FEDERAL COURT OF AUSTRALIA

Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 4) [2019] FCA 1275

ORDERS

THE COURT ORDERS THAT:

1.    The second, third and fourth cross-claims be heard and determined prior to the further programming or hearing of the principal proceeding and the first cross-claim.

2.    Within 14 days, the parties file a minute of consent orders programming forward the hearing of the second, third and fourth cross-claims.

3.    If a minute of consent orders as contemplated by order 2 cannot be agreed upon by the parties, the parties are to file separate minutes of proposed orders within the same 14 days.

4.    Any dispute as to the programming orders be determined on the papers.

5.    Costs reserved to be determined on the papers, with submissions not to exceed two pages.

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

REASONS FOR JUDGMENT

MCKERRACHER J:

INTRODUCTION

1    The State of Western Australia, being the second respondent and the third cross-claimant in this matter, applies for an order that the second, third and fourth cross-claims (the cross-claims) be heard and determined prior to the further programming or hearing of the principal proceeding and first cross-claim (the application).

2    The State principally submits that the making of the order sought:

(a)    is the sole means by which the cross-claimants can be accorded their contractual rights; and

(b)    will allow the entirety of the proceeding to be managed more efficiently.

3    Buurabalayji Thalanyji Aboriginal Corporation (RNTBC) (BTAC), being the applicant and the second, third and fourth cross-respondent, opposes the application.

4    Onslow Salt Pty Ltd, being the first respondent and fourth cross-claimant, filed written submissions in support of the application. Chevron Australia Pty Ltd, being the first cross-respondent and second cross-claimant but not a party to the principal proceeding, made oral submissions at the hearing of the application to the effect that if the Court was minded to grant the State’s application then the cross-claims ought to be determined together.

5    For the reasons which follow, I will allow the application. The cross-claims should be heard together prior to further progression of the principal proceeding.

BACKGROUND

6    Much of the relevant background to this matter - the principal proceeding and the cross-claims - is contained in previous judgments: Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd [2017] FCA 1240, Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 2) [2018] FCA 978 and Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 3) [2019] FCA 492. However, it is convenient to lay out some further detail of the principal proceeding and the cross-claims.

The principal proceeding

7    In the principal proceeding, BTAC relevantly pleads in its substituted statement of claim that:

(1)    Onslow Salt, via its subcontractor Chevron, extracted and removed up to 10 million cubic metres of fill material from the Salt Mining Area.

(2)    The fill material was deposited and used as fill in Chevron’s Wheatstone Project.

(3)    Chevron paid Onslow Salt either $75 million or $70 million in exchange for the fill material.

(4)    The removal of the fill material:

(a)    was not authorised by the mining lease granted to Onslow Salt by the State, which was for evaporites only;

(b)    was not and could not be validly authorised by the Minister under the Onslow Salt Agreement, as the Minister had purported to do, as it was outside the approvals power under Onslow Salt’s State Agreement and was an improper exercise of public power whereby the Minister knew that the stated purpose of flood mitigation was a pretext by Onslow Salt to conceal its real purpose of extracting fill material to sell to Chevron; and

(c)    was required to be, but was not, authorised by a mining lease, and was not otherwise authorised.

(5)    Onslow Salt had no lawful authority to cause or permit Chevron to remove the fill material, which resulted in, inter alia, Onslow Salt tortiously interfering with native title rights and interests and in BTAC suffering loss, which was caused contumeliously so as to justify exemplary damages.

8    The State relevantly admits in its amended substituted defence that, by subcontractors, Chevron removed the material, which included gravel, sand and rock, from the area of the mining lease under agreement with Onslow Salt, and deposited the material in the area of its Wheatstone Project which was used by Chevron as fill. However, the State otherwise denies or does not admit the pleadings summarised above and positively avers that the removal of the fill material was authorised by the mining lease.

9    Importantly in the context of this application, BTAC contends that a mining lease needed to be granted in order to allow any excavation of fill material from the area the subject of Onslow Salt’s evaporites mining lease. Such a grant would have triggered an obligation for the grant applicant to notify and consult BTAC under s 24MD(6B) of the Native Title Act 1993 (Cth) - with the ability for BTAC to negotiate a royalty - before the future act occurred; if no agreement could be reached BTAC could have lodged an objection.

10    BTAC also pleads that the purported approval (being void) and the removal of the fill material were not future acts within the meaning of the Native Title Act. In the alternative, BTAC pleads that if the purported approval is not void (as pleaded by the State), then it triggered a right to compensation under s 24MD(3) of the Native Title Act.

The cross-claims

11    The cross-claimants rely on a contract entitled the ‘Native Title Agreement Wheatstone Project’, executed on or about 22 December 2010. For example, in para 8 of the State’s amended statement of third cross-claim (the State’s cross-claim), it is pleaded:

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 (clauses 5.2, 5.6 and 7 of the Native Title Agreement).

8.2.    The “Wheatstone Project” included the excavation of material from four sites identified in Annexure I to the Native Title Agreement as Borrow Sites 1, 2, 3 and 4 (clause 1.1 (definition of “Wheatstone Project”)).

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) (clause 19.3 of the Native Title Agreement).

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 (clause 19.1 of the Native Title Agreement).

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 (clause 19.2 of the Native Title Agreement).

12    Crucially, in relation to the cross-claims, cl 19 of the Native Title Agreement provides:

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.

(Emphasis added)

13    ‘Native Title Compensation’ is a defined term within the Native Title Agreement:

“Native Title Compensation” means any compensation, damages, restitution, benefits, costs, expenses or loss whatsoever, whether arising or recoverable under any State or Commonwealth statute including the Native Title Act, Land Administration Act 1997 (WA), Racial Discrimination Act 1975 (Cth) or the Aboriginal Heritage Act 1972 (Cth) or at common law or in equity or otherwise in connection with any extinguishment of, or effect or impact on, any Native Title Rights as a consequence of or arising out of or in relation to:

(A)    a taking of Native Title Rights for the purposes of granting the Interests to Landcorp, DPA, Chevron, the Venturers or the agents or contractors of Chevron or the Venturers;

(B)    the grant of the Interests to Landcorp, DPA, Chevron, the Venturers or the agents or contractors of Chevron or the Venturers;

(C)    the exercise of rights or the discharge of obligations of any person under or in connection with the Interests; and

(D)    the development, construction, operation and maintenance and decommissioning of the Wheatstone Project.

14    ‘Interest’ is also further defined:

“Interest” means any title or any other legal or beneficial interest in, or in connection with, land or waters or any right to access, traverse, use, occupy or carry out activities on land, or any right, lease, easement, right of occupancy, charge, power, permit, or licence over or in connection with the Project Area necessary for or incidental to the development (including planning, design and construction), operation, maintenance and decommissioning of the Wheatstone Project, including leases, licences or permits under the Land Administration Act 1997 (WA), Petroleum and Geothermal Energy Resources Act 1967 (WA), Petroleum Pipelines Act 1969 (WA), Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth), Petroleum (Submerged Lands) Act 1982 (WA), Mining Act 1978 (WA), Public Works Act 1902 (WA) and Rights in Water and Irrigation Act 1914 (WA).

15    Each cross-claimant, by their respective cross-claim, says that cl 19 of the Native Title Agreement covers the claims made by BTAC in the principal proceeding against Onslow Salt and the State.

16    It is evident from the terms of the pleadings that the cross-claims - the second, third and fourth cross-claims - give rise to the same relief and will invoke the determination of the same, or very similar issues.

17    The prayers of relief sought by the State (and similarly by the other cross-claimants) in its cross-claim are as follows:

A.    A declaration that BTAC’s conduct in commencing and continuing to prosecute the Principal Proceedings against the State is in breach of the Native Title Agreement.

B.    A declaration that the consideration paid by Chevron under the Native Title Agreement are in full and final satisfaction of BTAC’s claims in the Principal Proceedings.

BA.    An order permanently staying the Principal Proceedings.

C.    A final injunction permanently restraining BTAC from continuing the Principal Proceedings against the State.

D.    Damages incurred in the defence of the Principal Proceedings and in prosecution of the Third Cross-claim.

E.    Any other remedy that this Honourable Court considers fit.

18    In summary then, by the State’s application, the cross-claimants seek that their entitlement to this relief be determined separately and prior to further prosecution of the principal proceeding.

THE PRINCIPLES

19    As to the principles concerning an application for a separate hearing, the default position is that in a proceeding all issues of fact and law should be determined at the one time following a trial. More specifically, the default position is that the hearing and determination of a cross-claim should take place at the same time as the principal proceeding: r 15.10(1)(c) Federal Court Rules 2011 (Cth), but cf r 15.13.

20    By rr 15.10, 15.13 and 30.01 of the Rules it is provided:

15.10    Conduct of proceeding after cross-claim is filed

(1)    To the extent practicable and not inconsistent with this Part:

(a)    the parties must conduct a cross-claim in the same way as the principal proceeding; and

(b)    these Rules apply to the cross-claim in the same way as they apply to the principal proceeding; and

(c)    the trial or a hearing, or any other step, in relation to the cross-claim is to be carried out at the same time as the trial or hearing, or any other step, in relation to the originating application.

(2)    For the purpose of giving effect to this rule:

(a)    a cross-claimant is to be treated as an applicant; and

(b)    a cross-respondent is to be treated as a respondent.

…

15.13    Hearings in relation to cross-claims

A party to a cross-claim may apply to the Court for an order:

(a)    that any claim, question or issue arising in the cross-claim be tried in accordance with an order of the Court; or

(b)    permitting a cross-respondent to defend the claim made in the principal proceeding or any other cross-claim in the proceeding, either alone or with another party; or

(c)    permitting a cross-respondent to appear at the hearing of the principal proceeding or any other cross-claim in the proceeding, and to participate in the hearing as the Court considers appropriate; or

(d)    determining the extent to which the cross-claimant, and a cross-respondent, are to be bound as between each other by an order or a decision made in relation to the principal proceeding or any other cross-claim in the proceeding; or

(e)    for the hearing and determination of the principal proceeding and the cross-claim; or

(f)    dismissing the cross-claim.

…

30.01    Application for separate trials

(1)    A party may apply to the Court for an order that a question arising in the proceeding be heard separately from any other questions.

(2)    The application must be made before a date is fixed for trial of the proceeding.

Note 1    The Court may order that a party state a case and the question for decision.

Note 2    The Court will give any directions that are necessary for the hearing of the separate question.

21    While there are authorities suggesting that it is only in an unusual case that a cross-claim should be heard and determined separately (for example, Barclays Bank v Tom [1923] 1 KB 221 and Shrimp v Landmark Operations Ltd (2007) 163 FCR 510), any approach by this Court must be informed by the broader and more flexible principles and powers prescribed in s 37M and s 37P of the Federal Court of Australia Act 1976 (Cth) (the FCA). There is also a need to facilitate a just resolution as quickly, inexpensively and efficiently as possible: s 37M(1) of the FCA.

22    In relation to the principles applicable in guiding the Court’s discretion to order a cross-claim be heard separately, the parties chiefly refer to Beach J’s decision in Australian Energy Regulator v Snowy Hydro Limited [2014] FCA 1013. There Beach J said (at [38]-[40]):

38    Rule 15.13 is expressed broadly. Likewise r 30.01 gives the Court a broad power to make an order for the determination of a separate question in a proceeding. Sometimes this has been described as a power to be exercised where it is “just and convenient” to do so, although this is not the precise language of r 30.01.

39    An important, if not overarching, consideration informing the exercise of any power under r 15.13 or r 30.01 is the need to facilitate a just resolution involving, inter alia, efficient case management (s 37M of the FCA). That is, will this proceeding be managed more efficiently if there is a separate determination of the invalidity question or cross-claim?

40    An issue may not be appropriate for separate and preliminary determination where:

(a)    It is one of two or more alternative ways in which a case is framed and determination of the separate issue would still leave significant other issues unresolved;

(b)    It gives rise to significant contested factual issues both at the time of the hearing of the separate determination and at trial;

(c)    It results in significant overlap between the evidence adduced on the hearing of the separate determination and at trial (GMB Research & Development Pty Ltd v Commonwealth of Australia [1997] FCA 934 (GMB) and Reading Australia Pty Ltd v Australia Mutual Provident Society (1999) 217 ALR 495 (Reading Australia) at [8]);

(d)    Related to point (c), it results in the calling of the same witnesses at both stages of the hearing (GMB and Reading Australia). Such a factor may be significant if not exacerbated if credit issues are involved in relation to lay witnesses or reliability issues are involved in relation to expert witnesses, although the latter problem has less significance;

(e)    It would or is likely to prolong rather than shorten the litigation.

(Emphasis added)

23    Whether a separate hearing is appropriately ordered is a question to be answered by having regard to the ‘utility, economy and fairness’ between the parties: see Tepko Pty Ltd v Water Board (2001) 206 CLR 1 per Kirby and Callinan JJ (at [168]-[170]).

24    Informing these considerations is the nature of the question or issue and whether it is hypothetical. Its factual underpinning is highly significant in determining the appropriateness of any separation.

25    Providing that such guiding principles are not infringed, an issue may be appropriate for separate and preliminary determination if it contributes to the saving of time and cost by substantially narrowing the issues for trial, leads to disposal of the action or contributes to the settlement of the proceeding: Reading Australia Pty Ltd v Australia Mutual Provident Society (1999) 217 ALR 495. It will be relevant if the question or issue that would be subject of an order for separate determination has the potential to finally determine parties’ rights.

26    However, ultimately, as I elaborate further below, the question that arises for the Court when confronted with an application for a separate hearing is whether, in the exercise of the Court’s discretion, this is an appropriate case for the departure from the ordinary course that all issues of fact and law should be determined at the one time, on the basis that it is just and convenient for the order to be made.

THE STATE’S ARGUMENTS

The extent of the overlap of the factual issues

27    The extent of the overlap of the facts across the principal proceeding and the cross-claims is at the core of the contest between the parties as to the appropriateness of the orders sought in this application.

28    The State contends that the matters for determination in the cross-claims do not significantly intrude upon any of the contentious issues in the principal proceeding. The State characterises the object of the cross-claims, relying on the relief being sought, as being the avoidance of the factual contest raised by the principal proceeding.

29    The State emphasises that the cross-claims are confined. Specifically, they are confined to the issues as follows:

(1)    The legal issues of the proper construction of a contract, being the Native Title Agreement.

(2)    In the cross-claims of the State and Onslow Salt, the availability of s 11 of Property Law Act (WA).

(3)    The estoppel alleged by BTAC in defences to the cross-claims. For example, BTAC’s defence to the State’s cross-claim (at paras 25-29) pleads:

Estoppel

25    Shortly before entry into the Native Title Agreement, Chevron represented to BTAC and to the Native Title Claimants that:

a)    the consents Chevron sought to be given by BTAC and the Thalanyji people in the Native Title Agreement were limited to the Initial Taking Order Area and did not include consent to mining, or to the grant of a mining lease or other tenement outside the Initial Taking Order Area;

b)    if agreed and executed the provisions of the Native Title Agreement would not interfere with BTAC’s and the Thalanyji people’s negotiation rights under the Native Title Act in respect of areas outside the Initial Taking Order Area, and that BTAC and the Thalanyji people would retain and could exercise those rights:

   i)    to object to any proposed new tenement sought by any person within the Native Title Determination Area that was outside the Initial Taking Order Area; and

   ii)    to inter alia seek and obtain a royalty by agreement with that person,

     collectively, “the Statements”.

                         Particulars

     1.    The Statements were oral, and were made by Mr Peter McNally of Chevron to Mr Jerome Frewen as agent for and representative of BTAC and the Thalanyji people, in about November 2010.

     2.    Further particulars may be provided following discovery and the close of evidence.

26    Chevron made the Statements knowing and intending that BTAC would rely on them.

27    BTAC people relied upon the Statements and were induced thereby to enter into the Native Title Agreement in its present form in reliance upon the Statements.

28    If Chevron were free to resile from or to go back on the Statements or otherwise to claim that the Native Title Agreement operated inconsistently with the Statements, BTAC would suffer detriment in that it would be prevented from exercising rights it otherwise was induced to believe it still retained.

29    In the premises, if (which is denied) the Court finds that upon the proper construction of the Native Title Agreement:

a)    The Fill Agreement operated as contended by the State; or

b)    the Borrow Pits were part of the Project Area; or

c)    BTAC had consented to the carrying out of mining activities on the Borrow Pits; or

d)    BTAC’s claim is a claim for Native Title Compensation within the meaning of clause 19.3 of the Native Title Agreement: or

e)    BTAC would otherwise be in breach of cl 19.3 of the Native Title Agreement; or

f)    the Payments set out in clause 7 of the Native Title Agreement were in complete satisfaction of BTAC’s claim or the agreement to receive the Payments operated as a discharge of BTAC’s claim; or

g)    the Native Title Agreement would otherwise have the effect that BTAC could not prosecute its claim against Onslow Salt or the State, or otherwise could not recover the relief BTAC seeks,

then Chevron, and any person claiming the benefit of the Native Title Agreement, is estopped and should not be heard to raise that contention against BTAC.

(4)    BTAC’s claims in its defences to the cross-claims that it is entitled to orders against Chevron under s 87(1) of the Trade Practices Act 1974 (Cth) (the TPA), or alternatively s 244 of the Australian Consumer Law (the ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth). For example, BTAC’s defence to the State’s cross-claim (at paras 30-34) pleads:

Trade Practices Act

30    Further, or in the alternative, at all times since at least 1 January 2009, Chevron has been a corporation duly incorporated under a law of the Commonwealth or a State of Australia.

31    The Statements were made by Chevron in trade and commerce within Australia.

32    Further, or in the alternative, the Statements were representations as to a future matter within the meaning of sec 51A(l) of the [TPA], alternatively sec 4 of the [ACL].

33    In the premises, if (which is denied) the Court finds that the Native Title Agreement is to be construed in any or all of the ways pleaded in paragraph 29(a) to (g) of this amended defence, then:

a)    the Statements were misleading or deceptive or likely to mislead or deceive;

b)    further, or alternatively, Chevron did not at the time they were made have reasonable grounds for making the Statements;

c)    BTAC has suffered loss or damage by reason of the Statements as of such time that construction was proffered to the Court by Chevron, or alternatively would suffer loss or damage as of such time that the Court concluded that the Native Title Agreement was to be construed in that manner.

Particulars

  Chevron, the State and Onslow Salt have in cross-claims in this litigation asserted a construction of the Native Title Agreement different from that contained in the Statements, which would have the effect of reducing or preventing BTAC’s claim against Onslow Salt and the State.

34    In the premises, BTAC is entitled to an order against Chevron under sec 87(1) of the TPA, alternatively sec 244 of the ACL, including but not limited to an order under 87(2)(b) of the TPA, alternatively sec 243 of the ACL, to vary the Native Title Agreement so that it is consistent with the Statements.

30    The State contends that, subject to one exception, none of the contested factual questions in the principal proceeding need to be determined in order to resolve the confined issues identified above. The single exception identified is BTAC’s attempt to incorporate the issue of whether a mining lease was required for the extraction of fill material. The State does not accept that this issue validly arises in the cross-claims, nor that it need be examined, and says in any event that it is a matter of statutory interpretation on which no risk arises that a decision in the cross-claims will embarrass the Court in the principal proceeding.

31    The State contends the cross-claims can efficiently be determined without risk of determining facts likely to arise again in the principal proceeding.

The cross-claimants’ contractual rights

32    As to the interests of justice, the State submits if the cross-claims are not determined separately, the relevant contractual rights of the State, Chevron and Onslow Salt conferred by the Native Title Agreement will essentially be rendered otiose.

33    The State stresses that the relevant contractual right is a right not to be sued at all; it is not confined to a contractual right to not be successfully sued.

34    The State points to several matters which compromise or prejudice its and the other cross-claimants contractual rights, including:

(1)    Contractual rights in respect of the various costs of the litigation. Particularly, the cross-claimants’ contractual rights include elimination of the risk that the Court will not order indemnity costs as damages for their expenditure upon their success in the cross-claims. In any event, costs will inevitably be incurred that are not recoverable, even as indemnity costs as damages, if the principal proceeding and cross-claims are heard concurrently. Further, it is evident from the pleadings that the breadth of the factual matters in dispute in the principal proceeding will necessitate the discovery of significantly more documentary material than will be required as a result of the cross-claims.

(2)    The State’s contractual rights include not being obliged to procure the assistance of witnesses on events in 2010 to 2012. That contractual right will be nugatory unless the cross-claims are heard first.

(3)    The State’s contractual rights include the right not to be the subject of adverse findings of fact. Regardless of the final orders, BTAC will seek, and the State is exposed to the risk of, adverse findings of fact.

Efficiency in the management of the proceeding

35    The State characterises the question for the Court as whether the proceeding would be managed more efficiently, retaining a just outcome, if there was a separate prior determination of the cross-claims.

36    The essential point argued is that, if the cross-claims are heard first and separately, the principal proceeding may not be needed at all.

37    The principal proceeding will require determination of significantly more contested issues than the cross-claims.

38    The State accepts:

(a)    if oral evidence will be required from the persons alleged to have made and heard the ‘Statements’ (as defined in para 25 of BTAC’s defence to the State’s cross-claim), then the hearing of the cross-claims would occupy two days; and

(b)    a separate hearing of the cross-claims would involve the separate provision of discovery and exchange of witness statements regarding those issues identified above, ahead of general discovery and exchange of evidence.

39    However, the State contends a concurrent hearing of the principal proceeding and the cross-claims would be significantly longer. Counsel for the State estimate a hearing in excess of 5 days, on the basis that additional oral evidence will likely be required in relation to issues raised by BTAC.

40    Further, the State submits the time it will take for the Court to draft reasons will be much greater for the resolution of the principal proceeding and cross-claims if heard concurrently than if the cross-claims were heard separately in circumstances where there is the prospect no further hearing would be required.

41    Accordingly, it is argued the separate hearing of the cross-claims has the potential to substantially reduce costs and time for the parties and for the Court.

42    In contrast, the State contends the sole consideration in favour of hearing the principal proceeding and the cross-claims concurrently is that all matters may be heard and determined at once. Such a course would come with the expense of denying, without trial, the contractual rights of the cross-claimants and with the expense of the loss of a substantial prospect of a much shorter proceeding.

43    The State submits that none of the factors in Snowy Hydro (at [40] and set out above), apply in the present case, other than to an extent the consequence for lengthening the proceeding (at [40(e)]). Specifically, the State notes:

    The cross-claims are not an alternative way of approaching the principal proceeding.

    The factual issues raised by the cross-claims are discrete and separate from those raised by the principal proceeding.

    On the pleadings in respect of the cross-claims there are few identifiable witnesses. The State is unable to speculate as to whether any of the persons named in those pleadings would be witnesses capable of giving relevant evidence on any contested issue in the principal proceeding.

    The hearing of the cross-claims separately would not extend the overall hearing time of the proceeding, even if they are unsuccessful, and has the prospect of shortening the litigation significantly. The State accepts that the separate provision of discovery and evidence on issues arising in the cross-claims may lengthen the litigation if the cross-claims were unsuccessful, but that delay can be ameliorated by robust programming of those relatively discrete matters and is outweighed by the potential saving in time if the cross-claims succeed.

44    On the other hand and as noted in Snowy Hydro (at [47]), a preliminary determination may be appropriate if it saves time and cost by disposing of the action or contributing to the settlement of the proceeding. The State contends this is the case.

BTAC’S ARGUMENTS

45    BTAC contends the State’s motion is misconceived and should be dismissed. BTAC argues:

(1)    The issues raised by the cross-claims will require resolution of most of the issues in the principal proceeding, will require a similar amount of discovery and will involve consideration of some of the same evidence.

(2)    There would be an increase in, and not a saving of, time or expense in proceeding as the State suggests. Separating the trial will bring about the very problems of duplication, waste of the Court’s and parties’ resources and potential hypothetical or incompletely litigated findings that the High Court has cautioned against.

(3)    The chief vice in the State’s submissions is the failure to examine properly the nature of the case made by the cross-claimants. When that is done, it can be seen that significant issues of fact and law are identical to those in the principal proceeding and are antithetical to a separate hearing.

46    It is immediately clear that the construction of cll 19.1, 19.2 and 19.3 of the Native Title Agreement - and the construction put upon them in paras 8.3, 8.4 and 8.5 of the State’s cross-claim - will arise for determination on the State’s cross-claim. BTAC contends, when these are examined, the enormous extent of overlap with BTAC’s claims in the principal proceeding becomes self-evident.

Paragraph 8.3 of the State’s cross claim and cl 19.3 of the Native Title Agreement

47    BTAC contends para 8.3 of the third cross-claim does not accurately plead the content or effect of cl 19.3 of the Native Title Agreement (both of which are set out above). Specifically, there is no reference in the Native Title Agreement to ‘excavation of material’ and secondly, the State’s pleading employs the words ‘any interest’, whereas the Native Title Agreement employs ‘the Interests’, where ‘Interest’ is a defined term.

48    BTAC contends there will be a question of interpretation as to what ‘the Interests’ are and that the State has not sought to identify what the supposed interest is. If the interest is said to be something granted by Onslow Salt under the Fill Agreement (as Chevron pleads), then BTAC says the question of whether any ‘Interest’ could or was granted would arise, involving the same factual and legal dispute joined between the parties in the principal proceeding. BTAC characterises this dispute as whether Onslow Salt had the power to authorise Chevron to do what it did, and hence whether any ‘Interest’ could arise.

49    Resolving the question on the cross-claims as to whether any ‘Interest’ exists such that the definition of ‘Native Title Compensation’ can even apply would therefore involve the Court having to resolve some of the same contests and the very questions of fact which arise in the principal proceeding.

50    Additionally BTAC argues that para (B) and para (D) of the definition of ‘Native Title Compensation’ require determination of the validity of the purported approval, which would presumably require the calling of witnesses on the preliminary hearing designed to disprove BTAC’s allegations. BTAC asserts credit findings would no doubt need to be made, which ‘would affect’ the hearing of the principal proceeding if those witnesses had to give evidence again.

51    Further, BTAC contends there would need to be significant discovery required, all of which would add significantly to the estimate for time required for preparation and the separate hearing of the cross-claims. This would simply result in the preliminary question absorbing the bulk of the issues of the principal proceeding itself. The State’s estimates of time and savings are therefore said to be ‘palpably wrong’.

52    BTAC particularly draws the Court’s attention to the factual contest that would arise at the separate hearing of the cross-claims, arguing that a declaration should not be made or an answer given which amounts to no more than a declaration that the law dictates a particular result when certain facts in the material or pleadings are established. The facts must be stated and identified with precision. And the facts should not be left open. They should be established or agreed.

53    Identifying that para 8.3 of the third cross-claim appears to be the basis for the declaration sought in prayer A and the injunction sought in prayer C of the State’s cross-claim, BTAC argues it is not a proper use of the separate hearing procedure to seek from the Court a declaration that depends on facts yet to be established. The examples BTAC gives are whether Onslow Salt’s evaporite mining lease went beyond evaporites and whether the purported approval was invalid.

54    BTAC contends that it is a declaration which is sought here in respect of the declaratory relief pleaded in the prayers of relief in the State’s cross-claim, rendering it inappropriate for a separate hearing.

55    BTAC argues the State’s application must fail on each of the points identified in Snowy Hydro (at [40] and set out above):

    There are identical contested factual issues both at the time of the hearing of the separate determination and at trial.

    There is significant overlap between the evidence adduced on the hearing of the separate determination and at trial.

    The same witnesses will be required.

    The litigation would be prolonged.

56    As BTAC also stresses, it has pleaded in its defence to the cross-claims that a representative of Chevron stated to BTAC just before the Native Title Agreement was signed that the Native Title Agreement would not prevent BTAC from seeking a royalty from any person proposing to acquire a mining lease on Thalanyji land to provide materials for the Wheatstone Project (referred to as the ‘Statements’). That founds the estoppel and TPA defence pleaded against Chevron and, via s 11 of the Property Law Act and general principles of equity, the defence pleaded against the State. If successful, the cross-claims will be wholly precluded. This claim will involve discovery, given that para 1 of Onslow Salt’s reply (in relation to the fourth cross-claim) expressly pleads that the matters ‘must be viewed in the context of the communications by BTAC and the Thalanyji People to Onslow Salt’. That means that two rounds of discovery would likely need to be provided by every party, once in relation to the separate hearing of the cross-claims and once in relation to the principal proceeding.

57    Finally, BTAC says that even if the State were completely successful on its proposed separate hearing, this would not fully resolve claims against Onslow Salt for breach of the Development Deed, therefore leaving significant other issues unresolved.

58    BTAC contends the State’s assertions that it ‘does not accept’ that (1) the issue of the validity of the extraction of the fill material as a result of the mining lease ‘validly arises’ on the cross-claims; and (2) irrespective, the matter is ‘a matter of statutory interpretation on which no risk arises that a decision in the [c]ross-claims will embarrass the Court in the primary proceedings’ or of ‘determining facts likely to arise again the principal proceedings’, are both wrong. The question is not what the State ‘accepts’, rather it is what would be involved if the cross-claims were heard separately as sought. BTAC contends the State has ignored that its contention that the damages sought in the principal proceeding are ‘Native Title Compensation’ cannot be assumed. Nor can it be determined without examining the rights conferred under the mining lease and the validity of the purported approval - which is a very large part of BTAC’s claim against the State in the principal proceeding. BTAC characterises what is sought as not a separate hearing, but rather a partial hearing of the bulk of the principal proceeding.

59    Finally, BTAC takes issue with the State’s statements about what it asserts to be its ‘contractual rights’. It has those rights only if the Native Title Agreement applies, as the State asserts.

Paragraph 8.4 and para 8.5 of the State’s cross claim and cl 19.1 and cl 19.2 of the Native Title Agreement

60    The same problems are contended to affect the remainder of the State’s cross-claim concerning cl 19.1 and cl 19.2 of the Native Title Agreement (set out above).

61    First, BTAC contends that the release therein contained does not extend to Onslow Salt, meaning that it will not affect the proceeding against Onslow Salt even if the State were successful. Separate questions should not be ordered if they would not ‘settle the dispute finally’ or avoid further litigation: Director of Fisheries (NT) v Arnhem Land Aboriginal Land Trust (2001) 109 FCR 488 per Sackville J (at [136]) (with whom Merkel J agreed).

62    Secondly, the satisfaction is only for claims for ‘Native Title Compensation’. As set out above, determining whether BTAC’s claims in the principal proceeding include claims for ‘Native Title Compensation’ involves litigating many of the same substantial issues in the principal proceeding.

63    Thirdly, the promise in cl 19.1 and cl 19.2 must also be construed according to the principle in Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112, where Dixon CJ, Fullagar, Kitto and Taylor JJ said (at 129-130):

From the authorities which have already been cited it will be seen that equity proceeded upon the principle that a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor.

64    In Grant, the Court observed (at 131) that general words of a release are read ‘by reference to particular matters which recitals show to be the occasion of the instrument’ and are ‘also affected by the general tenor of the deed’.

65    This takes particular significance if it is to be asserted by the State that the Native Title Agreement should be read as acknowledging satisfaction for claims which BTAC describes as involving uncontemplated illegal activities during the construction of the Wheatstone Project, and further, the activities of Onslow Salt (which is not named in the definition, and not party to the Native Title Agreement). It is not at all likely that the State can succeed in a contention that BTAC was promising Chevron not to sue Onslow Salt or the State in respect of illegal mining by Onslow Salt that caused damage to the native title rights and interests. Resolving that question will again require evidence about the factual matrix of the Native Title Agreement, including evidence from any necessary witness and discovery.

66    Each of these obstacles is said to be fatal to an application for a separate hearing of this part of the State’s cross-claim. BTAC contends the core bases on which the State rests its cross-claim cannot be determined separately from the principal proceeding without a significant duplication of time and costs.

CONSIDERATION

67    I note for completeness that issue was taken in written submissions filed by BTAC with the Court’s power to make an order in respect of all three of the relevant cross-claims under r 15.13 of the Rules in circumstances where only the State had brought on an application for a separate hearing and there were no separate applications before the Court in respect of Chevron and Onslow Salt’s cross-claims. BTAC did not press that argument. It is clear that although r 15.13 of the Rules only applies to the State’s application insofar as it relates to its cross-claim, the Court has power more generally to make an order for a separate hearing of all three cross-claims if appropriate: see r 1.32 and 1.35 of the Rules. As an important preliminary question, I am satisfied I have the power to make the orders sought for a separate hearing of the cross-claims. The key issue is whether I ought to exercise my discretion and make such orders.

68    In determining this application, it is important to bear in mind that by the cross-claims the cross-claimants seek to rely on a purported covenant not to be sued. While I accept BTAC’s submission that the scope and existence of those contractual rights is placed in issue, if the matter proceeds to final hearing at which the question of whether the cross-claimants (or some subset of the cross-claimants) have these rights, it will be too late then for such rights, if any, to be of benefit. The whole point of such a covenant would be defeated. This is evidenced by the matters noted by the State in respect of litigation costs, the preparation of witnesses and exposure to adverse factual findings. The covenant on its face is not to sue, rather than to not sue successfully.

69    BTAC’s submissions focus predominantly on what can most appropriately be characterised as the efficiency of a separate hearing of the cross-claims. However, in considering the exercise of the broad discretionary power conferred in respect of this issue of case management, regard must be had to the course which affords the most just outcome between the parties, not only the efficiencies.

70    In essence, the issues in the State’s cross-claim relate to the proper construction of the Native Title Agreement, with reference to the allegations made in the principal proceeding. In the State’s cross-claim it is pleaded that, by the Native Title Agreement, BTAC and the native title parties promised that they would not commence any action or application against the State for compensation as a consequence of, or arising out of, or in relation to:

(a)    the grant to Chevron or the Venturers of the Interests; or

(b)    the development, construction, operation and maintenance and decommissioning of the Wheatstone Project.

71    BTAC contends that these issues give rise to the question of whether the release in the Native Title Agreement can extend to authorise the acts carried out and that this question will necessarily involve the Court determining the substance of the claim pleaded in the principal proceeding with the resultant delay, unnecessary costs and overlap of evidence, particularly in respect of witnesses and the consequential risk of inconsistent credibility findings. As put by counsel for BTAC, the contest as to the scope of the release will require an investigation of ‘the factual matrix at the time of contracting for the Native Title Agreement’.

72    I will assume that any hearing of the cross-claims may be met by a contention by BTAC that the release can only be construed as applying to approvals lawfully granted and that the approval granted was invalid. While the cross-claimants’ response may be that such an argument is irrelevant, as foreshadowed by senior counsel for the State, I accept that it may be an argument advanced if the cross-claims are heard separately. To the extent that BTAC raises matters in defence germane to the cross-claims (irrespective of whether or not they are relevant to the principal proceeding), the cross-claimants will need to be on notice and prepared to address such contentions. If they are issues pleaded in the principal proceedings, they will be determined at the separate hearing and my findings of fact and/or law will be applicable in the principal proceeding should the cross-claims be unsuccessful. Issues which do not arise in the principal proceeding, such as BTAC’s estoppel defence, pose no great bearing on the assessment of overlap.

73    Any finding on credit in the separate hearing would relate to persons present at discussions about the Native Title Agreement with Chevron, which does not relate to the principal proceeding. In any event, the same credit issue would arise in a combined hearing and might similarly affect other evidence. The point of BTAC’s submission as to issues of credibility is not compelling. BTAC’s counsel pointed to the possibility of the State or Onslow Salt wanting to call witnesses on the cross-claims regarding the validity of the purported approval and contended those possible witnesses would be the same called in the principal proceeding. The possibility of different credibility determinations arising at different stages in a proceeding and/or in relation to different issues does not pose a difficulty. The rejection of the account of witness X on issue A does not mean he or she has to be disbelieved on issue B.

74    I was referred to several authorities which emphasise, and I fully accept, the need for courts to exercise considerable caution before making orders for the separate determination of matters: for example, Bass v Permanente Trustee Co Ltd (1999) 198 CLR 334 (at [49]-[59]) and Tepko Pty Ltd v Water Board (2001) 206 CLR 1 (at [168]-[170]). The Court was also referred to Kenny J’s observations in Fleming’s Nurseries Pty Ltd v Hannaford [2008] FCA 591 (at [17]) in relation to the predecessor to r 30.01 and which were cited with approval by Mortimer J in Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd [2016] FCA 610 (at [17], see also [23]):

The principles that govern the circumstances in which an order under O 29 r 2 of the Federal Court Rules may be made are well established. They are discussed by Branson J in Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 (Reading) at [7] and [8] and by French J in Olbers Co Ltd v Commonwealth (No 3) [2003] FCA 651 at [7]. Ultimately, the question is whether, in the exercise of the Court’s discretion, this is an appropriate case for the departure from the ordinary course that all issues of fact and law should be determined at the one time, on the basis that it is just and convenient for the order to be made: see Reading at [9]; Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130. As counsel for the applicants pointed out, the outcome of the reported decisions on O 29 r 2 turns in each instance on the nature of the case and the particular circumstances relevant to it.

(Emphasis added.)

75    I accept there may be matters of efficiency, as identified by BTAC, which may possibly point against a separate hearing of the cross-claims. However, there are also matters of efficiency, and more importantly in this instance of justice, which do point in favour of such an approach. The State’s defence in the principal proceeding also pleads the release in the cross-claims. If the State fails in the separate hearing of its cross-claim, the relevant paragraphs of the defence would fall away. If the State succeeds, there will be no principal proceeding against the State. It is this point which is crucial. As much as BTAC is entitled to have its arguments about the contractual interpretation fully ventilated, on the face of the matter, the State is, in my view, entitled to have its argument as to the effect of the contractual clause tested. Otherwise the clause is totally worthless. Without commenting further on the content of the clause, the construction and effect of which in context is yet to be determined, I would simply add that I would not reach this conclusion in favour of the State’s argument, if on its face the clause were of a confined, narrow or limited effect. Subject perhaps to the foreshadowed reliance on Grant, BTAC has not advanced any construction of the clause in the contention quite to this effect. Its arguments as advanced to date appear to turn on surrounding circumstances.

76    I note BTAC’s further contention that a separate hearing of the cross-claims may not finally determine the matter in respect of Onslow Salt. However, in my view, this should not stand in the way of the State’s application for a separate hearing. It is not clear how this point addresses the State’s claimed right not to be sued, independent of any suit against Onslow Salt. In any event, Onslow Salt has filed its own cross-claim.

77    Finally, even if the determination of the cross-claims does not finally dispose of the proceedings in respect of all parties, it will significantly narrow the matters in dispute in the principal proceedings. It may also realistically assist in improving the prospect of compromise.

78    BTAC characterises the core question as whether it is just and convenient to hold a hearing on the cross-claims and contends, principally in light of the overlap of discovery, evidence and credit findings as to witnesses, that the cross-claims are inapt for separate determination. However, the key point relevant to the State’s application for a separate hearing is that the BTAC allegations are made in the principal proceeding and that the separate hearing of the cross-claims would prevent the injustice of a continued breach of a contractual promise, such that even if the Court were to need to engage in some fact-finding that ought not to be fatal to this application. I have considered all matters raised and accept the State’s argument on this point.

CONCLUSION

79    The authorities make clear that the question is whether efficiency can be obtained whilst doing justice to the parties. The justice that the State and the other cross-claimants rely upon is a contractual promise not to be sued. The assessment of efficiencies cannot be assessed in isolation from the demands of justice. The State’s cross-claim is, essentially, an application to restrain BTAC from further breach of a negative covenant in a contract. Justice demands that the cross-claimants be entitled to seek to rely upon the contractual promises to which they respectively point in their cross-claims and BTAC to explain why they cannot do so. I consider that the circumstances of this case warrant, in an exercise of the Court’s discretion, a departure from the ordinary course on the basis that it is just and convenient for the cross-claims to be heard first.

Associate:

Dated: 15 August 2019