Waardi and Guumbarr
144 The Waardi Limited and Guumbarr Limited interveners read the following affidavits:
1. Adam Paul Levin sworn 15 and 27 March 2013; and
2. John Robert Reynolds sworn 28 March 2013.
145 Pursuant to the terms of the PPA, Waardi Limited and Guumbarr Limited were incorporated on 7 February 2012 and 13 March 2012 respectively by the NTP (the applicant). Waardi has ratified the PPA.
146 Waardi is a company limited by guarantee owned and governed by members of the GJJ claim group, for the purpose of taking on the role of the "Administrative Body" under the PPA: cll 20 and 21 of the PPA. One of the key functions of the Administrative Body is to administer the monetary and non-monetary benefits payable to the Native Title Claim Group as defined under the PPA: cll 21.1(b), 21.2(a) and (b) of the PPA.
147 The Native Title Claim Group is, as I have already stated, the GJJ claim group. Accordingly, I will, for reasons of uniformity and ease of understanding, refer to this group as the GJJ claim group.
148 Pursuant to a Ratification Deed dated 4 July 2012 and signed by all of the parties to the PPA, Waardi was formally appointed as the Administrative Body and became a party to the PPA.
149 Waardi's constitution provides that all members of the GJJ claim group are eligible to become members of Waardi, and as at March 2013, Waardi had 239 members.
150 Waardi's governance structure provides that each of the 10 families comprising the GJJ claim group have a right to appoint a director to the board. In addition, three independent directors sit on the Waardi board.
151 Guumbarr, a company limited by guarantee, was incorporated for the purpose of taking on the role of the "Corporate Trustee" under the PPA. Guumbarr's objections include acting as trustee in relation to the trusts to be established under the PPA to receive monies paid by the State and Woodside: cll 20 and 22 of the PPA.
152 Pursuant to a Ratification Deed dated 4 July 2012 and signed by all parties to the PPA, Guumbarr was formally appointed as the Corporate Trustee and became a party to the PPA.
153 Waardi is the sole member of Guumbarr. The Guumbarr board of directors includes three community directors from the GJJ claim group and two independent directors, one of whom is nominated by the State.
154 As I mentioned, whilst these interveners support the application for leave to discontinue, they submit that it ought be subject to conditions.
155 Waardi and Guumbarr invited the Court to consider their submissions against the following background:
(a) On 6 May 2011, the GJJ claim group voted to direct the applicant to do all thing necessary to enter the PPA (and associated agreements);
(b) On 30 June 2011, in accordance with the GJJ claim group's direction, the applicant, as the NTP, signed the PPA on behalf of the GJJ claim group.
(c) On 6 February 2013, the GJJ claim group resolved to direct the applicant to discontinue these proceedings, but made no specific further decisions regarding the PPA.
(d) The PPA contemplates and provides for a discontinuance of these proceedings and is expressly stated "to continue in full force and effect" after any such discontinuance; cl 7.2 of the PPA.
(e) The persons named as applicant have a duty of care, akin to a fiduciary duty, to the GJJ claim group requiring diligence, good faith and care and responsibility: Foster v Copper Strike Ltd (2006) 200 FLR 182 at [39]; Moore v Mungeranie (2005) 193 FLR 62.
(f) The parties to the PPA are required do all things and execute all documents necessary to give full effect to the PPA: cll 5.2(a) and (b) and 57(a) of the PPA. Further, they submit that at common law the parties also have a duty to co-operate, and may have an additional duty to act in good faith: Secured Income Real Estate (Australia) Limited v St Martins Investments Proprietary Limited (1979) 144 CLR 596 at 607; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 192.
156 The particular adverse consequences which may follow upon an unconditional discontinuance concern a specific accrued benefit of $13 million and ongoing rights and benefits which would accrue, prior to a final determination of native title, to the GJJ claim group under the PPA.
157 Under the PPA, the GJJ claim group is entitled to significant monetary and non-monetary benefits. I have already referred to some of this but it is convenient to repeat these together with other provisions of the PPA to which these interveners point. The benefits include:
(a) monetary payments from the State including $5 million to fund Waardi: cl 15; $10 million for an Economic Development Fund: cl 9; and $20 million for an Indigenous Housing Fund: cl 10;
(b) monetary payments from Woodside including $33 million in milestone payments: item 2.2 of Sch 5; $3.6 million per annum for the life of the project: item 2.3 of Sch 5.; $400,000 per annum to fund Waardi: item 2.4 of Sch 5; $1.4 million for the first 10 years of the project (and $400,000 per year thereafter) for the Business Development Organisation: item 4.1 of Sch 5; $8 million for a Reading Recovery Program: item 5.5(b) of Sch 5; and $10 million for a Ranger Program: item 5.6(b) of Sch 5;
(c) the provision of employment and training: cl 33, item 5.2 of Sch 5 and Sch 12; and business development and contracting opportunities: cl 34, items 4.2 and item 5.3 of Sch 5 and Sch 13;
(d) freehold title to 2,900 hectares of land; transfer of the housing land for the NTP including 25 residential lots, 6 house and land packages and 15 hectares of englobo developable land: cl 13; and transfer of the Waardi office land: cl 12.
158 Some monetary and non-monetary Benefits have already accrued to the NTP, Waardi and Guumbarr: cl 12 and 13 and items 2.2(a), 4.1(a)(i)(ii) and 4.2 of Sch 5 of the PPA. The bulk of the Benefits are to be delivered by the State and Woodside in the future.
159 As noted above, the PPA provides for Woodside to make significant payments into a PBF. Woodside were due to pay a total of $13 million on the commencement date of the PPA subject only to the PBF being established: item 2.2 of Sch 5 of the PPA.
160 By executing the Ratification Deeds, the applicant, as the NTP, authorised Guumbarr to prepare the PBF Trust Deed: cl 22.5(a) of the PPA.
161 On 23 November 2012, Guumbar issued the State and Woodside with two separate PBF Trust Deeds and a Statement of Compliance confirming that in Guumbarr's opinion the PBF Trust Deeds complied with the provisions of the PPA. The State and Woodside were invited to approve the PBF Trust Deeds as "not inconsistent with" the PPA in accordance with clause 22.5(g)(i) of the PPA.
162 The State approved of the PBF Trust Deeds as "not inconsistent with" the PPA on 14 December 2012.
163 Notwithstanding the State's position, on 21 December 2012, Woodside advised that they did not approve the PBF Trust Deeds in accordance with cl 22.5(g)(i) of the PPA. Woodside asserted that in addition to the Ratification Deeds signed by the NTP (the applicant), the NTP was required to specifically certify that it had determined the objects and rules of the PBF Trust Deeds.
164 On 19 February 2013, Latro Lawyers, on behalf of the NTP, wrote to Jackson McDonald (acting for Guumbarr) attaching two letters.
(a) Determination Letter: A letter addressed to Woodside confirming that the NTP had determined the rules and object of the PBF Trust Deeds signed by two of the three named persons who together are the applicant (Rita Augustine and Ignatius Paddy). The third named person, Mr Anthony Watson, had not signed the letter but a space was provided for his signature.
(b) Conditions Letter: A letter to Guumbarr signed by the three named persons who together are the applicant setting out conditions which the applicant required Guumbarr to agree in relation to the $13 million due from Woodside. The conditions were as follows:
(i) following a future discontinuance of this claim Waardi was to hold the $13 million due from Woodside on commencement of the PPA on trust until the separate anticipated claims to be registered by the Jabirr Jabirr and Goolarabooloo claim groups were finally determined;
(ii) an amount of up to $3 million was to be made available to pay the legal and other costs of the separate anticipated claims to be registered by the Jabirr Jabirr and Goolarabooloo claim groups; and
(iii) the $3 million was to be provided equitably as between the future separate anticipated claims foreshadowed by the Jabirr Jabirr and Goolarabooloo.
165 Significantly, the Conditions Letter signed by all three named persons expressly stated "The NTP have determined the specific objects and rules of the PBF as required by the Agreement" (the PPA). The covering letter from Latro Lawyers indicated that Mr Anthony Watson would sign the Determination Letter addressed to Woodside only if Guumbarr accepted the conditions in the Conditions Letter.
166 Jackson McDonald responded to Latro Lawyers on 21 February 2012 stating that:
(a) the first condition was inconsistent with the decision of the GJJ claim group as embodied in the PPA. The PPA provided that only monetary Benefits that became due and payable after a discontinuance were to be held in an interest bearing account by Woodside and the State;
(b) all three conditions were contrary to law because Guumbarr was required to hold monies in accordance with the terms of the PBF Trust Deeds and could not fetter its discretion as trustee; and
(c) without fettering its discretion it was favourably disposed to providing money to fund any future separate native title claims registered on behalf of the Jabirr Jabirr and the Goolarabooloo claim groups.
167 Despite further correspondence and a Notice of Dispute being issued to Woodside in relation to the $13 million payment due upon commencement of the PPA, the current position is as follows:
(a) Woodside refuses to make the $13 million payment into the PBF without the NTP specifically certifying to Woodside that the NTP has determined the objects and rules of the PBF Trust Deeds;
(b) Mr Watson refuses to sign a letter addressed to Woodside confirming the NTP has determined the rules and objects of the PBF unless Guumbarr agrees to his conditions; and
(c) Guumbarr is not, as a matter of law, able to accept those conditions because they are inconsistent with the PPA and its position as trustee.
168 I am unable to see any lawful basis for the imposition of the conditions proposed by Mr Watson. Senior counsel for Waardi and Guumbarr submits that the imposition of such conditions is inconsistent with the PPA, and on the basis of the information currently available, appears at odds with the fiduciary duties owed to the GJJ claim group. I think this submission is correct.
169 It may well be that the answer to this question is in Waardi's own hands, as it has been authorised by the NTP to determine the specific objects and rules of the PBF Trust Deed in appointing Waardi as the Administrative Body under the PPA and the Waardi Ratification Deed, and further signing the Guumbarr Ratification Deed and in authorising Guumbarr to prepare the Trust Deeds. However, I cannot resolve that question for present purposes. It is but another example of the kind of difficulty which would inevitably be thrown up were there to be an unconditional discontinuance.
170 As soon as these proceedings are discontinued, the NTP, one of the parties to the PPA, will cease to exist. That, as I have already said, is because the applicant in these proceedings is defined as the NTP under the PPA.
171 Clause 7.2 of the PPA specifically provides that in the event of a discontinuance of these proceedings and new native title claims being registered:
(a) the PPA continues "in full force and effect", save that the obligations of the State and Woodside to provide Benefits cease from the date of dismissal (subject to what follows): cl 7.2(a);
(b) the State and Woodside must hold all monetary Benefits payable under the PPA in an interest bearing account pending a determination of native title by this Court. This is the combined effect of cll 7.2(b)(i)(A) and 7.2(c) which only suspends Benefits which are "payable" and can be held in an interest bearing account;
(c) the monetary Benefits are then to be transferred to an entity nominated by the party who is ultimately found by this Court to have native title over land which is part of the LNG Precinct;
(d) the State must, nevertheless, deliver to Waardi non-monetary Benefits such as the land package to which I have referred which it would otherwise have delivered to the NTP in a manner consistent with Ch 3 of the PPA: cl 7.2(b)(i)(A); and
(e) Woodside may elect to deliver any non-monetary Benefits.
172 These interveners correctly submit that notwithstanding the provisions outlined above, the PPA does not fully address the fact that on the date these proceedings are discontinued a party to the agreement (i.e. the NTP) ceases to exist. From that point in time until a final determination of native title (the Pre-Determination Period), there is no native title party represented by the applicant for the purposes of the Browse Agreements. This raises issues as to whether the rights and obligations in respect of the GJJ claim group no longer exist; or whether they continue to exist in respect of every member of that claim group represented by the applicant, but that there is no representative of these members of the claim group with whom to deal.
173 The NTP ceasing to exist as an entity represented by the applicant in the proceedings creates a number of problems for the delivery of Benefits and the ongoing operation of the PPA during the Pre-Determination Period. During this period there is no entity to represent the Kimberley Indigenous People.
174 The PPA:
(a) provides that the other parties are required to negotiate or agree with the NTP on a range of future matters: cll 4.3, 21.15, 22.8, 44; and items 20.1-20.3 and 21 of Sch 6;
(b) provides that the NTP is to receive notice of, be consulted about or review, comment and negotiate on a range of matters: cll 6.5(b), 32.2, 32.3; 33.2, 34.2, 45; items 7-9 of Sch 4; items 5.4, 5.5, and 7 of Sch 5; item 6 of Sch 12; item 5 of Sch 13 & items 5, 7, and 8 of Sch 14;
(c) provides the NTP with the right to request the transfer of accommodation facilities to Waardi: cll 18 and 39;
(d) provides for the NTP to be actively involved in cultural heritage management: cl 31 and Sch 7; cultural awareness training: cl 35; environmental management: cl 32 and Sch 8; and the management of decommissioning: cl 38 and Sch 11;
(e) anticipates the NTP having a central role in the delivery of a range of non-monetary Benefits: i.e. employment and training: cl 33; items 4.2 and 5.2 of Sch 5 and Sch 12; and business development and contracting opportunities: cl 34, item 5.3 of Sch 5 and Sch 13;
(f) provides for the NTP to takes certain steps as a precondition to particular funds being released (although as noted above during the Pre-Determination Period these monies would be paid into an interest bearing account): cl 8.4 and item 4.1 of Sch 5;
(g) provides the NTP with the right to negotiate additional Benefits from other commercial parties who wish to negotiate entry into the LNG Precinct (Additional Proponents) and sets parameters for those Benefits: cll 19 and 36.2;
(h) provides for the NTP to have 5 representatives on the Precinct Management Committee and to be members of the Precinct Control Group: cll 27.2 and items 4, 5.1, 7 and 8 of Sch 6; and
(i) provides for the NTP to be the Site Manager of the Third Party Contractors Site and enter an agreement with LandCorp and undertake other functions in that respect: cl 28.4 and item 5.4 of Sch 5.
175 Waardi and Guumbarr submit that if leave is granted to discontinue the proceedings before these matters are addressed there will be no one to take on the rights and role of the NTP on behalf of the GJJ claim group under the PPA during the Pre-Determination Period, and yet by its express terms the PPA continues in force and effect. Accordingly, this of itself is likely to generate considerable prejudice, not only to the State and Woodside but also to the members of the GJJ claim group.
176 The PPA does not expressly address how to deal with the matters set out above, although significantly, in a number of instances, it does provide for Waardi to take over or be delegated functions from the NTP: cl 7.2(b)(i)(A); 11.5(e); 13; item 3 of Sch 8; item 3 of Sch 9; item 3 of Sch 11.
177 The PPA reflects the current decision of the GJJ claim group on its subject matter. The GJJ claim group, by the applicant, as I have mentioned, made the Browse Agreements, including the PPA, despite the divisions which had emerged as between its members and, broadly speaking, between the Goolarabooloo members and the Jabirr Jabirr members.
178 It is probable that the parties to the PPA have contractual and common law obligations of the kind to which I have referred to address what should occur in the Pre-Determination Period, prior to any discontinuance of these proceedings.
179 Waardi and Guumbarr raised their concerns regarding this issue and suggested possible solutions to the State, Woodside and the applicant's lawyers in correspondence dated 21 February 2013 and 11 March 2013.
180 As at 28 March 2013, the State and Woodside had not responded substantively to this correspondence.
181 The applicant's lawyers have advised that the NTP will not agree to assigning their rights and obligations under the PPA to Waardi but might consider assigning them to another entity. The identity of any alternative entity to represent and act on behalf of the GJJ claim group, even given their internal conflict, is not clear but the NTP appears to accept that some form of assignment is one means of addressing the issue.
182 At this stage, there has been no substantive endeavour by the parties, at least not any involving Waardi or Guumbarr, to resolve the issue of who should represent the members of the GJJ claim group in the Pre-Determination Period for the purposes of the PPA.
183 In these circumstances, Waardi has prepared and circulated a draft Deed of Assignment and Assumption (Deed) which it considers to be the best means of addressing the problem and protecting the rights and benefits of the GJJ claim group under the PPA.
184 The objective of the Deed is to ensure that to the greatest possible extent the rights and benefits of the GJJ claim group under the PPA are preserved and protected following any discontinuance.
185 The Deed is based on the principles set out below:
(a) The GJJ claim group has authorised both the entry into the PPA and the discontinuance of these proceedings.
(b) Every individual member of the existing GJJ claim group is eligible as of right to be a member of Waardi.
(c) The Deed provides an alternative entity (Waardi) to represent and protect the interests of the members of the former GJJ claim group following a discontinuance of these proceedings and the NTP ceasing to exist.
(d) Upon discontinuance, the authorised and agreed decision making process provided under the NTA for the GJJ claim group will cease to exist although this claim group continues to be relevant under the PPA.
(e) The governance and decision making mechanism of a corporation would then allow Waardi to engage with all of the members of the former GJJ claim group after these proceedings are discontinued.
(f) The Deed provides a mechanism for Waardi, in the future, to assign matters to any other third party on instruction of the members of the former GJJ claim group.
(g) The Deed provides for certain decisions/acts under the PPA to be reserved for a decision by the members of the former GJJ claim group through a general meeting of Waardi.