Federal Court of Australia

Malone v B &M Aboriginal Corporation (in Administration) [2024] FCA 270

ORDERS

THE COURT ORDERS THAT:

1.    The notice of appeal attached to the application for leave to appeal filed on 14 March 2024 be deemed to be a notice of appeal with any requirement for filing and service of the same being dispensed with.

2.    Any appeal so instituted be heard together with the application for leave to appeal with submissions in respect of leave being treated as submissions on a substantive appeal, to the end that, if leave be required and granted, any consequential appeal be determined instanter.

3.    The operation of orders 2, 3 and 5 of the orders made by the Court on 26 February 2024 be stayed until the hearing and determination of the application for leave to appeal and the appeal or further earlier order.

4.    Costs be reserved.

5.    Liberty to apply.

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

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

LOGAN J:

1    There is an adage that “the road to hell is paved with good intentions”. Some attribute the origin of that adage to Samuel Johnson, as related in Boswell’s Life of Johnson in the last quarter of the 18th century. But as there related, what Johnson is supposed to have said is “hell is paved with good intentions”, without the introductory words “the road to”. It is possible to find yet earlier supposed sources of the adage as far back as the 12th century when Saint Bernard of Clairvaux is supposed to have observed “hell is full of good intentions or desires”.

2    Whatever might be the source, the applicability of the adage in the circumstances of this case came to mind when hearing, as general duty judge, an application for a stay of certain orders made on 26 February 2024 in a native title matter: see QGC Pty Limited v Alberts (No 5) [2024] FCA 139. On that day, the Court made the following orders:

1.    Pursuant to r 9.05 of the Federal Court Rules 2011 (Cth), Margaret Hornagold, Christine Malone, Dorothy Daylight, Brent Daylight, Chereta Daylight and the Daylight United Aboriginal Corporation (ICN 10168) be joined as interested parties (the Daylight Interested Parties).

2.    Orders 1 and 2 of the Orders of the Court made on 2 March 2023 be set aside.

3.    The funds held by the Court on behalf of B&M Aboriginal Corporation (ICN 9678) pursuant to Orders 3 and 5 made by the Court on 3 February 2023, plus any interest accrued from the funds being held by the Court, be paid to Bruce Gleeson in his capacity as voluntary administrator of B&M Aboriginal Corporation (ICN 9678).

4.    Rule 17.01(2) of the Federal Court Rules 2011 (Cth) be dispensed with, with respect to any parties to the proceedings who are not members nor disputed members of B&M Aboriginal Corporation (ICN 9678), being:

4.1    QGC Pty Limited;

4.2    Natalie Alberts;

4.3    Kenneth Bone;

4.4    Mona Booth;

4.5    Lillian Colonel;

4.6    Patricia Conlon;

4.7    William Davis;

4.8    Elizabeth Doyle Johnston;

4.9    Kylie Jerome;

4.10    Edna Malone;

4.11    Christine Malone;

4.12    Margaret McLeod;

4.13    Kathleen Ott;

4.14    BCJWY Aboriginal Society Limited;

4.15    Murra Downs Ltd;

4.16    Boonyi Downs Pty Ltd.

5.    The Daylight Interested Parties’ application for orders sought in paragraphs 2 – 6 of their interlocutory application lodged on 9 February 2024 be dismissed.

6.    B&M Aboriginal Corporation (ICN 9678) and the Daylight Interested Parties bear their own costs of the interlocutory applications lodged on 1 December 2023 and 9 February 2023 respectively.

3    Ms Christine Malone, Ms Margaret Hornagold, Ms Dorothy Daylight, Mr Brent Daylight and Ms Chereta Daylight (the Daylight interested parties), who were joined as interested parties by that order of 26 February 2024, seek leave to appeal or alternatively appeal against orders 2, 3 and 5 of the orders made on 26 February 2024.

4    The good intentions in this case repose in an indigenous land use agreement registered as QI2010/006 (the ILUA) under the Native Title Act 1993 (Cth) (the Act). Amongst other things, that ILUA provides for the payment of financial benefits to a nominated entity or nominated entities as provided for under that agreement for the families (as defined in that agreement). At a most general level of abstraction, it might be said that those financial benefits flow from the undertaking of particular works in respect of the Curtis Island liquefied natural gas project.

5    The road to the payment of those financial benefits with all of the good intentions, so apparent from the ILUA, has been beset by a series of later controversies in this Court. Those controversies, in turn, as can sometimes happen, reflect disagreements within families. Such disagreements have seen much time and effort and, therefore, costs expended by lawyers and, most recently, by the administrator of one nominated entity, B&M Aboriginal Corporation (ICN 9678) (B&M). B&M also is an interested person in these proceedings.

6    The primary judge noted, as do I, that the history of disputes arising in relation to this ILUA is to be found in several judgments of Rares J: Conlon v QGC Pty Limited (No 2) [2017] FCA 1641; 359 ALR 460; QGC Ltd v Alberts [2020] FCA 1869; QGC Ltd v Alberts (No 2) [2021] FCA 540; QGC Ltd v Alberts (No 3) 404 ALR 493; QGC Ltd v Alberts (No 4) [2022] FCA 1590.

7    The immediate source of the controversy which it fell to the primary judge to resolve was an order made by Rares J on 3 February 2023. That order provided materially:

1.    It be declared that Trevor Hauff Lawyers has an equitable right to be paid the sum of $299,384.18 out of the funds paid into Court by the applicant before any other distribution of those funds, being for solicitor/client costs as certified in the certificate of taxation issued by the Registrar on 25 July 2022.

2.    The applicant pay the 2022 and 2023 annual payment required under clause 3.1(c) of the Indigenous Land Use Agreement included on the register of the National Native Title Tribunal as QI2010/006 (ILUA) into Court on or before 8 February 2023.

3.    The funds paid into Court by the applicant plus any interest accrued from the funds being held by the Court be distributed by the Court through the process set out in Order 4 to the entities noted below as follows:

(a)    first, $299,384.18 be paid to Trevor Hauff Lawyers, being for solicitor/client costs as certified in the certificate of taxation issued by the Registrar on 25 July 2022; and

(b)    secondly, the balance be distributed by payment in 11 equal shares to each of the [named] entities [which relevantly included B & M].

…

5.    Subject to each entity listed in order 3(b) continuing to meet the requirements for being a Nominated Entity in accordance with the ILUA, the remaining payments to be made by [QGC] in accordance with the terms of the ILUA, be paid by [QGC] in 11 equal shares to the respective bank accounts of those entities as notified to [QGC] as when they become due.

8    After 3 February 2023, a further order was made in the proceedings on 2 March 2023 by Meagher J. That order provided:

THE COURT NOTES THAT:

1.     An internal dispute has arisen between the directors of the B&M Aboriginal Corporation (ICN 9678) (“the entity”) in relation to the payment of the funds held by the Court on behalf of the entity, which are in the sum of $218,971.42.

THE COURT ORDERS THAT:

1.    The entity provide a resolution in accordance with its rule book notifying the Court of its bank account details.

2.    To the extent that Order 3 and Order 4 of the Court’s orders of 3 February 2023 relate to the entity, these orders are suspended pending receipt of the reolution referred to in Order 1.

3.    The parties have liberty to apply on the giving on three days’ notice.

4.    Costs of this case management hearing be reserved.

[sic]

9    There were several interlocutory applications before the primary judge. They included, on the part of B&M, an application for the following (and adopting the short-titling used by the primary judge):

(a)     to set aside Orders 1 and 2 made by Meagher J on 2 March 2023, which required B & M to provide a resolution in accordance with its rule book notifying the Court of its bank account details, and suspending the operation of Orders 3 and 4 of the Rares J Orders pending receipt of that resolution;

(b)     a direction that the funds held by the Court on behalf of B & M pursuant to Orders 3 and 5 of the Rares J Orders, plus any interest accrued from the funds being held by the Court, be paid to Bruce Gleeson in his capacity as voluntary administrator of B & M;

(c)    an order that r 17.01(2) of the Federal Court Rules 2011 (Cth) be dispensed with, with respect to any parties in the proceedings who are not members nor disputed members of B & M.

10    For their part, the Daylight interested parties sought a declaration that another corporation, Daylight United Aboriginal Corporation (ICN 10168), be declared to be the new nominated entity for the purposes of the ILUA in substitution for B&M. Apart from their joinder as interested parties, the Daylight interested parties also sought these orders (again adopting the primary judge’s short titles):

(b)    that the B & M IA be struck out and dismissed;

(c)    pursuant to r 39.05(c) of the Rules, Order 3(b)(iv) of the Rares J Orders be amended to replace B & M with DUAC;

(d)    a direction that the funds in Court held previously on behalf of B & M pursuant to Order 3(b) and the funds held by QGC pursuant to Order 5 of the Rares J Orders, plus any interest accrued, be paid to DUAC upon notification in accordance with Order 4(b) of the Rares J Orders; and

(e)    an order that the administrator, Mr Bruce Gleeson, pay the costs of Trevor Hauff Lawyers in respect of his application on an indemnity basis.

11    Originally, yet another incorporated body, BCJWY Aboriginal Society Limited, incorporated on 6 April 2011, was the nominated entity. QGC Pty Limited, which is a party to the ILUA and the person responsible for payment of financial benefits for which Annexure 3 provides, commenced proceedings in the Court on 18 May 2018 because of concerns about BCJWY’s capacity to receive and administer a distribution of funds payable under the ILUA. BCJWY was placed in administration on 2 March 2019. Later, on 5 July 2019, it was placed in liquidation.

12    It is helpful, as the primary judge found, not just to set out particular clauses from the ILUA, but to do so interpolating the way in which, by a declaration made on 29 April 2021, Rares J declared that clause 2.1(b) of Annexure 3 be construed. Materially, and subject to that declaration, clauses 1, 2 and 3 of Annexure 3 to the ILUA provide:

1    Nominated Entity

1.1    The Parties agree to establish the Nominated Entity to be used for the purposes of holding the Financial Benefits provided under this Agreement for the Families.

1.2    The Nominated Entity must be an entity created at law and must be either:

(a)    an incorporated body:

(i)    whose membership or shareholding is restricted by its constitution to members of the Families;

(ii)    which is not in administration, receivership or liquidation under any laws applicable to the incorporated body;    

(iii)    which the Native Title Party has agreed is a Nominated Entity for the purposes of this Agreement; and

(iv)    which exists at the date of this Agreement or is established by the Families for the purposes of this Agreement; or

(b)    a trust:

…

2    Nomination of the Nominated Entity

2.1    As soon as practicable after the later of:

(a)    the Authorisation Date; or

(b)    the establishment of the Nominated Entity, if there is no Nominated Entity at the Authorisation Date or, if at any time thereafter, the Nominated Entity for any reason has ceased to be capable of acting in accordance with clause 1.2;

the Native Title Party, on behalf of the Families, must notify QGC in writing of the name and address of the Nominated Entity.

2.2    Once the Nominated Entity has been established and all signatories to this Agreement have provided written notice and direction to transfer the Benefits to the Nominated Entity, QGC will transfer the Benefits to the Nominated Entity in accordance with this Annexure and this Agreement.

2.3    In the event that the Nominated Entity has not been established by 31 December 2010 and provided the Registration Date has passed by that date, the Parties agree that the Financial Benefits will be transferred to Gadens Lawyers’ trust account to be held on trust in accordance with the terms of this Agreement.

3    Financial Benefit

3.1    QGC will pay the following amounts:

(a)    $1 million on the Authorisation Date (to be held in Gadens Lawyers’ trust account until the Registration Date);

(b)    $1 million on the Registration Date; and

(c)    Ten annual payments of $350,000, with the first payment to be made on the QCLNG Commissioning Date and subsequent payments to be made on the anniversary of that date (Anniversary Date).

3.2    The amounts payable under clause 3.1(c) of this Annexure 3 shall be adjusted annually to reflect any increase in the All Groups Consumer Price Index applicable to Brisbane for the quarter ending prior to the Anniversary Date that year.

3.3    QGC will make $50,000 available to the Native Title Party from the Authorisation Date to assist with legal advice and documentation for the establishment of the Nominated Entity. This $50,000 will be payable for activities which are a necessary component of the Nominated Entity’s establishment, including, but not limited to:

(a)    the provision of ongoing corporate governance training for directors;

(b)    the establishment of an organisational structure;

(c)    the development of business plans;

(d)    the development of strategic and operational plans; and

(e)    capacity building to enhance financial and administrative capability within the Nominated Entity.

[emphasis in original]

13    The declaration made by Rares J on 29 April 2021 was that the ILUA:

…on its proper construction, includes after the words “the establishment of the Nominated Entity, if there is no Nominated Entity at the Authorisation Date” the following implied term, namely “or, if at any time thereafter, the Nominated Entity for any reason has ceased to be capable of acting in accordance with clause 1.2.”

14    Before the primary judge, the Daylight interested parties submitted that because B&M was, by then, in administration, it could no longer be a nominated entity within clause 1.2(a)(ii), such that it was not eligible to be paid under order 3(b) and order 5 of the orders made by Rares J on 3 February 2023. The Daylight interested parties put emphasis on the conditional clause by which order 5 commences “subject to each entity listed in order 3(b) continuing to meet the requirements for being a Nominated Entity in accordance with the ILUA”.

15    B&M was placed in administration on 14 September 2023. Prior to then, QGC had paid into Court two groups of funds, namely, the annual 2022 and 2023 payments contemplated by clause 3.1(c) of Annexure 3 to the ILUA.

16    B&M’s submission, which was upheld by the primary judge, was that order 3(b) of those made by Rares J on 3 February 2023 required that funds be distributed to the 11 entities listed in that paragraph, which included B&M, in 11 equal shares. In her Honour’s view, because at that date B&M was a nominated entity and had not yet entered administration, it had a vested right to receive the one eleventh equal share in accordance with order 3(b). Having reached that conclusion, and in respect of any further annual payments which her Honour termed “the future funds”, her Honour stated at [16]:

The future funds were to be paid out to the 11 entities only insofar as those entities continued to meet the requirements of clause 1.2(a)(ii). It is not disputed that B&M no longer meets those requirements as a company in administration. It makes no claim to the future funds.

17    On 14 March 2024, the Daylight interested parties filed an application for leave to appeal against the orders mentioned of those made on 26 February 2024. On 15 March 2024, I ordered that the operation of those orders be stayed until 6 pm today or further earlier order. That was to enable counsel for each of the parties to be heard. It was not possible to hear counsel for the Daylight interested parties on Friday, 15 March 2024, only by telephone their solicitor, Mr Hauff. It is apparent enough from his affidavit that Mr Hauff, who practises in Port Douglas in Far North Queensland, faced very real difficulties, having been notified late the previous day in coming to Brisbane. Further, the only practical, or at least reliable, means of communication with him that day was by telephone.

18    The administrator of B&M, Mr Gleeson, had the difficulty of an upcoming expiry of a convening period this coming Friday, 22 March 2024. Even so, one might have expected upon Mr Hauff’s difficulties having come to the attention of the administrator and those acting for him, as well as an ability to hear a stay application today, that there would have been a consensual position reached as such that, without admission as to the merits of a stay application, the status quo was preserved until today without any need for an appearance last Friday. However that may be, it is necessary to determine today whether or not to grant a stay.

19    QGC, though notified of the application, has not appeared. That is hardly surprising as it has, quite properly, paid contentious funds into Court. Other respondents have also been given notice of the application. Those respondents, however, have no particular interest in the one-eleventh share which is controversial, so, once again, it is hardly surprising that they have not appeared.

20    It is perhaps a moot point as to whether leave to appeal is necessary. The orders of 26 February 2024 are a sequel as between interested parties to proceedings instituted in 2018. Commendably, with respect, B&M’s position via Mr Gleeson as administrator is that the interest of B&M is in resolution of a controversy, rather than the agitation of practice points. B&M recognises that if leave were required, it is inherently likely that the Court would deem submissions on any leave to appeal application as submissions on a substantive appeal, if leave were granted to the end of any such appeal being heard and determined instanter if leave were granted. B&M’s position is to try and minimise costs associated with the controversy which has emerged with respect to the particular orders of 26 February 2024 which are under challenge. The Daylight interested parties have a like interest, as was voiced by their counsel.

21    In these circumstances, and irrespective of the fate of the stay application, I propose to order that the application for leave to appeal, if leave be necessary, be heard and determined on the footing that submissions in respect of the leave application be treated as submissions on any consequential appeal, to the end that any such appeal be heard and determined instanter. I also propose to order that the draft notice of appeal annexed to the application for leave to appeal filed on 14 March 2024 be deemed to be a notice of appeal filed that day with the requirement for the separate filing and service of such deemed notice of appeal being dispensed with. I also propose to order that any appeal as so instituted be heard together with the application for leave to appeal.

22    The grounds of appeal as set out in what is now the deemed notice of appeal are prolix and, with respect, unnecessarily so. It is not necessary in the context of determining whether to grant a stay to delve into whatever may be the merits other than at an impressionistic level.

23    As to an alleged denial of procedural fairness, it seems to me that, if there were any such denial and in relation to the payments made into Court and whether or not to stay their payment, that ground ultimately leads nowhere.

24    The other grounds of appeal rehearse a submission which I have already mentioned, made by the Daylight parties before her Honour, which failed before her Honour. They also, though, challenge the reference “and 5” to the orders of 3 February 2023 as found in order 3 of the orders of 26 February 2024. It is, with respect and as a matter of impression, a little difficult to reconcile the reference “and 5” in order 3 with [16] of the reasons for judgment of the primary judge, quoted above. It may be having regard to that paragraph of her Honour’s reasons that the reference to “and 5” is nothing more than an unintended slip in the translation of her Honour’s reasons for judgment into order 3 of the orders made on 26 February 2024.

25    If the parties were to reach that view jointly, it may be that any consequence of that part of the order in its present form would not require the setting aside, on appeal, of that order, as opposed to a consent being filed by each of the interested parties along with a joint submission highlighting to the primary judge what was jointly contended to be an unintended slip and annexing what was said to be a suitable corrective order.

26    Having heard the submissions of the parties today, I would respectfully urge the parties to give consideration to that course. That would not resolve the application for leave to appeal or appeal entirely, but it would certainly narrow the focus.

27    Further, and in any event, the stay which is sought is not in respect of any amount payable under clause 3 of annexure 3 of the ILUA in this or any later year. The stay which is sought is only in respect of the payments for the 2022 and 2023 years which QGC has paid into Court.

28    The principles which attend whether or not to grant a stay of an order pending the hearing and determination of an application for leave to appeal or an appeal are no new subject. It has long ceased to be the case in this Court, and, for that matter, in the Supreme Court of New South Wales, that it is necessary for an applicant for a stay to demonstrate special or exceptional circumstances, so as to deprive a person having the benefit of a judgment in the original jurisdiction of the fruits of that judgment: see Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, at 692 – 694.

29    In another New South Wales Supreme Court case, Woolworths Limited v Strong (No 2) (2011) 80 NSWLR 445, Campbell JA (with whom Handley AJA and Harrison J agreed), at [68], referred to the importance of what his Honour termed the “usual practice” of staying judgments pending appeal where there is a risk that the plaintiff will be unable to repay the money without difficulty or delay if the appeal were to succeed. As to this consideration, reference might also be made to TCN Channel 9 Pty Ltd v Antoniadis (No 2) (1999) 48 NSWLR 381, at [15] and [16] (the Court).

30    In this Court, reference is frequently made, in relation to applications for a stay, to a helpful summary offered by Jagot J, then of this Court, in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (No 2) (2010) 88 IPR 633, at 638, [15]; [2010] FCA 1212. Without being exhaustive, the following considerations are discernible in her Honour’s summary:

(1)    a successful party is presumed to be entitled to the benefits of the judgment obtained;

(2)    an applicant for a stay has the burden of persuading the court that it should be granted, although it is not necessary to show special or exceptional circumstances;

(3)    the court in the exercise of its discretion will not hesitate to stay proceedings when it is necessary to preserve the subject matter or integrity of the litigation, nor will the court hesitate to grant a stay where the refusal of a stay could create practical difficulties in terms of the relief which the court could grant;

(4)    it is relevant to consider whether there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed;

(5)    another relevant consider is whether the proposed appeal is genuine and based on reasonable grounds;

(6)    relevant also is the willingness or not of a party to give an undertaking as to damages.

31    Here, the Daylight interested parties have given no undertaking as to damages. Equally, there is no undertaking by the administrator not to pay funds which would be paid out to the administrator in accordance with the order of 26 February 2024, if that order were not stayed.

32    In the ordinary course of events, one might expect – and the evidence demonstrates this – that in the course of the administration, and apart from administrator’s costs, payment would be made to the one creditor who has proved in the administration (that creditor appears to be a law firm which rendered professional services at one stage to B&M) and a very small surplus might result (according to the administrator’s present view).

33    It does seem to me that, if payments were made by the administrator (sourced in the payment out of Court of the 2022 and 2023 financial benefits under the ILUA), it might prove a somewhat complicated process to recover those payments. That particular consideration weighs heavily upon me.

34    There is, at an impressionistic level, certainly some attraction, as there was for the primary judge, in B&M’s accrued rights position. It was not in administration in February 2023. But the orders made that month were suspended by an order of 2 March 2023. That suspension was not lifted until the orders of 26 February 2024, and, in the interval, B&M went into administration.

35    Impressionistically, the construction of the ILUA, as promoted by the Daylight interested parties, does not strike me as utterly hopeless. There does seem to be in clause 1.1 of Annexure 3 an overarching intention that the nominated entity will receive and hold the financial benefits “for the families”. As construed in light of the declaration made in 2021, it may be that the nominated entity must at all times until payment not be in administration.

36    It is not necessary to resolve the controversy, only to recognise that the position of the Daylight interested parties is not utterly hopeless and that much difficulty and inconvenience might flow were the funds paid out and used in the ordinary course of administration, if the appeal were to prove successful.

37    One suggestion that was made in submissions on behalf of B&M was that a stay should be granted only on particular terms. One such term promoted would have conditioned the grant of any stay on the payment of a very large sum of money into Court by the Daylight interested parties by way of security for costs. An immediate difficulty with that is that costs in a proceeding under the Act do not, as a matter of course, follow the event. The costs discretion is qualified: see s 85A. It would be necessary for me to reach a conclusion that the conduct of the Daylight interested parties was such that it was inherently likely on any appeal that it would be regarded as unreasonable.

38    Another suggestion made was that the convening period for the second meeting of creditors might be extended under s 439A(6) of the Corporations Act 2001 (Cth) to a particular date. A difficulty with that is that, absent the appeal or leave application being treated as a special fixture, it would not in the ordinary course be heard until the Court’s August sittings, with there being no particular precision thereafter as to when judgment might be delivered. To try and fix, even in an estimated way, what that date might be may only be to visit on the parties a need again to approach the Court if judgment were reserved and not delivered by a date which I selected.

39    I am very reluctant to visit any more costs than have already been visited both on B&M and the Daylight interested parties. Instead, it seems to me that the administration of B&M would be facilitated in the short term by some certainty. Further, as I have indicated, although B&M’s position in relation to the existence of an accrued right has its attractions, I am not persuaded that the Daylight interested parties’ basis of challenge, insofar as it touches upon the payments into Court, is utterly hopeless.

40    In these circumstances, and as a matter ultimately of discretion, it seems to me that the interests of justice favour a stay, pending the hearing and determination of the leave to appeal and any appeal, or further earlier order.

Associate:    

Dated:    22 March 2024

SCHEDULE OF PARTIES