FEDERAL COURT OF AUSTRALIA

Mangarrayi Aboriginal Land Trust v Banibi Pty Ltd (No 2) [2011] FCA 173

THE COURT ORDERS THAT:

1.    The respondent pay to the first and second applicants their costs of the proceeding to 15 November 2010 to be taxed or agreed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    This action commenced on 22 September 2010. It progressed quickly as there were issues which were required to be resolved urgently. It was set down for hearing on 15 November 2010.

2    It resolved shortly before the hearing. The respondent consented to the three primary orders sought by the applicants. Orders broadly in the terms of the first three paragraphs of the application were made on 15 November 2010.

3    The question of costs, including reserved costs, was not resolved. These reasons deal with that issue. The parties have agreed that the costs issue will be determined on the basis of written submissions.

BACKGROUND

4    The Mangarrayi Aboriginal Land Trust (the Land Trust) is established under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (the Land Rights Act). Under the Land Rights Act, it was granted 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.

5    A Pastoral Land Use Agreement (the Agreement), apparently duly executed, between the Land Trust, the Land Council and Banibi was made on 3 December 2004. The agreement was varied by Deeds of 6 February 2006 and 13 November 2008. Under the Agreement, Banibi was licensed to occupy and use Elsey Station on the terms and conditions of the Agreement. The 2008 Deed 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.

6    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. Banibi was presumably referring to the Agreement as varied by the two Deeds, and in particular the 2008 Deed. It also 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.

7    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 did not accept that it should no longer occupy Elsey Station. There was a potential stalemate.

8    That ultimately led to this action to resolve the stalemate. The application by the Land Trust and the Land Council sought orders for possession of Elsey Station as against Banibi and consequential orders, and was accompanied by an apparently straightforward statement of claim. Particulars of the statement of claim were requested and provided. Banibi filed its defence on 22 October 2010. That defence introduced further interested groups or entities into the picture; the traditional Aboriginal owners of Elsey Station, and the Corporation. It also made various allegations relating to the Land Council’s conduct and claims for relief.

9    On 1 November 2010 a notice of motion was brought by Banibi seeking an order removing the Land Trust as an applicant and replacing it as the second respondent (the First Motion). On 3 November 2010 I refused the First Motion as it was not supported by proper evidence and I was of the view that the status of the Land Trust was not an impediment to any party’s access to evidence, or to the progress of the proceeding with the present parties: see Mangarrayi Aboriginal Land Trust v Banibi Pty Ltd [2010] FCA 1195 at [9].

10    The First Motion also sought orders for leave to Banibi to amend its defence. On 3 November 2010 I gave Banibi that leave. However, as there were a number of issues relating to the adequacy of the defence, the leave was subject to Banibi providing proper particulars of certain paragraphs of its defence, and certain paragraphs of the proposed amended defence which contained wide allegations of duress and undue influence and claiming damages for breach of statutory duties, negligence and in tort for unspecified or only generally specified conduct of the Land Council, and for equitable relief. Leave was given to Banibi to file a cross-claim or a supplementary amended defence properly pleading the general matters raised: Mangarrayi Aboriginal Land Trust v Banibi Pty Ltd [2010] FCA 1195 at [28]. The costs of the First Motion were reserved.

11    An amended defence was filed on 5 November 2010. No cross-claim or supplementary amended defence was filed.

12    A further notice of motion of 9 November 2010 was brought by Banibi and heard by Reeves J on 10 November 2010 (the Second Motion). The Second Motion applied again to have the Land Trust removed as the first applicant and replaced as the second respondent. Reeves J refused the Second Motion. He was not persuaded that Banibi was entitled to such an order. The Second Motion also sought orders for representatives of the Mangarrayi and Yangman people to be joined as the third respondents. That order was also refused as his Honour did not consider there was any basis shown that such persons had a sufficient interest to be joined, unless they or Banibi made some cross-claim in the action.

13    The Second Motion also sought an order for the action to be stayed to allow for proper preparation for hearing, time for discovery and to enable the pursuit of other options for resolution. Reeves J was of the view that the matters of urgency which caused the hearing to be set down quickly still applied and that a mediation had already been conducted and was unsuccessful. The applicants assured his Honour that all relevant documents had been produced. Reeves J also extended the time for Banibi to file and serve any affidavit or précis of any affidavit it intended to rely on at the hearing and consequential orders to allow Banibi more time to prepare. The costs of the Second Motion were reserved.

14    Affidavits and submissions were duly filed by the applicants. Banibi did not file any further affidavits or précis of affidavits, save for one supplementary affidavit of M Gorringe filed 15 November 2010.

15    As noted above, before the hearing commenced, on 15 November 2010 I made orders by consent chiefly in the terms of the first three paragraphs of the application. In summary, I ordered that:

(1)    As against Banibi, the Land Trust is entitled to possession of the land known as Elsey Station;

(2)    Banibi, by itself and by its servants and agents, is to give the Land Trust possession of the land known as Elsey Station;

(3)    Banibi, by itself and by its servants or agents is restrained from remaining on or continuing in occupation of the land known as Elsey Station;

16    I also ordered that those orders not be entered until or after noon 26 November 2010, and that Banibi could apply, in relation to the management of and accounting for a herd of cattle on Elsey Station which it owned (the Banibi Herd), upon reasonable notice. It was accepted by the parties that orders 1 to 3 did not require Banibi to cause the removal of the Banibi Herd from Elsey Station by 26 November 2010. The purpose of that extra time was so that issues relating to the mustering and relocation of the Banibi Herd, particularly having regard to the imminent wet season, could be addressed between the parties.

17    That is the context in which the issue as to costs arises. There has been no adjudication on the merits of the claim, but on its face Banibi appears to have accepted that it can no longer remain on Elsey Station under the terms of the Agreement in the events which are alleged to have happened.

CONSIDERATION

18    Section 43 of the Federal Court Act 1976 (Cth) gives the Court a discretion to order costs in any action. The discretion is unfettered, save only that it be exercised judicially and not against a successful party except for some reason connected with the case: Grey v Mango Pre Paid Calling Cards Pty Ltd [2005] FCA 362.

19    Generally an order for costs follows the event, and is to be taxed on a party/party basis. However, if the substantive issues have not been determined by the Court, it will usually make no order as to the costs of the proceeding as there has been no hearing on the merits: L & A Maglio Pty Ltd v Commissioner of Taxation [2007] FCA 1365 at [22]-[24]. In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622, McHugh J said at 625:

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.

20    In this matter there is material which enables me to go beyond that starting point.

21    The applicants contend they were wholly successful in obtaining the primary relief sought in their application. They achieved that outcome upon Banibi acknowledging, by submitting to the orders made, that it had no reasonable prospect of successfully resisting the relief sought. They say they are therefore entitled to the costs of the action, as costs should follow the event, and it was not a matter where the parties’ ultimate agreement made the need for the action academic at any earlier time than 15 November 2010.

22    Banibi asserts that the matter was settled without disposing of the real issues between the parties. It identifies the outstanding issues as being or including whether or how the Banibi Herd would remain on Elsey Station, the legal authority of the Land Council as agent of the Land Trust to grant or direct the grant of licences to other so called ‘former sub-licensees’ of the Land Trust, and the non-payment of rents by those former sub-licensees. Banibi contends that the matter remains to be finally concluded and may not resolve itself if the parties are unable to negotiate the further management arrangements for the Banibi Herd. In that event the matter may return for a determination as to whether or not Banibi is trespassing by virtue of the presence of the Banibi Herd. Banibi argues the question of costs should be adjourned and not determined until the whole issue of the Banibi Herd is finally disposed of.

23    As I have noted, the outcome of the action is that the applicants succeeded in obtaining the primary relief they sought. They did so only at or shortly before the hearing. A few days before the hearing, Banibi’s written submission indicated that at that time it still disputed the entitlement to the third primary claim, and it was not until shortly before the hearing that its position changed. Clearly, the case is not one where the Court does not know how the parties resolved the primary issues in dispute. Nor is it one where the terms on which the action was resolved are equivocal, in the sense of reflecting some compromise of the respective position. The present position may be contrasted with that addressed by Hill J in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194. See also Balgra Shopping Centre Management Pty Ltd v Commissioner of Taxation [2010] FCA 1172 at [22]-[24].

24    I do not regard the deferral of the question as to how the Banibi Herd is to be managed as really informing the exercise of the costs discretion. That is a question which arises only because the primary relief claimed was ordered by consent. The defence of Banibi did not indicate that that consequential question was the real issue between the parties. To that point, Banibi claimed that it was entitled to continue to occupy Elsey Station and to have the Banibi Herd there. The resolution of that consequential question, once the primary relief sought was to be granted, was a matter which would in that event have to be addressed. It presented practical issues to the parties, which they would have to sort out or which they would otherwise ask the Court to address. At no point prior to the consent orders did Banibi convey that its concern was only to ensure the Banibi Herd was properly looked after and managed.

25    Banibi has raised a number of other considerations which, it contends, should nevertheless lead to the view that there should be no order for costs of the action.

26    It makes the important point about the relationship between the parties. It is a matter I remarked upon at an early directions hearing. The sole shareholder of Banibi is the Corporation, whose members are traditional Indigenous persons living on or in the vicinity of Elsey Station. Its directors come from that group. Those persons as a group are either the same as, or at least to a significant degree, those persons on whose behalf the Land Trust was established. There was some proposed evidence, as indicated by filed affidavits, suggesting that some members of the Land Trust did not support the action being taken by the Land Council on behalf of, and in the name of, the Land Trust. It is a little hard to understand how, in those circumstances, matters got to the stage they did.

27    However, there is nothing of substance to suggest that the Land Council did not properly follow the procedures required under the Land Rights Act in relation to the Land Trust before instituting the action on its behalf. Nor is there anything to suggest that the Land Council, in doing so, was not conscientiously endeavouring to perform its proper functions under the Land Rights Act. They are important factors, and responsibilities, imposed on the Land Council. It is a vehicle to oversee the proper management and accountability of the Land Trust within its geographical area of responsibility. Although Banibi says the action was unnecessary, I do not accept that. There was a significant period of time over which communications between the Land Council and Banibi took place, initially prompted by Banibi’s assertion that it was not found by the Agreement, at least as varied by the 2008 Deed, but those communications did not lead to a satisfactory resolution of the Land Council’s concerns.

28    The Land Council is constituted by Aboriginal persons extending well beyond those from the area of Elsey Station. It is publicly accountable for what it does and how it does it. Whilst Banibi can reasonably argue that the relationship between the parties to the action might cause the Court towards making no order for costs, the role and status of the Land Council with its wider accountability influences me to conclude that, despite that relationship, the application for costs of the Land Council, including on behalf of the Land Trust, should be acceded to. There will be only one set of recoverable costs.

29    There is one further contention of Banibi which requires specific consideration. It submits that it abandoned its defence as soon as reasonably practicable following the orders of Reeves J of 10 November 2010 on its motion of 9 November 2010. That motion, as earlier noted, asserted that Banibi wished the Land Trust to become a respondent, rather than an applicant, in the proceeding and sought an adjournment of the hearing. Affidavits from a number of members of the Land Trust supported those contentions. It was only after that motion was refused that it became both necessary and appropriate, so the contention runs, that the defence be no longer pursued. I do not accept that contention. There is no contention now that the action was not brought by the Land Trust and the Land Council in accordance with the procedures under the Land Rights Act. That had previously been in issue, but the issue was not pursued. It was not a consequence of the ruling of Reeves J that the issue could no longer be pursued. That issue was and remained available to be pursued on behalf of Banibi. It had been directed to provide particulars of its case on that issue. Even if that issue were abandoned, so that the status of the Land Trust as one of the applicants was no longer challenged, Banibi had foreshadowed a number of other issues in its defence which, if properly pleaded, could have been pursued. They may not have led to the orders sought by the applicants being refused, but as noted above, Banibi had foreshadowed a much wider series of allegations which it might have pursued at a later hearing. It chose not to do so. The affidavit evidence relied upon on that motion does not go to the conduct of Banibi upon which the applicant’s claim was based. It goes to whether, notwithstanding that conduct of Banibi (by those then directly controlling its affairs), a number of members of the Land Trust and a number of the members of the Indigenous community on Elsey station wanted Banibi to continue to occupy it. If that were the proper question in the proceeding, it may have been ventilated. But the issue concerned the status of the Land Trust (through the Land Council) under the Land Rights Act to have brought the claim, and whether the grounds on which the claim was brought were made out, and if so whether the orders sought should be made. The outcome of the motion of 9 November 2010 did not affect Banibi’s capacity to address those issues. There was no cross-claim as had previously been foreshadowed.

30    For those reasons, I propose to order that the applicants, the Land Trust and the Land Council, have their costs of the proceedings to 15 November 2010 to be taxed or agreed. It is then a matter for those entities as to how, and to what extent, they seek to recover those costs. The submissions for Banibi that, in the circumstances, the recoverable costs should be limited because certain costs were unreasonably incurred are best left to the taxing Registrar. So too, are the submissions for Banibi that the recoverable costs should be limited to the proper professional fees of counsel and solicitors for the Land Trust and the Land Council and proper disbursements (an uncontentious proposition). If, as asserted, some of the legal work was carried out by the Land Council as a litigant in person without incurring legal fees, that will emerge on taxation. The order is that Banibi pay to the Land Trust and the Land Council their costs of the proceeding to 15 November 2010 to be taxed or agreed.

Associate:

Dated:    7 March 2011