FEDERAL COURT OF AUSTRALIA

Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 3) [2019] FCA 492

ORDERS

THE COURT ORDERS THAT:

1.    Within 7 days of the publication of this order, the parties provide a signed minute of consent orders giving effect to these reasons.

2.    The matter remain listed for a case management hearing on 15 April 2019 at 10.15 am.

3.    Costs be in the cause.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCKERRACHER J:

1    The third cross-claimant (the State of Western Australia) challenges paragraphs of the defence to the third cross-claim filed by the applicant (BTAC), who is also the second, third and fourth cross-respondent in the principal proceedings. By an interlocutory application filed on 28 February 2019, the State seeks that certain paragraphs of BTAC’s defence to the third cross-claim be struck out or, in the alternative, further particulars.

2    The State has pleaded that the terms of an agreement operate to bar BTAC’s claim. BTAC has pleaded that in light of surrounding facts that is not so. BTAC may also contend that the agreement does not have that effect regardless of the facts.

3    In my view, the state of the pleadings needs clarification. The parties should commit to their positions. More detailed reasoning follows.

THE PRINCIPLES

4    The State relies on r 16.21 and r 16.45 of the Federal Court Rules 2011 (Cth), which provide:

16.21    Application to strike out pleadings

(1)    A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

(a)    contains scandalous material; or

(b)    contains frivolous or vexatious material; or

(c)    is evasive or ambiguous; or

(d)    is likely to cause prejudice, embarrassment or delay in the proceeding; or

(e)    fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

(f)    is otherwise an abuse of the process of the Court.

(2)    A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1)(a), (b) or (c) or is otherwise an abuse of the process of the Court.

…

16.45    Application for order for particulars

(1)    If a pleading does not give a party fair notice of the case to be made against that party at trial and, as a result, the party may be prejudiced in the conduct of the party’s case, the party may apply to the Court for an order that the party who filed the pleading serve on the party:

(a)    particulars of the claim, defence or other matter stated in the pleading; or

(b)    a statement of the nature of the case relied on; or

(c)    if there is a claim for damages—particulars of the damages claimed.

  (2)    An application under subrule (1) may be made only if:

(a)    the particulars in the pleading are inadequate; and

(b)    the party seeking the order could not conduct the party’s case without further particulars.

(3)    A respondent who applies to the Court for an order under subrule (1) before filing the respondent’s defence must satisfy the Court that an order is necessary or desirable to enable the respondent to plead.

Note:    The intent of the pleading rules is that a party should include all material facts in its pleadings as initially filed so that there is no unfairness to another party by any lack of particularity. If the party has not done so, the Court may at trial refuse to allow the party to present a case that is outside the terms of their pleading.

THE STATE’S THIRD CROSS-CLAIM

5    By the statement of third cross-claim, the State pleads that Chevron Australia Pty Ltd (ABN 29 086 197 757) is the operator and, as part of a joint venture with other participants, is an owner of an LNG plant and processing facility near Onslow in Western Australia (the Wheatstone Project). It pleads that BTAC holds native title on trust for the Thalanyji People as determined in a native title determination and is the applicant in the principal proceedings by which it seeks damages or compensation from the State in respect of loss or damage allegedly caused by the excavation of material from sites within the area over which the BTAC holds native title. It pleads that the first respondent (Onslow Salt Pty Ltd ACN 050 159 558), who is also the first and fourth cross-claimant in the principal proceedings, holds the relevant Mining Lease (ML273SA). The loss or damage claimed by BTAC in the principal proceedings is said to arise from excavation of material from the Mining Lease area.

6    The State then pleads an agreement entered into on 22 December 2010 with BTAC and the native title claimants, the Thalanyji People, in respect of the native title determination (the Native Title Agreement).

7    In [8], the State pleads:

8.    On the proper construction of the Native Title Agreement:

8.1.    For valuable consideration, BTAC and the Native Title Parties supported and consented to the development of and promised not to object to the construction of the Wheatstone Project.

8.2.    The “Wheatstone Project” included the excavation of material from four sites identified in Annexure 1 to the Native Title Agreement as Borrow Sites 1, 2, 3 and 4.

8.3.    BTAC and the Native Title Parties promised Chevron that they would not commence any action or application against the State for compensation under the Native Title Act 1993 (Cth) or under any other law in connection with any effect or impact on any native title right held by BTAC on trust or by the Native Title Parties as a consequence of or arising out of or in relation to: (a) the grant to Chevron of any interest or (b) the construction of the Wheatstone Project, including excavation of material from Borrow Sites 1, 2, 3 and 4 (Native Title Compensation).

8.4.    BTAC and the Native Title Parties agreed that the consideration referred to above, was in full and final satisfaction of all liabilities, determinations, orders, applications, actions, suits, proceedings, claims or demands for, or any other entitlement to, Native Title Compensation which BTAC and the Native Title Parties may then or in the future have, or but for the Native Title Agreement might have had, against the State in connection with construction of the Wheatstone Project.

8.5.    BTAC and the Native Title Parties agreed that the Native Title Agreement could be pleaded by the State as an absolute bar against all liabilities, determinations, orders, applications, actions, suits, proceedings, claims or demands for, or any other entitlement to compensation otherwise arising as Native Title Compensation claimed against the State.

8    The State says it will refer at trial to the Native Title Agreement ‘for its full terms and conditions’.

9    The State also pleads a further agreement entered into on or about 13 July 2011, between Chevron and Onslow Salt pursuant to which Onslow Salt engaged Chevron as a contractor to excavate and remove up to 10 million cubic metres of fill material from Borrow Sites 1, 2, 3 and 4 within the Mining Lease area (the Fill Agreement). The Borrow Sites referred to in the Fill Agreement are the same as those identified in Annexure 1 of the Native Title Agreement as Borrow Sites or Borrow Pits.

10    The State pleads that the promises made by BTAC in the Native Title Agreement and referred to in [8.3], [8.4] and [8.5], conferred benefits directly on the State for the purposes of s 11(2) of the Property Law Act 1969 (WA) and are thereby enforceable by the State in its own name.

11    The State pleads that from about 13 February 2012, in accordance with the Fill Agreement, Chevron’s contractor, Bechtel (Western Australia) Pty Ltd (by its contractor Thiess Pty Ltd) accessed the Mining Lease area, excavated and removed fill material from the Borrow Pits and deposited the Fill Material elsewhere for use in the construction of the Wheatstone Project.

12    BTAC claims damages or loss in the principal proceedings against the State, but that claim, the State says, is in breach of the promises made as pleaded at [8.3].

13    The State also pleads that if, which is denied, the State is otherwise liable at law to pay damages or compensation to BTAC pursuant to the allegations in the principal proceedings and by reason of the matters pleaded in [8.4], the State is not liable to pay the damages sought by BTAC in the principal proceedings.

14    The State pleads that by reason of the matters pleaded in [8.5], the Native Title Agreement is an absolute bar to the commencement and continuation by BTAC of the principal proceedings against the State.

15    The State reiterates that BTAC promised Chevron that BTAC would consent to the excavation by Chevron of the fill material from the area of Onslow Salt’s Mining Lease. Accordingly, any loss claimed by BTAC, by reason of an excavation of fill material by Chevron, was not caused by the State’s facilitation of the excavation by Chevron or by the manner in which that facilitation was effected.

16    The State says that it has suffered loss and damage by reason of BTAC’s breaches of contract, being the payments in court fees and payments to counsel. It seeks an injunction to restrain BTAC from continuing to prosecute the principal proceedings and declaratory relief to the effect that BTAC’s conduct is in breach of the Native Title Agreement and that the consideration paid by Chevron under the Native Title Agreement is in full and final consideration of BTAC’s claims. It seeks a final injunction permanently restraining BTAC from continuing the principal proceedings against the State as well as damages and other relief.

BTAC’S DEFENCE

17    Relevant to the present dispute are [8] and [14] of BTAC’s defence. At [8] BTAC pleads:

8    As to paragraph 8:

a)    BTAC denies that the proper construction of provisions and definitions of the Native Title Agreement can be ascertained without reference to:

    i)    the remainder of the provisions of that agreement;

ii)    the background facts forming part of the factual matrix that enlivens the issue of contractual construction for determination;

iii)    the facts upon which those provisions are said to create, alter or affect the rights of a person, or otherwise to operate,

and says that, accordingly, paragraph 8 is embarrassing;

  b)    BTAC otherwise denies paragraph 8.

18    At [14] BTAC pleads:

14    As to paragraph 14:

a)    BTAC says that from about 13 February 2012, Onslow Salt extracted and removed, or caused to be extracted and removed, up to 10 million cubic metres of fill material, which included gravel, rock and sand, from one or more of Fill Site 2, Fill Site 3 or Fill Site 4 as defined in the Fill Agreement;

b)    BTAC says that the fill material was excavated and removed by Chevron, its employees, sub-contractors or agents, as a subcontractor of Onslow Salt, pursuant to the Fill Agreement;

c)    BTAC admits that Chevron’s sub-contractors included Bechtel (Western Australia) Pty Ltd and Thiess Pty Ltd, and that those persons accessed and carried out mining activities on the areas defined as Fill Site 2, Fill Site 3 or Fill Site 4 in the Fill Agreement;

d)    BTAC says that those mining activities were required to be, but were not, authorised by a mining lease granted under the Mining Act 1978 (WA) and were thereby carried out in contravention of sec 155(1) of the Mining Act 1978 (WA);

e)    BTAC admits that fill material was deposited for use in the Wheatstone Project but does not know and therefore cannot admit where the fill material was deposited and in what amounts; and

f)    BTAC otherwise denies paragraph 14.

CONSIDERATION

Paragraph 8 of the pleadings

19    The State has not specified which particular clauses of the Native Title Agreement it relies upon for its assertions in [8] of the third cross-claim. It may be assumed that it relies, at least, on cl 19 of the Native Title Agreement, which is in these terms:

19.    RELEASE AND INDEMNITY

19.1    BTAC and the Native Title Parties’ agree that the Parties’ obligations under this Agreement, including the Payments are in full and final satisfaction of all liabilities, determinations, orders, applications, actions, suits, proceedings, claims or demands for, or any other entitlement to, Native Title Compensation which BTAC and the Native Title Parties may now or in the future have, or but for this Agreement might have had, against Chevron, the Venturers or the State, and their respective employees, officers, agents or contractors.

19.2    BTAC and the Native Title Parties’ release Chevron and the Venturers from, and acknowledge that this Agreement may be pleaded by Chevron, the Venturers or the State as an absolute bar against, all liabilities, determinations, orders, applications, actions, suits, proceedings, claims or demands for, or any other entitlement to, Native Title Compensation.

19.3    BTAC and the Native Title Parties must not make or commence or facilitate any application, action, suit, proceeding, claim or demand against Chevron, the Venturers or the State in any court, tribunal or other authority for Native Title Compensation under the Native Title Act or any other law.

19.4    Chevron may deduct and set off against its obligations to make the Payments an amount equivalent to:

(A)    any damages payable by BTAC or the Native Title Parties to Chevron, or Venturers at law as a consequence of any breach of this Agreement by BTAC or the Native Title Parties; and

(B)    any amount payable by Chevron or the Venturers to the State by way of indemnity or reimbursement of any Native Title Compensation paid by the State.

19.5    The liability of Chevron to provide payments to BTAC and the Native Title Parties under this Agreement will be reduced in accordance with the deductions and set-offs referred to in clauses 19.4 and Chevron will not be required to make further payments until it has recovered the relevant amount by way of deduction and set off against payments under this Agreement.

20    The State has not, however, confined its pleading to cl 19. It seems that both the State and BTAC must have clearly understood their positions in relation to that agreement for a long time. The State should specify by pleading and particulars which parts of the Native Title Agreement give rise to the matters specifically raised in [8] of its pleading. Once the State has identified the clauses on which it relies, it is then incumbent upon BTAC to clarify its pleading, which is seriously lacking in material facts.

21    Further, the State notes that BTAC appears to have pleaded that the State’s claim is not adequately pleaded. However, the State submits that it is not possible to discern whether BTAC admits or denies the State’s pleaded construction of the Native Title Agreement. Exchanges of correspondence between the parties’ solicitors have not elucidated the position (and could not do so for pleading purposes). The State contends that BTAC must say whether or not it accepts on its face the construction of the Native Title Agreement that the State asserts. If BTAC accepts the State’s construction but says that other facts give rise to a different construction or conclusion BTAC must specify what those facts are and how they change or affect the construction. As the State observes, if the background facts are too cumbersome to be either the subject of a pleading or particulars, they should be supplied as a statement of the nature of the case relied on pursuant to r 16.45(1)(b) of the Rules set out above.

22    On this point, the State’s submissions (subject to the State clarifying on which clauses of the Native Title Agreement it is relying) are, in my view, correct. The State’s application regarding [8] of BTAC’s defence is supported by Onslow Salt and Chevron, who each make submissions substantially in the same terms. I will come to the question of the appropriate relief.

Paragraph 14 of the pleadings

23    The State also says that [14(d)] of the defence should be struck out, which is set out above (at [18]).

24    The State notes that the third cross-claim is confined to the State’s rights under the Native Title Agreement not to be sued in the principal proceedings for damages in respect of the removal of fill material from the Mining Lease area. It is not relevant to that claim, the State says, whether or not the State, but for those rights, would be liable under any head of claim. It is also said not to be relevant to the third cross-claim, in particular, whether or not the removal of fill material by or on behalf of Onslow Salt breached the Mining Act 1978 (WA) since any such breach would not raise any cause of action or defence available to BTAC. As such the State contends that [14(d)] should be struck out as disclosing no reasonable defence.

25    Neither Chevron nor Onslow Salt appear to make submissions in relation to [14(d)].

26    BTAC argues that in circumstances where the State is asserting that certain conduct is the subject of promises given in the Native Title Agreement, the legality of that conduct is highly relevant to a court considering that claim. It is argued that the State is seeking injunctive and declaratory relief in equity based on a contention that the Native Title Agreement should be read to include BTAC expressly consenting to and discharging Chevron and Onslow Salt from liability for engaging in ‘illegal’ mining in circumstances where the Native Title Agreement does not even expressly refer to the performance of ‘legal’ mining. BTAC argues that the proposition that it consented to, and gave release and discharge of any conduct whatsoever including conduct in breach of the law by means of general words in the Native Title Agreement is, on its face, ‘somewhere between weak and untenable’.

27    Further, BTAC relies on r 16.08 of the Rules which provides as follows:

16.08    Matters that must be expressly pleaded

In a pleading subsequent to a statement of claim, a party must expressly plead a matter of fact or point of law that:

(a)    raises an issue not arising out of the earlier pleading; or

(b)    if not expressly pleaded, might take another party by surprise if later pleaded; or

(c)    the party alleges makes another party’s claim or defence not maintainable.

28    BTAC contends that [14(d)] of the defence satisfies r 16.08(a) by raising the issue of the legality of the excavation and removal that is pleaded in [14] of the State’s cross-claim. Additionally, r 16.08(b) requires a party to plead a matter which might take another party by surprise. BTAC says illegality has long been treated as falling within that description, whether it is a true defence or as a factor that is relevant to construction of a provision of a contract (including whether illegal conduct is the subject of general promises made in the contract). BTAC relies on Thorby v Goldberg (1964) 112 CLR 597 per Owen J (at 617) and Fried v National Australia Bank Ltd [2000] FCA 604 per Weinberg J (at [44]).

29    In my view, [14(d)] of BTAC’s defence should remain. The point is neither unarguable nor embarrassing. The parties are sufficiently alerted to the argument which BTAC seeks to run. To that end, the pleading serves a necessary purpose.

CONCLUSION

30    The parties should file a consent minute consequential upon this ruling. In essence, within a short timeframe, the State should identify the particular provisions of the Native Title Agreement on which it relies and then, within a further reasonably short timeframe, BTAC should plead whether or not it asserts that on its face the Native Title Agreement does not carry the meaning contended for by the State. Alternatively, if it is relying on other facts for that position, what those facts are and how they affect the construction of the Native Title Agreement. The State’s argument that such facts could not be admissible to construe the ‘unambiguous’ Native Title Agreement should await the settled versions of the pleadings.

31    As the outcome has been mixed, costs will be in the cause.

Associate:

Dated: 10 April 2019