FEDERAL COURT OF AUSTRALIA

Mangarrayi Aboriginal Land Trust v Banibi Pty Limited [2010] FCA 1195

 FEDERAL COURT OF AUSTRALIA

Mangarrayi Aboriginal Land Trust v Banibi Pty Limited [2010] FCA 1195

CORRIGENDUM

1.      In paragraph 10 of the Reasons for Judgment, at line 3, the reference “s 51(xxx)” should read “s 51(xxxi)”.

2.      In paragraph 11 of the Reasons for Judgment, at line 8, the reference “s 51(xxx)” should read “s 51(xxxi)”.

3.      In paragraph 24 of the Reasons for Judgment, at sub-paragraph 5, the reference “s 51(xxx)” should read “s 51(xxxi)”.

Associate:

Dated:         8 November 2010

REASONS FOR RULING

1                     This proceeding commenced on 22 September 2010.  It has the unfortunate aspects that each of the parties and the others referred to in the pleadings are or are comprised of Aboriginal persons who, it is assumed, are all seeking to achieve the best outcome for the land in issue, Elsey Station.

2                     The Mangarrayi Aboriginal Land Trust (the Land Trust) is established under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (the Land Rights Act).  It was granted under the Land Rights Act the land known as Elsey Station on 2 February 2000.  The Northern Land Council (the Land Council) is a Land Council established under the Land Rights Act.  It has, inter alia, the roles and responsibilities of a land council under the Land Rights Act.  Banibi Pty Limited (Banibi) is a company whose shares are held by Mangarrayi Aboriginal Corporation (the Corporation).  The Corporation is apparently formed by the Aboriginal persons on or in the vicinity of Elsey Station.  Reference is also made in the pleadings to the traditional Aboriginal owners of Elsey Station.

3                     The principal document in issue is a Pastoral Land Use Agreement (the Agreement), apparently duly executed, between the Land Trust, the Land Council and Banibi made on 3 December 2004 and varied by Deeds of 6 February 2006 and 13 November 2008.  Banibi was licensed to occupy and use Elsey Station on the terms and conditions of the Agreement.  Following the 2008 Deed, the Agreement on its face is apparently executed by two directors of Banibi, the Land Trust, and the Land Council.  It also contains a Direction of the Land Council, having satisfied itself of the requirements of s 19(5) of the Land Rights Act, to the Land Trust to execute the Agreement, and an authorisation apparently signed by three members of the Land Trust authorising its Common Seal to be placed on the Agreement. 

4                     In early 2010, Banibi and the Land Council exchanged correspondence.  That correspondence included a letter from Banibi of 2 February 2010 by which it informed the Land Council (as agent of the Land Trust) that it regarded the Agreement as void and not binding upon it.  It said the Agreement made on 3 December 2004 then remained in force.  On its terms, the 2004 version of the Agreement expired on 22 February 2010.  Nevertheless, Banibi continues to occupy Elsey Station.

5                     After further correspondence, on 27 May 2010 the Land Council, on behalf of the Land Trust, gave notice of termination of the Agreement.  It did so because, it said, Banibi had repudiated the Agreement, and it accepted that repudiation.  It also relied on the failure of Banibi to comply with a request under the Agreement for access to Banibi’s audited financial accounts for 2008-2009.  Banibi however does not accept that it should no longer occupy Elsey Station.

6                     The proceeding commenced with an application seeking orders for possession of Elsey Station as against Banibi and consequential orders, and an apparently straightforward statement of claim.  Particulars of the statement of claim have been requested and provided.

7                     Banibi filed its defence on 22 October 2010.  That defence introduces further interested groups or entities into the picture: the traditional Aboriginal owners of Elsey Station, and the Corporation.  It seeks leave to amend its defence.  The defence and the proposed amended defence, in so far as they directly meet the claim, are materially different in only one respect.  Banibi now seeks alternatively an order for relief against forfeiture, under s 138 of the Law of Property Act 2000 (NT).  Strictly speaking, that should be by cross-claim.  The Land Trust has taken no point about that.  The ground for that claim will be confined to that expressed in the proposed para 9A(b), which is also expressed as a defence ground.  Paragraph 9A(c) asserts relief against forfeiture “as a matter of equity”.  That is not a pleading of material facts.  I will not allow it to stand.  If Banibi wishes to add some further material facts, it will have to express them properly in a further proposed amendment.

8                     The proposed amended defence does add two further things.

9                     First, it asserts that the Land Trust does not wish to be an applicant, but should be joined as a respondent.  It has applied for an order to that effect.  Its application is not supported by proper evidence at present, and Banibi by its counsel accepts that such an order should not be made at present.  The status of the Land Trust is not apparently an impediment to any party’s access to evidence, or to the progress of the proceeding with the present parties. I decline to make that order sought by Banibi on the basis of the material presently before me.

10                  Secondly, it pleads that s 19(6) and s 5(2) of the Land Rights Act are invalid because they purport to permit compulsory acquisition of property otherwise than on just terms, contrary to s 51(xxx) of the Constitution, and that therefore the Land Council cannot rely on s 19(6) to maintain the validity of the 2008 Agreement “in the face of the absence of consent thereto by the traditional Aboriginal owners of Elsey Station”.

11                  The Land Trust contends that that defence has no merit.  Nevertheless, it accepts that it is better for the issue to be ventilated.  Accordingly, I propose to allow that proposed amendment, with one qualification.  The quoted passage may give rise to an unnecessary contested issue of fact.  It is not, as I understand it, asserted that the action of the Land Council in terminating the Agreement involve the compulsory acquisition of property of the Land Trust.  The only property to which it can refer is Banibi’s rights or interests in relation to Elsey Station under the Agreement.  At present I do not see how the consent or otherwise of the traditional Aboriginal owners of Elsey Station could affect the application of s 51(xxx) of the Constitution as asserted.  I will allow that amendment but without the words in quotations.

12                  Banibi accepts it will have to give notices under s 78B of the Judiciary Act 1903 (Cth) in relation to that issue.  Those notices will have to be given promptly.

13                  Otherwise, the defence and the proposed amended defence appear to contain two categories of plea.  There are pleas directly responsive to the statement of claim and there are pleas which go well beyond it and, without being expressed as a cross claim, assert separate causes of action against the Land Trust.

14                  In each respect, Banibi’s defence, and its proposed amended defence, are unsatisfactorily discursive.

15                  In so far as there is an apparently direct response to the statement of claim, those documents do not appear to dispute that the persons whose signatures are on the Agreement did sign it as officers of Banibi, the Land Trust and the Land Council.  The issues appear to be:

(1)               the two directors of Banibi who signed the agreement were not told what they were signing or why, and “in the knowledge that Banibi did not agree to the 2008 Amendments and through the use of duress and undue influence” (cl 3(g));

(2)               the direction from the Land Council to the Land Trust was invalid and of no effect (cl 3(f));

(3)               at the time of the signature of the members of the Land Council, they were told that they were required by law to sign the agreement;

(4)               the Land Council did not consult with, or obtain the consent of, the traditional Aboriginal owners of Elsey Station;

(5)               Banibi on 2 February 2010 exercised its option to extend the term of the Agreement, and on 31 May 2010 requested the Land Council to withdraw its notice of termination, but the Land Council rejected that request;

(6)               the Land Council had no grounds to terminate the agreement, and Banibi did provide it with an opportunity to examine its financial accounts prior to the notice of termination (unparticularised) and the Land Council acted unreasonably and in breach of duty owed to the traditional Aboriginal owners of Elsey Station, Banibi and the Land Trust in issuing the notice of termination.

16                  Those allegations, and the legal consequences of them (if any) if they are made out are not particularised.  Clearly allegations of duress and undue influence must be particularised.  In the light of earlier allegations in paras 3(b) and (d), and the proposed 3(bb) the assertions that Banibi’s directors did not know what they were signing is at first sight hard to understand; those sub-paragraphs refer to negotiations between June and November 2008 between Banibi and the Land Council about proposed changes to the Agreement.  Clearly asserted invalidity of the direction from the Land Council must be explained.  Clearly the consequences of the asserted communications to the members of the Land Trust must be specified.

17                  There is no clear explanation as to why, as a matter of law, it was necessary for the Land Council to consult with the traditional Aboriginal owners of Elsey Station.  As to (5) and (6), it is not clear what the legal consequence of (5) is, if it is established.  The unreasonableness and breach of duty asserted in (6) is not particularised.  If there is some substantive issue of fact or law which is to be asserted so as to avoid what appears to otherwise be a properly executed and enforceable agreement, it must be properly pleaded.  Neither the defence nor the proposed defence does so.

18                  The balance of the defence asserts, so far as I can discern, the wider allegations that:

(7)               in 2009, there were communications between the corporation and the Land Council about the development of a meat works at Elsey Station, and the Land Council has impeded that plan;

(8)               in and since February 2009, the Land Council has attempted to undermine the capacity of the traditional Aboriginal owners of Elsey Station to manage their own affairs and has not acted in their best interests, in breach of s 23(1)(a) and 23AA of the Land Rights Act in certain ways, which are not particularised; and

(9)               By reason of those matters, the Land Council has breached its duty of good faith towards the Aboriginal owners of Elsey Station, and that those duties “are owed to Banibi” in an unexplained manner.

There is a separate general claim that the Land Council is no longer the agent of the Land Trust.  The defence (not by way of cross claim) also makes is a claim for damages from the Land Council for “breach of statutory duties, negligence and in tort” for unspecified or only generally specified conduct, and for equitable relief.

19                  The claims must of course be confined to those of Banibi.  It is the only respondent party.  The facts giving rise to fiduciary, statutory or common law duties owed to Banibi, and to their alleged breaches can only be guessed at.

20                  Those comments are sufficient to indicate that the defence is presently unsatisfactory.  Particulars of it have been requested but not supplied. 

21                  In the light of the above comments, I propose to give Banibi a further brief opportunity to file and serve a defence which complies with the Rules, so that the issues are clearly determined.

22                  This matter should be heard urgently.  There are three reasons for that.  Banibi has sub-authorised Northern Pastoral Development Company Pty Ltd to run cattle on Elsey Station.  There is a dispute between that entity and Banibi as to whether Banibi is entitled to muster the cattle on Elsey Station and to deal with them.  These proceedings have been adjourned for a few days to determine whether this matter will be resolved promptly.  The status of Banibi should be resolved quickly in those circumstances.  Secondly, Banibi asserts that funding for its proposed meat works development is contingent upon prompt progress of that development, and its status should therefore be clarified as quickly as possible.  Thirdly, Banibi asserts that the conduct of the Land Council in purporting to exclude it from Elsey Station has put it under severe economic constraints so that its solvency may in the near future become questionable.

23                  For those reasons, in my view, it is important that the status of the termination notice of the Agreement be resolved promptly.  I propose to list the matter for hearing as previously foreshadowed on 15 November 2010.  Banibi will have had almost two months by then to prepare for hearing.  If it coherently pleads that the Agreement or its termination is unenforceable against it, that pleading can be expressed within the next few days.  In that event, as explored with its counsel at the directions hearing on 1 November, there may be several witnesses who may be required to give evidence about the circumstances in which they came to sign the Agreement.

24                  At present, subject to Banibi expressing clearly the grounds of its defence, or its claim for relief against forfeiture, the issues will be:

1.                  whether Banibi, as a matter of law, signed the Agreement by two of its directors and is in force;

2.                  whether s 19(5) of the Land Rights Act is satisfied;

3.                  whether the Termination Notice could lawfully be given on the bases it relies upon;

4.                  whether Banibi should be given relief against forfeiture;

5.                  whether the Termination Notice could lawfully be given, having regard to s 51(xxx) of the Constitution.

Counsel for Banibi accepted that, in general, those issues will turn upon uncontested documents and the consideration of the relevant legislation.  If the defences of non est factum or duress or undue influence are pursued, the persons concerned may have to give evidence.  That is a small number of witnesses, so the case can be prepared and presented at that time.

25                  If Banibi pursues its wider allegations, including by a cross claim, it may be necessary for the cross-claim to be separately heard.  It is premature to decide that.  If the defence is amended in a way which makes the evidentiary material more extensive, and so that it is unfair to Banibi (or the Land Council) that it be heard fully on the date fixed, then Banibi or the Land Council will no doubt identify the issue or issues which can and should appropriately be heard on the date fixed.  I would be disposed to make an order under Order 29 of the Federal Court Rules for the separate trial of issues in that event.

26                  In that event, counsel for the Land Council has foreshadowed an application for summary judgment.  If the Land Council issues an application for summary judgment, I will list it for hearing at the same time as the hearing of the proceeding itself.  In that event, there may be a practical evidentiary obligation upon Banibi to show that its assertions going to the status of the Agreement or the validity of its termination have some substance beyond the immediate issues as to the enforceability of the Agreement and of the termination processes themselves.

27                  Finally, I repeat that if a cross-claim is made, it can be heard and determined separately.  Such a cross claim could later determine whether properly pleaded conduct of the Land Trust independently of the status of the Agreement gives rise to a cause or causes of action on the part of Banibi.  At present, in relation to the status of the Agreement, there appears to be an underlying dispute between Banibi and the Land Trust as to the appropriateness of the terms of the 2008 amendments to the Agreement.  The particular clauses of the Agreement which Banibi is concerned about have not been identified.  I was told in the directions hearing that they concern financial accountability. 

28                  I propose to give the following intimations, with orders to be made to give effect to these reasons for ruling when the parties have had an opportunity to consider them:

(1)               Order 1 of the application of Banibi by its notice of motion of 1 November 2010 be refused.

(2)               Order 2 of the application of Banibi by its said notice of motion be allowed, but so that –

(i)         the amended defence be filed and served by 12 noon on 5 November 2010;

(ii)        the amended defence annexed to the affidavit of Brett Ian Midena sworn on 1 November 2010 be the amended defence save that by 12 noon on 5 November 2010 proper particulars be given of:

(a)        the verbal agreement referred to in para 3(bb) be given,

(b)        the legal assertion made in para 3(f) be given,

(c)        the knowledge attributed to the Land Trust, the duress, and the undue influence referred to in para 3(g) be given,

(d)        the person or persons who gave the information referred to in para 3(h) be given,

(e)        the lack of informed consent referred to in para 3(hc) be given,

(f)         the legal assertion in para 8(b) be given,

(g)        the opportunity referred to in para 8(c) be given,

(h)        the legal assertion in para 8(d) be given,

(i)         the allegations in para 8(e) be given, confined to the duties alleged to be owed to Banibi,

(j)         the legal assertion in para 8(f) be given,

(k)        the legal assertion in para 8(g) be given,

(l)         the grounds of the relief against forfeiture asserted in para 9A(c) which are otherwise confined to that alleged in para 9A(b) and/or those alleged in para 10(a);

(m)       the grounds for the legal assertion in para 10(b) –

(iii)       to the extent that proper particulars of those paragraphs are not provided within the time specified, those paragraphs of the proposed amended defence are not allowed.

(iv)              paras 3(i), (j), (k), (l), (r), (s), (t) and (u), 4, 5, 6, 11 are not allowed, but Banibi is given leave to file and serve either a cross claim or a supplementary amended defence raising those general matters, if the cross claim or other document is properly pleaded having regard to these reasons for ruling, within a time to be specified by further direction;

(v)                the following parts of the proposed amended defence are not allowed –

(a)        para 8(e) in so far as it alleges duties owed to the traditional Aboriginal owners of Elsey Station, and the Land Trust,

(b)        para 8(c) in so far as it includes “in the face of the absence of consent thereto of the traditional Aboriginal owners of Elsey Station,

(c)        para 10(c),

(d)        para 10(d),

(e)        para 12(d),

(f)         para 12(e) in so far as it includes “and the traditional Aboriginal owners of Elsey Station”,

(vi)       to the extent that Banibi fails to comply with Order 2(ii), the paragraphs of the proposed amended defence in respect of which proper particulars are not provided are not allowed.

(3)               The Land Council have leave to file and serve an amended reply by 11 November 2010.

(4)               The application be listed for hearing, commencing at 2.15 pm on 15 November 2010.

(5)               Banibi, no later than 4:00 pm 5 November 2010, is to give the notice required by s 78B of the Judiciary Act 1903 (Cth) in respect of the matter alleged at [8A]-[8C]] of the proposed amended defence.

(6)               Banibi file and serve any affidavit or prÉcis of any affidavit upon which it seeks to rely at trial no later than 4:00 pm 9 November 2010.

(7)               The Land Council file and serve any affidavits in reply no later than 4:00 pm 12 November 2010.

(8)               The Land Council by 4:00 pm 12 November 2010 file and serve sufficient numbers of an indexed and paginated book of documents for use at the trial.

(9)               The Land Council file and serve their outline of submissions no later than 4:00 pm 10 November 2010.

(10)           Banibi file and serve its outline of submissions no later than 4:00 pm 12 November 2010.

(11)           Costs be reserved.

Associate: 

Dated:         3 November 2010