicant a notice of discontinuance of Supreme Court of the Northern Territory Action No 166 of 2003 drawn so that the claim and the counterclaim in that action be discontinued with no order as to costs (ii) present to Shirley Anne Collins a notice of discontinuance of Supreme Court of the Northern Territory Action No 101 of 2004 drawn so that the claim in that action be discontinued with no order as to costs (d) within seven days of the receipt by the applicant and Shirley Anne Collins of the notices of discontinuance referred to in Order 2(c)(i) and (ii) hereof, the applicant and Shirley Anne Collins do respectively sign those notices of discontinuance and do return them to Indigenous Business Australia; (e) forthwith upon the receipt of the said notices of discontinuance duly signed by the applicant and Shirley Anne Collins respectively, Indigenous Business Australia do sign the said notices of discontinuance and do file the same in the said Supreme Court actions and do serve the same upon the applicant and upon Shirley Anne Collins. 3. Upon the discontinuance of the said Supreme Court actions in accordance with Order 2 hereof, the applicant have leave to and do within seven days discontinue this action, such discontinuance being upon the basis that there be no costs of this action save as ordered in Order 4 hereof. 4. The applicant pay to Indigenous Business Australia costs of and incidental to its notice of motion dated 29 June 2005 and its costs of and incidental to the determination of the validity and enforceability of the IBA Agreement. 5. Upon payment by the applicant and by Shirley Anne Collins of the sums ordered to be paid by Order 2(a) and (b) hereof, and upon the discontinuance of the said Supreme Court actions in accordance with Order 2(c), (d) and (e) hereof and of this action in accordance with Order 3 hereof, Indigenous Business Australia do forthwith by notice in writing release and discharge the applicant from any further indebtedness under the loan agreement between the applicant and the respondent dated 30 August 1999 and under the bill of sale granted by the applicant to the respondent to secure its indebtedness and do release and discharge Shirley Anne Collins from any further indebtedness to Indigenous Business Australia under the Deed of Charge dated 2 February 2004 but limited to and only in respect of the indebtedness of the applicant to Indigenous Business Australia to the intent that any indebtedness of Shirley Anne Collins to Indigenous Business Australia under the said Deed of Charge arising by reason of any indebtedness of Jimara Pty Ltd to Indigenous Business Australia remains unaffected thereby. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

NORTHERN TERRITORY DISTRICT REGISTRY NTD 11 OF 2004

AND: TOURISM AUSTRALIA (AS SUCCESSOR IN TITLE TO THE AUSTRALIAN TOURIST COMMISSION)

NORTHERN TERRITORY DISTRICT REGISTRY NTD 15 OF 2004

AND: ABORIGINAL & TORRES STRAIT ISLANDER COMMISSION

introduction 1 Jarraman Arts Aboriginal Corporation (Jarraman) was incorporated under the Aboriginal Councils & Associations Act 1976 (Cth) (the ACA Act) on 11 November 1994. Its management is under the control of a governing committee comprising five members elected at the annual general meeting. The governing committee includes a chairperson. Shirley Anne Collins (Mrs Collins) has been the chairperson of Jarraman for at least a significant period of time subsequent to its incorporation. The precise periods when she has been chairperson are not disclosed in the evidence presently before the Court. 2 In early 1999, Jarraman was approached by Tourism Australia to consider participating in a touring exhibition in the United States of America arranged by the Bank of America and themed around Australia and the Sydney Olympics (the Downunder Tour) to promote and sell Aboriginal culture and art. Jarraman decided to participate in the Downunder Tour provided it could secure funding to do so. On 13 August 1999 it submitted an application to the Aboriginal and Torres Strait Islander Commission (ATSIC) for funding to participate in the Downunder Tour. That application was made under the hand of Mrs Collins as chairperson of Jarraman. 3 Jarraman was notified of ATSIC's decision to grant the loan, and of the security it required, by letter dated 16 August 1999. The required security for the loan included a third registered mortgage over a property owned by Mrs Collins. 4 On 30 August 1999, a loan agreement was entered into between ATSIC and Jarraman by which ATSIC agreed to lend to Jarraman $160,000 for the purpose of funding Jarraman's participation in the Downunder Tour. The loan was upon terms as to repayment which are not contentious, the first of which was a monthly instalment payable on 30 November 1999. Repayment was required over a 12 month period. The loan was to be secured by a Bill of Sale over the assets and business of Jarraman, and by the grant of a third registered mortgage over a property at 10 Princeton Place, Durack in the Northern Territory (the property). The property was held in fee simple in the name of Mrs Collins, under Certificate of Title Volume 452 Folio 088. The property was already subject to two registered mortgages, the first being granted by Mrs Collins to Westpac Banking Corporation (Westpac) to secure advances made by it and the second being granted by Mrs Collins to ATSIC to secure a loan in the sum of $115,000 made by ATSIC to Jimara Pty Ltd (Jimara) in March 1991. At present there is an amount outstanding owing by Jimara to Indigenous Business Australia under the Jimara loan in the order of about $57,000. The Bill of Sale and the third Mortgage by Mrs Collins to ATSIC to secure the borrowing by Jarraman from ATSIC (the mortgage) were duly granted. The mortgage was registered on 2 September 1999. 5 Jarraman then in September 1999 commenced participation in the Downunder Tour. It did not do so for very long. It withdrew from the tour in early October 1999, well prior to its completion. It did not repay the loan to ATSIC in accordance with its terms. That has led ultimately to four court proceedings, including the two proceedings presently before the Court. To explain how they came about, it is necessary again to refer in a little detail to the history. 6 Before doing so, it is necessary to refer to the status of ATSIC. It was established under the Aboriginal & Torres Strait Islander Commission Act 1989 (Cth) (the ATSIC Act). By the Aboriginal & Torres Strait Islander Commission Amendment Act 2005 (Cth) (the amending enactment), the ATSIC Act was renamed the Aboriginal & Torres Strait Islander Act 2005 and ATSIC was abolished. Indigenous Business Australia (IBA) is referred to in s 145 of the Act, and is the statutory successor of ATSIC by reason of items 192 and 195 of Sch 1 to the amending enactment and can exercise the rights and powers formerly enjoyed by ATSIC and to undertake its liabilities, as agent of the Commonwealth and pursuant to a delegation granted by the Minister. In respect of matters occurring after the amending enactment came into force, I shall refer to IBA rather than to ATSIC. 7 On 19 May 2000 ATSIC served upon Jarraman a notice pursuant to s 20 of the ATSIC Act requesting Jarraman to immediately repay the principal and accrued interest under the loan agreement. At that time the total was $168,108. Jarraman did not make the repayment demanded. 8 Matters then appear to have rested for some time. They were activated by ATSIC instituting proceedings against Jarraman and Mrs Collins in Northern Territory Supreme Court Action 166 of 2003 on 29 October 2003 (the first Supreme Court action). The first Supreme Court action sought from Jarraman payment of all monies due and payable under the loan agreement dated 30 August 1999 (said to be $229,510 at 26 June 2003 with interest continuing to accrue) and pursuant to the notice given on 19 May 2000. It also claimed that Mrs Collins was liable for the same amount by virtue of the mortgage. 9 The next event appears to have been prompted by the proposed sale of the property. In the normal course the three mortgages over the property would have been discharged at the time of settlement of the sale by payment of the amounts outstanding as secured under them. On 6 February 2004 ATSIC agreed to allow the discharge of the second and third mortgages over the property on the basis that Mrs Collins then repaid to ATSIC the sum of $30,000 in reduction of the indebtedness of Jarraman under its loan agreement of 30 August 1999 and that she granted a Deed of Charge over the net proceeds of the sale of the property securing the ongoing indebtedness of both Jarraman and Jimara to be held in a term deposit account in her name with a bank. Mrs Collins granted the Deed of Charge to ATSIC as required by it, and paid ATSIC the sum of $30,000. The net proceeds of the sale (which took place on 9 February 2004) totalled $146,692. They were deposited in a term deposit account in the name of Mrs Collins with Westpac on 9 February 2004. They are subject to the charge granted by the Deed of Charge of 6 February 2004 to secure the payment to ATSIC in respect of the outstanding indebtedness of Jimara and of Jarraman. 10 Once again, matters then appear to have fallen into a passive state until mid 2004. 11 On 28 June 2004 ATSIC served a creditor's statutory demand dated 25 June 2004 upon Jarraman pursuant to ss 63 and 67 of the ACA Act. It demanded repayment of the amount then outstanding under the Jarraman loan to ATSIC. On the same day ATSIC served upon Mrs Collins a notice of demand pursuant to cl 2.1 of the Deed of Charge dated 6 February 2004 also demanding the sum of $217,491, being the then indebtedness of Jarraman to ATSIC, and which by reason of cl 2.1 of the Deed of Charge Mrs Collins has covenanted to pay to ATSIC. Neither of the demands was satisfied. 12 On 30 June 2004 Jarraman and Mrs Collins commenced Federal Court Action NTD 11 of 2004 initially only against Tourism Australia and against ATSIC. It concerned the circumstances in which Jarraman came to participate in the Downunder Tour and then withdrew from it. It is not necessary at present to detail the nature of the allegations. In general terms, it was asserted that Tourism Australia and ATSIC had misrepresented to Jarraman and to Mrs Collins certain matters concerning the Downunder Tour which induced them to participate in the Downunder Tour and induced Jarraman to enter into the loan agreement with ATSIC dated 30 August 1999, and which induced Mrs Collins grant the mortgage over the property to secure the borrowing of ATSIC. The legality of the mortgage was also raised by reason of s 48 of the ACA Act. I shall call that the first Federal Court action. 13 The two notices of demand served on 28 June 2004 also led to the instigation of further proceedings. On 21 July 2004 Jarraman commenced proceedings in Federal Court matter NTD 15 of 2004 (the second Federal Court action) in which it sought to set aside the creditor's statutory demand for $217,491 served upon it on 28 June 2004. The supporting affidavit was that of Mrs Collins. She indicated that the statutory demand was sought to be set aside because Jarraman had offsetting claims to an amount in excess of Jarraman's indebtedness to ATSIC. The offsetting claims were those specified in the application and statement of claim in the first Federal Court action. The second Federal Court action was subsequently adjourned to a date to be fixed, to the intent that its outcome would abide the determination in the first Federal Court action. On 23 May 2005 the Court I directed that proceedings in the first Federal Court action and in the second Federal Court action be heard together. The circumstances in which that came to be an appropriate order are set out below when addressing the events of April 2005. I shall hereafter refer to the first Federal Court action and the second Federal Court action together as 'the current proceedings'. 14 The fourth proceeding commenced on 22 July 2004 was in Northern Territory Supreme Court Action 101 of 2004 (the second Supreme Court action). It followed Mrs Collins' failure to make payment to ATSIC in accordance with the notice of demand served upon her on 28 June 2004. It sought the determination of her indebtedness and repayment of her indebtedness in respect of the Jarraman loan under the Deed of Charge. The solicitors for Mrs Collins and ATSIC also agreed for that matter not to be progressed, at least for the time being, pending the hearing and determination of the first Federal Court action. It was to be the vehicle for determining whether Jarraman and Mrs Collins had claims which offset the indebtedness of Jarraman under its loan agreement with ATSIC and as secured by Mrs Collins initially under the mortgage and later under the Deed of Charge. 15 The only other procedural events which need to be noted are that on 14 September 2004 Jarraman and Mrs Collins filed their defence and a counterclaim in the first Supreme Court action. In essence, they disputed the indebtedness alleged against each of them because each of them had a counterclaim against ATSIC in effect on the same basis as they were pursuing relief in the first Federal Court action. Subsequently, on 16 September 2004 ATSIC discontinued its claim against Mrs Collins in the first Supreme Court action. That action has remained an action against Jarraman to recover the indebtedness of Jarraman under the loan agreement. The second Supreme Court action has remained an action by ATSIC against Mrs Collins to recover the amount of the indebtedness of Jarraman to ATSIC as undertaken by Mrs Collins, by cl 2.1 of the Deed of Charge of 6 February 2004. 16 In the meantime, directions were given to secure the hearing and determination of the issues arising in the first Federal Court action. There were various procedural steps taken, including challenges to the adequacy of the pleadings and applications for orders for security for costs. On the application of Jarraman and Mrs Collins, on 17 December 2004 orders were made joining Deloitte Touche Tohmatsu (Deloittes) and Auslink Pty Ltd (Auslink) as third and fourth respondents to the first Federal Court action. Deloittes and Auslink were alleged to have also engaged in misleading and deceptive conduct inducing Jarraman and Mrs Collins to participate in the Downunder Tour.

THE MEDIATION 17 On 2 February 2005 an order was made that the issues between Tourism Australia and Jarraman and Mrs Collins arising in the first Federal Court action be referred to a Registrar for mediation. At that time the only other respondent party was ATSIC and it had in its favour a decision that it was entitled to security for costs so its ongoing role as a party was unclear. That decision resulted in an order on 25 February 2005 that Jarraman and Mrs Collins should pay to ATSIC $30,000 security for its costs in the first Federal Court action, and their claims against ATSIC were stayed to 20 May 2005 and then to be dismissed if the security for costs was not paid. On 9 March 2005 Jarraman and Mrs Collins discontinued the first Federal Court action against ATSIC. That left the first Federal Court action as a claim against Tourism Australia, Deloittes and Auslink (each of which had by then been joined as respondents). By direction given on 11 March 2005, the issues involving Deloittes and Auslink were also be referred to mediation. On 18 March 2005 the Court also directed that ATSIC have liberty to participate in the mediation although the claims against it in the first Federal Court action had been discontinued. Subsequently, as noted, on 23 May 2005 the Court directed that the first Federal Court action and the second Federal Court action be heard and proceed together. 18 Some correspondence was entered into between solicitors for the applicants and solicitors for ATSIC concerning ATSIC's participation in the mediation. ATSIC through its solicitors indicated a preparedness to participate in the mediation. The correspondence in evidence (clearly not all correspondence relating to the issue is in evidence) indicates that ATSIC appreciated that its participation would probably be necessary in the event of the mediation being successful. The issues between Jarraman and Mrs Collins on the one hand, and Tourism Australia (and Deloittes and Auslink) on the other, could more likely be resolved, with some certainty as to the extent of Jarraman's or Mrs Collins' indebtedness to ATSIC, and without the risk of ATSIC (if the counterclaim against it in the first Supreme Court action were continued) joining Tourism Australia as a third party in those proceedings. Its solicitors indicated that ATSIC's preparedness to be involved in the mediation was not to be taken as a signal that it would accept less than the indebtedness under the Jarraman loan agreement and the Deed of Charge, although it was prepared 'to negotiate in good faith'. Its letter of 9 March 2005 through its solicitors said: '… any involvement of ATSIC in the proposed mediation would therefore only be only as a party that is owed money by your clients and not as a party subject to any claim.' That attitude is understandable. 19 Mrs Collins and Jarraman assert that she understood that the proposed mediation would involve all issues between the parties in any of the Federal Court or Supreme Court actions. Mrs Collins seems to have assumed that the participation of ATSIC (by then IBA) in the proposed mediation was on the basis that the amount of the indebtedness of Jarraman and of Mrs Collins to ATSIC could not be the subject of discussion or consideration. As ATSIC's correspondence made clear, what it did not propose to participate in at any mediation was discussion as to any putative claim (now discontinued in the first Federal Court action) made by Jarraman or Mrs Collins against ATSIC. The solicitors for Jarraman and Mrs Collins also raised in correspondence on 10 March 2005 issues as to 'the integrity of the loan documents', and the seizure, possession and disbursal of stock by ATSIC. It was asserted those matters were integral parts of the first Supreme Court action and part of the defence in that matter. In a letter on the following day, 11 March 2005, reference was made by the applicants to a 'set off in respect of … stock' which was 'the essence' of the Supreme Court action. It was not. The defence and counterclaim in the first Supreme Court Action does not refer to that issue. It refers to the same matters which were addressed in the statement of claim in the first Federal Court action. (Nothing turns on whether those matters were then pleaded, as asserted). 20 The mediation agreement signed by the parties on 12 April 2005 is generally in conventional terms. It notes by way of background that the parties (being defined as the parties to the first Federal Court action) and the mediator have invited IBA as statutory successor to ATSIC to attend the mediation, and that IBA has agreed to attend the mediation, subject to the conditions set out in Sch 2 to the mediation agreement in order to assist the parties in achieving a resolution of the dispute. Schedule 2 records that IBA is to bear its own costs of participating in the mediation and: 'Neither Jarraman nor Mrs Collins will raise against IBA, any claim previously pleaded and discontinued against its predecessor ATSIC in Federal Court proceedings NTD 11 of 2004 other than allegations set out in the current Supreme Court action between ATSIC and Jarraman No 166 of 2003 insofar as those allegations relate to the enforcement of the bill of sale 99/29 dated 3 August 1999.'

21 The mediation commenced at about 10 am on 12 April 2005. The parties were represented or in attendance as follows:

· Jarraman and Mrs Collins by Mr A Philp SC and Mr Wrenn of counsel and Ms Tran, a solicitor from the solicitors on the record for Jarraman and Mrs Collins, and Mr Barry Percival, an accountant advising Mrs Collins.

· IBA by Mr M Brady of counsel and Mr J Lee from the solicitors on the record for IBA, together with Mr Starkey, Manager, Compliance and Support Unit, IBA, and two other officers of IBA, Mr Perrett and Ms Charlton.

· Tourism Australia by Mr M Doepel a solicitor from the solicitors on the record for Tourism Australia and by the claims manager of its insurer, Mr Johnston.

· Auslink Pty Ltd by Mr G James, a solicitor from its solicitors on the record and its managing director, Mr R Tormey (in each instance by telephone).

· Deloittes by Mr P Smith, solicitor from its solicitors on the record and Ms V Sweetman, one of its in-house counsel.

THE OUTCOME OF THE MEDIATION 22 Settlement negotiations took place principally between legal representatives for the parties. In the course of the mediation agreement was reached. The terms of settlement were reduced into writing in separate documents. One of the documents reads as follows:

'Heads of agreement made 12/4/05 1. Payment within 28 days of today (12/4/05) (a) the first respondent will pay the applicants $55,000; (b) the third respondent will pay the applicants $ ; (c) the 4th respondent will pay the applicants $15,000. 2. Mutual releases between IBA, the respondents and the applicants. 3. Settlement on a "no admissions" basis. 4. Each party bears its own costs of the mediation and preparation and negotiation of a settlement deed. 5. The Federal Court proceedings be discontinued within seven days of payment per para 1 above with no order as to costs. 6. The settlement to proceed simultaneously with the settlement between IBA and the applicants. 7. The settlement as between Deloitte and the applicants be kept confidential.' By reason of cl 7, Deloittes requested I leave blank the figure in cl 1(b). That document (the All Parties Agreement) was signed by Mrs Collins on behalf of Jarraman and herself, and by the solicitors for Tourism Australia and Deloittes. The All Parties Agreement was read out to and accepted by Auslink. 23 The solicitor who wrote out the All Parties Agreement, Mr Smith, then confirmed with Mr Lee for IBA that IBA had also settled the issues arising between it and Jarraman and Mrs Collins. He then provided a copy of the All Parties Agreement to Mr Lee who also signed it on behalf of IBA. The terms of settlement between IBA and Jarraman and Mrs Collins were not at that time disclosed to Auslink, Deloittes or Tourism Australia. At the completion of that process, the All Parties Agreement was given to Ms Tran, to have Jarraman and Mrs Collins execute it. Shortly thereafter Ms Tran returned with the All Parties Agreement signed by Mrs Collins on her own behalf and on behalf of Jarraman. 24 On the following day, 13 April 2005, Mr Smith circulated a copy of the All Parties Agreement to the legal representatives of the parties by e-mail. The e-mail read: 'Attached is a copy of the heads of agreement made yesterday. Minter Ellison will be circulating a draft settlement agreement to document the terms of settlement.'

The e-mail provoked no adverse response. Subsequently, Mr Doepel for Tourism Australia executed a formal settlement deed on 20 May 2005 to give effect to the All Parties Agreement. It has not otherwise been executed. Jarraman and Mrs Collins have declined to sign it. It formalises the terms of the settlement as recorded in the All Parties Agreement. It has not been suggested by Mr Percival (who appeared on behalf of Jarraman and Mrs Collins) that the formal documents adds any significant clauses which had not been agreed or changes any terms of the All Parties Agreement in any material way. 25 The second document generated as a result of the mediation on 12 April 2005 reads as follows: '1. Collins do all things necessary to allow the payment of $130,000 from the Westpac Deposit Account to IBA within 28 days. 2. The balance of funds in the deposit account be held to secure the loan to Jimara pursuant to the terms of the Deed dated 6 February 2004. 3. Jarraman and Collins pay the sum of $25,000 to IBA within 7 days of receipt of settlement monies from the Respondents to Federal Court Action NTD 11 of 2004. 4. The settlement monies from the respondents be held in the trust account of the solicitors for the applicants pending payment of the sum referred to in paragraph 3 to IBA. 5. Discharge and releases from each party in respect of matters arising from the loan agreement, bill of sale and all other matters associated with the loan from ATSIC to Jarraman. 6. Discharge and release from Jarraman and Collins in respect of the Deed dated 6 February 2004. 7. Discontinue both Supreme Court actions and further Federal Court action within 7 days after payment of all monies referred to herein with each party to bear their own costs of each action. 8. IBA's rights under the deed of 6 February 2004 so far as that relates to the loan to Jimara are at all times reserved, notwithstanding the other provisions of this agreement. 9. This agreement is conditional upon the agreement between the applicants and the respondents in the Federal Court action NTD.11/2004. 10. The terms of this deed are in full and final settlement of all costs orders made in NTD.11/04.' That document (the IBA Agreement) is signed by Mrs Collins on behalf of Jarraman and herself, and signed by counsel for IBA on its behalf. 26 Subsequently, a deed incorporating the IBA Agreement was prepared, but Jarraman and Mrs Collins have refused to execute it.

the present issues 27 In the current proceedings, I have directed that there first be determined whether there are binding agreements resolving issues between the parties by reason of the All Parties Agreement and the IBA Agreement. The trial of those issues is reinforced by various notices of motion. In both the first Federal Court action and the second Federal Court action Jarraman and Mrs Collins have applied by motion for orders for a declaration that Mrs Collins is entitled absolutely to the proceeds of the term deposit account held in her name by the Westpac pursuant to O 25 r 6 or, alternatively, O 29 r 4 of the Federal Court Rules (the Rules). Tourism Australia has applied by motion in the first Federal Court action for orders (upon its undertaking to pay the agreed sum of $55,000) dismissing or alternatively permanently staying the claims against it on the ground that there is no reasonable action disclosed in the proceedings, and that they are an abuse of process. The grounds upon which it seeks those orders are that on 12 April 2005 Jarraman and Mrs Collins agreed, inter alia, with Tourism Australia that it would pay to them within 28 days $55,000 and that they would then provide Tourism Australia with a release and discontinuance of the proceedings, based upon the All Parties Agreement. It is also asserted that the All Parties Agreement was subsequently affirmed by Jarraman and Mrs Collins through their solicitor Ms Tran, in correspondence between representatives of the parties to the mediation. Consequently it is asserted that there is an accord and satisfaction which should lead to the dismissal of the proceedings. There is also a motion by Deloittes in the first Federal Court action seeking that the proceedings be dismissed against them pursuant to O 20 r 2, or alternatively O 11 r 16 of the Rules, again based (inter alia) on the All Parties Agreement. IBA has applied for a stay of the second Federal Court action to give effect to the All Parties Agreement and the IBA Agreement and for directions that those agreements be put into effect. 28 Following 12 April 2005, by facsimile from Ms Tran as solicitor for Jarraman and Mrs Collins to ATSIC on 13 April 2005, she said on behalf of Jarraman and Mrs Collins: '… I look forward to receiving the draft settlement agreements in due course. Mr Lee, upon my review of our settlement agreement, I would like to draw your attention to paragraph one and suggest that the timeframe of 28 days be alter [sic] to read "within seven days of receipt of settlement monies from the Respondents to the Federal Court Action" to ensure that it complies with paragraphs three and nine of our agreement.' By facsimile of the same date Ms Tran communicated to solicitors for Tourism Australia in the following terms:

'Would you please make the cheque payable to Conroy & Associates Trust Account. This will ensure that our clients comply with their settlement agreement with IBA.' On 5 May 2005, Conroy & Associates by facsimile communicated to solicitors for each of the other parties and IBA in the following terms:

'We refer to the above matter and to the heads of agreement which was executed at the mediation held on 12 April 2005. We note that in accordance with the heads of agreement settlement between the applicants and the three respondents to the Federal Court action NTD 11 of 2004 is to occur on Tuesday 10 May 2005. The settlement between the applicants and Indigenous Business Australia will be effected simultaneously once payment has been received from the respondents. We are instructed to request an extension of settlement for a period of 14 days until Tuesday 24 May 2005.' On 10 May 2005 Jarraman by (letter sent by facsimile) under the hand of Mrs Collins wrote to the solicitors for IBA, copied to solicitors for the other parties. She indicated that Jarraman and Mrs Collins were prepared to sign the proposed deed presented in respect of all but the IBA transaction. She said:

'I have advised Conroy & associates that the agreement would be signed with the first three respondents even though the amount of compensation was not adequate for loss suffered. However, I understood their offer on that day and accepted the settlement.' Subsequently in that facsimile she indicated that she regarded the agreement 'forced upon me by AGS representing ATSIC' as invalid and she rejected 'this part of the agreement'. 29 Indeed, the position of the applicants at the hearing of the current proceedings was that they remain prepared to give effect to the All Parties Agreement reached with Tourism Australia, Deloittes and Auslink. They are not prepared to acknowledge that any settlement has been effected with IBA. If the Court were to regard the IBA Agreement and the All Parties Agreement as intimately bound together, Jarraman and Mrs Collins then claim that neither document gives rise to enforceable obligations on their part. 30 The only evidence apart from the historical and documentary material referred to in support of Jarraman's position is contained in the two affidavits of Mrs Collins sworn on 21 and 22 June 2005. Those affidavits were received, although in part they contained argumentative as distinct from factual assertions, other than the sections referring expressly or by implication to the course of the mediation: see s 53B Federal Court of Australia Act 1976 (Cth). To the extent to which those affidavits contained argument or submissions, they were treated as having no more than that status. 31 In essence, Mrs Collins asserts that the settlement between Jarraman and herself and IBA on 12 April 2004 should not be allowed to stand, or is unconscionable, because it gives effect to a liability which she undertook by the mortgage in respect of Jarraman's loan from ATSIC and then, subsequently under the Deed of Charge of 6 February 2004, in the face of s 48 of the ACA Act. She suggests that ATSIC concealed from her that s 48 precluded her from incurring any liability in respect of the debts of Jarraman. In her second affidavit, she asserts that the formal deeds of settlement following the All Parties Agreement and the IBA Agreement, when presented, contained terms which were not in terms of those two handwritten documents. When asked about this point in the course of the hearing, her solicitor did not identify any such terms. She further complains that, as a result of the settlement at mediation, she undertook a liability because IBA then obtained relief against her personally when she was no longer a party to the first Supreme Court action. She also raises the issue as to the jurisdiction of the Court to enforce an alleged compromise insofar as it relates to Jarraman, herself and IBA. 32 Shortly prior to the hearing Jarraman and Mrs Collins filed three documents, namely a Statement of Position, a Supplementary Statement of Position, and a Further Supplementary Statement of Position. Those documents were intended to set out the grounds upon which Jarraman and Mrs Collins contended that they were not bound by the IBA Agreement, and if the All Parties Agreement is tied to and is not severable from the IBA Agreement, why they also were not bound by the All Parties Agreement. It is not necessary to refer to the content of those documents in detail other than in one respect. I do so only to indicate it has not been overlooked. It is alleged that on about 4 August 2000 stock held by Jarraman was seized by ATSIC pursuant to the Bill of Sale and subsequently returned to its suppliers by ATSIC, without a proper accounting. There is no evidence on this hearing to support that allegation. Nor, as I have noted, was it raised in the statement of claim in the first Federal Court action, or in the defence and counterclaim in the first Supreme Court action. The reason it is not necessary to refer to those documents in detail is because the position of Jarraman and Mrs Collins was refined at the hearing of the current proceedings to three points, the first of which was described as their principal contention. They were: (1) Mrs Collins could not lawfully undertake, or be required to undertake, the liability of Jarraman to ATSIC under its loan agreement of 30 August 1999 either under the mortgage or under the Deed of Charge of 6 February 2004 by reason of s 48 of the ACA Act, so that the IBA Agreement which was premised upon the legality of her having such a liability was itself illegal and should not be enforced. (2) The IBA Agreement was reached by unconscionable conduct on the part of IBA leading up to the mediation on 12 April 2004 because it was not prepared to discuss any offsetting claims that Jarraman or Mrs Collins may have had against IBA arising out of: (i) the disposal of Jarraman's stock by ATSIC; and/or (ii) the imposition of joint liability of Mrs Collins and Jarraman in respect of Jarraman's debt to IBA. It was submitted that IBA was prepared to negotiate the amount it would accept in settlement of its debt, but was not prepared to negotiate whether Jarraman or Mrs Collins had a valid claim against it. (3) The IBA Agreement, and alternatively the IBA Agreement and the All Parties Agreement, were not intended to give rise to mutual contractual obligations, but simply to note terms to be incorporated into a document or documents which only upon execution would give rise to enforceable contractual obligations, and alternatively were so vague and imprecise as to be unenforceable.

(1) The enforceability of the mortgage and the Deed of Charge 33 Section 48 of the ACA Act provides: '(1) A person who is or has been a member of an Incorporated Aboriginal Association in respect of which the application for incorporation stated that the members of the Association were not to be liable to contribute towards the payment of the debts and liabilities of the Association is not liable so to contribute.' (2) A person who is or has been a member of an Incorporated Aboriginal Association in respect of which the application for incorporation stated that the members of the Association were to be liable, to the extent specified in the application, to contribute towards the payment of the debts and liabilities of the Association is liable so to contribute in respect of debts and liabilities incurred after the incorporation of the Association and before the person ceases or ceased to be a member.' 34 The contention is that s 48 confers a general prohibition on any person or entity contracting with another person who is a member of an Incorporated Aboriginal Association under the ACA Act, so that other person may be liable to contribute to the payment of the debts or liabilities of the Association. It is said to immunise Mrs Collins from any liability she incurred under the mortgage granted to secure Jarraman's borrowing from ATSIC under the loan agreement of 30 August 1999, and subsequently under the Deed of Charge of 6 February 2004. Consequently, it is said also to result either in the IBA Agreement itself being unlawful or to demonstrate that IBA is acting unconscionably by seeking to enforce the IBA Agreement when IBA was not entitled to assert that Mrs Collins was in fact indebted to it under the mortgage and then under the Deed of Charge. 35 Counsel for the parties agreed that there are no decisions addressing the purpose and operation of s 48 of the ACA. Reference was made on behalf of Jarraman and Mrs Collins to the remarks of Mason J in Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 at 423. His Honour there said that it is a matter of construing the statute, by reference to its language and its scope and purpose, to discern the legislative intention as to the nature and effect of its particular terms. 36 The ACA Act provided for the establishment of two distinct forms of corporate entity. The first is an Aboriginal Council, based on a particular geographic area and intended to undertake a variety of functions on behalf of the Aboriginal community of that area. The second is an Aboriginal Association (such as Jarraman), formed by a group of Aboriginals for any social or economic purpose, including the conduct of a business enterprise. As is clear from the general provisions of the ACA Act, the forms of incorporation provided for are intended to be less complex than the normal forms of incorporation, principally under the Corporations Act 2001 (Cth) (the Corporations Act) or its antecedents. They also provide a structure which is capable of being more responsive to, or accommodating of, the nature and structure of Aboriginal traditions and customs. The parties were agreed on those matters, so it is not necessary to refer in detail to the provisions of the ACA Act to indicate why that is so. What is in issue is what s 48 effects in that context. 37 Part IV (ss 43-67) of the ACA Act deals with Incorporated Aboriginal associations. Section 43 specifies the requirements for incorporation. They include that the proposed association identify its objects, its proposed committee, and its proposed rules. The proposed rules must provide for particular matters of internal governance. Upon incorporation, the rules operate as a contract between the association and its members and as between its members: s 47. The members of the governing committee of an Incorporated Aboriginal Association must act honestly and diligently in performing their powers and functions (s 49C); they must disclose pecuniary interests in certain circumstances (s 49D); and they must vacate office upon bankruptcy (s 49E). The provisions also address the record keeping of Incorporated Aboriginal Associations. Changes to the objects, the name, or the rules must be notified to the Registrar of Aboriginal Corporations (ss 52-54), who must maintain a public register of Incorporated Aboriginal Associations (s 5(1)(a)). The association must appoint a public officer (s 56), who must keep a register of members available for public inspection (s 58). It must convene an annual general meeting and such special general meetings as s 58B provides for. It must keep proper accounts and prepare annual financial statements, available to its members (s 59). 38 The provisions also provide for the winding up of an Incorporated Aboriginal Association upon grounds similar to those applicable to a corporation under the Corporations Act, including insolvency: (ss 63 and 64). The more sophisticated rules under the Corporations Act relating to compositions with creditors and relating to the winding up of registered companies are adopted by ss 62 and 67. 39 As can be seen, the topics addressed by Pt IV of the ACA Act reflect similar matters addressed in a much more detailed way in the Corporations Act concerning registered companies under that Act. Whilst the ACA Act is intended to provide a simpler and more flexible model for an Incorporated Aboriginal Association, its structure and content does not indicate any radically different conceptual approach from those concepts underlying the Corporations Act and which have evolved through successive generations of companies legislation since the Joint Stock Companies Act 1844 (UK). 40 One such concept is the separate legal entity of the company from that of its members. The rights and obligations of members of an Incorporated Aboriginal Association are also addressed in Pt IV of the ACA Act. The rules must state whether the members are to be liable to contribute towards the payments of the debts and liabilities of the association, and if so, the extent of that liability: s 43(2)(c). If the association is to operate to secure pecuniary profit to its members, the rules must address the rights of members to share in those profits and in the distribution of surplus assets on winding up: s 44. If the rules specify that members have no, or limited, liability to contribute to the debts or liabilities of the association, s 48 then applies to give statutory effect to those rules. There is a clear legislative intention to adapt and adopt members' limited liability in certain companies registered under the Corporations Act. 41 Under the Corporations Act, s 515 exposes members to contribute to the debts and liabilities of a registered company except in the case of companies limited by shares, by a guarantee or both by shares and guarantee (ss 516-518). In my judgment, seen in its statutory context, s 48 of the ACA Act operates in the same way, where the rules of an association limit either fully or partly the liability of its members. As Jarraman's rules (and in particular rule 5) provide that its members shall not be liable to contribute to its debts and liabilities, s 48 then operates to provide statutory recognition to that position. It therefore recognises, and gives effect to, the long established doctrines that a company is a legal entity separate from its members, and that its members' liability for its debts may be limited. The statutory recognition of limited liability of the members of a company first appeared in the Companies Act 1855 (UK), although it existed in the case of the corporations under Royal Charter as early as the 15th century (W Holdsworth, History of English Law, 2nd edn, London 1925). The concept was first emphatically recognised by the Court in Saloman v A Saloman & Co Ltd [1897] AC 22. There is therefore no reason to conclude, as Jarraman and Mrs Collins contended, that s 48 of the ACA Act was intended to have a much more radical operation to immunise a member of an Incorporated Aboriginal Association from liability for the debts and liabilities of the association where the member had separately undertaken the same liability: cf Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215; Australia Meat Holdings Pty Ltd v Kazi [2004] QCA 147. 42 For those reasons, I reject the first contention put forward on behalf of Jarraman and Mrs Collins. Mrs Collins undertook the liability to be liable for, and to secure, the repayment of the loan by ATSIC to Jarraman on 30 August 1999 by reason of the mortgage. Her liability arises not by reason of her membership of Jarraman, but by reason of the mortgage. The Deed of Charge then came into effect in lieu of the mortgage in the circumstances referred to above. Again her liability arises not by reason of her membership of Jarraman, but by reason of the Deed of Charge. The liability exists independently of her membership, and would exist whether or not she were a member of Jarraman. 43 Consequently, the IBA Agreement was reached in respect of a lawful liability of Mrs Collins to ATSIC, so the attack upon its own lawfulness must fail. Similarly, as s 48 of the ACA Act does not have the effect contended for, no question can arise that IBA should have explained to Jarraman and Mrs Collins some other operation of s 48.

(2) The enforceability of the IBA Agreement 44 The second contention of Jarraman and Mrs Collins was only faintly argued on their behalf. At the time of the mediation, the claims against ATSIC in the first Federal Court action had been discontinued. Similar claims made in their counterclaim in the first Supreme Court action were still extant, but an issue may well have arisen in that action as to whether they would be permitted to maintain it: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. In any event, the evidence simply does not support the contention that IBA's conduct leading up to the mediation was unconscionable. Nor does it support any contention that the conduct or outcome of the mediation, including the IBA Agreement, was the consequence of any such conduct on the part of IBA. Leading up to the mediation, IBA was simply seeking to record its legal position following the discontinuance of the first Federal Court action against it. It was not unconscionable to assert that position, or to indicate the foundation upon which it was prepared to participate in the mediation. At the mediation, Jarraman and Mrs Collins were represented by senior and junior counsel, as well as by their solicitor. They had the support of their accountant. There is nothing upon which it could be found that their will was imposed upon in any unfair way leading to the IBA Agreement or the All Parties Agreement. Furthermore, the IBA Agreement resulted in IBA agreeing to accept in settlement of its outstanding claims for repayment of the balance of the Jarraman loan and interest and costs the sum of $155,000. That represents a very substantial reduction from the claimed entitlement of IBA against Jarraman and Mrs Collins. Its concession, for whatever reason, indicates a preparedness to participate in the mediation in good faith and to compromise the full amount of its claim.

The binding nature of the All Parties Agreement and the IBA Agreement 45 As to the third argument of Jarraman and Mrs Collins, in my judgment it is clear that the All Parties Agreement and the IBA Agreement were intended to give rise to binding legal obligations as between the parties to them. That was the purpose of the mediation, once it emerged that the parties to it would compromise their respective claims. The parties took some care to express the agreed terms carefully, and to have the documents signed. The All Parties Agreement and the IBA Agreement contained all the terms necessary to give rise to the binding and enforceable legal obligations. Each of the documents reflected the parties to it having reached finality in arranging all the terms of their bargain and that they intended to be immediately bound by it, although they proposed to have those terms restated in a more formal document which would not be different in effect: Masters v Cameron (1954) 91 CLR 353 at 360. 46 That position was affirmed by the communications from Jarraman and Mrs Collins through then solicitors referred to in [28] above. 47 There is therefore no need to determine whether the All Parties Agreement and the IBA Agreement are so inter-related that the IBA Agreement could not be severed from the All Parties Agreement.

the jurisdiction of the court 48 The issue as to the jurisdiction of the Court to entertain the current proceedings to determine the enforceability of the All Parties Agreement and the IBA Agreement was raised at one point by Jarraman and Mrs Collins although not at the hearing. It is appropriate that I should address it. 49 It is now settled that a compromise agreement can be enforced in the original proceedings in which the Court has jurisdiction: Roberts v Gippsland Agricultural & Earth Moving Contracting Co. Pty Ltd [1956] VLR 555. It is desirable that all matters in controversy may be finally determined and all remedies to which a party may be entitled be decided so as to avoid a multiplicity of proceedings: Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510; Macteldir Pty Ltd v Dimovski (2003) 132 FCR 492; Reid v Interarch Australia Pty Ltd [2000] FCA 1328. Indeed, it would be a disservice to the parties to the current proceedings to decline to exercise the Court's jurisdiction to enforce their settlement agreements if jurisdiction to do so exists. 50 The Court's jurisdiction has properly been invoked in the first Federal Court action, and in the second Federal Court action. Although the mediation order in the first Federal Court action did not include IBA, and although it was not a party to that action at the time of the mediation, it participated in the mediation with the concurrence of the other parties to that action. It is in any event a party to the second Federal Court action. The issues addressed in the mediation included the outcome of that action. The IBA Agreement, inter alia, compromises that action and will (if enforced) lead to its discontinuance. That is, the parties to the second Federal Court action in a mediation have agreed upon terms to resolve that action. The agreed terms all relate to matters properly brought forward in the matter. Indeed, it was recognised by the parties that they did so, as they agreed early on that the outcome of that action was largely tied to the outcome in the first Federal Court action. Consequently, the Court is asked to give effect to the All Parties Agreement and the IBA Agreement where those agreements are made between parties to the current proceedings, where those parties by their respective motions are asking the Court to enforce those agreements (or, if the agreements are not binding, to so determine), and where the matters addressed in those agreements in substance relate to the resolution of matters already in controversy in the current proceedings (cf Phillips v Walsh (1990) 20 NSWLR 206 at 210). If it were necessary to do so, I would also source the Court's jurisdiction in this matter to s 39B(1A)(c) of the Judiciary Act 1903 (Cth).

orders 51 I therefore propose to declare in the first Federal Court action that the All Parties Agreement, and in the second Federal Court action that the IBA Agreement, are each binding and enforceable as between the parties to them. The cause or causes of action of Jarraman and Mrs Collins in the first Federal Court action have, by the accord and satisfaction then reached, been discharged and replaced by the parties' respective entitlements to enforce the promises mutually made by the parties in the All Parties Agreement. I also find that the cause of action of IBA in the second Federal Court action has also, by the accord and satisfaction then reached in the IBA Agreement, been discharged and replaced by the parties' respective entitlement to enforce the promises mutually made by the parties: see generally McDermott v Black (1940) 63 CLR 161 per Dixon J at 183-185. 52 Apart from the declaratory orders I propose to make, I shall also make orders on the respective motions of Tourism Australia, Deloittes and IBA in the current proceedings. 53 On the motions of Tourism Australia of 30 June 2005 and Deloittes of 28 June 2005 in the first Federal Court action I will make orders to effect the following: (1) upon the payment by Tourism Australia, Deloittes and Auslink of the amounts respectively agreed to be paid by them to Jarraman and Mrs Collins under cl 1 of the All Parties Agreement, Jarraman and Mrs Collins do within seven days thereof discontinue the action; (2) the discontinuance of the action be upon the basis that there be no order as to the costs of the action including the costs of and incidental to the mediation as between the parties, save for the costs payable by order (3) hereof; (3) the costs of Tourism Australia and Deloittes of and incidental to their respective motions, and their costs of and incidental to the determination of the validity and enforceability of the All Parties Agreement be payable by Jarraman and Mrs Collins. (4) in the event that Jarraman and Mrs Collins do not discontinue the action in a timely manner in accordance with order (2) hereof, upon the expiration of 14 days after Tourism Australia, Deloittes and Auslink file and serve an affidavit or affidavits which establish to the satisfaction of the District Registrar of the Northern Territory District Registry that they have each paid to Jarraman and Mrs Collins the amounts required to be paid by them respectively under cl 1 of the All Parties Agreement, the action be dismissed.

Auslink did not participate in the hearing and does not seek any order for costs. For reasons which are apparent, I decline to make the declaratory orders sought by Jarraman and Mrs Collins in their motion of 28 June 2005. 54 On the motion of IBA in the second Federal Court action of 29 June 2005, I will make orders to effect the following: (1) Mrs Collins take all steps necessary to authorise the payment of $130,000 from the Westpac deposit account to IBA; (2) Jarraman and Mrs Collins do pay to IBA from the monies received by them from Tourism Australia, Deloittes and Auslink in accordance with cl 1 of the All Parties Agreement the sum of $25,000 within seven days of the receipt of those payments; (3) upon receipt of the said sums of $130,000 and $25,000, IBA do within seven days thereof: (i) present to Jarraman a notice of discontinuance of the first Supreme Court action drawn so that Jarraman may consent to its discontinuance including its counterclaim with no orders as to costs, and upon the return of that notice of discontinuance duly executed by Jarraman IBA do forthwith discontinue the first Supreme Court action; (ii) present to Mrs Collins a notice of discontinuance of the second Supreme Court action drawn so that Mrs Collins may consent to its discontinuance with no order as to costs, and upon the return of that notice of discontinuance duly executed by Mrs Collins IBA do forthwith discontinue the second Supreme Court action; and (4) upon receipt from Jarraman and Mrs Collins respectively of the notices of discontinuance duly executed by them in accordance with order (3) hereof, IBA have leave to discontinue the action and do forthwith discontinue the action by IBA on the basis that there be no order as to costs, other than as ordered in order (6) hereof; (5) the discontinuance of the action by IBA be on the basis that there be no order as to costs, other than as ordered in order (6) hereof; (6) Jarraman and Mrs Collins pay to IBA its costs of the action limited to its costs of and incidental to its motion, and its costs of and incidental to the determination of the validity and enforceability of the IBA Agreement; (7) upon the payment of the sums referred to in orders (1) and (2) hereof, and upon the provision of their consent to the discontinuance of the first Supreme Court proceeding and the second Supreme Court proceeding by Jarraman and Mrs Collins respectively being provided to IBA in accordance with order (3) hereof, IBA do forthwith by notice in writing release and discharge Jarraman from any further indebtedness under the loan agreement of 30 August 1999 or the Bill of Sale and do release and discharge Mrs Collins from any further indebtedness under the Deed of Charge of 6 February 2004 but limited to the extent to which that Deed of Charge relates to the indebtedness of Jarraman to IBA.

I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Counsel for the Jarraman Arts Aboriginal Corporation and Shirley Anne Collins: R Percival

Solicitor for Jarraman Arts Aboriginal Corporation and Shirley Anne Collins: Shane Ellis Lawyers

Counsel for Tourism Australia: DF Villa

Solicitor for Tourism Australia: Minter Ellison

Counsel for Indigenous Business Australia: JA Logan SC with DH Katter

Solicitor for Indigenous Business Australia: Australian Government Solicitor

Counsel for Deloitte Touche Tohmatsu: SE Brown

Solicitor for Deloitte Touche Tohmatsu: Freehills

Date of Hearing: 4 July 2005

Date of Judgment: 21 July 2005