The First Nine Years Litigation Analytics - Bennett + Co

Bennett + Co

The First Nine Years

Litigation Analytics2011 to 2020

Volume Three

SANDY and Another v YINDJIBARNDI ABORIGINAL CORPORATIONRNTBC and Another (No 4)

SUPREME COURT OF WESTERN AUSTRALIA

PRITCHARD J

5–9, 12–14, 19 December 2016, 9 February 2017, 20 April 2018 —Perth

[2018] WASC 124

Statutory corporation — Oppression — Conduct of meetings — Participation ofmembers in meetings — Admission of members — Obligations of directors withrespect to financial reports — Whether appointment of receiver appropriate —(CTH) Corporations (Aboriginal and Torres Strait Islander) Act 2006 ss 166-1, 166-5.

The plaintiffs were members of the Yindjibarndi people and are recognised as elders inthe Yindjibarndi community. They were also members of the first defendant, theYindjibarndi Aboriginal Corporation RNTBC (YAC). YAC is an Aboriginal and TorresStrait Islander (ATSI) corporation which is incorporated pursuant to and registered underthe Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act).It is governed by the requirements of that Act, and not the Corporations Act 2001 (Cth).At the date of the trial, Mr Warrie was a director of YAC and at various times has beenthe chairperson of YAC.

The plaintiffs contended in these proceedings that since December 2010, YAC hasacted, and has threatened to act, in contravention of the requirements of the CATSI Act andin contravention of its constitution (the YAC Rule Book). The plaintiffs contended that theconduct of YAC’s affairs, actual or proposed acts or omissions by or on behalf of YAC,and resolutions or proposed resolutions of the members of YAC, are contrary to theinterests of the members of YAC as a whole, and in addition, or alternatively, areoppressive to, unfairly prejudicial to, or unfairly discriminatory against members of YAC,whether in that capacity or in any other capacity, within the meaning of s 1661(1) of theCATSI Act. The plaintiffs also contended that the register of members of YAC (Register)is erroneous and should be corrected. (For convenience, the plaintiffs’ case will be referredto as alleging “oppressive conduct” on the part of YAC, recognising that that descriptionencompasses all of the forms of conduct referred to in s 166-1(1)(d) and (e) of the CATSIAct.)

The plaintiffs contended that YAC has engaged in oppressive conduct in five broadways, namely by operating at times without any validly appointed directors, denyingmembership rights and engaging in improper conduct in dealing with membershipapplications, failing to conduct or manage meetings properly, improper administration ofYAC’s finances, and continual noncompliance with the CATSI Act and the Rule Book.Within these five broad categories, the plaintiffs allege that YAC has engaged in 20separate instances of oppressive conduct, over the course of approximately six years. AsI understand it, the plaintiffs’ case is that these instances of alleged conduct are,individually and collectively, said to constitute oppressive conduct for the purposes of theCATSI Act.

The plaintiffs seek that the court grant relief in the form of an order for the appointmentof a receiver and manager (the receiver) of the property of YAC, for a period of 12 monthsfrom the date of the order, or until further order, for the purpose of carrying out a varietyof specific functions (in addition to the usual functions of a receiver). The functions thatthe plaintiffs say the receiver should perform include entering the names of specified

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persons onto the register as members of YAC; considering (and, if possible, deciding) anymembership applications which remain undecided or which are received during the termof the receiver’s appointment; investigating the affairs of YAC from as early as 15December 2010, including its finances and any significant decisions made by YAC or itsdirectors or office bearers since then, and reporting to the court (and in turn, the membersof YAC) about those matters; and investigating the circumstances surrounding the entry ofmembers onto the register since 10 September 2014 and reporting to the court (and in turn,YAC’s members) whether the register should be rectified, and in what manner.

The defendants’ case in respect of each of the instances of alleged oppressive conductis that the conduct in question did not constitute oppressive conduct, or even if it did, norelief should be granted in all of the circumstances, or alternatively, that relief in the natureof the appointment of a receiver is not warranted in all of the circumstances.

Held, finding oppressive conduct but not making an order appointing a receiver:

Alleged denial of membership rights and improper conduct in dealing with membershipapplications

Alleged wrongful conduct of YAC in excluding and hindering members in respect of theirrights to participate as members of YAC, and invalid resolutions made by YAC in relationthereto

(i) The exclusion of Sylvia Allan (Ms Allan) and Aillen Sandy (Ms Sandy) from theAGM on 15 December 2010 was conduct that is properly described as burdensome andwrongful. It was, therefore, conduct which was oppressive to those persons in theircapacity as members of YAC, contrary to s 166-1(1)(e) of the CATSI Act: at [254].

(ii) The purported cancellation of 26 memberships did not comply with the proceduralrequirements for a special resolution of an ATSI corporation, or of YAC in particular, anddid not give the members notice of the proposed resolution, or the opportunity to advancea contrary case. It was therefore not made in accordance with the requirements of theCATSI Act or the requirements of the Rule Book and was therefore oppressive conduct forthe purposes of s 166-1(1)(e). Further, the failure to give notice to the members concerned,the failure to provide them with the opportunity to know the case against them, and toadvance a case against cancellation was clearly a denial of procedural fairness andcontrary to the ordinary standards of fair dealing, and therefore oppressive conduct unders 166-1(1)(e): at [275].

(iii) However, as YAC subsequently acknowledged that Ms Allan and Ms Sandy in factremained members of YAC and that their membership had not been validly cancelled atthe meeting on 15 December 2010 and that they were subsequently permitted to attendmeetings of YAC, there is no order which the Court could now make which is capable ofremedying the oppression: at [256], [278], [279].

Threatened conduct of YAC to convene a meeting for the purposes of amending rr 3.1 and3.7 of YAC’s Rule Book, in order to limit the persons who can be members of YAC andthe grounds upon which membership may be cancelled

(iv) YAC’s failure to provide notice of the proposed AGM on 30 November 2011 to itsmembers was conduct in breach of the requirements of the CATSI Act and of YAC’s RuleBook. To fail to give a member proper notice of an AGM risks depriving that member ofone of the fundamental rights of membership of an ATSI corporation, namely to attend,speak and vote at a general meeting. To engage in conduct which is liable to have thatconsequence is, in the view of the court, oppressive for the purposes of s 166-1(1)(e) ofthe CATSI Act: at [304], [305].

(v) YAC’s conduct in proposing the proposed amendment, at least in so far as theysought to include the loyalty criterion and the disqualification ground in the membershiprules for YAC, was also conduct which was oppressive for the purposes of s 166-1(1) ofthe CATSI Act for the following reasons:

(a) The proposed amendments, if passed, would have been capable of application toexclude — either by denial of membership or by the cancellation of an existing

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membership — persons who otherwise were regarded, in accordance withYindjibarndi law and custom, as Yindjibarndi; and

(b) It is in the interests of the members of an ATSI corporation that all members beentitled to express their views about the proposed decisions of the corporation,and about whether, and the terms on which, that corporation should enter intoagreements concerning compensation for acts which are inconsistent withestablished native title rights: at [304]–[311].

Gaiman v National Association for Mental Health [1971] Ch 317, distinguished.

(vi) As there is no ongoing conduct of YAC arising out of the proposed amendmentswhich involves an ongoing oppression of YAC’s members, or which constitutes conductcontrary to the interest of the members, no relief should be granted: at [317], [318].

Wrongful conduct and exercise of power by YAC and its purported officers in refusingand/or failing to consider membership applications, during the period 2011–2016

(vii) The decision by the directors of YAC to reject 52 membership applications on 25August 2011 was conduct which was contrary to s 265-5 of the CATSI Act, in that thedirectors’ power to deny membership was not exercised for a proper purpose. In addition,the decision to refuse the 52 applications was conduct of the kind described in s166-1(1)(d) of the CATSI Act, in that it was conduct which was contrary to the interestsof the members of YAC as a whole:

(a) First, the directors dealt with the 52 applications as a bundle and did notconsider each application on its individual merits.

(b) Second, the decision to reject the 52 applications was made to ensure that thosepersons who were members or supporters of Wirlu-murra Yindjibardi AboriginalCorporation (WMYAC), and who supported entry into the agreement betweenFortescue Metals Group (FMG) and WMYAC in relation to the use of landwithin the Yindjibarndi #1 claim area (FMG Agreement), were denied anychance of obtaining control of YAC’s board of directors, or of voting at a generalmeeting of YAC.

(c) Third, the directors’ belief (that entry into the FMG Agreement would bedetrimental to the interests of YAC and to the interests of the common lawholders) was not one which could be said to have been reasonable in all of thecircumstances.

(d) Fourth, the decision to reject to 52 applications, in all the circumstances, cannotbe said to have been made in the interests of all of the members as a whole.

(e) Fifth, any decision by YAC to enter into an indigenous land use agreement(ILUA) in respect of acts in the Yindjibarni #1 claim area would arguablyconstitute a “native title decision” (as defined in YAC’s Rule Book) and thus itsdirectors would need to comply with the requirements of YAC’s Rule Book toconsult with the common law holders and obtain their consent to enter into theILUA.

(f) Sixth, it is not in the best interests of the members of an ATSI corporation, noris it consistent with the objects of YAC, for the directors of the corporation touse their powers to admit members for the purpose of stifling debate, and tostifle views which differ from their own: at [352]–[367].

Millar v Houghton Table Tennis & Sports Club Inc [2003] SASC 1; AustralianSecurities Commission v Multiple Sclerosis Society of Tasmania (1993) 10 ACSR489, considered.

Gaiman v National Association for Mental Health [1971] Ch 317, distinguished.

(viii) It is neither necessary nor appropriate to grant any relief directed to the directors’decision to reject the 52 membership applications, as that refusal was remedied by thedirectors’ decision to admit members in the process under the settlement deed: at [369].

AUSTRALIAN CORPORATIONS AND SECURITIES REPORTS372 WASC

Wrongful denial of membership to persons approved by the board in 2014 to be eligiblefor membership

(ix) The plaintiffs have not established that failure by YAC to advise the 17 applicantsthat their applications for membership had been accepted breached s 144-10(5) of theCATSI Act or r 3.2 of the Rule Book and it has not been established that YAC’s conductconstituted oppressive conduct of the kind described in s 166-1(1) of the CATSI Act: at[466].

Approval (in November 2015) of membership applications by YAC’s purported board, andsubsequent registration of the membership as members of YAC, for an improper purpose

(x) The admission of the 46 members to membership of YAC was oppressive conductfor the purposes of s 166-1 of the CATSI Act, as it was clearly for the purpose ofmarshalling sufficient votes in favour of the incumbent directors as to outweigh thosemembers who opposed them. That conduct clearly constitutes conduct which waswrongful and unfairly prejudicial to the members of YAC who did not share the views ofthe incumbent board: at [486].

(xi) No relief should be granted in respect of this incident of oppressive conduct, asJustice Le Miere made a declaration that the resolutions made at the meeting on 16December 2015, including the resolution to admit the 46 members to membership, wereinvalid: at [488].

Apparent bias in dealing with membership applications in June 2016

(xii) The plaintiffs established on the evidence that the conduct of the directors indetermining the membership applications on 29 June 2016 was oppressive for thepurposes of the CATSI Act. In particular, to exclude applicants for membership simplybecause those persons might pursue YAC’s adoption of policies with which the directorsdid not agree would not be a proper exercise of the power to admit members. The directorsdid not act in good faith and by applying their membership power in that way, thedirectors’ conduct was contrary to the interests of the members as a whole, contrary to s166-1(1)(d) of the CATSI Act: at [691], [690].

(xiii) Though relief should be granted in respect of this conduct, the court is notpersuaded that the appropriate relief is the appointment of a receiver: at [710].

Alleged failure to conduct or manage meetings property and alleged improperadministration of YAC’s finances

Failure to conduct meetings properly and improper administration of finances — Inparticular failure to explain YAC’s annual financial report or provide members anopportunity to ask questions or make comments at the AGM held on 21 March 2012

(xiv) The plaintiffs have not established that YAC’s conduct in relation to the tabling ofthe financial report at the AGM was conduct which was not in the interests of membersas a whole, or oppressive, or unfairly prejudicial to a member or members of YAC.Members were given the opportunity to take a copy of the financial report away andconsider it. There is nothing to suggest that they were prevented from asking questions ormaking comments: [737].

(xv) Even if this conclusion is incorrect, the conduct the subject of the complaint hasnot been shown to have any ongoing adverse consequences for the members and so norelief granted could have any practical utility: at [738].

Discussion about financial issues hindered at the AGM held on 10 September 2014 andissues arising out of the Korda Mentha report tabled at that same AGM

(xvi) In so far as Mr Woodley, and the chairperson, sought to defer discussion of theissues regarding YAC’s payments to Juluwarlu until later in the meeting, that conductclearly hindered the discussion of members’ concerns. No reason was advanced, either atthe meeting or in evidence, about why the questions and concerns could not have beendealt with immediately either by Mr Woodley or by any of the other directors of YAC. Areasonable chairperson of the meeting, and a reasonable CEO, would have dealt with those

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concerns immediately and failure to do so had the consequence that those real issues ofconcern to members were simply not dealt with. That approach fell short of the standardof reasonable conduct which the members were entitled to expect in the conduct of YAC’saffairs and as such, YAC’s conduct of the AGM was conduct of the kind described in s166-1(1)(e) of the CATSI Act: at [787]–[789].

(xvii) The plaintiffs cannot rely on the findings in the Korda Mentha report as evidenceof improper administration of YAC’s finances. No evidence was adduced in support offindings made in that report: at [791].

(xviii) The conduct in question is now long past and there was no suggested that thisoppression was continuing: at [795].

Failure to report to members in compliance with subdiv 333-A of the Corporations(Aboriginal and Torres Strait Islander) Regulations 2007 (Cth) due to the failure to prepareconsolidated accounts

(xix) The directors of YAC could not reasonably be expected to be familiar with thedetail of the accounting standards so as to be able to identify which accounting standardsmight be relevant to YAC’s financial reporting obligations. Further, there is no evidenceto suggest that directors of YAC failed to provide YAC’s accountants with all potentialrelevant factual information to enable them to determine what standards may apply: at[943], [944].

Australian Securities and Investments Commission v Healey (2011) 196 FCR 291;278 ALR 618; 83 ACSR 484; [2011] FCA 717, considered.

(xx) In all of the circumstances, even though it is now apparent that YAC failed tocomply with the requirements of subdiv 333-A of the CATSI Regulations, the court is notpersuaded that its conduct constituted conduct which was contrary to the interests of themembers as a whole, for the purposes of s 166-1(1)(d) of the CATSI Act. Further, the courtdoes not see any basis on which that conduct could be regarded as oppressive conductunder s 166-1(1)(e): at [948].

(xxi) In any event, even should that conclusion be incorrect, the relief would not havebeen granted in respect of this conduct by YAC, as it has now engaged KPMG to act asits accountant and Grant Thornton to act as its auditor so as to ensure that YAC complieswith the requirements of the Accounting Standards in the future: at [949], [950].

Signing off on the 2014 annual financial report when it contained material errors

(xxii) The plaintiffs have not established that the delegation, by the directors of YAC,of their power to approve expenditure, was contrary to r 8 of YAC’s Rule Book orotherwise invalid and have not established that when George Irving and Mr Woodleyincurred such expenditure that they did so in circumstances where they exceeded theirauthority under the delegation from the directors made in 2014. The plaintiffs have notestablished that in incurring any expenses during the relevant period that YAC’s conductwas of the kind described in s 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act: at[1046]–[1050].

Alleged continual non-compliance with the CATSI Act and Rule Book

(xxiii) The compliance notice issued by the registrar or his delegate under the CATSIAct cannot be relied on in court proceedings to establish the proof of the facts asserted inthat notice, or proof of non-compliance with the CATSI Act, because the basis for the issueof a compliance notice is merely a suspicion on reasonable grounds that a corporation hasfailed to comply with the CATSI Act or its rules; the registrar does not need to be satisfiedthat there was in fact a failure to comply: at [1078].

(xxiv) The plaintiffs have not established that any conduct referred to in the first orsecond compliance notice occurred, or that it was conduct by YAC of the kind referred toin s 166-1(1) of the CATSI Act: at [1080].


The overall relief which should be granted in respect of the conduct of YAC within s166-1(1) which the plaintiffs have established

(xxv) The appointment of a receiver is not the appropriate relief under s 166-5 inresponse to the court’s findings that YAC has engaged in conduct of the kind described ins 166-1(1)(d) and (e) of the CATSI Act; the appointment of a receiver would not be ‘justand convenient’ for the following reasons:

(a) (In so far as the oppressive conduct concerning membership is concerned, areceiver could not, without advice, determine membership applications and sowill not, in reality, provide a solution to the membership dispute. Further toentrust decisions about membership to a stranger from outside the Yindjibarndicommunity is liable to perpetuate membership disputes rather than to resolvethem.

(b) In so far as YAC has failed to prepare accounts that comply with subdiv 333-Aof the CATSI Regulations and the applicable accounting standards, the courtdoes not consider it necessary to appoint a receiver to rectify this deficiency inthe future. In view of the court’s decision, YAC’s directors, advised by itsaccountants, can undertake the preparation of consolidated reports as required.

(c) At the time when much of YAC’s oppressive conduct took place, it did not havethe assistance of external accountants and auditors. The court has no reason todoubt that as YAC has now engaged accountants and auditors, its compliancewith its financial and reporting requirements should improve.

(d) The directors of YAC would benefit from education and training in relation totheir role and responsibilities and the appointment of a receiver would onlypostpone the time at which that more fundamental problem must be tackled: at[1107]–[1123].

Application

This was an application for an order appointing a receiver and manager of theproperty of the first defendant for a period of 12 months from the date of the orderor until a further order is made.

M L Bennett and T J Elder instructed by Bennet + Co for the plaintiffs (AileenSandy and Sylvia Allan).

V Houston SC, J L Edwards and T Jowett instructed by HWL EbsworthLawyers for the first and second defendants (Yindjibarndi Aboriginal CorporationRNTBC and Stanley Warrie (in his capacity as representative of personspurportedly appointed as directors of the first defendant on or after 15 December2010)).

[1] Pritchard J. The plaintiffs are members of the Yindjibarndi people, and arerecognised as Elders in the Yindjibarndi community.1 They are also members ofthe first defendant, the Yindjibarndi Aboriginal Corporation RNTBC (YAC).

[2] YAC is an Aboriginal and Torres Strait Islander (ATSI) corporation whichis incorporated pursuant to, and registered under, the Corporations (Aboriginaland Torres Strait Islander) Act 2006 (Cth) (CATSI Act).2 It is governed by therequirements of that Act, and not the Corporations Act 2001 (Cth). At the date ofthe trial, Mr Warrie was a director of YAC. At various times, he has been theChairperson of YAC. He was joined as a defendant, as a representative of thedirectors of YAC, in April 2012.

1. Originally Ms Mavis Pat was also a plaintiff in this action. She discontinued her action in July2013.

2. Section 16-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).

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[3] In these proceedings, the plaintiffs contend that since December 2010, YAChas acted, and has threatened to act, in contravention of the requirements of theCATSI Act and in contravention of its constitution (the YAC Rule Book).3 Theplaintiffs contend that the conduct of YAC’s affairs, actual or proposed acts oromissions by or on behalf of YAC, and resolutions or proposed resolutions of themembers of YAC, are contrary to the interests of the members of YAC as a whole,and in addition, or alternatively, are oppressive to, unfairly prejudicial to, orunfairly discriminatory against members of YAC, whether in that capacity or inany other capacity, within the meaning of s 166-1(1) of the CATSI Act.4 Theplaintiffs also contend that the register of members of YAC (Register) iserroneous and should be corrected.5 (For convenience, I will refer to theplaintiffs’ case, in shorthand, as alleging ‘oppressive conduct’ on the part of YAC,recognising that that description encompasses all of the forms of conduct referredto in s 166-1(1)(d) and (e) of the CATSI Act.)

[4] The plaintiffs contend that YAC has engaged in oppressive conduct in fivebroad ways, namely by operating at times without any validly appointeddirectors, denying membership rights and engaging in improper conduct indealing with membership applications, failing to conduct or manage meetingsproperly, improper administration of YAC’s finances, and continualnon-compliance with the CATSI Act and the Rule Book.6 Within these five broadcategories, the plaintiffs allege that YAC has engaged in 20 separate instances ofoppressive conduct, over the course of approximately six years. As I understandit, the plaintiffs’ case is that these instances of alleged conduct are, individuallyand collectively, said to constitute oppressive conduct for the purposes of theCATSI Act.

[5] Under the CATSI Act, the Court has expansive powers to grant relief if itfinds that an Aboriginal and Torres Strait Islander corporation (ATSI corporation)has engaged in oppressive conduct.7 The plaintiffs seek that the Court grant reliefin the form of an order for the appointment of a receiver and manager (Receiver)of the property of YAC, for a period of 12 months from the date of the order, oruntil further order, for the purpose of carrying out a variety of specific functions(in addition to the usual functions of a Receiver). The functions that the plaintiffssay the Receiver should perform include entering the names of specified personsonto the Register as members of YAC; considering (and, if possible, deciding)any membership applications which remain undecided or which are receivedduring the term of the Receiver’s appointment; investigating the affairs of YACfrom as early as 15 December 2010, including its finances and any significantdecisions made by YAC or its directors or office bearers since then, and reportingto the Court (and in turn, the members of YAC) about those matters; andinvestigating the circumstances surrounding the entry of members onto theRegister since 10 September 2014 and reporting to the Court (and in turn, YAC’smembers) whether the Register should be rectified, and in what manner.

[6] There was no dispute that the plaintiffs have the standing to apply for anorder pursuant to s 166-1, having regard to the requirements for standing set outin s 166-10(a) of the CATSI Act.

3. Plaintiffs’ substituted notice of originating motion at [18].4. Plaintiffs’ substituted notice of originating motion at [19].5. Plaintiffs’ substituted notice of originating motion at [20].6. Plaintiffs’ substituted statement of issues, facts and contentions (PSIFC) at [89].7. Section 166-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).


[7] The defendants also do not dispute that the main issues to be determined arewhether YAC has engaged in oppressive conduct of the kind encompassed bys 166-1 of the CATSI Act.8 However, the defendants’ case in respect of each ofthe instances of alleged oppressive conduct is that the conduct in question did notconstitute oppressive conduct, or even if it did, no relief should be granted in allof the circumstances, or alternatively, that relief in the nature of the appointmentof a Receiver is not warranted in all of the circumstances.9 For completeness, Inote that in response to some of the alleged instances of oppressive conduct, thedefendants sought to rely on s 166-1(2) of the CATSI Act, which precludes theCourt from making an order under s 166-1 in certain circumstances.10 However,in their closing submissions, counsel confirmed that the defendants no longermaintained that plea.11

[8] For the reasons which follow, I am satisfied that some of the conduct reliedupon by the plaintiffs constituted conduct which, at the time when it occurred,was conduct of the kind described in s 166-1(1)(d) or s 166-1(1)(e) of the CATSIAct. I am also satisfied that other conduct relied upon by the plaintiffs constitutedconduct which, at the time of trial, was conduct which fell within s 166-1(1)(d)or s 166-1(1)(e) of the CATSI Act. However, I not persuaded that the appropriaterelief in respect of any such conduct is the appointment of a Receiver. That isbecause I have formed the view that in respect of some oppressive conduct, norelief is warranted at all (because the oppression has already been remedied, oris no longer of any effect). In respect of the remaining oppressive conduct —namely that which was still continuing as at the date of the trial — I have formedthe view that rather than appoint a Receiver, the appropriate relief is, instead, tomake an order addressing the conduct of that aspect of YAC’s affairs into thefuture.

[9] In these reasons for decision, I deal with the following matters:1. The Yindjibarndi people, YAC, subsidiaries of YAC, and the role of

YAC in relation to the native title rights of the Yindjibarndi people;2. The pleadings, the trial and the evidence;3. Some background to this litigation — a dispute between YAC and those

of its members who are also members of the Wirlu-murra YindjibarndiAboriginal Corporation (WMYAC);

4. What these proceedings are not about;5. Legal principles concerning conduct of directors under the CATSI Act;6. Overview of the conduct which the plaintiffs contend constitutes

oppressive conduct;7. Whether the plaintiffs have established that YAC engaged in oppressive

conduct:7.1. Alleged denial of membership rights and improper conduct in

dealing with membership applications;7.2. Alleged failure to conduct or manage meetings properly and

alleged improper administration of YAC finances;

8. Defendants’ statement of issues, facts and contentions (DSFIC) at [1].9. DSFIC at [179]–[180].

10. That subsection provides that the court must not make an order by way of relief if an officer oremployee of the corporation does, or refrains from doing, or proposes to do, the act said toconstitute oppressive conduct in good faith, and with the belief that doing the act is necessaryto ensure that the corporation complies with a Native Title legislation obligation.

11. Defendants’ reply submissions at [8].


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7.3. Alleged continual non-compliance with the CATSI Act and RuleBook; and

8. The overall relief which should be granted in respect of the conduct ofYAC within s 166-1(1) which the plaintiffs have established.

1. The Yindjibarndi people, YAC, subsidiaries of YAC and the role of YAC

in relation to the native title rights of the Yindjibarndi people

(a) The Yindjibarndi people and their native title rights and interests over land

in the Pilbara region of Western Australia

[10] The Yindjibarndi people come from the Pilbara region in WesternAustralia. In 2003, the Federal Court12 recognised that the Yindjibarndi peoplehad certain native title rights in an area referred to as the Yindjibarndi NativeTitle Area (which was defined in the first schedule to the Court’s determination)(Daniel Determination Area).13 Those native title rights and interests werenon-exclusive native title rights and interests. In other words, those rights did notconfer possession, occupation, use and enjoyment of the land and waters in theDaniel Determination Area to the exclusion of others.

[11] The Yindjibarndi people, who are referred to as the ‘common law holders’of those native title rights and interests, were identified in the Daniel decision as‘Aboriginal persons who recognise themselves as, and are recognised by otherYindjibarndi people as, members of the Yindjibarndi language group’.14

[12] Under the Native Title Act 1993 (Cth) (NT Act),15 common law holderswill ordinarily nominate a prescribed body corporate to hold their native titlerights and interests on trust for them. There was no dispute16 that for the purposesof the NT Act, YAC is a ‘prescribed body corporate’17 (PBC) and a ‘registerednative title body corporate’;18 in that capacity, it holds the native title rights andinterests in respect of the Daniel Determination Area on trust for the common lawholders.19

[13] As a PBC which holds native title rights and interest on trust, YAC hasprescribed functions, including the function to manage the native title rights andinterests of the common law holders; in doing so, it is required to consult withthe common law holders.20 In its capacity as a trustee which holds the rights andinterests of the common law holders, YAC has the legal capacity to negotiatecertain future governmental acts, such as the conferral of mining rights and thecompulsory acquisition of native title rights and interests,21 and to make

12. Daniel v Western Australia [2005] FCA 536 (Daniel). The Daniel decision was the subject ofan appeal to the full Federal Court. The court affirmed the decision of the trial judge, save tovary it in certain respects, which are not presently relevant: see Moses v Western Australia

(2007) 160 FCR 148; 241 ALR 268; [2007] FCAFC 78.13. Exhibit 1.3.14. Exhibit 1.3.15. Section 56(2) of the Native Title Act 1993 (Cth).16. PSIFC at [4]–[6]; DSIFC at [7].17. See Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth).18. Section 253 of the Native Title Act 1993 (Cth).19. Exhibit 1.3.20. Regulation 6 of the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth).21. Sections 25(1), 29(2), 30A, 31 and 33 of the Native Title Act 1993 (Cth).


indigenous land use agreements (ILUAs).22 Payments of compensation, such asthose which may be made pursuant to an ILUA, will be held on trust for thecommon law holders.23

[14] The common law holders are all of the members of the Yindjibarndilanguage group, and not just those persons who are, or may become, members ofYAC. As the trustee of the common law holders’ native title rights, YAC istherefore obliged to act in the interests of all of those common law holders, andnot just in the interests of the members of YAC.

(b) The Yindjibarndi #1 claim

[15] In 2003, the Yindjibarndi people also made a claim of native title in respectof an area of land immediately to the south of the Daniel Determination Area.24

In these reasons, I refer to that claim, as the parties did, as the Yindjibarndi #1claim.

[16] The Yindjibarndi #1 claim is brought on behalf of the Yindjibarndi peoplewho are said to be the descendants of 31 identified apical ancestors.25

[17] The NT Act requires that proceedings for the determination of a claim ofnative title be brought by persons authorised as a single applicant.26 TheApplicant in the Yindjibarndi #1 claim was a group of people (which included theplaintiffs) who were authorised by the Yindjibarndi people to bring that claim(the original Applicant). The claim brought by the original Applicant was fornative title rights and interests in the land which were exercised by theYindjibarndi people in the Yindjibarndi #1 claim area, to the exclusion of others.

[18] In 2008, YAC was appointed the agent for the original Applicant in theYindjibarndi #1 claim.27

[19] By the time of the trial in the present action, the trial of the Yindjibarndi#1 claim had concluded, and the trial judge had reserved his decision on thatclaim.28

(c) YAC — Its rule book, members and people

[20] YAC is governed by its constitution (referred to as its Rule Book).29 Thecurrent iteration of the Rule Book was registered on 15 March 2016. Under theCATSI Act, the Rule Book operates as a contract between the corporation andeach member.30

[21] The objectives of the YAC include to:31

(a) provide direct relief from poverty, sickness, suffering, misfortune,destitution or helplessness among Aboriginal people, especially thecommon law holders;

22. Sections 24BA, 24BC and 24BD(1) of the Native Title Act 1993 (Cth).23. Rule 13.1 of the YAC Rule Book: Ex 1.292.24. Exhibit 1.2.25. Exhibit 1.2.26. Section 61 of the Native Title Act 1993 (Cth).27. Exhibit 1.4.28. The decision was delivered on 20 July 2017, and orders made on 13 November 2017 effecting

the decision: see Warrie (formerly TJ) (on behalf of the Yindjibarndi People) v Western

Australia [2017] FCA 803 (Warrie); Warrie (formerly TJ) (on behalf of the Yindjibarndi

People) v Western Australia (No 2) [2017] FCA 1299 (Warrie (No 2)).29. Exhibit 1.292.30. Section 60-10 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).31. Rule 2.1 of the YAC Rule Book: Ex 1.292.


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(b) be and to perform the functions of a prescribed body corporate for thepurpose of being the subject of a native title determination under [theNT Act];

(c) be and to perform the functions of a registered native title bodycorporate for the purpose of being the subject of a determination under[the NT Act];

(d) protect, preserve and advance the traditions, laws, languages, cultureand customs of Aboriginal people, especially the common law holders;and

(e) hold title to any vested land.

[22] Without limiting the generality of those objectives, the YAC may also:32

(a) advance and promote the wellbeing of Aboriginal people, especially thecommon law holders;

(b) provide environmental, social, economic and cultural benefits toAboriginal people, especially the common law holders;

(c) maintain, protect, promote and support the culture, native title traditionsand customs, economic development, interests and social progress ofAboriginal people, especially the common law holders; and

(d) support and provide education, training and employment for Aboriginalpeople, especially the common law holders.

[23] Yindjibarndi people who meet criteria specified in the Rule Book mayapply for membership of YAC. The board of YAC determines applications formembership. (The rules concerning membership of YAC are discussed in greaterdetail later at [219]–[229] in these reasons.)

[24] YAC is governed by a board of 12 directors. At the date of the trial itsChairperson was Ms Lyn Cheedy. The day to day management of YAC isundertaken by a Chief Executive Officer (CEO), Mr Michael Woodley.Mr Woodley was the CEO of YAC at all relevant times, other than for a shortperiod in 2014 when he stepped down from that role. From July 2013, Mr GeorgeIrving was employed as an in-house counsel for YAC. Mr Philip Davies was alsoemployed by YAC, as its contact officer with the Office of the Registrar ofAboriginal and Torres Strait Islander Corporations (ORIC).

(d) YAC’s subsidiaries and related entities

[25] It was not in dispute that YAC has a number of subsidiaries.33 It is the soleshareholder of Yindjibarndi Capital Pty Ltd (Yindjibarndi Capital) and ofYindjibarndi Wealth Pty Ltd (Yindjibarndi Wealth).

[26] It was also not in dispute that in June 2013, YAC entered into an ILUAwith Rio Tinto Iron Ore (Rio Tinto) (the Participation Agreement). Part 6 of theParticipation Agreement established a Benefit Management Structure that led tothe establishment of Yindjibarndi Community and Commercial Ltd (YCCL) toact as the Trustee for the Yindjibarndi People Community Trust (YPCT) and theYindjibarndi Commercial Trust (YCT). YAC is the sole shareholder of YCCL.

[27] Currently, the primary source of income for the benefit of Yindjibarndipeople is payments made pursuant to the Participation Agreement.34 Paymentsunder the Participation Agreement are made to YCT and YPCT. The Agreement

32. Rule 2.2 of the YAC Rule Book: Ex 1.292.33. Pursuant to s 689-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).34. Exhibit 1.94.


contemplates that payments may be made by YCT and YPCT to YAC, such as foradministrative support services provided by YAC. (The terms of the ParticipationAgreement are discussed later in these reasons.) However, as I note later in thesereasons at [891]–[892] there was some evidence that YAC had received incomeof a significant quantum from the Trusts during the 2014 and 2015 financialyears.

[28] In addition, in February 2013, YAC established an incorporated jointventure with Anthony Martin and Right Foot Forward Pty Ltd, called Yurra PtyLtd (Yurra), pursuant to which YAC held 50% of its shares, and Mr Martin andRight Foot Forward Pty Ltd each held 25% of its shares. In or about March 2014,YAC’s shareholding in Yurra was transferred to Yindjibarndi Wealth. YAC’sCEO, Mr Michael Woodley, is one of two directors of Yurra.

[29] It was also not in dispute that in about November 2008, YAC entered intoa management agreement with Juluwarlu Group Aboriginal Corporation(Juluwarlu). Under that agreement, Juluwarlu managed YAC’s native title,heritage, environmental, cultural, administrative, banking and professional needs.That management agreement was terminated in about August 2013.

(e) Other related investigations and proceedings in respect of which YAC hasbeen involved

[30] Some of the matters relied upon by the plaintiffs as constituting conductwarranting the grant of relief under s 166-1 of the CATSI Act, or which relate tosuch conduct, have previously been the subject of proceedings in this Court, orhave been the subject of processes adopted by the Registrar of Aboriginal andTorres Strait Islander (ATSI) Corporations (Registrar) to enforce therequirements of the CATSI Act.

Related proceedings before this court

[31] The following related proceedings have been litigated in this Court. Theseare discussed further below, in the context of several of the claims of oppressiveconduct made by the plaintiffs, but it is convenient to mention them briefly at thispoint.

[32] In November 2011, the plaintiffs, together with Ms Mavis Pat, commencedproceedings seeking an interlocutory injunction to restrain YAC from proceedingwith a proposed annual general meeting (AGM) on 30 November 2011, on thebasis that notice of that meeting had not been properly given to members of YACin accordance with the requirements of the CATSI Act.35 In addition, theplaintiffs in that action sought an injunction to restrain YAC from putting aproposed resolution to the AGM to amend YAC’s Rule Book which was intendedto change the criteria for membership of YAC. They contended that thoseamendments were contrary to the CATSI Act, contrary to the interests ofmembers and that they were oppressive, so as to attract the statutory remediesunder s 166-5 of the Act.36

[33] Master Sanderson granted an interlocutory injunction restraining YACfrom proceeding with the AGM proposed for Wednesday 30 November 2011until notice had been given to all members of YAC, and from considering orpermitting to be passed, at any meeting, any of the resolutions set out in the

35. Exhibit 1.64.36. Pat v Yindjibarndi Aboriginal Corporation [2011] WASC 354 (Pat) at [22]–[23].


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notice for that AGM in relation to the proposed amendment of those rules in theYAC Rule Book which concerned the criteria for membership of YAC.37

[34] In Adams v Yindjibarndi Aboriginal Corporation RNTBC,38 two membersof YAC — Ms Charmaine Adams and Ms Jill Tucker — sought declarations asto the validity of their convening of a general meeting of YAC on 10 November2014. Justice Kenneth Martin made a declaration that the general meeting hadbeen validly called and that each of the motions set out in the notice of thegeneral meeting was able to be proposed at that meeting.39

[35] Finally, in, Sandy v Yindjibarndi Aboriginal Corporation RNTBC (No 2)40

Mr John Sandy brought proceedings challenging the validity of a meeting of thedirectors of YAC which was held on 16 December 2015. Mr Sandy contendedthat the meeting had not been validly convened because it had not been called bya director; because reasonable notice had not been given to one of the directors(Ms Tucker); and because the directors had accepted membership applicationsfrom 46 new members for an improper purpose, namely to influence the outcomeof motions to be considered at a general meeting of YAC on 1 February 2016. Inaddition, Mr Sandy contended that the terms of appointment of all of YAC’sdirectors had expired on 10 September 2015, and that although extended (by theCATSI Act) until the next general meeting of YAC on 30 November 2015,motions for the appointment of directors were put, but not passed, at thatmeeting, with the result that on 16 December 2015, YAC had no validlyappointed directors.

[36] Justice Le Miere held that the purported meeting of directors on16 December 2015, and the resolutions passed at that meeting, were invalid,because the person who called the meeting, and the persons who attended, hadceased to be directors on 30 November 2015. His Honour also held thatreasonable notice of that directors’ meeting had not been given to Ms Tucker. HisHonour further held that the directors had accepted the 46 membershipapplications for an improper purpose.41

Related procedures pursued by the registrar of ATSI corporations

[37] The CATSI Act creates both the statutory office of the Registrar, andORIC.42

[38] The Registrar is given a number of functions to administer the CATSIAct.43 In addition, the Registrar has a wide variety of powers to enforcecompliance with the requirements of the CATSI Act. By way of example, theRegistrar may issue a notice requiring the directors of a corporation to take actionto comply with the CATSI Act or the corporation’s constitution, or to remedy anirregularity (compliance notice). A compliance notice may be issued if theRegistrar suspects on reasonable grounds that an ATSI corporation has failed to

37. Exhibit 1.66; Pat.38. [2014] WASC 467 (Adams).39. Adams at [116]–[118].40. (2016) 306 FLR 205; [2016] WASC 75 (Sandy (No 2)).41. Sandy (No 2) at [31], [44], [63].42. Sections 1-30 and 653-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006

(Cth).43. Section 658-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).


comply with a provision of the CATSI Act or its constitution, or if there has beenan irregularity in the affairs of the corporation.44

[39] The Registrar also has power to appoint a special administrator if theRegistrar suspects on reasonable grounds that circumstances exist that constitutegrounds for the appointment of a special administrator.45 The grounds for theappointment of a special administrator include if the affairs of the corporation arebeing conducted in a way that is oppressive or unfairly prejudicial to, ordiscriminatory against a member or members; or contrary to the interests of themembers as a whole; or if disputes between the corporation’s members andofficers are interfering with the proper conduct of the corporation’s affairs; or ifthe appointment is required in the interests of the members, or in the publicinterest.46

[40] The Registrar has issued two compliance notices of relevance to thepresent proceedings. The first, issued on 8 March 2011, required that YAC’sdirectors take action to, amongst other things, deal with outstanding applicationsfor membership and to put in place a system for the directors’ approval of anypayments to be made by YAC (first compliance notice).47 In October 2011, theRegistrar advised that he was satisfied that YAC had met the requirements of thefirst compliance notice.48

[41] Another compliance notice was issued by the Registrar on 16 May 2016,following the decision of Le Miere J in Sandy (No 2) (second compliancenotice).49 That notice required YAC to, amongst other things, prepare draftpolicies and procedures requiring that YAC hold its AGM before 30 Novembereach year, and that all membership applications be dealt with at a directors’meeting within a reasonable time after their receipt, and that by 30 June 2016, thedirectors consider any membership applications made prior to 1 June 2016.

[42] In addition, I should also mention that following the decision of Le Miere Jin Sandy (No 2), the Registrar exercised his powers under the CATSI Act tochange YAC’s Rule Book, by replacing the requirement that resolutions passedat a general meeting be passed by a special majority with a requirement for asimple majority only. In addition, the Registrar called a general meeting of YAC’smembers to appoint directors of YAC.50

2. The pleadings, the evidence and findings as to credibility of the witnesses

(a) The history of the action

[43] This action has a long history, having commenced in 2011. In August2013, the parties reached agreement as to a basis on which they would settle thisaction. A copy of the Deed of Settlement and Release (Settlement Deed) enteredinto by the parties at that stage was in evidence.51 The Settlement Deed providedthat, upon certain steps being taken, the proceeding would be dismissed with nodetermination on the merits. Regrettably, the parties fell into dispute in relation

44. Section 439-20(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).45. Sections 439-20(3) and 487-1 of the Corporations (Aboriginal and Torres Strait Islander) Act

2006 (Cth).46. Section 487-5(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).47. Exhibit 1.32.48. Exhibit 1.58.49. Exhibit 1.306.50. Exhibit 1.294.51. Exhibit 1.97.


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to completion of those steps and the proposed settlement did not come to fruition.However, certain steps were taken by the parties in partial compliance with theterms of the Settlement Deed. These are discussed below because they form partof the factual foundation for some of the claims of oppressive conduct by YAC.

[44] The action did not proceed by way of formal pleadings. Instead, the partiesfiled Statements of Issues, Facts and Contentions. That had the advantage ofidentifying, perhaps more clearly than formal pleadings might have, the issuesthe parties identified as requiring resolution, and the legal arguments the partiessaw as underpinning their respective positions. On the other hand, the preciseextent of the parties’ disagreement as to the facts was less clear. In someinstances, it appeared that there was little factual dispute, and on other occasionsthe facts alleged by each of the parties appeared to be broadly similar, but therewere no admissions and few statements of express agreement as to the facts.Consequently, it has been necessary to make factual findings about each of thealleged incidents of oppressive conduct alleged by the plaintiffs.

(b) The trial and the evidence

[45] The trial took place over 10 days in December 2016 and February 2017.A very large volume of documentary evidence was tendered in a trial bundle.Many other exhibits were also tendered in evidence.

[46] The plaintiffs tendered a total of 25 affidavits, which were sworn oraffirmed by the following 18 witnesses:

• Ms Sylvia Allan;52

• Ms Aileen Sandy;53

• Mr Vincent Adams;54

• Ms Michelle Adams;55

• Ms May Adams;56

• Mr Rodney Adams;57

• Mr John Sandy;58

• Ms Allery Sandy;59

• Mr Ken Sandy;60

• Ms Sally Anne Walker;61

• Ms Karen Toby;62

• Mr George Ranger;63

• Mr Michael Gallagher;64

• Mr Payden Sandy;65

• Ms Symaya Moody;66

52. Exhibits 6–10 and 13.53. Exhibit 30.54. Exhibits 2, 3.55. Exhibit 4.56. Exhibit 5.57. Exhibit 14.58. Exhibit 31.59. Exhibits 18, 19.60. Exhibit 27.61. Exhibit 23.62. Exhibit 20.63. Exhibit 28.64. Exhibit 29.65. Exhibit 24.66. Exhibit 21.


• Mr Wesley Munda;67

• Mr Ian Charles Francis;68

• Ms Alexandra Zhu.69

[47] The defendants tendered a total of eight affidavits, which were sworn oraffirmed by the following six witnesses:

• Mr Angus Mack;70

• Ms Lyn Cheedy;71

• Mr Michael Woodley;72

• Mr George Irving;73

• Mr Charlie Cheedy;74

• Mr Graeme Sheard.75

[48] Each of the parties called expert evidence from an accountant, in relationto the alleged oppressive conduct arising from YAC’s alleged failure to provideconsolidated accounts for it and various entities said to be related to it foraccounting purposes. The plaintiffs relied on the evidence of Ms SusanOldmeadow-Hall76 and the defendants relied on the evidence of Ms NikkiShen.77 In addition, the expert witnesses met and conferred, and, as a result ofthat conferral, provided a joint memorandum outlining the areas of agreementand disagreement.78 The experts gave evidence in a concurrent session whichwas of assistance in further highlighting the reasons why they disagreed inrelation to the extent of the consolidation of YAC’s accounts which was requiredby relevant Accounting Standards.

(c) The credibility and reliability of the non-expert witnesses

[49] Only the plaintiffs, Mr Vincent Adams and Mr Rodney Adams werecross-examined by counsel for the defendants. The remainder of the plaintiffs’affidavit evidence was unchallenged and I accept it.

[50] Counsel for the plaintiffs cross-examined all of the defendants’ witnesses,apart from Mr Cheedy, whose evidence (limited as it was) I accept.

[51] All of the lay witnesses, apart from Mr Irving and Mr Sheard, areYindjibarndi people. In assessing their credibility, I have taken into account thefact that cultural differences may affect the way in which Aboriginal witnessesgive evidence, or their demeanour as witnesses. It is well recognised that anumber of factors may impact on the evidence given by Aboriginal witnesses,including some characteristics of communication in Aboriginal society such asthe avoidance of direct eye contact as a sign of respect, and a tendency togratuitously concur with questions, as well as language difficulties.79 To the

67. Exhibit 22.68. Exhibit 25.69. Exhibit 26.70. Exhibit 33.71. Exhibit 39.72. Exhibit 41.73. Exhibits 51–53.74. Exhibit 56.75. Exhibit 49.76. Exhibits 43, 44 and 46.77. Exhibit 47.78. Exhibit 45.79. See, for example, S Fryer Smith, Aboriginal Benchbook for Western Australian Courts, 2nd ed,

2008, 5:6–5:10.


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extent that these factors may have impacted on the evidence of particularwitnesses, I have commented on them below.

[52] In so far as the witnesses were concerned, I make the following findingsas to their reliability and credibility.

[53] Ms Sylvia Allan is an elderly woman who has spent her entire life inYindjibarndi country.80 Ms Allan is a softly spoken woman, who was hard ofhearing,81 and obviously had difficulties, on occasion, in comprehending spokenEnglish. (Ms Michelle Adams sat in the witness box with Ms Allan while shegave her evidence to provide reassurance and to act as an informal interpreter,when required. There was no objection by defence counsel to that course82 andMs Adams took the interpreter’s oath for that purpose.)

[54] In cross-examination, it soon became apparent that Ms Allan rememberedlittle of the matters referred to in her affidavits, particularly in so far as theyconcerned meetings of YAC, or other meetings in which she had participated.83

Much of her oral evidence was of little or no assistance as a consequence of thosedifficulties. Ms Allan’s memory was stronger when she was asked to recall peopleor relationships within the Yindjibarndi community, and her role in resolvingmembership disputes (as a member of what was referred to as the Elders’Sub-committee, which is discussed below at [393] and following). I have takenthat part of her evidence into account, and refer to it below.

[55] The evidence of the elderly woman, who had a very limited recollectionwhen giving her evidence in the witness box, stood in marked contrast to thedetailed evidence set out in Ms Allan’s affidavits. That raises the question of howthe evidence set out in her affidavits should be approached. Counsel for thedefendants submitted that ‘to the extent that the affidavit evidence of the Plaintiffsis contentious it cannot be given any weight. This is because of the difficultiesthat the Plaintiffs had in recalling even basic facts about the proceeding’.84

[56] In the end I approached Ms Allan’s affidavit evidence with caution, but Ihave taken it into account. Subject to the following qualifications, I accept thatMs Allan’s affidavit evidence is truthful and reliable evidence. In reaching thatconclusion, I have taken into account, first, the fact that Ms Allan’s affidavitswere prepared some time ago, and no doubt with more time and less pressurethan a witness experiences in a court room. Secondly, much of Ms Allan’saffidavit evidence (for example, in relation to various meetings which sheattended, or applications she made in the Yindjibarndi #1 claim) was consistentwith the documentary evidence in relation to those events or actions, or wascorroborated by other witnesses. Thirdly, the balance of Ms Allan’s evidenceconcerned her own motivation for participating in WMYAC, her concerns aboutYAC’s management and its approach to membership, and her evidence aboutwhether other persons were Yindjibarndi people. I did not understand thedefendants to challenge the genuineness of that evidence. I have taken this aspectof Ms Allan’s evidence into account as an example of the concerns, and differentviews, held by the Yindjibarndi people. However, I have not relied on the

80. Exhibit 10.81. See, for example, ts 602.82. Ts 552–3.83. See, for example, ts 598–9,617.84. Defendants’ closing submissions at [17].


concerns or opinions of Ms Allan, or of any of the other witnesses for theplaintiffs, for the purpose of determining whether, in fact, YAC’s conduct wasoppressive on any count.

[57] I turn next to the evidence of Ms Aileen Sandy. Ms Sandy is a Yindjibarndiwoman of advancing years, who was born and grew up in Roebourne, and speaksthe Yindjibarndi language ‘all the time’.85 (As she did with Ms Allan,Ms Michelle Adams sat with Ms Sandy in the witness box to provide reassuranceand to act as an informal interpreter, when required.)

[58] Most of Ms Sandy’s oral evidence was of no assistance, for two reasons.First, she was unable to remember much about the events about which she wascross-examined. On several occasions, she indicated that she could not remember‘because it has been too long’.86 Secondly, on numerous other occasions, it wasapparent that Ms Sandy clearly did not wish to answer the questions put to her.At times she responded to questions with silence, while on other occasions shequite simply ‘closed down’ and replied in terms such as ‘I can’t give you answeron that. Thank you very much’.87 Her demeanour on those occasions wasdifferent from the occasions on which she told the Court that she could notremember the events in question. That reluctance appeared particularlypronounced when she was asked about the dispute between YAC and WMYAC.Perhaps Ms Sandy’s response was attributable to cultural differences, but she leftme with the clear impression that she simply did not wish to give evidence inrespect of certain matters. Ms Sandy conveyed the impression that she was wearyof litigation, and deeply sad and disappointed about the division in theYindjibarndi community.88

[59] As for Ms Sandy’s affidavit evidence, it stands in a different position to heroral evidence. Much of it sets out her reasons for participating in WMYAC andher concerns about YAC and its management. I accept that evidence on the basisthat it reflects Ms Sandy’s genuinely held views about those matters. However,I have not relied on the concerns or opinions of Ms Sandy for the purpose ofdetermining whether, in fact, YAC’s conduct was oppressive on any count.

[60] Turning to the evidence of Mr Rodney Adams and Mr Vincent Adams, Iwas satisfied that their ability to give their evidence was not hampered by culturaldifferences or language difficulties. Subject to one reservation in relation toMr Rodney Adams’ evidence (which I discuss at [212]), I accept that theevidence given by each of them was credible and reliable.

[61] As for the defendants’ evidence, Mr Angus Mack gave evidence in supportof the defendants’ case.89 I carefully observed him giving his evidence. Counselfor YAC submitted that it was extremely difficult for Mr Mack to comprehendlengthy and detailed questions, having regard to his limited education, and tocultural differences.90 Sometimes the questions put to him were lengthy andinvolved considerable detail, and there were a number of occasions on whichMr Mack clearly did not understand the question.91 However, on most occasions,Mr Mack requested clarification or that the question be put to him differently. On

85. Exhibit 30 at [1]–[5].86. For example, ts 811, 833.87. See, for example, ts 818, 821, 822, 827, 829.88. Ts 818–19.89. Exhibit 33.90. Ts 877.91. For example, ts 874, 876.


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other occasions where he appeared to be experiencing difficulties incomprehension, I intervened to confirm that he understood the question put, or toask counsel to rephrase the question. In addition, Mr Mack also asked counsel toproceed more slowly if his questions were put too quickly.92 In the end, I wassatisfied that Mr Mack’s evidence adequately, and accurately, conveyed hisknowledge of, and perspective on, the events and issues in dispute in this trial andwas not hampered by cultural differences.93

[62] At times there were long pauses in Mr Mack’s evidence while he thoughtabout the question put to him. On some occasions — when dealing withquestions concerning the approach taken by the YAC directors to membershipapplications by WMYAC members — it appeared that Mr Mack was hesitant ingiving his evidence because he was concerned that his answer might result in anacknowledgement of conduct by YAC which might be open to criticism.94 Iapproached his evidence with caution for that reason.

[63] Ms Lyn Cheedy answered questions directly and frankly, and clarifiedquestions with counsel when she was uncertain what was being asked. There wasnothing to suggest that Ms Cheedy experienced any comprehension or languagedifficulties in giving her evidence, and I did not observe anything in herdemeanour to suggest that her evidence was hampered by cultural differences.Ms Cheedy appeared to find cross-examination stressful and distressing onoccasion.95 That may have been, in part, a response to the stress of extensivecross-examination. In addition, Ms Cheedy had recently experienced a familybereavement.96 However, it was also apparent that, on occasion, Ms Cheedysought to answer questions so as to cast the best light on the directors’ conduct.That was especially so in relation to her evidence as to the basis for the directors’decisions as to membership on 29 June 2016, and consequently I found someaspects of her evidence, in relation to that issue, unconvincing. I approached thebalance of her evidence with caution, but ultimately I have accepted it.

[64] Mr Woodley is the CEO of YAC, and has been for some years. He gavehis evidence directly and confidently. It was clear that he has passionate andstrongly held views about the importance of preserving the culture and identity,and protecting the financial interests, of the Yindjibarndi community, and that hesees those interests as best served by YAC. It was also apparent that it isMr Woodley who drives many of the management decisions and policies adoptedby the YAC board.

[65] I approached Mr Woodley’s evidence with some caution because of therisk that his strongly held views would skew his recollection of events. By wayof example, when asked about a suggestion made by Korda Mentha concerningthe delegation of authority by the board of YAC, Mr Woodley’s ambiguousanswer (which may have been deliberately so) was that the board ‘took it on, but[the board] had some other plans in terms of how [the board] thought what wouldbe in the best interests for the corporation’97 and that ‘at the end of the day, theBoard had [its] own ideas in terms of what we was going to do in terms of [Korda

92. Ts 877.93. See, for example, S Fryer Smith, Aboriginal Bench Book for Western Australian Courts, 2nd ed,

2008, 5:6–5:10.94. Ts 914–15.95. Ts 1104.96. Ts 1125.97. Ts 1210.


Mentha’s suggestion].’98 In addition, Mr Woodley gave very vague andambiguous evidence when asked about financial matters related to Juluwarlu, andhe subsequently suggested that he kept his distance from Juluwarlu mattersbecause his wife, Ms Lorraine Coppin, is the chief executive officer ofJuluwarlu.99 I have not relied on any of Mr Woodley’s evidence to the extent thatit concerned Juluwarlu and its financial connection with YAC.

[66] In so far as Mr Woodley’s evidence pertained to factual matters, I haverelied upon his evidence to the extent that it is consistent with the documentaryevidence. However, in so far as Mr Woodley’s evidence concerned the decisionsof the board of YAC, I have relied primarily on the documentary evidence, andon the evidence given by Ms Cheedy and Mr Mack, subject to my expressedreservations in relation to their evidence..

[67] Mr Irving is the solicitor and in-house counsel for YAC. I accept hisevidence as credible and reliable.

[68] Similarly, I accept the evidence of Mr Sheard as credible and reliable.

(d) The defendants’ failure to call the directors of YAC apart from Mr Mack

and Ms Cheedy

[69] Counsel for the plaintiffs made a submission, in reliance on Jones v

Dunkel,100 arising from the decision by the defendants not to call any directorsof YAC apart from Mr Mack and Ms Cheedy.101 He submitted that

the failure to call evidence from 10 of the 12 members of the YAC Board, includinga director of not only YAC but all its subsidiaries (except Yurra Pty Ltd), should enablethe Court in the evaluation of evidence to infer that the omitted evidence would havenot have assisted the defendants’ case on either of the financial issues or themembership issues. Further, it should enable the Court to more confidently or readilydraw inferences of fact adverse to the defendants which might otherwise be open.102

[70] With respect, that submission was not an entirely fair reflection of thedefendants’ position. Late in the course of the trial, counsel for the defendantsadvised the Court that the defendants had decided not to call Mr Stanley Warrie,the second defendant. Counsel advised that Mr Warrie was an elderly man who,by the time he was due to give evidence, after having waited at the Court forseveral days to do so, was not feeling sufficiently well to give evidence.103

[71] Counsel for the defendants also advised the Court that the defendantsdecided not to call Ms Pansy Sambo, who is a director of YAC and all of thecorporate entities related to YAC, except Yurra Pty Ltd, because she had had abereavement in her family in the course of the trial.

[72] Counsel for the defendants submitted that an adverse inference should notbe drawn from the defendants’ failure to call other directors of YAC. Hesubmitted that it would have been both ‘unrealistic and disproportionate’104 for

98. Ts 1214.99. Ts 1233–4.

100. (1959) 101 CLR 298; [1959] ALR 367 (Jones v Dunkel).101. Plaintiffs’ closing submissions at [33].102. Plaintiffs’ closing submissions at [33].103. Ts 1404.104. Defendants’ reply submissions at [11].


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the defendants to obtain affidavits from each of the persons who had beendirectors of YAC between 2010 and 2016. He also submitted that:105

In view of the lengthy cross-examination of the Defendants’ witnesses, there wouldhave been insufficient time to call any further witnesses than those who were called. Thecase could not have finished within a reasonable time.

[73] Notwithstanding these practical difficulties (which are not without someforce) in my view, it remains open to the Court to infer, from the defendants’failure to call other directors, that none of the other directors would have been ofmore assistance to the defendants’ case than the evidence of Mr Mack andMs Cheedy. However, that inference is of limited assistance to the plaintiffs in thecircumstances of this case, particularly the following two circumstances. First,the failure to call individual directors would have been particularly significanthad the defence under s 166-1(2) of the CATSI Act been maintained. As thedefendants abandoned reliance on that ‘defence’, the forensic significance of theabsence of the other directors was much reduced. Secondly, in many respects thedefendants’ case involved little dispute about the facts alleged by the plaintiffs,but rather centred on whether, in all of the circumstances, the relief sought by theplaintiffs should be granted. In that context, the evidence of other directors wasalso of lesser forensic significance, and the impact of any Jones v Dunkelinference far less important than it might have been in a case involving a disputeabout a critical fact.

[74] I have relied on the evidence of Mr Mack and Ms Cheedy as evidence ofthe conduct and views of the directors as a whole, and those of YAC itself. I havealso relied on Mr Woodley’s evidence as to his conduct as evidence of theconduct of YAC, given his integral role in the management of YAC and hisinfluence on its decisions.106

[75] Counsel for the plaintiffs also submitted that the decision by thedefendants not to call Mr Philip Davies to give evidence was also of significance.Mr Davies was one of the management staff within YAC, and the officerdesignated as the contact person for enquiries relating to ORIC. I accept that I caninfer that Mr Davies’ evidence would not have assisted the defendants, any morethan the evidence given by the other witnesses involved in the management ofYAC, notably Mr Woodley. However, in view of the documentary evidencerelating to YAC’s responses to the Registrar’s intervention in its affairs (which isdiscussed later in these reasons), and the nature of the case advanced by YAC, thesignificance of the failure to call Mr Davies was also considerably diminished.

3. Some background to this litigation — A dispute between YAC and thoseof its members who are also members of the Wirlu-murra YindjibarndiAboriginal Corporation (WMYAC)

[76] At the heart of this action is a dispute between YAC and those of itsmembers who are also members of the ATSI corporation called WMYAC.

105. Defendants’ reply submissions at [12].106. The knowledge and state of mind of a company’s officers can be ascribed to the company where

those officers have control of the company’s acts, to the extent that they act as the company’sdirecting mind and will: Tesco Supermarkets Ltd v Nattrass [1972] AC 153 at 170; [1971] 2 AllER 127 at 148; Hamilton v Whitehead (1988) 166 CLR 121 at 127; 82 ALR 626 at 629; 14ACLR 493 at 496 per Mason CJ, Wilson and Toohey JJ; Bell Group Ltd (in liq) v Westpac

Banking Corporation (No 9) (2008) 39 WAR 1; 70 ACSR 1; [2008] WASC 239 at[6142]–[6143] per Owen J.


[77] WMYAC was registered under the CATSI Act on 23 November 2010.107

It was established by a number of YAC members, including the plaintiffs.Ms Sylvia Allan is a director of WMYAC108 and Ms Aileen Sandy was a directorof WMYAC until shortly before the trial.109

[78] WMYAC’s objectives, as set out in its Rule Book,110 are expressed inidentical terms to YAC’s objectives.111 The membership criteria set out inWMYAC’s Rule Book are also similar to the membership criteria set out inYAC’s Rule Book. In order to be a member of WMYAC, a person must be at least18 years old, a Yindjibarndi person who holds in common the body of traditionallaw and culture governing the Daniel Determination Area, and identify asYindjibarndi.112

[79] There was some dispute between the parties as to the precise bounds of thedispute between YAC and those of its members who are members of WMYAC.It is not necessary to resolve the origins of that dispute, or even to make findingsabout all of the issues which may be in dispute. It was, however, apparent thatsome of the issues which led to the dispute included concerns about themanagement of YAC, including the management of its financial affairs and therole and conduct of its CEO, Mr Michael Woodley, and, most significantly, adispute about whether Yindjibarndi people (through YAC) should enter into aland access agreement with Fortescue Metals Group (FMG) for the payment ofcompensation for its mining activities on land the subject of the Yindjibarndi #1claim.

[80] I deal with the nature of these aspects of the dispute between YAC and itsmembers in a little more detail later in these reasons because they form part ofthe context for some of the allegations of oppressive conduct made by theplaintiffs.

4. What these proceedings are not about

[81] This is an appropriate juncture to make some brief observations aboutwhat this case was not about, and thus what this judgment does, and does not,determine. This case was not about whether YAC, or the Yindjibarndi peoplerepresented by some other indigenous corporation, should enter into anagreement with FMG, or the terms of that agreement. Nor was this case one inwhich a determination was sought that particular persons are, or are not, eligiblefor membership of YAC, or of any other indigenous corporation which purportsto exist to act in the interests of the Yindjibarndi people. Nor did this case concernwho should be the directors and chief executive officer of YAC. These are allquestions with which the Yindjibarndi people must continue to grapplethemselves.

[82] All this case is about is whether the particular conduct of YAC (which hasbeen specifically identified and relied upon by the plaintiffs), said to have beenengaged in by YAC’s directors and CEO, constitutes conduct of the kind referredto in s 166-1 of the CATSI Act, and if so, whether any order should now be made

107. Exhibit 1.17.108. Exhibit 6 at [5]–[6].109. Ts 815.110. Exhibit 1.297.111. Rule 2 of the WMYAC Rule Book: Ex 1.297.112. Rule 3.1 of the WMYAC Rule Book: Ex 1.297.


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by the Court in relation to that conduct, and in particular, whether the reliefsought by the plaintiffs — namely the appointment of a Receiver — should begranted.

5. Legal principles concerning conduct of directors under the CATSI Act

[83] One of the objectives of the CATSI Act was to align the corporategovernance requirements for ATSI corporations with modern standards ofcorporate regulation and accountability, but in such a way as to reflect thedifferent circumstances of ATSI corporations, and so as to enable some flexibilityfor ATSI corporations to tailor their arrangements to suit those circumstances.113

So, for example, fundamental concepts from the Corporations Act 2001 (Cth) —such as the separate legal personality of a corporation upon its registration,114 andits governance by a board of directors115 who are accountable to the corporation’smembers, and required to act in good faith in the best interests of the corporation,and for a proper purpose116 — are replicated in the CATSI Act.117 Furthermore,some of the key corporate governance provisions from the Corporations Act 2001(Cth) are closely replicated in the CATSI Act. They include the provisionsconcerning the duty of directors to exercise their powers and perform their dutiesin good faith in the best interests of the corporation, and for a proper purpose,118

which are found in s 181 of the Corporations Act 2001 (Cth) and reflected ins 265-5 of the CATSI Act.

[84] The plaintiffs’ claims for relief in this case are founded on ss 166-1 and166-5 of the CATSI Act, which are in very similar terms to ss 232 and 233 of theCorporations Act 2001 (Cth). To the extent that the CATSI Act provisions inrelation to corporate governance reflect those in the Corporations Act 2001 (Cth),the principles developed in relation to the application of the Corporations Actprovisions apply also to the CATSI Act provisions.119

(a) The duty on a director to exercise their powers in good faith in the best

interests of the corporation, and for a proper purpose

[85] Directors of a company are fiduciary agents, and a power conferred uponthem cannot be exercised in order to obtain some private advantage or for anypurpose foreign to the power, but rather must be exercised for the benefit of thecompany as a whole.120

113. Adams at [8]–[16] per K Martin J.114. Sections 42-1 and 96-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006

(Cth).115. ATSI corporations with more than two members must have at least three and not more than 12

directors: Sections 243-1 and 243-5 of the Corporations (Aboriginal and Torres Strait Islander)Act 2006 (Cth).

116. Section 265-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). Thatobligation mirrors the good faith and proper purpose obligations in s 181 of the CorporationsAct 2001 (Cth): see Sandy (No 2) at [51] per Le Miere J.

117. Adams at [9] per K Martin J.118. Section 265-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).119. Shaw v Minister for Families, Housing, Community Services and Indigenous Affairs (2009) 181

FCR 201; 263 ALR 593; 113 ALD 286; [2009] FCA 1397 at [308], [363]–[369]; Adams at[9]–[10].

120. Mills v Mills (1938) 60 CLR 150 (Mills v Mills) at 185 per Dixon J; Whitehouse v Carlton Hotel

Pty Ltd (1987) 162 CLR 285 at 300; 70 ALR 251 at 262; 11 ACLR 715 at 726.


[86] As Dixon J explained in Mills v Mills, if the power would not have beenexercised save for some ulterior and illegitimate object, then that121

which has been attempted as an ostensible exercise of power will be void,notwithstanding that the directors may incidentally bring about a result which is withinthe purpose of the power and which they considered desirable.

[87] The test for determining whether a power has been exercised for a properpurpose is an objective one.122

[88] In determining whether a power has been exercised for a proper purpose,the Court must first determine the purpose or purposes for which the power mustproperly be exercised. That is a question of law. The Court then determines thepurpose for which the power was, in fact, exercised, and whether that purposewas within the category of permissible purposes.123

[89] The power of the directors must be used for the purpose for which it wasconferred. That power must not be used under the cloak of such a purpose but infact for an ulterior purpose, such as benefiting some shareholders at the expenseof others, or so that some shareholders can wrest control of the company fromothers.124 Similarly, for a director to exercise the power to accept or decline amembership application for the purpose of manipulating the voting power ofmembers, or creating a new majority of members, would be foreign to thepurpose of that power.125

[90] Clearly, there may be cases where conduct which constitutes a misuse ofdirectors’ powers (that is, the exercise of those powers other than in good faithand for a proper purpose) also constitutes oppressive conduct towards membersof the corporation.

(b) Section 166-1 of the CATSI Act

[91] Section 166-1 of the CATSI Act provides:

(1) Subject to subsection (2), the Court may make an order under section 166-5if:

(a) the conduct of an Aboriginal and Torres Strait Islander corporation’saffairs; or

(b) an actual or proposed act or omission by or on behalf of an Aboriginaland Torres Strait Islander corporation; or

(c) a resolution, or a proposed resolution, of members or a class ofmembers of an Aboriginal and Torres Strait Islander corporation;

is either:(d) contrary to the interests of the members as a whole; or(e) oppressive to, unfairly prejudicial to or unfairly discriminatory against,

a member or members whether in that capacity or in any other capacity.

[92] The Court must not make an order under that section in certaincircumstances, including where the act said to constitute oppressive conduct wasdone by an officer of the corporation in good faith and with the belief that doingthe act was necessary to ensure that the corporation complied with a Native Title

121. Mills v Mills at 186 per Dixon J.122. Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1; 89 ACSR 1;

[2012] WASCA 157 (Westpac v Bell Group (No 3)) at [1988], [2027] per Drummond AJA.123. Hancock v Rinehart (2015) 106 ACSR 207; [2015] NSWSC 646 at [60] per Brereton J.124. Ngurli Ltd v McCann (1953) 90 CLR 425 at 439–40 per Williams ACJ, Fullagar and Kitto JJ;

Mills v Mills at 186 per Dixon J.125. Sandy (No 2) at [55] per Le Miere J.


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legislation obligation.126 Initially, the defendants sought to rely on that provisionbut in the course of submissions, counsel confirmed that that was no longerpressed.127

[93] The orders which may be made by a Court (which includes the SupremeCourt128) pursuant to s 166-1 are set out in s 166-5 of the CATSI Act, whichprovides:

(1) The Court can make any order under this section that it considers appropriatein relation to the corporation, including the following:

(a) an order that the corporation be wound up;

(b) an order that the corporation’s existing constitution be modified orrepealed and replaced;

(c) an order regulating the conduct of the corporation’s affairs in thefuture;

(d) an order for the corporation to institute, prosecute, defend ordiscontinue specified proceedings;

(e) an order appointing a receiver, or a receiver and manager, of any or allof the corporation’s property;

(f) an order restraining a person from engaging in specified conduct orfrom doing a specified act;

(g) an order requiring a person to do a specified act.

[94] The persons who are entitled to apply for an order under s 166-5 are setout in s 166-10 of the CATSI Act. They include a member of the corporation.That is so even if the application relates to an act or omission that is against themember in a capacity other than as a member, or another member in thatmember’s capacity as a member. As I have already observed, there was nodispute that the plaintiffs were entitled to bring the present action.

[95] Chapter 11 of the CATSI Act provides for corporations to be placed underspecial administration and for a special administrator to be appointed. Theexercise of the power to appoint a special administrator will be informed by theobjects and aims of the CATSI Act, in contrast to an administration under theCorporations Act 2001 (Cth), which is principally driven by the interests ofcreditors and a certainty of commercial transactions.129

[96] In addition to the Court’s powers under the CATSI Act, the plaintiffs alsorely on the Court’s power in its equitable jurisdiction to grant injunctions or makedeclarations about the rights of the parties.130 The plaintiffs contend that to theextent that the conduct or proposed conduct of YAC constitutes a breach orthreatened breach of the Rule Book, an injunction or declaration could be grantedby way of relief.131 There is no doubt that the Court has power to grant relief ofthat kind in an appropriate case.

126. Section 166-1(2) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).127. Defendants’ reply submissions at [8].128. Section 694-35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).129. Sandy (No 2) at [66] per Le Miere J.130. PSIFC at [217].131. PSIFC at [219].


(c) What conduct is proscribed by s 166-1?

[97] The ground of being ‘contrary to the interests of members as a whole’under s 166-1(1)(d) is independent of the ground of being ‘oppressive to, unfairlyprejudicial to or unfairly discriminatory against, a member or members whetherin that capacity of any other capacity’ under s 166-1(1)(e).132

[98] It is convenient to consider the meaning of each of those provisionsseparately.

Acting contrary to the interests of members as a whole under s 166-1(1)(d)

[99] The meaning of the phrase ‘contrary to the interests of the members as awhole’ in the corporations legislation has been equated with ‘the benefit of thecompany as a whole’.133

[100] The interests of the members, considered as a whole, are ‘circumscribedby, and found within, the constituting documents of the company’.134 So, forexample, to exclude a member from membership of a corporation, contrary to itsarticles, may be contrary to the interests of the members of the company as awhole.135

[101] The requirement that an exercise of a corporation’s powers be for thebenefit of the members as a whole is to exclude their exercise for ‘ulterior specialand particular advantages’. The provision is directed to ‘purposes foreign to theassociation’s operations, affairs and organizations’.136

[102] Conduct by a board of directors will be contrary to the interests of themembers as a whole if no board, acting reasonably, could have engaged in thatconduct.137 It is not necessary to show bad faith on the part of the directors. Inother words, conduct may be contrary to the interests of the members as a wholeeven though the board of directors does not act in bad faith.138

[103] In considering an allegation that conduct was contrary to the interests ofthe members as a whole, the courts will not assume the management ofcorporations, so as to substitute their decisions and assessments (about the meritsof particular management decisions) for those of the directors.139 Consequently,

132. Turnbull v National Roads and Motorists’Association Ltd (2004) 50 ACSR 44; [2004] NSWSC577 (Turnbull) at [39] per Campbell J; Shelton v National Roads and Motorists’Association Ltd

(2004) 51 ACSR 278; [2004] FCA 1393 at [25] per Tamberlin J.133. New South Wales Rugby League Ltd v Wayde (1985) 1 NSWLR 86 at 96; 9 ACLR 465 at 474

(Wayde). The decision of the New South Wales Court of Appeal was unsuccessfully appealedto the High Court, and without any adverse comment by the members of the court on that aspectof the judgment of the Court of Appeal.

134. Wayde at NSWLR 96; ACLR 474.135. Australian Securities Commission v Multiple Sclerosis Society of Tasmania (1993) 10 ACSR

489 (ASC v MS Society (Tas)) at 516.136. Pettit v South Australian Harness Racing Club Inc (2006) 95 SASR 543; [2006] SASC 306

(Pettit) at [26] per White J.137. Pettit at [26] per White J; Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459

at 467–8; 61 ALR 225 at 230–1; 10 ACLR 87 at 92 (Wayde v NSWRL) per Mason ACJ, Wilson,Deane and Dawson JJ.

138. Pettit at [26] per White J, citing Wayde v NSWRL at CLR 472; ALR 234; ACLR 95 per BrennanJ.

139. Wayde at NSWLR 102; ACLR 479.


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in order to show that a decision was not in the overall interests of the membersas a whole, it has to be shown that the decision of the board of directors was suchthat no board acting reasonably could have made it.140

Oppressive conduct under s 166-1(1)(e)

[104] As Menhennitt J noted in Re Tivoli Freeholds Ltd:141

Whether or not a company is being conducted in a manner oppressive to certain

shareholders or members depends upon all the circumstances and it is not possible toattempt a universal definition.

[105] The concept of oppression in the corporations legislation has,historically, been understood as importing the notion ‘that the oppressed arebeing constrained to submit to something which is unfair to them as the result ofsome overbearing act or attitude on the part of the oppressor’.142 A key issue inthe application of the equivalent statutory test under the corporations legislationis that of fairness,143 and the different elements in the statutory formulation basedon oppression, unfair prejudice and unfair discrimination have been described as‘merely different aspects of the essential criterion, namely commercialunfairness’.144 As Tamberlin J explained in Shelton, ‘[i]f directors exercise apower so as to impose a disability or burden on a member that is unfair accordingto ordinary standards of reasonableness and fair dealing, then such conduct maybe described as oppressive’.145 Conduct on the part of a director that is merelyunwise, inefficient or careless will not, by itself, amount to oppression.146

[106] Those alleging that the affairs of the company have been conducted in amanner oppressive to them must therefore establish, as one element, conductwhich is unfair, or burdensome, harsh and wrongful, to the other members of thecompany or some of them, and which lacks that degree of probity which they areentitled to expect in the conduct of the company’s affairs.147 A failure to provideinformation, or a lack of transparency about the financial affairs of a closely heldgroup of companies may also amount to oppressive conduct.148 So, too, can apersistent failure to allow time for discussion at meetings.149

140. Wayde v NSWRL at CLR 468; ALR 231; ACLR 92 per Mason ACJ, Wilson, Deane and DawsonJJ and see also, to similar effect, Brennan J at CLR 469–70, 473; ALR 232–3, 235; ACLR 93–4,96.

141. [1972] VR 445 (Re Tivoli) at 452 per Menhennitt J; Shelton v National Roads and Motorists’

Association Ltd (2004) 51 ACSR 278; [2004] FCA 1393 (Shelton) at [23]–[24] per TamberlinJ.

142. Re Jermyn Street Turkish Baths Ltd [1971] 3 All ER 184 at 199; [1971] 1 WLR 1042 at 1060(Re Jermyn) per Buckley LJ.

143. Nilant v RL & KW Nominees Pty Ltd [2007] WASC 105 (Nilant) at [112] per Hasluck J,referring to Jenkins v Enterprise Gold Mines NL (1992) 6 ACSR 539.

144. Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342(Nassar) at [87] per Barrett J; Dosike Pty Ltd v Johnson (1996) 16 WAR 241; 22 ACSR 752.

145. Shelton at [23] per Tamberlin J.146. Re Five Minute Car Wash Service Ltd [1966] 1 All ER 242 at 247; [1966] 1 WLR 745 at 752–3

(Re Five Minute); Nilant at [111] per Hasluck J.147. Re Jermyn at All ER 199; WLR 1059 per Buckley LJ; Nilant at [110] per Hasluck J; Re Tivoli

at 452 per Menhennitt J.148. Re Ledir Enterprises Pty Ltd (2013) 96 ACSR 1; [2013] NSWSC 1332 at [194]–[199].149. John J Starr (Real Estate) Pty Ltd v Robert R Andrew (A’Asia) Pty Ltd (1991) 6 ACSR 63 at

71–2, 82–4; Shum Yip Properties Development Ltd v Chatswood Investment and Development

Co Pty Ltd (2002) 40 ACSR 619; 166 FLR 451; [2002] NSWSC 13 at [205].


[107] The Court should not take a narrow approach to cases of oppression150

and the Court’s jurisdiction should not be confined by technical distinctions.151

The judicial imposition of limitations on the scope of the provisions should beapproached with caution.152

[108] Oppression is not established simply by showing that the majority are incontrol of the company, or that the applicant is consistently out-voted, or that themajority have made some questionable decisions from a business point of view.The mere disadvantage of being in a minority does not in itself constituteoppression.153 Similarly, disagreement with a decision by a majority ofshareholders and directors on the part of a minority shareholder does not entitlethat shareholder to relief under the section.154 Nor does the mere fact that amember of a company has lost confidence in the manner in which the company’saffairs are conducted, or is dissatisfied with the conduct of the company’s affairs;nor can resentment at being outvoted.155

[109] In judging whether particular conduct is oppressive, the Court mustdecide whether, in balancing the interests of the company as a whole againstminority interests, the directors of the company have acted so as to unfairlyprejudice the interests of the minority. Whether the conduct complained of isoppressive is to be determined objectively, from the position of a hypotheticaland reasonable director, and according to ordinary standards of reasonablenessand fair dealings.156

[110] As Tamberlin J observed in Shelton, ‘[t]he question is one of fact anddegree for the Court to determine, having regard to the view the directors haveformed themselves, and allowing for any special skill or knowledge possessed bythe directors’.157 Where a member is adversely affected by conduct of thecompany, the determination as to whether the conduct was oppressive requires anoverall assessment of the position of the member in the company, and of thecompany itself. Whether the conduct involved unfairness ‘cannot be assessed ina vacuum or simply from one member’s point of view. It will often depend onweighing conflicting interests of different groups within the company’.158 TheCourt will need to determine whether there was a departure from the standardsof fair dealing in light of the history and structure of the particular company andthe reasonable expectations of the members, so as to determine whether thedetriment caused to the members’ interests by the conduct of the company wasjustifiable.159

150. Shelton at [23] per Tamberlin J.151. Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 (Fexuto)

at [4].152. Campbell v Backoffıce Investments Pty Ltd (2009) 238 CLR 304; 257 ALR 610; 73 ACSR 1;

[2009] HCA 25 (Campbell) at [72] per French CJ.153. Shelton at [23]–[24] per Tamberlin J.154. Shelton at [23]–[24] per Tamberlin J; Re Bountiful Pty Ltd (1994) 12 ACLC 902.155. Re Five Minute at All ER 247; WLR 751.156. Wayde v NSWRL at CLR 472; ALR 234; ACLR 95 per Brennan J; Shelton at [23]–[24] per

Tamberlin J; Nilant at [110] per Hasluck J.157. Shelton at [23] per Tamberlin J.158. Wayde at NSWLR 95–6; ACLR 473, quoting Thomas v HW Thomas Ltd (1984) 2 ACLC 610

(Thomas) per Richardson J.159. Wayde at 95–6; ACLR 473, quoting Thomas per Richardson J.


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[111] Relief may be sought for oppressive conduct in respect of a single act oromission, or in respect of the continuous conduct of the affairs of the companyover time.160 It is necessary for each single allegation in an oppression case to bepleaded clearly in order to assess whether the totality may amount tooppression.161 In a case whether there are a variety of individual allegations, it isnecessary to consider not just whether each of them constitutes oppressiveconduct, but whether the totality of the allegations constitutes oppression.162

[112] The provisions are directed to conduct of the company which is unjustlydetrimental to any member of the company, whatever form it takes and whetherit adversely affects all members alike or discriminates against some only.163 Thatdetriment may be to the financial interests of the member as a member, or it maybe conduct which is adverse to a member’s interests in other capacities, as where,for example, the member is excluded from participation in the management of thecompany.164

[113] The onus of establishing unfairness rests on the applicant asserting theconduct that is contrary to the interests of the members as a whole, or that isoppressive, unfairly prejudicial or discriminatory. An applicant must actuallyprove oppression before obtaining relief.165

[114] In order to succeed, it is not necessary for an applicant to show that anydecision of the corporation was invalid.166 However, proof of invalidity ornon-compliance with the corporation’s constitution may indicate that a decisionis contrary to the interests of the members as a whole. This is because of theimportance which the law attaches to adherence to the provisions of acorporation’s constitution. The failure to observe those provisions has the effectof depriving members of their right, as members, to have the affairs of thecorporation conducted in accordance with its constitution and rules.167

[115] In determining whether conduct is oppressive within the meaning of thesection, the courts are not concerned with reviewing the underlying merits of thedecisions of the directors. The courts do not substitute their discretion for thediscretion exercised in good faith by the board.168 Actions for oppressive conductare not the vehicle for de facto appeals on the merits of management decisions.169

By way of example, in the context of membership disputes, it is not for the Courtto determine whether membership applications are bona fide.170 In those caseswhere the decision making body (whether the directors, a managementcommittee or otherwise) has a very broad discretion to accept or rejectmembership applications, the Court will be very slow to interfere with decisions

160. Re Norvabron Pty Ltd (No 2) (1986) 11 ACLR 279 at 289.161. Shelton at [23]–[24] per Tamberlin J; Weatherall v Satellite Receiving Systems (Australia) Pty

Ltd (1999) 92 FCR 101; [1999] FCA 741.162. Fexuto at [6] per Spigelman CJ.163. Wayde at NSWLR 95–6; ACLR 473, quoting Thomas per Richardson J.164. Wayde at NSWLR 95–6; ACLR 473, quoting Thomas per Richardson J.165. Shelton at [23]–[24] per Tamberlin J.166. Pettit at [26] per White J.167. Pettit at [26] per White J; quoting Popovic v Tanasijevic (No 5) (2000) 34 ACSR 1; [2000]

SASC 87 at [505] per Olsson J.168. Pettit at [26] per White J).169. Pettit at [26] per White J.170. Millar v Houghton Table Tennis & Sports Club Inc [2003] SASC 1 (Millar) at [190] per

Besanko J; Pettit at [26] per White J.


made in good faith.171 That principle recognises that there may be manylegitimate reasons why a decision maker for a corporation or association wouldreject a membership application, ranging from a determination that the aims andaspirations of the applicant are not consistent with the objects of the corporationor association, to questions of capacity where the association does not have theability to cater for an influx of members.172

[116] Conduct which is not in the interests of the members as a whole (contraryto s 166-1(1)(d)) may also constitute conduct which is oppressive (contrary tos 166-1(1)(e)). By way of example, rejection of membership applications as abundle, and without consideration of each individual application, and for apurpose unrelated to the objects of the corporation, may be oppressive, and notin the best interests of the members as a whole.173

6. Overview of the conduct which the plaintiffs contend constitutesoppressive conduct

[117] As I have already mentioned, the plaintiffs allege 20 different kinds ofoppressive conduct. These were identified under five broad headings. The allegedoppressive conduct was:

(a) Alleged oppressive conduct by operating without any validly appointeddirectors: permitting itself to operate and engage in affairs without therebeing any directors;

(b) Alleged denial of membership rights and improper conduct in dealingwith membership applications:

(i) Alleged wrongful conduct of YAC in excluding and hinderingmembers in respect of their rights to participate as members ofYAC, and invalid resolutions made by YAC in relation thereto,namely by:

(I) alleged wrongful exclusion of members from meetings ofYAC, in particular the AGM of 15 December 2010; and

(II) alleged wrongful purported cancellation of memberships on15 December 2010 with respect to 26 members of YAC, andcontinued denial of that membership until at least 21 March2012;

(ii) Threatened conduct of YAC to convene a meeting for the purposeof amending rules 3.1 and 3.7 of YAC’s Rule Book, in order tolimit the persons who can be members of YAC and the groundsupon which membership may be cancelled;

(iii) Wrongful conduct and exercise of power by YAC and itspurported officers in refusing and/or failing to considermembership applications, during the period 2011–2016;

(iv) Wrongful denial of membership to persons approved by the boardin 2014 to be eligible for membership;

(v) Approval (in November 2015) of membership applications byYAC’s purported board, and subsequent registration of themembership applicants as members of YAC, for an improperpurpose;

171. Millar at [190] per Besanko J.172. Millar at [190]–[199] per Besanko J; Pettit at [26] per White J.173. Millar at [196]–[199] per Besanko J.


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(vi) Apparent bias in dealing with membership applications in June2016.

(c) Failure to conduct or manage meetings properly:(i) Failure to explain YAC’s annual financial report or provide

members an opportunity to ask questions or make comments atthe AGM held on 21 March 2012;

(ii) Discussion about financial issues hindered at the AGM held on10 September 2014;

(iii) CEO’s report not accepted on the basis that it did not relate to theaffairs of YAC in the 2014 and 2015 financial years.

(d) Improper Administration of YAC finances:(i) Failure to explain YAC’s annual financial report or provide

members an opportunity to ask questions or make comments atthe AGM held on 21 March 2012;

(ii) Issues arising out of the Korda Mentha report tabled at the AGMheld on 10 September 2014;

(iii) Signing off on the 2014 annual financial report when it containedmaterial errors;

(iv) Incurring costs in defending legal proceedings without authorityfrom the board;

(v) Incurring and paying expenses in the period when YAC had novalidly appointed directors;

(vi) Failure to report to members in compliance with Subdiv 333-A ofthe Corporations (Aboriginal and Torres Strait Islander)Regulations 2007 (Cth) due to the failure to prepare consolidatedaccounts.

(e) Other conduct:(i) Other evidence of continual non-compliance with the CATSI Act

and Rule Book, namely:(I) Matters identified by the Registrar in the first compliance

notice issued on 8 March 2011;(II) Matters identified by the Registrar in the second compliance

notice issued on 16 May 2016;(III) Failure to adequately maintain the Register of Members.

[118] Each of these instances of alleged oppressive conduct is separatelyconsidered below.

[119] Given the extensive factual and temporal context for the plaintiffs’allegations of oppressive conduct, I have not adopted the orthodox approachadopted in judgments of making findings of fact in a global sense, and in achronological order. Instead, I have made specific findings of the facts relevantto each of the allegations of oppressive conduct.

[120] As far as possible, I have endeavoured to deal with the allegations ofoppressive conduct in a chronological order. However, it is convenient to dealfirst with all of the allegations of oppressive conduct in relation to membership,as a group, and then to deal with the allegations of oppressive conduct in relationto YAC’s conduct of meetings and its management of its finances as a group.

[121] Before turning to consider the plaintiffs’ allegations of oppressiveconduct by YAC, it is necessary to consider in some more detail the broaderdispute between YAC and those of its members who were also members of


WMYAC. The defendants say that the conduct of the directors of YAC, inrelation to the membership of YAC in particular, needs to be assessed in light ofthat broader dispute.

(a) Concerns about the management of its YAC, including the management ofits financial affairs, and the role of its CEO, Mr Woodley

[122] The evidence established that for about the past decade, some of themembers of YAC have held concerns about how YAC is managed, about themanagement of YAC’s finances and the finances of YAC’s subsidiaries, and aboutthe role of its CEO, Mr Michael Woodley.

[123] A number of the plaintiffs’ witnesses gave evidence that they areconcerned about what they consider to be a lack of transparency about YAC’sfinances, and about where money received by YAC is spent. By way of example,Ms Allan deposed that174

[f]or years I have had a concern about the adequacy of information given to membersabout dealings with YAC’s finances.

As one of the Elders I have worried about how the money had been spent.I do not know how the money is being spent for the benefit of the Yindjibarndi

people.

[124] Similarly, Ms Aileen Sandy explained that175

when I go to YAC meetings, one of the reasons I go is I want to know where all themoney is going. They never gave us any report back from Rio Tinto. They will not tellus if they have money in the trust. I do not know what they are using the money in thetrust for.

[125] Mr Rodney Adams expressed a similar view. After attending a meeting ofYCCL on 3 December 2015, he was concerned that ‘[t]here was no paperworkon how much money we had, there was nothing that showed any of this’.176

[126] Other witnesses expressed their ongoing concern about the adequacy ofYAC’s financial management generally. By way of example, Mr RodneyAdams177 and Mr John Sandy178 were concerned that YAC’s accounts had beenshown to contain errors. A number of the plaintiffs’ witnesses had not heard of,or were unaware of the business or functions of, a number of YAC’s subsidiariesor entities related to YAC, such as Yindjibarndi Capital, Yindjibarndi Wealth orYurra,179 or were concerned to know what financial agreements YAC had enteredinto with mining companies.180 Others were concerned about where YAC’smoney was being spent, felt that that they were not informed as to how the moneyreceived by YCT or YPCT was being spent,181 felt that that money was not beingspent on, or for the benefit of, the Yindjibarndi people, or had a perception thatYAC money was being paid to Juluwarlu, with which Mr Woodley wasassociated, or that it otherwise went to Mr Woodley’s family.182

174. Exhibit 10 at [22]–[24].175. Exhibit 30 at [11].176. Exhibit 14 at [33].177. Exhibit 14 at [27].178. Exhibit 31 at [23].179. For example, Ms Aileen Sandy (Ex 30 at [38]–[39]) and Mr John Sandy (Ex 31 at [35]–[36]).180. For example, Mr John Sandy (Ex 31 at [26]).181. For example, Ms Allery Sandy (Ex 19 at [17]–[18]).182. For example, Ms Sylvia Allan (Ex 10 at [29], [36]–[37]), Mr Ken Sandy (Ex 27 at [22]), and

Mr Vincent Adams (Ex 2 at [4]–[5]).


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[127] A number of witnesses gave evidence to the effect that they had concernsabout the management style, and conduct, of Mr Michael Woodley in his capacityas the CEO of YAC. The evidence suggested that these concerns had contributedto the decision by some members of YAC to establish, or join, WMYAC.Ms Allan deposed that the reason she joined WMYAC was because Mr Woodleywould not permit her, or other members of YAC, to speak or to ask questionsabout YAC’s finances when they attended meetings of YAC. Her evidence wasthat ‘[w]e were not being listened to so we decided to set up our owncorporation’.183

[128] Ms Aileen Sandy’s understanding of why WMYAC was established wasthat:184

YAC says that we started Wirlu-murra because of FMG. The old people startedWirlu-murra because of all the fighting with the YAC mob. We used to go for themeetings for YAC and we would always be told to shut up. All the old people could saynothing.

We were frightened of Michael Woodley. He does not let the old people talk. Wealways end up in an argument. He does not listen to us, to the Elders. He makes us feelno good. He has got not respect for us. Wirlu-murra started because of that.

[129] Mr Ken Sandy’s evidence was that at YAC meetings:185

Elders would ask questions, particularly of Michael Woodley, to the effect of whatmoney had been received on behalf of YAC members and Yindjibarndi people and whatit had been spent on.

Michael laughed at their questions and would not answer them. At a particularmeeting in 2010, one of the Elders, Maudie Jerrold asked where the money had comefrom to buy houses in Karratha and one in Perth.

Lorraine Coppin and Rosemarie Woodley told Maudie she should shut up.Michael Woodley told her to sit down and shut her mouth …

… the Elders in our community had lost any sense of authority and standing. Theirquestions were not being answered. We decided amongst ourselves that we should forma new corporation where the Elders’ views would be listened to.

[130] Similarly, Ms Allery Sandy’s evidence was that the dispute over thegovernance of YAC ‘has been essentially about who should be on the board andwhether YAC should be run by Michael Woodley’.186 Mr Ken Sandy’s view wasthat ‘if you are not a supporter of Michael Woodley, you are excluded fromreceiving any benefits such as being included in heritage surveys with companieslike Rio Tinto and Hancock’.187

[131] It is neither necessary nor appropriate to make any findings about theaccuracy of these views or the legitimacy of these concerns. I should also makeclear that the accuracy of these views was contested. Mr Woodley expresslydenied that YAC’s money was paid to his family, or expended for the benefit ofhis family members.188 He also rejected all allegations that he had not allowedpeople to have their say in relation to YAC’s business and activities or that he hadbullied people.189 For present purposes, it suffices to say that I accept that the

183. Exhibit 10 at [46].184. Exhibit 30 at [31]–[32].185. Exhibit 27 at [12]–[16].186. Exhibit 19 at [15].187. Exhibit 27 at [33].188. Exhibit 41 at [66].189. Exhibit 41 at [67].


evidence of the plaintiffs’ witnesses established that some members of YAC aredissatisfied with the management of YAC, including the management of itsfinances, and that of its subsidiaries. It was also clear on the evidence that thoseconcerns contributed to the decision made by some YAC members to establish,or join, WMYAC, and continue to contribute to the dispute between YAC andthose of its members who are also members of WMYAC.

(b) The dispute about whether YAC should enter into an ILUA with FMG

[132] The more significant area of dispute between YAC and those of itsmembers who are also members of WMYAC pertained to whether YAC shouldenter into an ILUA with FMG.

Background to this aspect of the dispute

[133] FMG is engaged in substantial mining operations, including its SolomonHub mine, on land which is the subject of the Yindjibarndi #1 claim. FMGobtained three mining leases in respect of that land in 2010, followingdeterminations made by the National Native Title Tribunal (which were thesubject of unsuccessful appeals to the Federal Court).190

[134] From about 2007, YAC (in its capacity as the agent for the originalApplicant in the Yindjibarndi #1 claim) opposed the grant of mining tenementsto FMG. At the same time, it was involved in negotiations with FMG for a landaccess agreement which would govern the terms on which FMG would conductmining operations, and the compensation which would be paid to theYindjibarndi people for the impact of those operations on the native title rightsthey asserted in the Yindjibarndi #1 claim area.

[135] It appears that the intention was that once it was executed by FMG, theApplicant in the Yindjibarndi #1 claim, and YAC, such an agreement would beregistered as an ILUA under the NT Act. Entering into an agreement of that kindwould be a significant step for the Yindjibarndi people. Generally, in the case ofa registered ILUA, there is no entitlement to any compensation for the loss orimpairment of native title rights and interests, other than compensation providedfor in the ILUA.191

[136] Mr Woodley’s evidence was that the Yindjibarndi #1 claim was made toenable YAC, as the PBC for the common law holders of native title in that area,to negotiate compensation with FMG in respect of its mining activity on land thesubject of the Yindjibarndi #1 claim.192

[137] I digress to observe that from a commercial perspective, the very likelydifficulty in negotiating an agreement of that kind — in circumstances where theYindjibarndi #1 claim had not been determined, and when it was not clearwhether the Yindjibarndi people would establish any native title rights, and mostsignificantly, any exclusive native title rights in that area — would lie in reachinga consensus about what would constitute adequate compensation for the loss orimpairment of those asserted native title rights which would occur as a result ofFMG’s mining operations.

190. FMG Pilbara Pty Ltd v Cheedy (2009) 259 FLR 293; [2009] NNTTA 91; FMG Pilbara Pty Ltd/

Wintawari Guruma Aboriginal Corporation/ Ned Cheedy on behalf of the Yindjibarndi People

v Western Australia [2009] NNTTA 99; Cheedy on behalf of the Yindjibarndi People v Western

Australia [2010] FCA 690; Cheedy on behalf of the Yindjibarndi People v Western Australia

(2011) 194 FCR 562; [2011] FCAFC 100.191. Section 24EB of the Native Title Act 1993 (Cth).192. Ts 1201.


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[138] Although YAC had opposed the grant to FMG of mining tenements onland the subject of the Yindjibarndi #1 claim, it was unable to prevent that fromoccurring, and FMG was able to commence mining at its Solomon HubProject.193

[139] By August 2010, negotiations between YAC and FMG had broken down,and YAC ceased negotiations with FMG.

The emergence of differences of view within the Yindjibarndi community aboutwhether to enter into an agreement with FMG

[140] It is apparent that there were a number of Yindjibarndi people who werein favour of continued negotiations with FMG, and who were dissatisfied withYAC’s unwillingness to continue to pursue those negotiations. Those peopledecided to establish their own ATSI corporation, which became WMYAC.Mr Woodley said that he first learned that members of YAC were intending to setup WMYAC in August 2010 when he attended a meeting between FMG and YACat the National Native Title Tribunal. His evidence was that at this meeting194

I heard Bruce Woodley, Maudie Jerrold, Jill Tucker and Allery Sandy announce thatthey were going to go their own separate way. I remember them saying that they hadhad enough, they were leaving YAC to set up their own corporation to do their ownthings …

[141] The dissatisfaction felt by some Yindjibarndi people as a result of YAC’sdecision not to continue to pursue an agreement with FMG was very clearlyreflected in a letter sent by 23 members of the Yindjibarndi #1 claim group,including the plaintiffs, to the then Minister for Regional Development andLands, Mr Brendon Grylls MLA, dated 10 November 2010. In that letter, thesignatories to it expressed their concern to the Minister that Mr Woodley:195

has no authority to speak or act independently of his six fellow applicants, despite theappearance that he frequently does so. It is a matter of great concern and regret to usthat Mr Woodley appears to present himself as having authority to act as spokespersonfor our claimant group, when that is not the case. …

Further, the concern felt by our group as to Mr Woodley’s independent actions isheightened by his failure to consult his fellow applicants or claim group members, andparticularly those of the group who are, to him, elders with superior status, power andauthority within the Yindjibarndi #1 native title determination applicant group.

Mr Woodley is associated with an Indigenous corporation called YindjibarndiAboriginal Corporation, but that entity exists for the purpose of being the ‘prescribedbody corporate’ for the Yindjibarndi native title determination [in the Daniel decision]…. Mr Woodley is probably authorised to speak on behalf of that corporation, but thatdoes not extend to our native title claim, being [the Yindjibarndi #1 claim] in whichMr Woodley is merely one of seven applicants who has not been authorized to act asspokesman for our claimant group, and especially not to do so without priorconsultation with us.

…… there are legal proceedings being conducted in the names of the applicants in theYindjibarndi #1 native title claim against FMG, in relation to the proposed issuing ofcertain mining leases to FMG over land within our claim area.

These legal proceedings do not have the approval or support of a substantial number,possibly a majority, of the members of our native title claim group. … more than 100

193. Ts 1200–1.194. Exhibit 41 at [9].195. Exhibit 1.14.


members of the group recently have signed documents indicating that they do not wishto be in litigation with FMG and would prefer to make agreements with that companyas provided for in the Native Title Act.

[142] A number of the persons who signed that letter became members ofWMYAC when it was established later that month.

[143] WMYAC members then engaged in negotiations with FMG in relation toa land access agreement. Mr Woodley’s evidence was that he first became awareof those negotiations in December 2010, when he received a copy of an unsignedland access agreement between FMG, YAC and the applicants for theYindjibarndi #1 claim. Mr Woodley’s evidence was that he had had noknowledge of this agreement before receiving a copy of it and he was not evenaware that FMG was negotiating that agreement.196

[144] By March 2011, FMG had reached an agreement with WMYAC inrelation to use of land within the Yindjibarndi #1 claim area (FMG Agreement).The terms of the FMG Agreement contemplated that that agreement would besigned by the eight Yindjibarndi people who were the then claimants inYindjibarndi #1 claim, and by YAC.197 (YAC’s agreement was necessary becauseit was the agent for the Applicant in the Yindjibarndi #1 claim.) At that point, theFMG Agreement was signed by the plaintiffs and Ms Mavis Pat (who was alsoa plaintiff in this action when it commenced).198

[145] In order to be able to assess the submissions which were made about theimplications for YAC if it entered into the FMG Agreement, or an agreement insimilar terms, it is necessary to set out, in broad terms, the key planks of the FMGAgreement. The FMG Agreement was to be a tripartite agreement between FMG,various persons (including the plaintiffs) acting (or purporting to act) for and onbehalf of all of the Yindjibarndi people, and YAC. If executed, the Agreementwas to continue for the life of all of FMG’s railway, port and mining operationswithin the Agreement Area (which included the area covered by the Danieldetermination, and within the Yindjibarndi #1 claim area).199 As I have alreadymentioned, FMG’s Solomon Hub Mine project was located within the area of theYindjibarndi #1 claim area.

[146] Under the FMG Agreement, the Yindjibarndi people would consent to thegrant and renewal of FMG’s railway, port and mining operation,200 but withoutrelinquishing or surrendering any native title rights or interests in the AgreementArea, or being taken to consent to the extinguishment of any such rights,201 andFMG would not oppose the recognition of the Yindjibarndi people’s claim tonative title in the Yindjibarndi #1 claim area.202 FMG would also take allreasonable and practical measures to ensure that its operations did not harmAboriginal cultural heritage, that it would work with the Yindjibarndi people toaddress any concerns they had in relation to Aboriginal cultural heritage,203 andthat it would support the development of Aboriginal business opportunities.204

196. Exhibit 41 at [13].197. Exhibit 1.37.198. Exhibit 1.37.199. Exhibit 1.37, cl A3.2, to be read with the definitions in cl A1.200. Exhibit 1.37, cl A5.201. Exhibit 1.37, cl A11.202. Exhibit 1.37, cl A16.203. Exhibit 1.37, cl D2.204. Exhibit 1.37, cll F1 and F3.


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[147] It was also contemplated that FMG would pay compensation, and thatthat compensation would be paid to WMYAC. The compensation was to take theform of a lump sum payment to WMYAC within 14 days of the FMG Agreementbeing signed, a fixed royalty payment during each year in which iron ore wasmined and shipped from mining tenements held by FMG within the AgreementArea, and an additional discretionary royalty which FMG may choose to pay tomembers of WMYAC who were employed or engaged in FMG’s projects, or whowere undergoing vocational training and education in relation to FMG’s projects,within the Agreement Area.205 In addition, the FMG Agreement would requireFMG to establish a foundation, and contribute a not insignificant amount eachyear to that foundation, for the purpose of benefiting Yindjibarndi Elders (namelythose Yindjibarndi people who were over 50 years of age).206

[148] Under the FMG Agreement, the Yindjibarndi people would agree thatFMG’s compliance with its obligations under the Agreement, including thepayment of compensation, would constitute the full and final satisfaction of allliabilities, claims for, or entitlement to, native title compensation which theYindjibarndi people had, or would in the future have, against FMG, and theYindjibarndi people would release FMG from any such liabilities or claims in thefuture.

[149] Furthermore, the Yindjibarndi people were obliged to ensure that:

any [PBC] has executed and delivered to FMG a deed of covenant by which the[PBC] covenants to observe, perform, comply with and be bound by the obligations ofthe Yindjibarndi People under this Agreement in respect of that portion of theAgreement Area for which its details are entered on the National Native TitleRegister.207

[150] I note that nothing in that obligation suggests that it was necessary, underthe FMG Agreement, for YAC to be replaced as the PBC for the Daniel

Determination Area or as the agent for the Applicant in the Yindjibarndi #1 claim.

[151] The FMG Agreement also contemplated that FMG would apply to haveit registered as an ILUA under the NT Act, and that the Yindjibarndi peoplewould not object to that occurring.

[152] A meeting of the directors of YAC was held on 10 March 2011.208 At thatmeeting, the directors passed the following resolution:209

That the Yindjibarndi Aboriginal Corporation (YAC) continues to oppose FMG andthe Wirlu-Murra group with every legal avenue possible so that YAC protects allYindjibarndi country, both in the Yindjibarndi native title determination and applicationareas because the agreement that FMG and the Wirlu-Murra group want YAC to signis a bad agreement for YAC and all Yindjibarndi people.

[153] The partially executed FMG Agreement was sent to YAC’s solicitors forexecution by YAC in March 2011. Consistent with the resolution of the directors,YAC refused to execute that Agreement.

205. Exhibit 1.37, cll B2–B4.206. Exhibit 1.37, cl B5.207. Exhibit 1.37, cl A17.2.208. Exhibit 37.209. Exhibit 37.


The differences of view in relation to the FMG agreement

[154] The evidence clearly establishes, and I find, that from late 2010 onwards,and up until the trial, there were genuine, and very strongly held, opposing viewswithin the Yindjibarndi community, and within YAC’s membership, aboutwhether the Yindjibarndi people (through YAC) should enter into an agreementwith FMG on the terms set out in the FMG Agreement, in advance of thedetermination of the Yindjibarndi #1 claim.

[155] By way of example of the position of the witnesses who supported theplaintiffs’ case, Ms Aileen Sandy’s evidence was that it was her view that:210

maybe there should be an agreement with FMG. It is more important to get contractsand work rather than a lot of money. It would be good to get all the boys working.

[156] Mr Ken Sandy described the dispute as being211

whether FMG should pay royalties now which could be applied for the benefit of allYindjibarndi people and in particular our young people or whether YAC shouldcontinue to pursue a compensation claim. Native Title takes a very long time and Ipersonally believe that the compensation claim will never be successful. I think that theYindjibarndi people should obtain benefits now for our children and their children.

[157] Mr John Sandy also supported entering into an agreement sooner ratherthan later. His evidence was:212

I want some of the benefits of native title agreements [to] be achieved in my lifetimeand in the lifetime of my children. In my opinion it is necessary for the preservation ofthe Yindjibarndi people, its culture, its laws and traditions that immediate benefits beinvested in the community.

[158] Others supported the FMG Agreement because they doubted whether theYindjibarndi people would be able to establish exclusive native title rights in theYindjibarndi #1 claim area which would warrant the extent of compensation YAChad sought in its negotiations with FMG.213 By way of example, Mr VincentAdams’ view was that214

the dispute has arisen because Michael Woodley is more interested in money than incommunity. He … made claims in Court about how our Birdarra law is practised whichwere not true. The claims were exaggerated, and appeared to me to be designed toobtain a better native title claim or more compensation from mining companies likeFMG.

…… Michael [Woodley] has all his eggs in one basket. This is the claim for exclusivepossession against FMG. By seeking this claim he has spent millions of dollars that hasbeen received by YAC. Those funds have not flowed through to the community, to theElders or to our children. By trying to put all his eggs in one basket he has deprived theYindjibarndi people of opportunities that could have been developed.

Each year an Elder passes away with nothing, nothing at all. I consider that to be verywrong.

[159] Mr Rodney Adams accepted that there was a division within theYindjibarndi community over whether or not the agreement FMG proposedshould be entered into or not, and that that was a serious division within the

210. Exhibit 30 at [28].211. Exhibit 27 at [18].212. Exhibit 31 at [33].213. See, for example, Mr Rodney Adams’s evidence: Ts 748–9.214. Exhibit 3 at [10], [52]–[53].


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Yindjibarndi community.215 He also agreed that it was generally the case thatYAC was associated with those members of the Yindjibarndi community who didnot want to enter into the Agreement,216 and he accepted that it was the case thatthe members of WMYAC favoured entering into the Agreement so as ‘to moveforward’.217

[160] Mr Adams explained that his understanding of the FMG Agreement waspremised on Yindjibarndi people not having exclusive possession of theYindjibarndi #1 claim area, but that in return, they would be provided with jobsand opportunities,218 and he supported the FMG Agreement for that reason:219

through all the years I’ve been going to Roebourne, I never seen Rio Tinto …approach us with anything …. Their rules are that they give people employment ifthey’re highly educated and for this — FMG to come in and do this and give us anopportunity and to train our people on the job, that was good — I found that — that wasreally good in a way.

[161] Mr Adams went on to explain that ‘[w]e just wanted to stop the fight andgo forward’.220

[162] In contrast, YAC was opposed to entry into the FMG Agreement. Theevidence established that its opposition to the FMG Agreement was twofold.First, it is apparent that YAC did not consider that the compensation payableunder the FMG Agreement was adequate compensation for the loss orimpairment of the native title rights of the Yindjibarndi people in the Yindjibarndi#1 claim area, which it was hoped would be recognised in the Yindjibarndi #1claim. The evidence of Mr Mack, one of the directors of YAC, was that thedispute was one concerning ‘fair compensation’.221 He said that under the FMGAgreement, the Yindjibarndi people would get a specified benefit of $4 millionper year, but that in return ‘the whole country is at risk … [and] … FMG wouldhelp themselves and mining all parts — Yindjibarndi country’.222 Consequently,he thought the Agreement was ‘a no good deal and that’s why I wouldn’t signit’.223 His evidence was that the concern was not so much about whether thedispute was about ‘[m]oney now or money sometime in the future’ as counsel forthe plaintiffs suggested,224 but rather whether the FMG Agreement represented‘the right agreement so we can look after our old people’.225

[163] Mr Woodley explained that YAC did not sign the FMG Agreement for thefollowing reasons:226

I have read the Agreement. I believed then and believe now that the Agreement wouldnot be in the interest of the Yindjibarndi future, I consider this Agreement compared toother agreements we have with other mining companies to be very bad for YAC and forYindjibarndi people. The Agreement covered all of the determination area in Daniel…and the Yindjibarndi #1 claim area … If YAC and the applicants for the Yindjibarndi #1

215. Ts 744.216. Ts 744.217. Ts 744.218. Ts 748.219. Ts 748.220. Ts 749.221. Ts 885.222. Ts 887.223. Ts 896.224. Ts 902.225. Ts 902.226. Exhibit 41 at [28].


claim signed the Agreement, the Yindjibarndi would forego their right to compensationagainst the State. This is important because the Yindjibarndi people have claimedexclusive native title rights over the Solomon project and the value of the compensationcould be high.

[164] The same concern was set out in newsletters YAC distributed to itsmembers shortly after the plaintiffs signed the FMG Agreement. By way ofexample, a newsletter from YAC dated March 2011 indicated that:227

If Yindjibarndi are granted EXCLUSIVE native title to the Yindjibarndi #1 Claimarea, or parts of it, and we do not sign away these rights in the proposed FMGagreement, then FMG would not be so cocky. They would be forced to by AustralianLaw to pay substantial compensation to Yindjibarndi people for their Solomon minesand for the damage they have done.

[165] Mr Woodley, and YAC’s legal counsel, Mr Irving, had urged YACmembers to ‘continue to reject the FMG offer, because, he argued, … the FMGAgreement is unacceptable because it is too low and it doesn’t allow theYindjibarndi people to speak for, or have any control over their country, whereFMG has tenements in Yindjibarndi country’228 and that if YAC were to sign theFMG Agreement it would not be acting in the best interests of the Yindjibarndipeople, the beneficial owners of those rights and interests.229

[166] The second aspect of YAC’s opposition to the FMG Agreement was thatunder the terms of that Agreement, any money paid would be paid toWMYAC.230 Mr Mack’s evidence was:231

if we were to sign the deal, that money going to Wirlu-murra. Not YindjibarndiAboriginal Corporation or Yindjibarndi.

[167] Mr Mack deposed that in his view the proposed agreement whichWMYAC had negotiated with FMG was not ‘a good deal to sign. All thecompensation goes to Wirlu-murra. YAC misses out. YAC represents allYindjibarndi people. They miss out too’.232

[168] Similarly, Mr Woodley explained that one of the reasons for YAC’sopposition to the FMG Agreement was that ‘all of the compensation paid underit would be paid to Wirlu-murra. YAC would get nothing’.233

[169] It thus appears to have been assumed that if YAC were to enter into theFMG Agreement, the terms of that agreement (especially in so far as itcontemplated that compensation would be payable to WMYAC) would benon-negotiable. There was no evidence to suggest that that assumption was wellfounded. There was no evidence, for example, that FMG would not have beenagreeable to making payments to YAC, or to a trust associated with YAC. And itcannot be inferred that FMG would consider such a term to be non-negotiable,in circumstances where YAC held a significant bargaining advantage, namely thatno agreement could be made without its consent, in its capacity as the agent forthe Applicant in the Yindjibarndi #1 claim.

227. Exhibit 1.7.228. Exhibit 1.545.229. Exhibit 1.545.230. Ts 890.231. Ts 896.232. Exhibit 33 at [40].233. Exhibit 41 at [28].


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[170] Nevertheless, I accept that the payment of compensation to WMYAC wasone of the reasons why YAC opposed the FMG Agreement, and refused to enterinto it.

Attempts to secure YAC’s agreement to enter into the FMG agreement

[171] As I have already observed, as YAC was the agent for the Applicant inthe Yindjibarndi #1 claim, no agreement with FMG could proceed without YAC’sagreement. The plaintiffs, and Ms Mavis Pat, called a meeting of the members ofthe Yindjibarndi #1 claim group on 21 December 2010, in an attempt to securea resolution to support the FMG Agreement.234

[172] The meeting notice235 indicated that the motions to be put to the meetingincluded motions to the effect that all objections on behalf of the Yindjibarndi #1claim group members against FMG’s Solomon Hub project land tenure should bewithdrawn, that the Applicant in the Yindjibarndi #1 claim should give consentto any tenement applications by FMG in respect of land in the Yindjibarndi #1claim area, and that the Applicant in the Yindjibarndi #1 claim immediatelyproceed to finalise a land access agreement with FMG in terms approved by themajority of the claim group membership.236

[173] Ms Allery Sandy attended the meeting, which was held at the 50 CentHall in Roebourne on 21 December 2010. Her evidence was that she understoodthat237

three of the named applicants in that native title claim group would be askingYindjibarndi people at the meeting to consider previous actions by the other namedapplicants, including Mr Woodley, concerning resolutions associated with FMG’smining tenement applications and a proposed ILUA with FMG.

[174] Mr Woodley attended the meeting. His evidence was that while herecalled that the meeting ‘never got started’, he was unable to remember why.238

However, in her evidence, about which she was not cross-examined, Ms AllerySandy shed light on why the meeting had to be abandoned. She explained:

Michael Woodley spoke throughout the whole meeting and would not allow anyother person to speak by interrupting and talking over questions by members. Themeeting was disbanded after one hour when many people walked out.239

[175] The plaintiffs and Ms Pat then called another meeting of the Yindjibarndi#1 claim group for 16 March 2011. The meeting notice proposed the same itemsfor discussion as those which were to have been discussed at the meeting inDecember 2010, but also contained an additional item to the effect that, if theYindjibarndi #1 claimants did not comply with the directions of the majority ofthe Yindjibarndi #1 claim group, then Mavis Pat and the plaintiffs wereauthorised to apply to the Federal Court to remove them as Applicant in theYindjibarndi #1 claim.240

[176] One hundred and seventy-one people from the claim group attended thatmeeting. Also in attendance were a number of lawyers, including Mr GeorgeIrving, YAC’s legal counsel, and Mr Ronald Bower and several other lawyers

234. Exhibit 1.24.235. Exhibit 1.24.236. Exhibit 1.24.237. Exhibit 18 at [16].238. Exhibit 41 at [18].239. Exhibit 18 at [17].240. Exhibit 18 at [18].


from the legal firm Corser & Corser, who were then acting for WMYAC. Themeeting was also attended by Mr Andrew Forest on behalf of FMG. Mr Woodleyrecalled that ‘a big bunch of FMG representatives’ were at the meeting.241

Security personnel and police officers also attended the meeting.

[177] A set of minutes of the meeting, prepared by Corser & Corser,242 whichwere in evidence, make plain that strongly felt opposing views were expressedabout whether the meeting should proceed at all, and about the issues on theagenda. The minutes note, at various points, that arguments broke out betweenvarious members of the claim group, and that there was ‘disruption from MichaelWoodley and surrounding persons, stating that they did not want the Agenda toproceed’.243 Mr Woodley acknowledged that he opposed the discussion.244

Mr Woodley’s evidence was that he and many other Yindjibarndi people,including some of the claimants for the Yindjibarndi #1 claim, left the meetingbefore any voting took place.245 The minutes indicate that the total number ofvotes cast in respect of each of the various items on the agenda was markedly lessthan the total number of persons who signed the attendance register.

[178] The minutes, and the evidence of Ms Allery Sandy, established thatduring the meeting a resolution was passed (with 120 votes in favour, and noneagainst) in favour of the following resolution:246

That the Yindjibarndi #1 Native Title Claim Applicants immediately proceed tofinalise a land access agreement with [FMG] in terms approved by the majority of theclaim group membership.

[179] In addition, the minutes of the meeting record that the followingresolution was also passed (by 112 votes in favour and no opposing votes):247

That Aileen Sandy, Mavis Pat and Sylvia Allan be authorized to apply to the FederalCourt of Australia under section 66B of the Native Title Act 1993 (Cth) for the removalof any Yindjibarndi #1 claim applicant who refuses to sign documents or do other thingsnecessary to be signed or done by the Yindjibarndi #1 claim applicants to give effect toany motion passed in this meeting.

[180] Notwithstanding the meeting’s resolutions, YAC refused to enter into theFMG Agreement,248 and continues to do so to date.

[181] Mr Vincent Adams acknowledged that the dispute about the FMGAgreement represented a serious division in the Yindjibarndi community.249

[182] The depth of feeling about the dispute over the FMG Agreement wasillustrated by newsletters distributed by YAC to its members prior to each of themeetings of the Yindjibarndi #1 claim group discussed above. Those newsletterscontained statements highly critical of WMYAC and some of its members, andof FMG. Ms Allery Sandy and Mr Vincent Adams regarded those statements asoffensive, and as constituting attacks on them.250

241. Exhibit 41 at [24].242. Exhibit 1.627.243. Exhibit 1.627 at [11].244. Exhibit 41 at [24]–[25].245. Exhibit 41 at [25].246. Exhibit 18 at [19], Annex AS-30; Ex 1.627.247. Exhibit 1.627.248. Exhibit 18 at [19], Annex AS-30.249. Ts 523.250. Exhibit 18 at [26]; Ex 3 at [51].


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Attempts to change the applicant in the Yindjibarndi #1 claim

[183] On 2 September 2011, the plaintiffs, together with Ms Mavis Pat, madean interlocutory application in the Yindjibarndi #1 claim proceedings in theFederal Court, in which they sought orders that they, on behalf of theYindjibarndi people, be appointed to jointly replace the persons who comprisedthe original Applicant in the Yindjibarndi #1 claim.251 No order to replace theoriginal Applicant was made by the Federal Court on that occasion.

[184] On 15 June 2012, the persons comprising the original Applicant, apartfrom the plaintiffs and Ms Pat, made an application pursuant to s 66B of the NTAct in the Yindjibarndi #1 claim proceedings in the Federal Court for an orderthat they replace the original Applicant in the Yindjibarndi #1 claim (theReplacement Applicant).252 The objective of that application was thus to excludethe plaintiffs and Ms Pat as members of the original Applicant in the Yindjibarndi#1 claim. Ms Sylvia Allan’s evidence was that at no stage did YAC inform orconsult with her about that application.253

[185] On 15 February 2013, McKerracher J ordered that that application beallowed and that the Replacement Applicant254 (that is, the group of personswhich did not include the plaintiffs and Ms Pat) jointly replace all of the personswho had previously comprised the original Applicant in the Yindjibarndi #1claim.255 On 26 March 2013, the persons comprising the Replacement Applicantin the Yindjibarndi #1 claim appointed YAC as agent on behalf of the Applicantin those proceedings.256

[186] However, that was not the end of the efforts by those members of YAC,who were also members of WMYAC, to be a part of the Applicant in theYindjibarndi #1 claim. In 2015, Rodney Adams, Sylvia Allan, Maudie Jerrold,Francis Phillips, Allery Sandy, Ken Sandy and Diana Smith called a meeting ofthe Yindjibarndi native title holders and Yindjibarndi #1 claim group membersfor 23 June 2015, at the 50 Cent Hall in Roebourne (June 2015 ballot). (It doesnot appear that a meeting was actually held. Instead, the 50 Cent Hall was set upas a polling booth, and voting took place at the appointed time on 23 June 2015.)

[187] According to the notice of the June 2015 ballot,257 the purpose of that‘meeting’ was for Yindjibarndi people to vote, by secret ballot, on a number ofresolutions. (It was proposed that voting on those resolutions would also bepossible at voting stations in Carnarvon and in Perth.) The resolutions put to thevote in the June 2015 ballot included that:258

• Rodney Adams, Sylvia Allan, Maudie Jerrold, Francis Phillips, AllerySandy, Ken Sandy and Diana Smith be authorised to replace theApplicant in the Yindjibarndi #1 claim;

251. Exhibit 1.52; Ex 53 at [9], Annex GMI 4.252. Exhibit 53 at [10], Annex GMI 5.253. Exhibit 10 at [39]–[41].254. The persons comprising the replacement applicant were Thomas Jacob, Stanley Warrie, Allum

Cheedy, Kevin Guiness, Angus Mack, Michael Woodley, Joyce Hubert, Pansy Sambo, JeanNorman, Esther Pat, Judith Coppin and Maisie Ingie.

255. Exhibit 53 at [11], Annex GMI 6; see also NC (dec’d) v Western Australia (No 2) [2013] FCA70.

256. Exhibit 53 at [12], Annex GMI-7.257. Exhibit 1.250.258. Exhibit 1.250.


• The conditions of authorisation of the previous Applicant in theYindjibarndi #1 claim, including the appointment of YAC as agent, berevoked;

• The Replacement Applicant be authorised and directed to consent to adetermination of native title like the Ngarluma Yindjibarndidetermination (that is, a determination similar to the Daniel

determination) (resolution 5);

• A new corporation — the Yindjibarndi Native Title AboriginalCorporation (YNTAC) — should be the PBC for the Yindjibarndi #1claim area, and should replace YAC as the PBC for the DanielDetermination Area;259

• YNTAC should replace YAC as the agent of the Yindjibarndi peopleunder the Participation Agreement with Rio Tinto.260

[188] On 3 July 2015, Rodney Adams, Sylvia Allan, Maudie Jerrold, FrancisPhillips, Allery Sandy, Ken Sandy and Diana Smith (the Adams Applicant) madea s 66B application in the Federal Court in the Yindjibarndi #1 claim proceedings,for an order that they jointly replace the persons then comprising the Applicantin the Yindjibarndi #1 claim.261 The evidence apparently relied upon in supportof that application included an affidavit sworn by Ms Davina Boyd, a communitydevelopment consultant, who deposed that she had assisted the Adams Applicantto conduct the June 2015 ballot, and that the resolutions put to the vote had beenpassed.262 Ms Sylvia Allan also swore an affidavit in support of thatapplication,263 in which she deposed that she understood that as a result of theresolutions having been passed, she and other members of the Adams Applicantwere authorised by the members of the Yindjibarndi #1 claim group to make theapplication.

[189] That application was dismissed by Rares J on 21 July 2015.264 HisHonour concluded that the notice of the ‘meeting’ and the resolutions to be putto the ballot was not sent to all known members of the Yindjibarndi #1 claimgroup (and in fact that over half that claim group did not receive a written noticeat all); that the notice and the resolutions did not identify with precision thepersons comprised in that claim group; that what occurred was not, in fact, anauthorisation meeting at all; that the notice of the ‘meeting’ and of the resolutionswas misleading in that it did not clearly state that what was proposed (inresolution 5) was that the Adams Applicant would try to reach a consentdetermination on the basis that the Yindjibarndi people did not have exclusivenative title rights and interests in the Yindjibarndi #1 claim area; and that theYindjibarndi Elders who were members of the Adams Applicant and who gaveevidence — namely Allery Sandy, Sylvia Allen and Maudie Jerrold — had nounderstanding of the nature of the authorisation or of the implications ofresolution 5, or of the consequences for the Yindjibarndi #1 claim if the AdamsApplicant was authorised to act in accordance with resolution 5. His Honour also

259. YNTAC had been registered on 29 May 2015 (see Ex 11). Its original members were RodneyAdams, Sylvia Allan, Maudie Jerrold, Francis Phillips, Allery Sandy, Ken Sandy and DianaSmith.

260. Exhibit 1.250.261. Exhibit 53 at [21], Annex GMI 9.262. Exhibit 53 at [21], Annex GMI 8.263. Exhibit 13.264. TJ v Western Australia (2015) 242 FCR 283; [2015] FCA 818 (TJ v Western Australia).


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concluded that he would not, in any event, have exercised his discretion in favourof the Adams Applicant having regard to a number of factors, including thatWMYAC had made it known that those who voted, and attended at its offices,would receive supermarket vouchers, that FMG ‘orchestrated the convening ofthe meeting and the voting procedure to a considerable degree’,265 and that ‘thesignificant role that FMG played in the promotion and conduct of the meeting,and the benefit to it if resolution 5 were passed, were not revealed to persons whomight be interested in voting’.266

The belief of YAC’s directors that FMG was behind WMYAC and the attempts ofits members to pursue entry into the FMG agreement

[190] A large plank of the defendants’ case was that the conduct which is saidto constitute ‘oppressive conduct’ by YAC was informed by the belief held by thedirectors of YAC that it was WMYAC, supported by FMG, which stood behindthe plaintiffs and the other YAC members who had taken steps to try to secureYAC’s entry into the FMG Agreement, to try to replace the Applicant in theYindjibarndi #1 claim, and YAC as the agent for the Applicant. The defendantscontended that throughout this proceeding, the plaintiffs and WMYAC had actedas if they were one and the same, and in substance, the plaintiffs representedWMYAC’s interests in this proceeding.267 I understood that submission toamount, in effect, to a submission that the present dispute should be seen, not asa dispute between YAC and some of its members, but in truth as a disputebetween YAC and WMYAC. The defendants’ case was that that characterisationof the dispute was relevant to the exercise of the Court’s discretion whether togrant relief in the event that it found that YAC had engaged in oppressiveconduct,268 particularly with respect to applications for membership of YAC, andthat that characterisation was also relevant as part of the context within which thefacts relating to the issues in dispute should be viewed.

[191] It is not necessary to reach any conclusion as to whether WMYAC in factsought to take control of YAC, with a view to entering into the FMG Agreement,or an agreement in similar terms. To the extent that the beliefs of YAC’s directorsand CEO may be relevant to the question of relief for oppressive conduct, theonly question I need determine is what YAC’s officers believed when theyengaged in the conduct alleged to amount to oppressive conduct.

[192] The evidence established that the directors and the CEO of YAC saw theattempts by the plaintiffs and other members of WMYAC to compel YAC to enterinto the FMG Agreement, and their subsequent attempts to replace YAC as theagent for the Applicant in the Yindjibarndi #1 claim, as constituting an attack byWMYAC on YAC with the objective of taking control of YAC, or removing it asthe agent for the Applicant in the Yindjibarndi #1 claim, so as to enable the FMGAgreement to be executed. I have reached that view for the following reasons.

[193] First, the foundation for that view lay in the negotiations betweenWMYAC members and FMG, which occurred without YAC’s knowledge.Mr Woodley explained that he had not been aware that WMYAC members werenegotiating an agreement with FMG during 2010 and 2011. He said that he firstbecame aware that that had occurred because he was sent a copy of the

265. TJ v Western Australia.266. TJ v Western Australia.267. DSIFC at [120].268. DSIFC at [121].


Agreement by a staff member in the office Mr Vince Catania, a member ofparliament who had tried to assist communications between FMG and YAC.269

Mr Woodley explained that:270

I felt that this was an attack on Yindjibarndi people and an attack on YAC toundermine its role as the authorised PBC.… I feared the partnership between Wirlu-murra and FMG. I feared this because of theway that Wirlu-murra was formed and the way I believe it negotiated the [FMG]Agreement with FMG behind YAC’s back. I also feared this because of what I saw asa change in the attitude and character of the Wirlu-murra leaders.

[194] Secondly, Mr Woodley’s evidence was that he believed at the time, andstill believes, that that271

application to replace the applicants on the Yindjibarndi #1 claim and their oppositionto the current applicants’ applications in that claim to replace the applicant was anattempt by Wirlu-murra to gain control of the Yindjibarndi #1 claim. I believe then andstill believe that Wirlu-murra was trying to do this so the applicants would sign the[FMG] Agreement.

[195] Both Mr Mack272 and Mr Woodley273 believed that FMG stood behind,and supported, the steps taken by WMYAC members in seeking to have YACsign the FMG Agreement, and in organising the Yindjibarndi #1 claim groupmeetings, with a view to permitting WMYAC members to take control of YACso that it could enter the FMG Agreement, or to bypass YAC so as to secure anagreement of that kind with the Applicant in the Yindjibarndi #1 claim.

[196] As at the date of the trial, the terms of the FMG Agreement (which, as Ihave said, was negotiated in 2010–2011) were out of date. However, it wasapparent that Mr Mack and Mr Woodley remained concerned that WMYACmembers, and FMG, still sought to enter into a similar agreement with theYindjibarndi people in the future. Mr Woodley’s evidence was that:274

I believe that FMG’s endgame is to have an indigenous land use agreement on itsterms that deals with the question of compensation for the effect of its Solomon mineon the Yindjibarndi people’s native title rights and interests and control of how theYindjibarndi people utilise the compensation for our own development.

If [WMYAC] gains control of YAC or replaces YAC as the PBC then I believe thatYAC or a new PBC will make an agreement with FMG about compensation and thatthis agreement will be a bad deal for Yindjibarndi.

[197] Furthermore, Mr Woodley said he275

believed then, and still believe[s] that Aileen Sandy [and] Sylvia Allan[’s] …application to replace the applicants on the Yindjibarndi #1 claim … was an attempt by[WMYAC] to gain control of the Yindjibarndi #1 claim

and that276

I believe that FMG has supported [WMYAC] every step of the way since 2010.

269. Ts 1366; Ex 1.22.270. Exhibit 41 at [20]–[21].271. Exhibit 41 at [44].272. Ts 886.273. Exhibit 41 at [28]–[29].274. Exhibit 41 at [55]–[56].275. Exhibit 41 at [44].276. Exhibit 41 at [55].


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[198] I am satisfied that in all of the circumstances, it was not unreasonable forYAC, acting through its directors and CEO, to have formed the belief thatWMYAC was supported by FMG, and sought to take control of YAC so that itcould enter into an agreement with YAC, or replace YAC as the trustee of thenative title rights held by the Yindjibarndi people. That that was the case was putbeyond doubt when, on 16 March 2011, the plaintiffs organised the Yindjibarndi#1 claim group meeting seeking authority to make an application to replace theApplicant in the Yindjibarndi #1 claim. From that point, there was no doubt thatWMYAC members sought to take control of the Yindjibarndi #1 claim, andultimately to exclude YAC as the agent for the Applicant in that claim.

[199] In addition, I am satisfied that from 2011 until the trial, YAC, actingthrough its directors and CEO, continued to believe WMYAC still intended to tryto reach an agreement with FMG, and that FMG was still pursuing an agreementin similar terms. By way of example, Mr Mack was asked about hisunderstanding of the s 66B application made by the plaintiffs (as part of theAdams Applicant) in 2015:277

So, you thought that was — the result of this application was going to be you getreplaced, they will sign up the agreement? — Yes. They will sign the agreement. Yes.

[200] Mr Mack also confirmed that his concern was that if the s 66Bapplication succeeded and if YNTAC became the PBC in respect of theYindjibarndi #1 claim area, in the end, there would an agreement signed withFMG.278

[201] Mr Woodley’s evidence was that he believed that if persons associatedwith WMYAC became directors of YAC, they would enter into an agreementwith FMG about compensation, which Mr Woodley considered would be a ‘baddeal’ for the Yindjibarndi people.279 That was so, even though he acknowledgedthat the FMG Agreement was now out of date because a number of the miningtenements referred to in it had been withdrawn or abandoned by FMG.280

Mr Woodley explained that he held that concern because the fact ‘that a mining— an exploration tenement has been withdrawn from my country doesn’t movefrom the fact that FMG … still want our whole country … they still want a wideclaim agreement of our country’.281 Furthermore, there was evidence that FMGhad made a more recent application for a mining lease in the area covered by theYindjibarndi #1 claim.282 That confirms that the extent of the compensationwhich FMG may be required to pay the Applicant in the Yindjibarndi #1 claimremains an ongoing issue, which is not confined to FMG’s operation of itsSolomon Hub mine project.

[202] In my view, in all of the circumstances, it was not unreasonable for thedirectors and CEO of YAC to have continued to hold those beliefs, having regardto what occurred in 2015 and 2016, for the following additional reasons.

[203] First, the reasonableness of that belief was confirmed by thecircumstances surrounding the June 2015 ballot. Mr Mack’s evidence was that hewas aware that the persons who had organised the ballot were directors, or

277. Ts 1011.278. Ts 1012.279. Ts 1201, 1360.280. Ts 1201–5.281. Ts 1205.282. Exhibit 48.


members, of WMYAC.283 That WMYAC had organised the ballot was alsoapparent to those who attended at the 50 Cent Hall on 23 June 2015. Mr Mack‘saw lots of people who do not normally come to Yindjibarndi #1 claim groupmeetings vote at this meeting. These are people who have an Yindjibarndi sideto their family but who do not follow Yindjibarndi’.284 Mr Woodley’s evidencewas that people at a WMYAC tent outside the 50 Cent Hall were handing outhow-to-vote flyers. He also saw people going into the 50 Cent Hall who he didnot recognise as Yindjibarndi people.285

[204] The evidence established that WMYAC had organised the June 2015ballot. Mr Rodney Adams confirmed that WMYAC arranged for the hire of the50 Cent Hall and for the other voting stations,286 that WMYAC had arranged thelogistics of organising the voting and the meetings,287 and that WMYAC hadarranged to engage employees of a company based in Queensland to staff theballot boxes and count the votes.288 Mr Adams also accepted that all of thepersons who sought to replace the then current applicants for the Yindjibarndi #1claim were either directors of WMYAC or had been founding members ofWMYAC,289 that he and the other directors of WMYAC had discussed thedecision to hold the meeting on 23 June 2015 at WMYAC board meetings,290 andthat the resolutions put to the vote at the meeting on 23 June 2015 had beenframed by the directors of WMYAC.291

[205] Secondly, it would have been obvious to all concerned that WMYAC wasreceiving financial support from some third party. As it was not a trustee of anynative title rights, WMYAC did not have any authority to enter into an ILUA toreceive compensation, yet it had engaged lawyers, and had the resources topursue applications in the Federal Court and to organise the meetings of theYindjibarndi #1 claim group discussed above. In the circumstances, the mostlikely source of that financial support was FMG.

[206] Thirdly, as I have already noted, in his decision in respect of the s 66Bapplication made by the Adams applicant, Rares J found that FMG ‘hadorchestrated the convening of the meeting and the voting procedure to aconsiderable degree’292 and that it had paid for a number of expenses associatedwith that meeting.293 There was evidence that at least one of YAC’s directors —Mr Mack294 — was aware of that judgment. That judgment providedconfirmation to YAC’s directors that FMG was behind attempts by WMYAC’smembers to remove YAC as the agent for the Applicant in the Yindjibarndi #1claim, and to enter into a land access agreement with FMG.

[207] Fourthly, the members of WMYAC had made no secret of the fact thatthey had, and that they welcomed, an association with FMG. At an AGM held forYAC on 30 November 2015, Mr John Sandy distributed a statement on behalf of

283. Exhibit 33 at [19].284. Exhibit 33 at [23].285. Exhibit 41 at [47].286. Ts 726.287. Ts 726.288. Ts 726.289. Ts 726–7.290. Ts 727.291. Ts 727.292. TJ v Western Australia at [10].293. TJ v Western Australia at [23], [28].294. Exhibit 33 at [25].


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himself and a number of other persons who were members of WMYAC who werestanding for election as directors of YAC.295 The statement indicated:296

On FMG:• We are very proud of our relationship with FMG.• We have secured training and jobs for hundreds of Yindjibarndi people. We

have secured contracts valued at hundreds of millions. None of this happenedbefore FMG came along. Wirlu-murra does not receive millions of dollars inroyalties like YAC does.

• We asked FMG to support us here today. FMG has given us financial andother support to help us make sure that all members can have a say at thismeeting.

[208] That statement referred expressly to an agreement with FMG:297

On an agreement with FMG:• We have no native title agreement with FMG. We are not in negotiations with

FMG for a native title agreement.• But, we have an excellent relationship with them and we are the best people

to negotiate a native title agreement with them. (emphasis added)

[209] In summary, I find that from late 2010 and up to the date of the trial,YAC’s directors and its CEO, Mr Woodley, honestly, and not unreasonably,believed that:

(i) WMYAC stood behind the plaintiffs and the other YAC members whotook steps to oblige YAC to enter the FMG Agreement, and who soughtto have it removed as the agent for the Applicant in the Yindjibarndi #1claim;

(ii) WMYAC’s objective in doing so was, initially, to enter into the FMGAgreement, and later to enter into an agreement with FMG in similarterms to the FMG Agreement;

(iii) WMYAC members were determined to achieve this objective — theyhad been willing to apply to the Federal Court to remove YAC as theagent for the Yindjibarndi #1 claim, and to seek to remove YAC as thePBC for the common law holders in respect of the Daniel claim; and

(iv) FMG was supporting WMYAC and its members in seeking to achievethese objectives.

[210] Counsel for the plaintiffs emphasised that the evidence did not establishthat, had it been successful in replacing the Applicant in the Yindjibarndi #1claim, WMYAC would inevitably have entered into an agreement with FMG.298

He pointed to the fact that Mr Rodney Adams denied that the purpose behind theJune 2015 ballot was to try to take YAC’s responsibilities away and give them toa new, WMYAC-controlled Applicant in the Yindjibarndi #1 claim.

[211] Mr Adams’ evidence was that the purpose was ‘to be fair with all ourmembers. That’s the whole purpose of us trying to start something new, so we canbe fair with all our people around that’.299 However, it was also apparent fromMr Adams’ evidence that he understood that the objectives of the June 2015ballot were that he and other WMYAC members could replace the Applicant in

295. Exhibit 1.272.296. Exhibit 1.272.297. Exhibit 1.272.298. Plaintiffs’ closing submissions at [109].299. Ts 734.


the Yindjibarndi #1 native title claim,300 that YNTAC could replace YAC as theagent of the Yindjibarndi people in the Yindjibarndi #1 claim,301 and thatYNTAC would then be the PBC for any native title determination that resultedfrom the Yindjibarndi #1 native title claim,302 with the result that YAC would nothold the native title rights and interests of the common law holders in theYindjibarndi #1 claim area on trust, and would not have the right to manage thosenative title rights.303 Mr Adams clearly understood that if all of that occurred,YNTAC could enter into an agreement with FMG.304

[212] Mr Adams was asked whether he and the other WMYAC members wereproposing ‘to strip YAC of all of its functions and virtually all of its finances’, buthe denied that the aim was to ‘strip YAC’.305 Instead, he said that they wantedto ‘try and make YAC a better … corporation so we can help our members andsort everything out’.306 It was far from clear how Mr Adams was able to reconcilethat view with his participation in the s 66B application which, had it succeeded,would have seen YNTAC replace YAC as the PBC for the common law holdersin relation to the Daniel Determination Area,307 replace YAC under theParticipation Agreement,308 in circumstances where YAC received nearly all ofits income from the Participation Agreement.309 Mr Adams accepted that ifYAC’s funding was cut off in that way, it would be extremely difficult, andperhaps impossible for it to carry out its objectives as set out in its Rule Book.310

Mr Adams accepted that it was fair to say that he and the other WMYAC directorsdid not support and uphold YAC’s objectives.311 While that evidence wasexpressed in very general terms, in fairness I think it must properly be understoodas an acceptance that Mr Adams and the WMYAC directors did not agree withthe objectives of YAC’s directors in relation to compensation for interferencewith Yindjibarndi native title interests, especially in relation to the Yindjibarndi#1 claim. I do not think there is any reason to doubt that Mr Adams, for example,supported the objects set out in YAC’s Rule Book, such as to provide relief frompoverty for Aboriginal people and to protect the traditions, laws and culture of theYindjibarndi people.

[213] In any event, the objective purpose of the June 2015 ballot was to passresolutions, the effect of which, if adopted and acted upon, would be to bypassYAC so that it could no longer stand in the way of an agreement being enteredinto between FMG and the members of the Yindjibarndi #1 claim group, and sothat it would no longer have any role to play in the Yindjibarndi #1 claim.

[214] Counsel for the plaintiffs emphasised that the plaintiffs and otherWMYAC members were not negotiating with FMG for a land access agreement.That was the stated position of WMYAC members seeking election as directors

300. Ts 724.301. Ts 724.302. Ts 724.303. Ts 728.304. Ts 739.305. Ts 725.306. Ts 725.307. Ts 724.308. Ts 724.309. Ts 725.310. Ts 759.311. Ts 740.


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of YAC in November 2015.312 However, it was also clear that the objective of theplaintiffs and other members of YAC who were members of WMYAC remainedthat if they became directors of YAC, they would ‘negotiate an agreement withFMG.’313 As Mr Sandy deposed, their position was that they would ensure thatYAC ‘negotiates and signs native title agreements which benefit all Yindjibarndipeople.’314 There is nothing in the evidence which would suggest that the termsof any such agreement were likely to be markedly different from those in theFMG Agreement. After all, the members of WMYAC who had been willing toenter into the FMG Agreement clearly regarded its terms as sufficientlyadvantageous to the Yindjibarndi people to warrant doing so.

[215] Counsel for the plaintiffs submitted that the dispute simply concerned:

conflicting views as to how best to utilise the actual and potential financial benefitsassociated with traditional Native Title land rights to best advance the present and futureneeds of their community and the families within it.’315

[216] While I accept that that was one aspect of the dispute, the disputebetween YAC and those of its members who were also members of WMYAC wasnot, and is not, confined to a dispute about the terms of the FMG Agreement, orany similar agreement between YAC and FMG. However it was also a disputeabout the management of YAC, including as to its financial management.

[217] Later in these reasons, I consider the implications of that belief on thepart of YAC’s directors and CEO in relation to the question of relief foroppressive conduct.

[218] Before turning to consider the allegations of oppression in relation tomembership decisions, it is convenient to recall the requirements of the CATSIAct in relation to membership of ATSI corporations, and the principles whichhave emerged from the cases concerning allegations of oppression in the contextof membership disputes.

(c) Membership of YAC — Requirements of the CATSI Act and of YAC’s RuleBook

[219] A person is a member of an ATSI corporation if they were a member onthe registration of the corporation, or if they agree to become a member after thecorporation is registered.316 A person becomes a member if they apply formembership, if they are eligible for membership, if their membership applicationis accepted by the directors of the corporation, and if their name is entered ontothe register of members.317

[220] The only criterion for membership of an ATSI corporation which is setout in the CATSI Act is that a member must be at least 15 years of age.318 AnATSI corporation’s constitution may provide for other eligibility requirements formembership319 and for the circumstances in which a person’s membership of thecorporation will be cancelled on the ground that the person is ineligible to be a

312. Exhibit 1.272.313. Exhibit 31 at [29]–[30], Annex JS-5.314. Exhibit 31 at [29]–[30], Annex JS-5.315. Plaintiffs’ closing submissions at [2].316. Section 138-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).317. Section 144-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).318. Section 141-20 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).319. Section 141-20 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).


member.320 The directors of an ATSI corporation are responsible for decidingmembership applications in respect of the corporation.321

[221] The directors of an ATSI corporation must not accept an applicant formembership unless the applicant applies in the required manner, and meets theeligibility for membership requirements of the corporation.322 Even if thoserequirements are complied with, however, the CATSI Act expressly grants to thedirectors the discretion to refuse to accept the membership application.323

[222] YAC’s Rule Book contains membership criteria for YAC members. At allmaterial times,324 YAC’s eligibility rule has provided:

3.1 Who is eligible?Subject to these rules and the PBC Regulations, a member must be:(a) at least 18 years of age; and(b) a Yindjibarndi person who holds in common the body of traditional law

and culture governing the determination area and who identifies asYindjibarndi.

[223] I accept the submission of counsel for the defendants that, in addition tothe age requirement, rule 3.1 effectively embodies three criteria. The first is thatthe applicant must be a Yindjibarndi person. It was not in dispute that that is areference to a person who descended from one of the Yindjibarndi apicalancestors identified in the Daniel determination. Secondly, the applicant musthold in common the body of Yindjibarndi traditional law and culture of theDaniel Determination Area. Broadly speaking, that appears to mean that theapplicant must follow or observe Yindjibarndi law and culture. However, theevidence established that there are differing views within the Yindjibarndicommunity as to precisely what that means. Thirdly, the applicant must identifyas Yindjibarndi. So, for example, a person may have a Yindjibarndi apicalancestor, but may not follow Yindjibarndi law and culture, and may insteadidentify with, and follow, the law and culture of an ancestor who was notYindjibarndi, but who belonged to another Aboriginal group.

[224] Under YAC’s Rule Book, a person becomes a member if they apply inwriting, if they are eligible under rule 3.1, and if the directors agree. Theapplication for membership for YAC can be found at sch 1 to the YAC RuleBook. It requires the applicant to set out their full name, their address and todeclare that they are eligible for membership of YAC.325

[225] However, at all material times, YAC’s Rule Book has provided that ‘thedirectors may refuse to accept a membership application. If they do, they mustnotify the applicant in writing of the decision and the reasons for it.’326

[226] The parties did not dispute that the directors have a discretion as towhether to accept an application for membership of YAC. There is no doubt thatthat discretion is not an unfettered one. Given the other requirements of theCATSI Act, including s 166-1, and the duties on directors of an ATSI corporation,

320. Sections 150-15 and 150-30 of the Corporations (Aboriginal and Torres Strait Islander) Act2006 (Cth).

321. Section 144-10 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).322. Section 141-10(2) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).323. Section 144-10(3) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).324. YAC’s Rule Book was amended during the time frame covered by these proceedings: see Ex 2,

Annex VA 4 (Rule Book from 29 June 2009); Ex 1.292 (Rule Book from 15 March 2016).325. Exhibit 1.292.326. Rule 3.2 of the YAC Rule Book: Ex 2, Annex VA 4; Ex 1.292.


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there can be no doubt that the discretion to refuse an application for membership(which otherwise satisfies the criteria for membership under YAC’s Rule Book)must be exercised in good faith, fairly and rationally, having regard to the meritsof each application, consistently with the objects of YAC, and not for an improperpurpose.

[227] An ATSI corporation is required to set up and maintain a register ofmembers.327 Ordinarily, if an application for membership is accepted, thecorporation must enter the member on the register within 14 days ofacceptance.328

[228] An individual who is a member of an ATSI corporation will cease to bea member of that corporation if they resign, die, or if their membership iscancelled.329 One of the bases on which a person’s membership may be cancelledis for misbehaviour by the member. However, in that case, the cancellation mustbe effected in the manner and circumstances provided for in the CATSI Act,namely by a special resolution passed by the corporation in a general meeting.330

The general meeting must be satisfied that the member ‘has behaved in a mannerthat significantly interfered with the operation of the corporation or ofcorporation meetings’.331 A copy of the resolution of the meeting must be givento the members as soon as practicable after the resolution has been passed.332 Thesignificance of the decision to terminate a person’s membership of an ATSIcorporation is reflected in both the statutory requirement for a special majority ata general meeting of the corporation, and the high threshold set by the statute forconduct which will be considered to warrant expulsion.

[229] YAC’s Rule Book also provides for how a person stops being a memberof YAC. At all material times, rule 3.6 has provided that a person stops being amember if they resign in writing, they die, or if their membership is cancelled.YAC’s Rule Book sets out how a member’s membership may be cancelled. At allmaterial times, rule 3.7 has provided:333

If a member:

• can’t be contacted for two years.

• misbehaves or his or her conduct is detrimental to the interests of thecorporation

• is not an Aboriginal or Torres Strait Islander person

• no longer observes or complies with Law and Customs.

the member can only be removed by special resolution at a general meeting. Thedirectors must then send that person a copy of the special resolution at their last knownaddress, as soon as possible after it has been passed.

If a person is not eligible for membership for some other reason, the directors cancancel their membership by passing a resolution at a directors meeting. Before themeeting, directors need to give the member 14 days to object in writing. If the memberobjects, the directors can’t cancel the membership. The member can only then beremoved at a general meeting by resolution.

327. Section 180-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).328. Section 144-10(5) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth);

r 3.2 of the YAC Rule Book: Ex 1.292.329. Section 150-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).330. Section 150-35(2) and (3) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006

(Cth).331. Section 150-35(3) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).332. Section 150-35(4) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).333. Exhibit 2, Annex VA 4; Ex 1.292.


In deciding to commence cancelling a person’s membership, the directors shallconsider the matter in accordance with law and customs. The process to cancelmembership of a member shall not be commenced unless at least 80% of the directorsvote in favour of the decision.

(original emphasis)

(d) Allegations of oppressive conduct in the context of membership disputes

[230] Disputes over the membership of corporations and associations givingrise to claims of oppression are not infrequent. These disputes typically arise inthe context of the cancellation of memberships, but can also arise in cases wheremembership is refused.

[231] In the latter case, the individual applicant may not be entitled to seekrelief against the corporation for oppressive conduct, pursuant to theCorporations Act 2001 (Cth) or the CATSI Act, because the applicant will not bea member of the corporation. However, the conduct may nevertheless have beencontrary to the interests of the members as a whole.

[232] The authorities in this area all turn on their facts, but some generalprinciples can be discerned. By way of example, if the directors of a corporationreject membership applications, without regard to whether that rejection wouldbe consistent with the corporation’s objectives, or by reference to some criteriaother than the corporation’s objects, that decision might be characterised as onethat no reasonable person could reach, or which was made for a purpose foreignto the corporation’s objects, operations and affairs, or as an exercise of thedirectors’ power for an improper purpose.334

[233] Considering (and refusing) applications for membership as a bundle,rather than individually, may be a factor which supports the conclusion that thedecision(s) were a misuse of the power to determine membership applications.That is because such an approach may support a conclusion that there was noconsideration of the merits of the application, or that the directors applied aninflexible attitude to all applications.335

[234] Differences of view between members of a corporation or association,about decisions or future courses of action which should be taken by thecorporation or association, are an inevitable part of the dynamic of humanrelationships, and a legitimate feature of any organisation which operates ondemocratic principles.336 For directors of a corporation to deny membership, orterminate membership, in order to quash debate, or silence dissent, risks thecharacterisation of that action as a misuse of power, and oppression of theminority. However, in a case where members, or applicants for membership, holdviews inimical to the objectives of the corporation itself, denial or termination ofmembership may be justified as being in the best interests of the corporation.337

[235] In identifying the best interests of a corporation or association, thoseinterests equate to the interests of all of its present and future members, ratherthan the interests of any particular section of its membership.338

334. Millar at [190]–[199] per Besanko J.335. See, for example, Pettit.336. Compare Gaiman v National Association for Mental Health [1971] Ch 317 (Gaiman) at 331 per

Megarry J.337. Gaiman.338. Gaiman at 330 per Megarry J.


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[236] Against that factual background, and in light of those principles, I turn,now, to consider each of the allegations of oppression by the plaintiffs whichpertained to decisions about the membership of YAC.

7. Whether the plaintiffs have established that YAC engaged in oppressive

conduct

7.1 Alleged denial of membership rights and improper conduct in dealing with

membership applications

[237] In this section of the judgment, I deal with the plaintiffs’ claims ofoppression arising from the alleged denial of their membership rights andimproper conduct by YAC in dealing with membership applications. Theseclaims are, in essence, as follows:

(a) Alleged wrongful conduct of YAC in excluding and hindering membersin respect of their rights to participate as members of YAC, and invalidresolutions made by YAC in relation thereto, namely by:

(i) alleged wrongful exclusion of members from meetings of YAC, inparticular the purported AGM of 15 December 2010; and

(ii) alleged wrongful purported cancellation of memberships on15 December 2010 with respect to 26 members of YAC, andcontinued denial of that membership until at least 21 March 2012;

(b) Threatened conduct of YAC to convene a meeting for the purpose ofamending rules 3.1 and 3.7 of YAC’s Rule Book, in order to limit thepersons who can be members of YAC and the grounds upon whichmembership may be cancelled;

(c) Wrongful conduct and exercise of power by YAC and its purportedofficers in refusing and/or failing to consider membership applications,during the period 2011–2016;

(d) Wrongful denial of membership to persons approved by the board in2014 to be eligible for membership;

(e) Approval (in November 2015) of membership applications by YAC’spurported board, and subsequent registration of the membershipapplicants as members of YAC, for an improper purpose;

(f) Apparent bias in dealing with membership applications in June 2016.

(a) Alleged wrongful conduct of YAC in excluding and hindering members in

respect of their rights to participate as members of YAC, and invalid resolutions

made by YAC in relation thereto

[238] The plaintiffs alleged two instances of oppression within this category,namely:

(i) The wrongful exclusion of members from meetings of YAC, inparticular the purported AGM held on 15 December 2010; and

(ii) The wrongful purported cancellation of memberships on 15 December2010 with respect to 26 members of YAC, and the continued denial ofthat membership until at least 21 March 2012.339

[239] I will deal with these allegations separately.

339. PSIFC at [115].


(i) Wrongful exclusion of members from meetings of YAC, in particular thepurported AGM held on 15 December 2010

The parties’ contentions

[240] In summary, the plaintiffs allege that in late 2010, a newsletter publishedby Juluwarlu contained a notice of an AGM for YAC to be held on 15 December2010 at Roebourne. The plaintiffs allege that ‘[n]umerous members of YAC werephysically prevented from attending the meeting’ and were ‘told by MichaelWoodley that they were “no longer part of YAC“’.340 The plaintiffs’ case is thatthat conduct by Mr Woodley constituted conduct by YAC which was contrary tos 166-1(1)(d) and (e) of the CATSI Act.

[241] In large part, the defendants do not dispute the plaintiffs’ allegations, savethat they do dispute that members of YAC were physically prevented fromattending the meeting. The defendants’ case is that, prior to the AGM, there wasa discussion between Mr Woodley and various members of YAC, who were alsomembers of WMYAC, who were accompanied by their lawyers. The discussiontook place outside the Juluwarlu office, where the AGM was to be held. Thedefendants’ case is that Mr Woodley told those persons that they could not attendthe meeting because they were not members of YAC, but that no one wasphysically prevented from entering the office and that the WMYAC members leftpeacefully with their lawyers.341

Factual findings

[242] Ms Sylvia Allan and Ms Allery Sandy both gave evidence in relation tothis aspect of the plaintiffs’ case. Mr Woodley also addressed the allegation in hisevidence. Also in evidence was a copy of a video recording of the AGM held on15 December 2010 (which I have viewed).342 The first part of that video appearsto depict the incident outside the Juluwarlu offices just prior to the YAC AGM,the subject of the plaintiffs’ allegation.

[243] The evidence of Ms Allan and Ms Sandy was that on 15 December 2010,each of them was a member of YAC,343 and each of them tried to attend the AGMat the Juluwarlu offices. There were a number of people gathered outside,including Mr Woodley and Mr Warrie. Both Ms Allan and Ms Sandy deposedthat they tried to enter the meeting, but Mr Woodley prevented them from doingso.

[244] Ms Allan’s evidence was the Mr Woodley refused to move out of the wayand said ‘I will not let you in because you’re a breakaway, you are no longer apart of YAC’.344 She argued for approximately 30 minutes that she should beallowed to enter but was refused entry.345 Ms Sandy’s evidence was thatMr Woodley said something similar to her.346 She confirmed that Ms Allanargued with Mr Woodley for about 30 minutes, but he would not let them in tothe meeting.347 Ms Sandy deposed that she also saw a number of other YAC

340. PSIFC at [32].341. DSIFC at [33]–[34].342. Exhibit 61.343. Exhibits 10 at [15], 18 at [12].344. Exhibit 10 at [10].345. Exhibit 10 at [11].346. Exhibit 18 at [28].347. Exhibit 18 at [28].


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members being denied entry to the meeting.348 Neither Ms Allan nor Ms Sandysuggested that the exchange with Mr Woodley involved physical contact.

[245] Ms Allan’s evidence in relation to this incident was not challenged incross-examination, and Ms Sandy was not cross-examined at all. I accept theirevidence.

[246] In broad terms, Mr Woodley’s evidence was consistent with the evidenceof Ms Allan and Ms Sandy, and his evidence was not challenged incross-examination. His evidence was that prior to the AGM, a number of persons,including Ms Allery Sandy, Ms May Adams and Ms Sylvia Allan attended theJuluwarlu offices, along with two lawyers from Corser & Corser (who wereacting for WMYAC by that stage). Mr Woodley’s evidence was as follows:349

I said to these people that the board felt that by attending the AGM you were notacting in the best interest of YAC and Yindjibarndi nation. We then had a discussionabout the issues that were concerning both sides. I talked about them establishing a newgroup and going against the YAC and not wanting to continue to work together so thatwe can get the best deals from mining companies; the deals that will set the foundationfor our future and for our children. The discussion went for about 20 minutes or half anhour. I said that they should not attend the meeting because of our concerns towardstheir actions. Then they left. There was some heated discussion but these people werenot prevented from attending in any physical way.

[247] The video of this discussion depicts a large number of Aboriginal peoplestanding outside or adjacent to an office. They can be seen engaging in a heateddiscussion with a man who appears to be Mr Woodley, who is standing a shortdistance away. The exchange continues for about 20 minutes. The audio isdifficult to follow, but it is apparent that the discussion concerned whether someof the persons present had been ‘kicked out’ of YAC, or treated as though theyhad resigned from YAC, on the basis that they had acted as if they did not wishto be members of YAC. Eventually Mr Woodley advised those present that themeeting would start, but told some of those present that they could not come inbecause they were not members of YAC. A large number of persons then left thearea. No physical altercation of any kind can be seen in the video.

[248] Given that the plaintiffs’ case did not identify the particular individualsexcluded from the meeting, other than Ms Allan and Ms Sandy, I will, for themost part, confine my findings to them.

[249] Having regard to the evidence to which I have referred, I find thatMs Allan and Ms Sandy (together with a number of other YAC members)attended the premises of Juluwarlu for the purpose of attending the YAC AGMon 15 December 2010. Mr Woodley, who was YAC’s CEO, made clear that theywould not be permitted to attend the AGM.

[250] In so far as the plaintiffs contend that they were physically preventedfrom attending the meeting, that allegation was not made out. There was noevidence to support a finding of that kind. However, it is very clear that Ms Allanand Ms Sandy were prevented from attending the meeting nevertheless.Mr Woodley made it very clear that they would not be permitted to do so.

[251] I find that when Mr Woodley acted in that way, he was acting in hiscapacity as YAC’s CEO, and on its behalf.

348. Exhibit 18 at [28].349. Exhibit 41 at [16].


Did YAC’s conduct constitute oppressive conduct of the kind described ins 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act?

[252] The defendants admitted that YAC did not have a lawful basis to excludethe WMYAC members from the YAC AGM held on 15 December 2010, that theWMYAC members excluded from the meeting were denied the opportunity toparticipate in the meeting, and that the exclusion of the WMYAC members fromthe meeting was oppressive conduct pursuant to s 166-1(1) of the CATSI Act.350

That concession was properly made. For the reasons outlined in respect of thenext incident of alleged oppressive conduct, at the time that Ms Allan andMs Sandy were prevented from attending the meeting, there was no basis forconcluding that either of them had ceased to be members of YAC. Under YAC’sRule Book, a person stops being a member of YAC only if they resign in writing,they die, or if their membership is cancelled.351 It was not alleged that Ms Allanor Ms Sandy had resigned in writing, and at the time of the incident outside theJuluwarlu office, their membership had not been cancelled in compliance with therequirements of the Rule Book (or at all).

[253] Excluding a member of a corporation from attending an AGM is a seriousintrusion on their rights of membership. The Rule Book provides that the rightsof a member of YAC include that they can attend, speak, vote and put forwardresolutions at a general meeting.352 A general meeting provides an opportunityfor members to raise concerns about the corporation and to ask questions of itsdirectors and executive officers. The business of an AGM of a corporation is ofparticular significance. It includes the election of directors, and the considerationof reports required to be laid before the AGM, including financial reports anddirectors’ reports.353 Accordingly, to prevent a member from attending an AGMalso prevents that member from participating in the election of directors, andfrom being in a position to ask questions about the important reports which areconsidered at that meeting.

[254] In my view, the exclusion of Ms Allan and Ms Sandy from the AGM on15 December 2010 was conduct that is properly described as unfair, burdensomeand wrongful. It was, therefore, conduct which was oppressive to those personsin their capacity as members of YAC, contrary to s 166-1(1)(e) of the CATSI Act.The defendants do not dispute that conclusion.

What relief, if any, should be granted in respect of this incident of oppressiveconduct?

[255] The defendants’ case was, however, that the Court should not make anorder under s 166-5 in respect of this conduct for a variety of reasons: becausethe oppression had ceased and been remedied (in that all members who wereexcluded from the AGM on 2010 have been able to participate in subsequentAGMs); because the oppression took place years before the trial, and at a timewhen the dispute between WMYAC and YAC was ‘particularly intense’; and

350. DSIFC at [127].351. Rule 3.6 of the YAC Rule Book: Ex 1.292.352. Rule 3.3 of the YAC Rule Book: Ex1.292.353. Sections 201-60 and 327-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006

(Cth).


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because the conduct occurred because the directors and members of YAC whoattended the AGM on 15 December 2010 considered that the WMYAC membershad resigned their membership.354

[256] I do not accept all of those submissions. However, as I note below at[273], it is clear that YAC subsequently acknowledged that Ms Allan andMs Sandy (and the other YAC members whose membership was purportedlycancelled) in fact remained members of YAC, that their membership had not beenvalidly cancelled at the meeting on 15 December 2010, and that they weresubsequently permitted to attend meetings of YAC. In those circumstances, thereis no order which the Court could now make which is capable of remedying theoppression involved in YAC’s impugned conduct. Considered on its own, thefinding of oppression in respect of this conduct does not warrant the grant ofrelief.

[257] I will, however, consider this conduct further below, in determiningwhether YAC’s conduct, overall, warrants the making of orders under s 166-5 ofthe CATSI Act.

(ii) Wrongful purported cancellation of memberships on 15 December 2010 withrespect to 26 members of YAC, and continued denial of that membership until atleast 21 March 2012


[258] The plaintiffs’ case is that at the YAC AGM on 15 December 2010, YACpurported to cancel the membership of 26 members, including the plaintiffs, onthe ground that each misbehaved, or that his or her conduct was detrimental tothe interests of YAC.355 The plaintiffs contend that the names of those whosememberships were cancelled were omitted from YAC’s membership list of 2 July2011.356

[259] The plaintiffs’ case is that the purported cancellation of thosememberships was void and of no effect because of the failure by YAC to complywith numerous provisions of the CATSI Act and of YAC’s Rule Book.357 Theplaintiffs say that YAC did not send to those persons whose memberships werepurportedly cancelled a notice of a special resolution to remove them as amember, nor give them any other notice that the cancellation of their membershipwould be put to the AGM.358 The plaintiffs also say that notice of the AGM wasnot sent to YAC’s members, but merely published in the Juluwarlu newsletter.359

They also say that, in any event, that notice was itself deficient because theproposed agenda which it included merely referred to an item of businessdescribed as the ‘Cancellations of Members’.360

[260] The defendants do not dispute the plaintiffs’ contentions as to whatoccurred at the AGM on 15 December 2010.361 The defendants also admit thatthe resolution passed at the AGM, and which cancelled the memberships, wasvoid on the ground that YAC did not comply with particular procedural

354. DSIFC at [131].355. PSIFC at [33]–[34].356. PSIFC at [37].357. PSIFC at [125].358. PSIFC at [35].359. PSIFC at [31].360. PSIFC at [30].361. DSIFC at [33].


requirements under the CATSI Act and under YAC’s Rule Book.362 Thedefendants concede that the purported cancellation of the memberships wasoppressive conduct of the kind described in s 166-1(1) of the CATSI Act for thisreason.363

[261] However, the defendants deny that the purported cancellation ofmemberships involved a failure to comply with all of the provisions of the CATSIAct and YAC’s Rule Book on which the plaintiffs rely, or that the cancellation ofmemberships involved an abuse of power by YAC.364

Factual findings

[262] On 15 December 2010, immediately after the incident described above at[242]–[251], YAC proceeded to hold its AGM in the Juluwarlu office building inRoebourne. The minutes record that at that time, YAC had 136 members,although only 26 members were present at the meeting. The meeting wasfilmed.365 Item 5 on the agenda for the meeting concerned the ‘Cancellation ofMembers’. The minutes record that ‘the group discussed what should be doneabout the Yindjibarndi people who have decided to form their own aboriginalcorporation which acts in opposition to the interests of the YAC’ and which ‘hadbeen set up in conjunction with [FMG]’.366 The minutes also record that:

Many of those Yindjibarndi people who support [WMYAC] have previously beenmembers of [YAC] however they indicated that they wished to resign their YACmembership at the YAC general meeting held in the Roebourne Community Hall on10/08/10 …

The YAC members decided to cancel the memberships of all those people who aremembers of [WMYAC] and also all those people who signed a letter to the HonourableBrendan Grylls, Minister for Regional Development and Lands, dated 10 November2010 … The YAC constitution clause relied upon to cancel the membership of the YACmembers … is clause 3.7, and in particular takes into account the wording ofcancellation of memberships who ‘misbehaves or his or her conduct is detrimental to

the interests of the corporation’. (original emphasis)

[263] The minutes record that the meeting unanimously passed a resolution thatthe members of WMYAC and the signatories to a letter sent to Mr BrendonGrylls on 10 November 2010 were cancelled as members of YAC (with theexception of four members who had signed a resignation form from WMYAC),with the result that 26 persons had their YAC membership cancelled. The minutesrecord that:367

The YAC members decided to cancel the memberships of all those people who aremembers of [WMYAC] and also all those people who signed a letter sent to theHonourable Brendon Grylls, Minister for Regional Development and Lands, dated10 November 2010. … The YAC constitution clause relied upon to cancel themembership of the YAC members … takes into account the wording of cancellation ofmembers who ‘misbehaves or his or her conduct is detrimental to the interests of thecorporation’. (original emphasis)

362. DSIFC at [128(a) and (b)].363. DSIFC at [128(c)].364. DSIFC at [129].365. Exhibit 61.366. Exhibit 1.544.367. Exhibit 1.544.


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[264] The defendants admit that the resolution passed, by a unanimous vote,was in the following terms:368

Resolution One — Agenda Item 5

That the members of the [WMYAC] and the signatories to the letter sent to Brendan

Grylls on 10/11/10 are cancelled as members of the YAC except for Russell Sandy,Dora Solomon, Billy King and Steven Hubert. The 26 members to be cancelled frommembership of the YAC are Sylvia Allan, Aileen Sandy, Stephen Adams, Clifton Mack,Marlene Harold, May Adams, Amy Jerrold, Berry Malcolm, Allery Sandy, WendyHubert, Bruce Woodley, Ricky Sandy, Gloria Lee, Mavis Pat, Ken Sandy, Celia Sandy,Jimmy Horace, Mark Horace, Jill Tucker, Diana Smith, Charmaine Adams, JoanneWillis, Esther Pat, John Sandy, Linda Norman and Harry Mills.

[265] (I note that there were other references in the evidence to the cancellationof the memberships of 27 persons on this occasion. The additional personreferred to in such other evidence appears to be Maudie Jerrold.369 However, inthe minutes of the AGM on 15 December 2010, Maudie Jerrold is noted ashaving previously resigned from YAC, in writing.370 For present purposes, thatdiscrepancy need not be resolved.)

[266] The defendants admitted that the names of those persons did not appearin membership lists subsequently prepared by YAC.371

[267] The defendants also admitted that the membership of those 26 personswas cancelled on the ground that each misbehaved, or that his or her conduct wasdetrimental to the interests of the corporation for the purposes of rule 3.7 ofYAC’s Rule Book.372

[268] The defendants admitted that the reason for the cancellation of thememberships was confirmed in a letter dated 19 June 2011, from the seconddefendant (Mr Warrie), who was then the Chairperson of YAC, to some of thepersons whose memberships were cancelled,373 including Ms Allery Sandy.374

Mr Warrie confirmed that their membership had been cancelled at the AGM heldon 15 December 2010, and advised of the reason why the memberships werecancelled. The letter stated:375

Your membership was cancelled via clause 3.7 of the Yindjibarndi AboriginalCorporation constitution, and in particular takes into account the wording ofcancellation of members who ‘misbehaves or his or her conduct is detrimental to the

interests of the corporation’.

[269] The persons whose memberships were cancelled did not receive anynotice of a special resolution to cancel their membership, nor were they given anyopportunity to object or to put a contrary case.376 The defendants admitted thatthat was the case.377

368. Exhibit 1.544.369. See minutes of the 2012 AGM held on 27 March 2013: Ex 18, Annex AS-20.370. Exhibit 1.544.371. DSIFC at [33]; PSIFC at [37].372. DSIFC at [33]; PSIFC at [33].373. DSIFC at [33]; PSIFC at [36].374. Exhibit 18 at [29].375. Exhibit 18 at [29], Annex AS-37.376. See, for example, Ms Allery Sandy’s evidence at Ex 18 at [29].377. DSIFC at [33]; PSIFC at [35].


[270] The defendants admitted that YAC’s conduct in cancelling thememberships was challenged in a letter dated 20 December 2010, from thesolicitors acting for those persons, Corser & Corser.378 Corser & Corser advisedthat their clients had asserted that they had not resigned as members, that theyremained members of YAC, and that they wished to participate in the AGM.Corser & Corser asserted that the reasons for denying their clients entry to andparticipation in the AGM were without legal basis, that the AGM on15 December 2010 was held invalidly, and that any resolutions purportedlypassed were also invalid.379

[271] This complaint about the wrongful cancellation of membership appearsto have simmered away for the better part of a year. On 3 November 2011,WMYAC’s solicitors wrote to ORIC to complain about YAC’s conduct,380 in thecontext of broader complaints about the manner in which YAC was dealing withmembership applications. (That broader dispute about membership, and theRegistrar and ORIC’s involvement, is discussed further below at [1054]–[1067].)WMYAC’s solicitors requested that ORIC send a representative to the 2011AGM which, at that stage, was proposed to be held on 30 November 2011.381

ORIC declined to do so on this occasion.382

[272] The plaintiffs, together with Ms Pat, then brought an application for aninterlocutory injunction to restrain YAC from holding the 2011 AGM, which itproposed to hold on 30 November 2011. (That application is discussed furtherbelow at [290]–[293].) The plaintiffs contended that they were members of YAC,and that they had not been given proper notice of the AGM on 30 November2011. In advancing that case, the plaintiffs contended that the purportedcancellation of their memberships (and those others whose memberships werecancelled on 15 December 2010) was invalid, with the result that they remainedmembers of YAC. Master Sanderson concluded that on the available evidence, itappeared that the plaintiffs had a very strong case for contending that theresolutions at the AGM on 15 December 2010 were ineffective, and that therequired notice for the proposed AGM on 30 November 2011 had not been given,so that that meeting could not be validly held. Having taken into account thebalance of convenience, Master Sanderson was satisfied that the proper coursewas to restrain the holding of the proposed AGM on 30 November 2011.383

[273] At some stage soon after that decision, YAC accepted that the purportedexpulsion of the 26 members on 15 December 2010 was not effective. By thetime of YAC’s 2011 AGM, which was eventually held on 21 March 2012, thedispute over the cancellation of the 26 memberships had been resolved. Theminutes of that meeting recorded that Mr Irving advised that each of the personswhose memberships had been cancelled at the AGM on 15 December 2010 hadhad their membership reinstated, had been invited to attend that AGM as a fullmember of YAC, and had been notified of the AGM in accordance with therequirements of YAC’s Rule Book.384 The plaintiffs acknowledged in their SIFC

378. DSIFC at [33]; PSIFC at [38].379. Exhibit 1.26; Ex 18 at [31]–[34].380. Exhibit 1.59.381. Exhibit 1.59.382. Exhibit 1.62.383. Pat at [20].384. Exhibit 1.545.


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that the members whose memberships had been cancelled on 15 December 2010were permitted to attend and vote at the AGM on 21 March 2012.385

Did YAC’s conduct constitute oppressive conduct of the kind described in

s 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act

[274] The defendants admitted that the resolution cancelling the membershipsof the 26 members was void on the ground that YAC did not comply with theprocedural requirements under the CATSI Act and the Rule Book, that YAC’sconduct in purporting to cancel the memberships involved a failure to complywith the requirements of the rules 3.7 and 4.5 of the Rule Book, andss 150-15(2)(c), 150-35(2), (3) and 201-35 of the CATSI Act, and consequentlythat the purported cancellation of those memberships was oppressive conductwithin s 166-1(1) of the CATSI Act.386 However, the defendants deny that thepurported cancellation of the memberships involved any abuse of power.387 It isunnecessary to decide that question, in view of the defendants’ concession thatYAC’s conduct was oppressive conduct for the purposes of the CATSI Act.

[275] In my view, that concession was properly made. The purportedcancellation of the 26 memberships did not comply with the proceduralrequirements for a special resolution of an ATSI corporation, or of YAC inparticular, and did not give the members notice of the proposed resolution, or theopportunity to advance a contrary case. It was therefore not made in accordancewith the requirements of the Rule Book,388 or with the requirements of theCATSI Act in relation to a special resolution.389 It was wrongful in that sense,and therefore oppressive conduct for the purpose of s 166-1(1)(e) of the CATSIAct. Further, there was no evidence to suggest that YAC’s directors hadconsidered the cancellation of the 26 memberships in accordance with law andcustoms, as required by rule 3.7. In my view, that was wrongful, and thereforeoppressive conduct for the purposes of s 166-1(1)(e). Further, the failure to givenotice to the members concerned, the failure to provide them with theopportunity to know the case against them, and to advance a case againstcancellation, was clearly a denial of procedural fairness,390 and was in my view,contrary to ordinary standards of fair dealing, and therefore oppressive conductunder s 166-1(1)(e).

What relief, if any, should be granted in respect of this incident of oppressive

conduct?

[276] The defendants submitted that the Court should not make an order unders 166-5 of the CATSI Act for a variety of reasons: because the oppression hadceased and been remedied (in that all members who were excluded from theAGM on 2010 have been able to participate in subsequent AGMs); because theoppression took place years before the trial, and at a time when the disputebetween WMYAC and YAC was ‘particularly intense’; and because the conduct

385. PSIFC at [51].386. DSIFC at [128].387. DSIFC at [129].388. Rule 4.5 of the YAC Rule Book: Ex 1.292.389. Sections 150-35, 201-20(1), 201-25 and 201-35(1)(c) of the See Corporations (Aboriginal and

Torres Strait Islander) Act 2006 (Cth).390. See ASC v MS Society (Tas) at 508, 514–15.


occurred because the directors and members of YAC who attended the AGM on15 December 2010 considered that the WMYAC members had resigned theirmembership.391

[277] The fact that the oppressive conduct occurred in circumstances where thedispute between WMYAC and YAC was ‘particularly intense’ hardly excuses theconduct in question. More importantly, I do not accept the submission that thedirectors and members of YAC acted on the basis that the 26 persons whosememberships were cancelled had actually resigned their membership. Perhapsthat submission was really intended to convey that the directors and membersacted on the basis that the members in question had acted inconsistently withmembership of YAC. But in any event, the evidence, viewed as a whole, does notsupport the conclusion that the members in question had resigned, or that therewas any proper basis for concluding that they had done so in accordance withYAC’s Rule Book. YAC’s Rule Book required that a member’s resignation be inwriting. Had the directors genuinely believed that Ms Sandy, Ms Allan and theother YAC members who were excluded from the meeting had resigned theirmembership of YAC, there would have been no need to put a resolution to theAGM that the membership of those persons be cancelled. (Rather, the resolutioncould have been to accept, or to note, the resignation of each of those members.)The resolution to ‘cancel’ the memberships, and YAC’s reliance on the conductof those members as the basis for that cancellation, is quite inconsistent with theexistence of any genuine belief that the members in question had resigned theirmembership of YAC.

[278] However, I do accept the defendants’ submission that the oppression inquestion has ceased and been remedied. As I have noted above, the cancellationof each of the 26 memberships was recognised by YAC as invalid, and thosepersons were recognised as having remained members, and were able toparticipate in subsequent AGMs of YAC.

[279] In those circumstances, there is no order which the Court could nowmake which is capable of remedying the oppression involved in YAC’s impugnedconduct. Considered on its own, the finding of oppression in respect of thisconduct does not warrant the grant of relief.


(b) Threatened conduct of YAC to convene a meeting for the purposes ofamending rr 3.1 and 3.7 of YAC’s Rule Book, in order to limit the persons whocan be members of YAC and the grounds upon which membership may becancelled


[281] This category of alleged oppression relates to an AGM for YAC, whichwas proposed to be held on 30 November 2011. It was proposed that amongst theitems of business to be considered at that meeting was an amendment to YAC’sRule Book to amend rules 3.1 and 3.7 in relation to the criteria for membershipof YAC, and cancellation of the membership of YAC (proposed amendments).

391. DSIFC at [131].


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[282] Items 7 and 8 on the proposed agenda for that AGM concerned theproposed amendments to YAC’s Rule Book in the following terms:392

7. Resolution proposed to change the current YAC constitution:

At rule 3.1 regarding qualification of membership of the organisation, the followinginsertions are to be added from 3.1(b) as follows:

(c) competent in knowing and speaking the Yindjibarndi language fluently

(d) competent in, and always practice, Yindjibarndi Birdarra Law andculture

(e) knowledgeable of Yindjibarndi country, songs, stories, dances, history,sites, Galharra, family relationships and kinship systems.

(f) loyal to the YAC and must not participate, associate or support anyother organisation or organisations that oppose the YAC objectiveswith regard to protecting the native title and common law rights andinterests of the Yindjibarndi nation.

8. Resolution proposed to change the current YAC Constitution

At rule 3.7 regarding cancelling the membership of members from the organisation,the following insertion is to be added as a dot point below the current fourth dot pointas follows:

• contravenes any of the membership eligibility criteria listed at rule 3.1.

[283] The plaintiffs contended that the proposed amendments gave rise to‘threatened or actual breaches of obligations, or irregularities’, in that theproposed resolutions were not properly notified to members, in breach of YAC’sRule Book and the CATSI Act, that the substance of the proposed amendmentswas contrary to the CATSI Act, and that the proposed amendments would, forthat reason, be contrary to the interests of the members of YAC as a whole, andoppressive, within the meaning of s 166-1 of the CATSI Act.393 The plaintiffsalso contended that even if the proposed amendments fell within YAC’s rulemaking power, they would, for that reason, be contrary to the interests of themembers of YAC as a whole, and would constitute conduct in contravention ofs 166-1(1)(e) of the CATSI Act.394 Finally, the plaintiffs contended that theproposed amendments were ‘so extravagant that no reasonable person couldconsider that they were for the benefit of YAC’395 and that the proposedamendments constituted an exercise of the rule making power which was notundertaken in good faith, and which, for that reason also, was conduct contraryto s 166-1(1)(d) or s 166-1(1)(e).396

[284] YAC did not proceed with either the AGM on 30 November 2011, or withthe proposed amendments. The defendants’ case was that, in those circumstances,the proposed amendments could not be oppressive conduct within s 166-1 of theCATSI Act.397

392. PSIFC at [138]; DSIFC at [132]; Ex 1.55.393. PSIFC at [139].394. PSIFC at [147].395. PSIFC at [155].396. PSIFC at [153]–[156].397. DSIFC [133].


Factual findings

[285] An AGM of YAC was called for Wednesday, 30 November 2011 inRoebourne. It was not in dispute, and I find, that on 9 November 2011, YACpublished a notice in the Pilbara News newspaper concerning the proposed AGMon 30 November 2011.398

[286] It was also not in dispute, and I find, that that notice set out the items ofbusiness on the proposed agenda for that AGM, including proposed resolutionsto amend the YAC Rule Book in a number of ways (as set out at [282]).399

[287] The proposed amendments thus had three planks: a criterion formembership of knowledge, competence, and practice of Yindjibarndi language,law and culture (the culture criterion); a criterion for membership of loyalty toYAC, and dissociation from any organisation which was seen to oppose YAC’sobjectives in relation to the native title rights and interests of the Yindjibarndipeople (the loyalty criterion); and a basis for cancelling the membership ofexisting YAC members if they contravened any membership eligibility criterion,including the new criteria (the disqualification ground).

[288] It was not in dispute, and I find, that YAC did not send notice of theproposed AGM to its members, or to those of its members whose membershipshad purportedly been cancelled at the AGM on 15 December 2010.400

[289] The plaintiffs’ case was that YAC intended to preclude those personswhose memberships had been cancelled from attending the meeting.401 Thedefendants’ case was that YAC did not post notices of the proposed AGM to itsmembers, because that was its policy at the time, and that consequently YAC didnot intend to exclude the persons whose memberships it had purportedlycancelled on 15 December 2010.402 YAC’s failure to give notice of the proposedAGM to its members does not, in my view, assist in discerning an intention toexclude persons it no longer regarded as members from attending that meeting.However, after having purported to cancel the membership of those persons, andhaving done nothing by this stage to reverse that decision, there is no reason tosuppose that YAC’s directors would permit those persons to participate in theproposed AGM. In my view, it is more likely than not that the directors did notintend to permit those persons whose membership had been cancelled to attend,and more importantly, to participate in, the proposed AGM on 30 November2011.

[290] The plaintiffs, together with Ms Pat brought an application for aninterlocutory injunction to restrain YAC from holding the proposed AGM on30 November 2011.403 In that application, the plaintiffs contended that theresolutions made at the AGM on 15 December 2010 were ineffective. Theycontended that they were given no notice prior to the meeting of any specialresolution to cancel the membership of numerous members of YAC, includingtheir own. The notice of the general meeting on 15 December 2010 did not setout a special resolution of that kind. Furthermore, in relation to the proposedAGM on 30 November 2011, the plaintiffs contended that as they had not been

398. PSIFC at [44]; DSIFC at [44].399. PSIFC at [138]; DSIFC at [132].400. PSIFC at [45]; DSIFC at [44].401. PSIFC at [45].402. DSIFC at [44].403. Exhibit 1.64.


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validly excluded from membership, they remained members and had not beengiven notice of the meeting in accordance with the Rule Book.

[291] In addition, the plaintiffs, in that application, sought to injunct YAC fromputting a resolution to the AGM for the proposed amendments of its Rule Book.The plaintiffs in that action contended that the proposed amendments werecontrary to the CATSI Act and, in particular, that the loyalty criterion wascontrary to ss 150-15(2)(c) and 35(2) of the CATSI Act, which covered the fieldwith respect to the cancellation of a person’s membership for misbehaviour. Itwas contended that to pass the amendments would amount to a breach ofs 166-1(5)(c) of the CATSI Act, which requires a corporation’s internalgovernance rules to be consistent with the CATSI Act.404 The plaintiffs alsoargued that the proposed amendments were contrary to the interests of themembers of YAC, were oppressive and attracted the statutory remedies availableunder s 166-5 of the CATSI Act. They argued that it would be oppressive torequire all of the members of the corporation to comply with the membershipcriteria because that could enable persons to be excluded from membership ofYAC, despite the fact they were among the group who held native title under theDaniel determination.405

[292] Master Sanderson granted an interlocutory injunction restraining YACfrom proceeding with the AGM proposed for 30 November 2011 until therequired notice had been given to all members of YAC; from preventing thosewhose memberships had been cancelled from participating in the next AGM; andfrom considering, or permitting to be passed at any meeting, any of the proposedamendments.406

[293] Master Sanderson’s reasons for granting the interlocutory injunction arenot determinative of the present question as to whether the plaintiffs haveestablished that YAC’s conduct was oppressive, which must be determined byreference to the evidence adduced at the trial. However, for completeness I notethat the Master was persuaded, on the evidence before him, that the plaintiffs hada very strong case for contending that the resolutions at the AGM on15 December 2010 were ineffective, and that the required notice for the proposedAGM on 30 November 2011 had not been given, so that that AGM could not bevalidly held. Master Sanderson was also satisfied that the injunction sought bythe plaintiffs should be granted on the basis that it was arguable that the proposedamendments were oppressive, and concluded that ‘it is arguable the changeswould exclude from the corporation persons who would otherwise be membersand may have an interest in the native title’.407

[294] There was no evidence that the proposed amendments were pursued atany stage after the interlocutory injunction was granted by Master Sanderson.Rather, it appears that the proposed amendments were abandoned.

[295] The plaintiffs adduced some evidence to establish that the proposedamendments would not be in the interests of the members of YAC as a whole, orthat the proposed amendments were not pursued in good faith or for the benefitof YAC. There was, for example, some evidence that the culture criterion whichthe proposed amendments sought to add to YAC’s membership criteria did not

404. Pat at [22].405. Pat at [23].406. Pat at [20]; Ex 1.66.407. Pat at [25].


reflect the criteria by which, as a matter of Yindjibarndi law and custom, a personwould be regarded as Yindjibarndi. Ms Allan’s evidence was that being able tospeak and understand the Yindjibarndi language fluently was not a requirementfor being regarded as being a member of the Yindjibarndi community, because‘[i]n the Yindjibarndi community a person is not treated as being any less aYindjibarndi person because they are not fluent in our language.’408

Consequently, it was Ms Allan’s view that if this aspect of the culture criterionwere included as a requirement for membership of YAC, it would ‘mean thatsome Yindjibarndi people could be excluded from YAC membership for a badreason that has nothing to do with whether or not they are Yindjibarndipeople’.409

[296] Ms Allan’s evidence also addressed the culture criterion in so far as itwould have required competency in, and practice of, Birdarra law and culture.Ms Allan’s view was that it410

would be unfair and wrong to change the YAC rules in this way because there areYindjibarndi people that I know, who through no fault of their own have been unableto learn everything there is to know about our people’s law and culture.

These are people whose lives have taken them away from our traditional country andfrom close contact with many other Yindjibarndi people for extended periods of time.But they will always be Yindjibarndi.

[297] Ms Allan was concerned that if the culture criterion were to be includedin the membership criteria in YAC’s Rule Book:

then every Yindjibarndi person who is a member of YAC or who would like to be amember of YAC will face the risk of not being able to have YAC membership forreasons which have nothing to do with them being a Yindjibarndi person.

…… Yindjibarndi people who have every right to become members of YAC will besubjected to some kind of test as a condition of YAC membership based on languagecompetency or their practice of law and culture ….… If that came about, then any Yindjibarndi person who should be accepted as aYindjibarndi person on the basis of their descent from a parent who was a Yindjibarndiperson would be at risk of being excluded from membership of YAC.411

[298] It was Ms Allan’s evidence that ‘[i]n Yindjibarndi law and culture, noneof those things should be used to decide whether or not a person should berecognised as a Yindjibarndi person or whether they can participate in thingshappening in the Yindjibarndi community’.412

[299] However, other evidence in the trial (which I discuss at length later inthese reasons at [620], [622]–[634]) illustrated that there are differing viewswithin the Yindjibarndi community about the criteria which are applied, as amatter of Yindjibarndi law and custom, to determine whether a person is to beregarded as Yindjibarndi. It is neither necessary nor appropriate for this Court tomake a determination about any such criteria for the purpose of resolving thisaction, or to make a finding about the legitimacy of the proposed amendments,in so far as they sought to introduce the culture criterion into the criteria formembership of YAC.

408. Exhibit 6 at [29].409. Exhibit 6 at [34].410. Exhibit 6 at [36]–[37].411. Exhibit 6 at [40]–[42].412. Exhibit 6 at [43].


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[300] However, there was also other evidence which emerged in the trial as tothe purpose of the proposed amendments, and particularly the loyalty criterion.Mr Mack was a director of YAC at the time that notice of the proposed AGM on30 November 2011 was given.413 Mr Mack accepted that the loyalty criterionwas included in the proposed amendments ‘to try and ensure that [YAC] had abasis for rejecting [WMYAC] members who were applying for membership’.414

Having regard to the cancellation of the 26 memberships in December 2010,there can be little doubt that the loyalty criterion (in conjunction with thedisqualification ground) was also intended to provide a basis to cancel thememberships of YAC members who were also members of WMYAC.

[301] The WMYAC members to whom the proposed amendments weredirected thus included persons who were members of YAC, or who would beentitled to membership of YAC, by virtue of meeting YAC’s existing criteria.(Were that not the case, the proposed amendment would not have been required.)I find that the proposed amendments, at least in so far as they concerned theloyalty criterion and the disqualification ground, would have applied in that way.


[302] The defendants’ case, as I have said, was that the proposed AGM on30 November 2011 did not proceed, and that the proposed amendments were notpursued, and therefore that YAC’s conduct did not constitute oppressive conductof the kind described in s 166-1 of the CATSI Act. The defendants’ alternativecase was that even if the conduct was oppressive, then no relief should be grantedunder s 166-5 of the CATSI Act, given that the AGM on 30 November 2011 didnot proceed, and the proposed amendments were not pursued.

[303] In my view, the fact that the AGM on 30 November 2011 did not proceed,and that the proposed amendments were not pursued, does not preclude a findingthat YAC’s conduct — in pursuing the proposed amendments — was of the kindcovered by s 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act, if that conductotherwise fell within the scope of those provisions. The question for presentpurposes is thus whether, at the time that it occurred, the conduct in question —proposing to hold an AGM, and proposing amendments to YAC’s Rule Book —was conduct which could properly be regarded as contrary to the interests of themembers of YAC, or oppressive, within the meaning of s 166-1(1)(d) ors 166-1(1)(e) of the CATSI Act.

[304] YAC’s failure to provide notice of the proposed AGM on 30 November2011 to its members was conduct in breach of the requirements of the CATSI Act,and of YAC’s Rule Book. The CATSI Act requires that written notice of a generalmeeting must be given by the corporation to each of the members entitled to voteat the meeting, at least 21 days prior to the meeting.415 If a special resolution isto be proposed, the notice must set out the intention to propose the specialresolution.416 As at November 2011, YAC’s Rule Book required that 21 days’notice of an AGM be given to members, either personally, or in a manner whichaccorded with Aboriginal and Torres Strait Islander custom, or sent to the

413. Exhibit 1.551.414. Ts 921.415. Sections 201-20, 201-25(1) and (3) of the Corporations (Aboriginal and Torres Strait Islander)

Act 2006 (Cth).416. Section 201-35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).


member’s address, by post, facsimile or email.417 If a special resolution wereproposed, that notice must set out the special resolution.418

[305] To fail to give a member proper notice of an AGM risks depriving thatmember of one of the fundamental rights of membership of an ATSI corporation,namely to attend, speak and vote at a general meeting.419 To engage in conductwhich is liable to have that consequence is, in my view, conduct which isoppressive for the purposes of s 166-1(1)(e) of the CATSI Act. (I note that in thiscase, not only did YAC fail to notify the persons it regarded as members, but italso failed to notify those persons who were, in fact, members but whosemembership had been purportedly cancelled at the AGM in December 2010.Failure to notify the latter members of YAC of the proposed AGM alsoconstituted oppressive conduct for the purposes of s 166-1(1)(e) of the CATSIAct.)

[306] In my view, YAC’s conduct in proposing the proposed amendments, atleast in so far as they sought to include the loyalty criterion and thedisqualification ground in the membership rules for YAC, was also conductwhich was oppressive for the purposes of s 166-1 of the CATSI Act. Thedefendants’ case appears to have been premised on an argument that YAC’sconduct in proposing the proposed amendments was not conduct which wascapable of properly being described as oppressive conduct because the proposedamendments were never voted on and passed. In other words, the argumentappeared to be that until such time as they were passed by a properly constitutedmeeting, in accordance with the requirements for passing a special resolution, theproposed amendments merely constituted a proposal about what YAC’smembership requirements should be.

[307] I do not accept that argument. Section 166-1(1)(c) permits the Court tomake an order in relation to a proposed resolution of an ATSI corporation. In myview, whether a proposed resolution is oppressive must necessarily be judged onthe assumption that that resolution will be passed by the corporation. Thatconclusion is supported by the fact that the Court’s powers in s 166-5 includepower to restrain a person from engaging in conduct. That power is broad enoughto enable the Court to intervene to ensure that proposed conduct does not occur.

[308] In my view, having regard to their substance, the proposed amendmentswere contrary to the interests of the members of YAC, or were oppressive, fortwo reasons.

[309] First, as I have found, the proposed amendments, if passed, would havebeen capable of application to exclude — either by the denial of membership, orby the cancellation of an existing membership — persons who otherwise wereregarded, in accordance with Yindjibarndi law and custom, as Yindjibarndi.Membership of YAC is significant in at least two respects. Decisions in relationto matters impacting the native title rights of the Yindjibarndi people must bemade by YAC, as the trustee of those rights. Membership of YAC thus carrieswith it the ability to participate in those decisions. In addition, compensation foracts which are inconsistent with the Yindjibarndi’s native title rights, pursuant tothe Participation Agreement, is paid to YPCT and YCT,420 and to the extent that

417. Rule 4.5 of the YAC Rule Book (from 29 June 2009): Ex 2, Annex VA 4.418. Rule 4.5 of the YAC Rule Book (from 29 June 2009): Ex 2, Annex VA 4.419. Rule 3.3 of the YAC Rule Book (from 29 June 2009): Ex 2, Annex VA 4.420. Exhibit 1.94.


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any of these funds are distributed to individuals (such as in the form of vouchersfor food or other purchases) such distributions are now made only to persons whoare members of YAC.421 (In the past, vouchers were given to Aboriginal peopleeven if not members of YAC.)422 To deny membership of YAC to a Yindjibarndiperson, merely because that person is a member of WMYAC, would be to denythat person any meaningful ability to participate in decisions affecting the nativetitle rights of the Yindjibarndi people, and to deny them the financial benefits ofany compensation paid for the benefit of the holders of native title under theDaniel determination. That outcome, in my view, would be inconsistent withYAC’s objectives (as outlined at [21]–[22]).423 In my view, conduct of that kindcould not be regarded as in the best interests of YAC, and thus would constituteconduct of the kind described in s 166-1(1)(d) of the CATSI Act.

[310] Similarly, to cancel the membership of a person who is recognised as aYindjibarndi person, for the reason that that person is a member of another ATSIcorporation, such as WMYAC, and in circumstances where that member’sconduct has not amounted to misconduct, would be contrary to the interests of thecorporation as a whole, for the same reason. Cancellation of a member’smembership in those circumstances would also clearly be unfair, or burdensome,harsh and wrongful, and thus also oppressive, for the purposes of s 166-1(1)(e)of the CATSI Act.

[311] Secondly, it is in the interests of the members of an ATSI corporation thatall members be entitled to express their views about proposed decisions of thecorporation, and about whether, and the terms on which, that corporation shouldenter into agreements concerning compensation for acts which are inconsistentwith established native title rights. Members of an ATSI corporation, and of YACin particular, are entitled to actively participate in the decision making of thecorporation — for example, by exercising their rights to vote on resolutionsmoved in general meetings or outside them,424 to move resolutions,425 and to askquestions or to make comments about the management of the corporation.426

Each member of an ATSI corporation, and each member of YAC, has one vote ina vote at a general meeting of the corporation.427 In other words, each person’svote, and each person’s viewpoint, is treated equally. If these rights are to haveany substantive content, debate — even robust debate — and the ability toexpress different points of view, must be permitted, and decisions must then bemade consistently with the views of a majority of the corporation (or of a specialmajority, if required428).

[312] The proposed amendments — in so far as they included the loyaltycriterion and the disqualification ground — were entirely antithetical tofacilitating the expression of the different points of view held by Yindjibarndipeople, and the contribution of those views to the decisions of YAC. The object

421. Ts 1050, 1052.422. Ts 1060, 1126–30.423. Compare r 2.1 of the YAC Rule Book: Ex 1.292.424. Section 201-115 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth);

s 204 1; r 4.6 of the YAC Rule Book: Ex 1.292.425. Section 201-40(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth),

r 4.6 of the YAC Rule Book: Ex 1.292.426. Section 201-165 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).427. Section 201-115 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth); r

4.10.3 of the YAC Rule Book: Ex 1.292.428. Rule 4.10.3(b) of the YAC Rule Book: Ex 1.292.


of those proposed amendments, as Mr Mack acknowledged,429 was to ensure thatYindjibarndi people with different points of view — in relation to what decisionswould best protect and further the native title rights of the Yindjibarndi people —could be excluded from membership of YAC.[313] In my view, YAC’s pursuit of the proposed amendments bears no analogyto the action taken by the council in the Gaiman case (as discussed at[355]–[366]). That case involved very different facts from this one.430 Moreimportantly, however, the evidence in that case left the Court in no doubt that ifthe members of the Church of Scientology were permitted to join, and remainmembers of, the association, and in such numbers as to dominate the association,their views about the practice of psychiatry would inevitably be reflected in thedemise of the association and its objectives. Permitting WMYAC members, whoheld different views in relation to whether YAC should enter into the FMGAgreement, to become, or to remain, members of YAC, could in no wayundermine or threaten YAC’s existence, or its ability to carry out its objectives.[314] So long as YAC remained (and remains) the PBC for the holders of nativetitle in the Daniel determination, it is, to my mind, inconceivable, in practical andlegal terms, that decisions about the native title rights of the Yindjibarndi peopleunder the Daniel determination could be made by any corporation other thanYAC, or that any agreement with FMG would see compensation being paid toWMYAC rather than YAC. In the latter case, that is because any compensationfor acts inconsistent with the Yindjibarndi people’s native title rights would needto be paid to YAC, as the trustee of those native title rights (or, as had alreadyoccurred in relation to the Participation Agreement, by the payment ofcompensation funds to a trust nominated by YAC). That much is reflected inYAC’s Rule Book which requires that, as a PBC and RNTBC, YAC enter intoagreements as trustee for the common law holders, and receive funds on behalfof the common law holders (including payments received as compensation orotherwise related to the native title rights and interests) and hold such paymentsin trust for common law holders.431 Entry into the FMG Agreement could not besaid to be inconsistent with YAC’s continued existence. Furthermore, YAC’s RuleBook contemplates that if decisions in relation to native title cannot be resolvedby consensus, then they may be referred to a vote at a general meeting.432

[315] Further, there was no basis on which YAC’s directors could conclude thatif WMYAC members were also members of YAC, they would support decisionswhich would necessarily be contrary to YAC’s objectives. Whether or not theYindjibarndi people should enter into an agreement with FMG for the paymentof compensation, and if so, in what amount, was a question on which a varietyof legitimate views might be held. The fact that WMYAC members held adifferent view about that course, as compared with the directors and some othermembers of YAC, did not mean that that viewpoint was inconsistent with YAC’sobjectives.[316] Accordingly, YAC’s conduct in putting forward the proposedamendments was conduct which was contrary to the interests of the members ofYAC as a whole, or oppressive to a member or members of YAC, and wastherefore conduct of the kind described in s 166-1(1)(d) or s 166-1(1)(e) of theCATSI Act.

429. Ts 921.430. Gaiman.431. Rule 13.1(d) and (g) of the YAC Rule Book: Ex 1.292.432. Rule 15.3 of the YAC Rule Book: Ex 1.292.


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[317] I turn, then, to the defendants’ alternative case, which was that no reliefshould be granted because the proposed amendments are no longer pursued.

[318] I accept that submission. There is no ongoing conduct of YAC, arisingout of the proposed amendments, which involves an ongoing oppression ofYAC’s members, or which constitutes conduct contrary to the interests of themembers. Considered on its own, the finding of oppression in respect of thisconduct does not warrant the grant of relief.


(c) Wrongful conduct and exercise of power by YAC and its purported offıcers inrefusing and/or failing to consider membership applications, during the period2011–2016

[320] This category of conduct is said to relate to a number of applications formembership which were made to YAC in the period between 2011 and 2016.However, the plaintiffs make separate allegations of oppression arising fromparticular decisions within the same period, namely the denial of membership to17 persons approved for membership in 2014; the admission of 46 persons tomembership of YAC in November 2015; and alleged bias in the decisionsconcerning membership made by the directors of YAC in June 2016. I do notpropose to deal with those specific allegations under this heading. Instead, it isconvenient in this part of the reasons to deal with the plaintiffs’ allegations in thefollowing categories:

(i) YAC’s rejection of 52 membership applications on 25 August 2011;(ii) YAC’s failure to deal with membership applications made to it between

7 November 2011 and August 2013 (when the parties entered into theSettlement Deed);

(ii) YAC’s treatment of membership applications following its entry into theSettlement Deed between August 2013 and August 2014.

(i) YAC’s rejection of 52 membership applications on 25 August 2011


[321] The plaintiffs’ case is that on or about 17 June 2011, 52 applications formembership were submitted to YAC by Yindjibarndi persons433 (the 52applications). The plaintiffs say that by a letter dated 25 August 2011, which wassigned by the second defendant, Mr Warrie, in his capacity as the Chairperson ofYAC, on behalf of ‘the directors and members’ of YAC, each applicant wasadvised that his or her application was refused.

[322] The plaintiffs say that the reasons for that refusal were the same in eachcase, namely that the applicant was a member or supporter of WMYAC, thatWMYAC had advocated against the interests of YAC, including by negotiatingthe FMG Agreement, that the terms of the FMG Agreement meant that thatAgreement was not in the best interests of the Yindjibarndi common law holdersof native title, that the 52 applications were brought for an ulterior purpose,namely to take control of YAC at the next general meeting and secure the

433. PSIFC at [40].


execution of the FMG Agreement, and that the applicant was therefore anunsuitable candidate for membership of YAC, and a person who, if already amember, would have been liable to removal on the grounds that their conduct wasdetrimental to the interests of YAC.434

[323] The plaintiffs say that the persons whose membership applications hadbeen wrongly rejected did not receive notice of the 2011 AGM for YAC, whichtook place on 21 March 2012, and were not able to attend the meeting.435

Similarly, the plaintiffs say that the persons whose membership applications hadbeen wrongly rejected were not notified of, nor given the opportunity to attend,YAC’s 2012 AGM, which took place on 27 March 2013.436

[324] The plaintiffs contend that in rejecting the 52 applications, the directorsacted contrary to s 265–5 of the CATSI Act, in that they failed to exercise theirpowers and discharge their duties in relation to membership applications in goodfaith in the best interests of the corporation, and for a proper purpose. Theplaintiffs also say that in refusing the 52 applications, the directors failed to actin good faith and with regard to the objects of YAC, and that their conduct wastherefore contrary to the interests of the members of YAC as a whole, and thatthat conduct was therefore within s 166-1(1)(d) of the CATSI Act.437

[325] The defendants admit that YAC refused the 52 applications, althoughthey say that that refusal occurred in or about July 2011.438

[326] The defendants’ case is that the directors did not abuse their power inrefusing the 52 applications because, in the circumstances, they exercised theirdiscretion by reference to the objects of YAC. The defendants say that thosecircumstances were:439

(a) the directors were satisfied that each applicant was a member ofWMYAC;

(b) WMYAC and FMG negotiated the WMYAC FMG agreementconcerning FMG’s then Solomon Hub project;

(c) YAC and the directors were unaware of that negotiation or agreementuntil they received a copy of WMYAC FMG agreement from the Hon.Vince Catania MLA;

(d) the WMYAC FMG agreement:(i) related to the area over which Yindjibarndi people held native title

rights and interests and over which they claimed native title;(ii) necessarily named YAC and the Applicant for the Yindjibarndi #1

claim as parties to it; and(iii) provided for compensation under the agreement to be paid to

WMYAC,(e) following a purported meeting of the Yindjibarndi #1 claim group

convened by the Plaintiffs on 16.03.11, the Plaintiffs signed theWMYAC FMG agreement as members of the Applicant and WMYAC’slawyer provided copies of the agreement to YAC to sign and to arrangefor the remaining members of the Applicant to sign it;

434. PSIFC at [41].435. PSIFC at [49]–[50].436. PSIFC at [53]–[57].437. PSIFC at [164]–[165].438. DSIFC at [136(a)].439. DSIFC at [139].


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(f) as a prescribed body corporate YAC has functions under the Native Title(Prescribed Body Corporate) Regulations 1999 (Cth) (PBC regulations)that include: managing the native title rights and interests of theYindjibarndi people; holding money in trust for the Yindjibarndi people;and consulting with Yindjibarndi people in accordance with theregulations;

(g) as a prescribed body corporate YAC has obligations under the PBCregulations to consult with and obtain the consent of Yindjibarndipeople before entering into an agreement like the WMYAC FMGagreement;

(h) by negotiating the WMYAC FMG agreement with FMG, WMYACsought to carry out YAC’s functions under the PBC regulations; and

(i) the actions of the Plaintiffs in convening a purported meeting of theYindjibarndi #1 claim group that purportedly decided to enter into theWMYAC FMG agreement; signing that agreement and then havingWMYAC’s lawyers provide the partially signed copies to YAC forsigning (and to arrange for the remaining members of the Applicant tosign it) meant that YAC could not perform any of its obligations underthe PBC regulations in relation to it.

[327] The defendants deny that the directors’ exercise of discretion in refusingthe 52 applications in those circumstances constituted a failure to exercise theirpowers in good faith in the best interests of the corporation for a proper purpose,or oppressive conduct of the kind described in s 166-1(1) of the CATSI Act.440

[328] The defendants also say that 50 of the 52 applications were re-submittedbefore 31 October 2013441 and that these were determined in the course of themembership process which occurred pursuant to the Settlement Deed. They alsosay that to the extent that a decision on any of those re-submitted applicationswas deferred, those applications were determined by the directors of YAC at theirmeeting on 29 June 2016. Accordingly, the defendants’ alternative case is that theCourt should not grant relief under s 166-5 of the CATSI Act or otherwise inrespect of the denial of the 52 applications.442

[329] Before setting out my findings in respect of the 52 applications, it isappropriate to refer to some other events which concerned disputes over themembership of YAC, and which took place at about this point in the chronologyof the disputes between YAC and WMYAC. These events concerned theinvolvement of ORIC in dealing with complaints about the conduct of YAC,including in relation to YAC’s dealing with membership disputes.

[330] The evidence established that, at various times, the Registrar and ORIChad become involved in investigating the affairs of YAC. The Registrar andORIC’s involvement is outlined in more detail from [1054] in relation to theplaintiffs’ allegations which concern the financial management of YAC.However, for present purposes, it is appropriate to briefly mention the Registarand ORIC’s inquiries into YAC’s affairs in relation to membership disputes.

440. DSIFC at [140].441. DSICF at [137(a)].442. DSIFC at [142].


[331] On 8 September 2010, a delegate of the Registrar caused authorisedofficers to examine the books of YAC and to report on the results of thatexamination.443 The report prepared as a result of that examination identified anumber of breaches of the requirements of the CATSI Act. Most of thosepertained to the management of YAC’s finances. However, the report alsoidentified a breach concerning membership applications, in that applications formembership were being received and accepted prior to an AGM held on the sameday, and those new members were permitted to then participate in the AGM.444

The authors of the report recommended that the Registrar issue a compliancenotice in accordance with s 439-20(1) of the CATSI Act to require the relevantbreaches to be identified and, amongst other things, that governance training beundertaken.

[332] On 8 March 2011, the Registrar issued the first compliance notice unders 439-20 of the CATSI Act to YAC.445 Pursuant to the first compliance notice, theRegistrar required that the directors of YAC take a variety of specified actions byspecified dates, including the following actions which pertained to membershipapplications:446

3. In the general business at the directors meeting … discuss and put in place acourse of action to resolve the following matters and ensure that:

3.1 all applications for membership are considered by the directors at adirector’s meeting;

3.2 the names and details of persons who apply for membership after anotice has been issued for an AGM or a general meeting are not enteredon the register of members until after the applicable AGM or generalmeeting has been held;

[333] The first compliance notice also required that the directors of YACforward to the Registrar copies of all minutes of directors’ meetings and generalmeetings held by YAC after the date of the first compliance notice until such atime as the Registrar was to notify YAC that he was satisfied that it was no longernecessary for him to monitor YAC.447

[334] On 25 October 2011, Mr Armstrong, a delegate of the Registrar, advisedYAC that after reviewing YAC’s responses to the first compliance notice, it wassatisfied that the directors had met all the requirements of the first compliancenotice and, as such, the Registrar’s period of monitoring YAC had officiallyconcluded.448

[335] On 3 November 2011, the solicitors for WMYAC wrote to ORIC tocomplain about ongoing membership disputes in relation to YAC and governanceissues in relation to YAC.449 The letter alleged that a significant number ofWMYAC members had had their names removed from the membership recordsof YAC in 2010 without their prior knowledge or approval, that it was anticipatedthat those persons would be barred from entering the 2011 AGM, and that theirapplications to re-join YAC had been ignored.450 In view of those concerns,

443. Exhibit 1.11.444. Exhibit 1.31.445. Exhibit 1.32.446. Exhibit 1.32.447. Exhibit 1.32.448. Exhibit 1.58.449. Exhibit 1.59.450. Exhibit 1.59.


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WMYAC’s solicitors requested that ORIC send an officer to attend the 2011 YACAGM.451 ORIC declined that request, on the basis that it did not attend ATSIcorporation meetings without a request to do so by the directors or members ofthe corporation in question.452

Factual findings

[336] There was no dispute, and I find, that on 17 June 2011, Corser & Corser(who, it appears, were then the solicitors for WMYAC) forwarded to YAC 52applications for membership of YAC.453

[337] The defendants, through their counsel, admitted that YAC’s directorsrefused all 52 applications in or around July 2011, and that YAC sent an identicalletter to each of the applicants advising of the refusal of the application and thereasons for it.454

[338] There was also no dispute, and I find, that by letter dated 25 August 2011,the second defendant, on behalf of the directors and members of YAC, wrote toeach applicant to advise that their application had been rejected by the YACboard, and the reasons for that decision.455 In summary, those reasons were asfollows:456

• The applicant was a member and/or supporter of WMYAC;• WMYAC had publicly and materially advocated against the interests of

YAC, including by instituting court proceedings;• That demonstrated that the applicant was an unsuitable candidate and a

person who, if already a YAC member, would have been liable toremoval for conduct detrimental to the interests of YAC, under rule 3.7of the Rule Book;

• The board also took into account the following matters:• WMYAC members had negotiated the FMG Agreement with

FMG;• WMYAC was established for the apparent purpose of receiving

benefits under the FMG Agreement;• The FMG Agreement directly and seriously affected native title

rights in the Daniel Determination Area, which were held in trustby YAC for the benefit of the Yindjibarndi common law holders;

• Notwithstanding that the FMG Agreement required execution byYAC, WMYAC members and supporters, when negotiating theagreement with FMG, neither informed YAC of, nor invited YACto attend, those negotiations, and thus prevented YAC fromcarrying out its obligations under the Native Title (PrescribedBody Corporate) Regulations 1999 (Cth) (PBC Regulations);

• The FMG Agreement, if executed, would permanently depriveYAC of the financial benefits set out in the Agreement, inconsideration for a promise by YAC to give perpetual consent tothe grant of any mining tenure desired by FMG (or any miningcompany with which it may have an agreement) in the Daniel

451. Exhibit 1.59.452. Exhibit 1.62.453. Exhibit 18 Annex AS-47.454. Defendants’ closing submissions [161].455. Exhibit 1.51.456. Exhibit 18, Annex AS-48.


Determination Area at any time in the future. All considerationunder the FMG Agreement would go to WMYAC, which was acomplete stranger to that Agreement, and an entity which owed nofiduciary obligations to the common law holders of the native titlerights affected by the Agreement;

• The FMG Agreement did not permit the Yindjibarndi commonlaw holders to reconsider the appropriateness of the compensationpackage under the Agreement, once the nature of FMG’s projectin the Daniel Determination Area became clear, and prohibitedany future compensation claim that might be thought fair andreasonable by any current and future generations of theYindjibarndi common law holders of native title rights;

• FMG’s project in the Daniel Determination Area would have adevastating impact on sacred sites and that impact;

• In view of the long term adverse consequences of FMG’s project,and the FMG Agreement, the YAC board regarded the applicant’ssupport for and/or membership of WMYAC as demonstrating thatthe applicant did not act to protect, preserve, maintain or advancethe traditions, laws, culture and customs of the common lawholders and their economic developments, interests and socialprogress;

• The board also concluded that each application, along with the other 51applications, was made for an ulterior purpose, namely to take controlof YAC at the next general meeting, and to secure the execution of theFMG Agreement, which was detrimental to the interests of YAC, and tothose of the common law holders, in whose best interests YAC wasrequired to act.

[339] The evidence of Mr Mack, and of Mr Woodley, confirmed that YAC’sdirectors and its CEO believed that the FMG Agreement was not in the bestinterests of the Yindjibarndi people, and that the 52 applications were refusedbecause they were viewed as part of an attempt by WMYAC to obtain control ofYAC, with a view to securing entry into the FMG Agreement.

[340] It was put to Mr Mack in cross examination that at the heart of the disputewere differing views as to whether the Yindjibarndi people should enter into anagreement with FMG immediately, or whether the Yindjibarndi people shoulddefer resolving the amount of compensation for FMG’s activities until after theYindjibarndi #1 claim was resolved. Counsel described these differing views asbeing, in summary, a question of whether to get ‘money now rather than later’.457

Initially, Mr Mack denied that when the directors considered the 52 applicationsthat they took the view that ‘any Yindjibarndi man or woman who wanted to bea member of YAC could only be a member if they agreed to support the claim formoney later, not money now’.458

[341] Mr Mack later acknowledged, however, that the concern of the directorswas that the admission of new members to YAC might constitute sufficientnumbers to obtain control of the board of directors:459

457. See, for example, ts 920.458. Ts 916.459. Ts 919–20.


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You were worried that they will have the support to be voted onto the board? —(indistinct) by Wirlu-murra — they — they support Wirlu-murra.

…Okay. You had 126 members. Add 52, you had 178. You would need 120-something

people vote, which means you need 50 of the members of YAC already to side withthese new 52–60 of them. That’s what you were worried about, was it, as a director: thatyour own members would side with these Wirlu-murra people for money now ratherthan money later? — Because of the deal we was going to make already been agreed.So they could control —

You’re agreeing with me that’s what you were worried about? — They could controlYAC.

[342] Later in his evidence, Mr Mack acknowledged that the rejection ofmembership applications by WMYAC members during 2011 and 2012, was dueto their support for the FMG Agreement:460

You know, don’t you, that back in the … period between 2011 and 2012, anyone whosupported Wirlu-murra was rejected for membership because they supportedWirlu-murra? — Because of that agreement.

Because they supported Wirlu-murra, they were rejected? — I mean, the agreementshows that — we have a document says the agreement shows … and if they — thisagreement in 2011 shows that if they want to take over YAC, an agreement to take over— agreement there says that —

They want to have an agreement with FMG? — They signed it in. FMG signed it in,Wirlu-murra gets all the benefits.

Yes? — And the native title rights were left —And you thought that was a really bad idea for YAC? — It is a bad idea. It’s all —

it’s all —I understand that? — It’s all for — yes.The question is, if someone applied, who was a member of Wirlu-murra at that stage,

did they get rejected because they supported that deal? — At that time, yes, because ofthe (indistinct) before.

[343] Similarly, Mr Woodley’s evidence was that he believed that, at the sametime as the plaintiffs commenced the present action, ‘Wirlu-murra started tryingto take over YAC and I believe they wanted to do that so YAC would sign theAgreement’461 and that he still believed that ‘with these applications Wirlu-murrawas trying to gain control of YAC by getting as many people as they could tobecome members’.462

[344] Furthermore, the evidence in relation to the refusal of the 52 applicationsmust be viewed in light of the evidence which I have set out at length above (at[140] and following), in so far as it concerned events prior to August 2011, whichwas the basis for the beliefs held by YAC’s directors that FMG was behindWMYAC and its attempts to gain control of YAC. Viewed in light of thatevidence, and having regard to the reasons set out in the second defendant’s letterof 25 August 2011, and to the evidence of Mr Mack and Mr Woodley, in my view,the primary reason why the 52 applications were rejected was to ensure thatmembers and supporters of WMYAC did not ‘take control’ of YAC, in the sensethat, by obtaining membership, they might secure enough votes to ensure theappointment of directors sympathetic to the FMG Agreement, or alternatively tosecure enough votes to pass a resolution at a general meeting of YAC. The reason

460. Ts 925.461. Exhibit 41 at [30].462. Exhibit 41 at [31].


why the directors were concerned to ensure that that prospect did not eventuatewas because they expected that if WMYAC members and supporters gainedcontrol of YAC, they would take action to ensure that YAC entered into the FMGAgreement.

[345] The directors were opposed to YAC’s entry into the FMG Agreementbecause their view was that that would not be in the best interests of theYindjibarndi people or of YAC. That was because the FMG Agreement fixed thecompensation payable for any future interference by FMG with the native titlerights of the Yindjibarndi people in the Yindjibarndi #1 claim area (bearing inmind that at that stage, the native title claims by the Applicant in the Yindjibarndi#1 claim had not been resolved, and a finding of exclusive native title rightswould place the common law holders in a stronger position in any claim forcompensation), and because compensation under the FMG Agreement was to bepaid to WMYAC and not to YAC. The directors were therefore of the view thatYAC’s entry into the FMG Agreement would be detrimental to the interests ofYAC itself, and to those of the common law holders of native title.

[346] On the basis of that view, the directors concluded that those whosupported the FMG Agreement did not share the objectives of YAC, namely toprotect, preserve and advance the traditions, laws, languages, culture andcustoms of the common law holders, and to maintain, protect, promote andsupport the culture, native title, traditions and customs, economic development,interests and social progress of the common law holders.

[347] The evidence established that that was a view not universally held by themembers of YAC. As I have noted above, dissatisfaction with YAC’s refusal tonegotiate the FMG Agreement was one of the reasons that the plaintiffs, and othermembers of YAC, established WMYAC. It is apparent from the evidence ofmembers of YAC including Aileen Sandy, John Sandy, Ken Sandy, VincentAdams and Rodney Adams (to which I referred at [154]–[161]) that they, asmembers of YAC, genuinely believed that entry into the FMG Agreement (or asimilar agreement with FMG) would be in the best interests of the Yindjibarndipeople.

[348] Furthermore, it was known to the directors of YAC that there was asignificant division of opinion within the membership of YAC about the merits ofthe FMG Agreement. Indeed, in so far as the directors of YAC were concernedthat admitting the 52 applicants to membership would enable WMYAC membersand supporters to take control of YAC, the inference can be drawn that thedirectors were aware, or assumed, that there were a not insignificant number ofYAC members who favoured entry into the FMG Agreement. As at August 2011,the YAC Rule Book provided that directors would be appointed by resolutionpassed at a general meeting.463 Further, the Rule Book contemplated that if thematters of business at a general meeting could not be resolved by consensus, thenany such matter could be put to a poll at a general meeting. To pass a resolutionat a poll required a majority of three quarters of the votes cast.464 As at July 2011,YAC’s Register of Members, as listed on ORIC website, named 144 individualsas members of YAC, although there was other evidence to suggest that there

463. Rule 5.4 of the YAC Rule Book: Ex 2, Annex VA-4.464. Rule 4.10.3 of the YAC Rule Book: Ex 2, Annex VA-4.


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were, in fact, 126 members at that time.465 (I will assume that the latter iscorrect.) If all YAC members attended, or appointed a proxy, then the passage ofa resolution at a YAC general meeting by a three quarters majority would requireas many as 95 votes. If 52 new members were admitted, and all attended andvoted, 147 votes would be required to achieve a three quarters majority vote infavour of a resolution. The directors’ concern that admission of the 52 applicantsto membership of YAC would enable WMYAC members and supports to gaincontrol of YAC presupposed that a not insignificant proportion of YAC’s existingmembership were understood to support entry into the FMG Agreement.

[349] In addition, there was no evidence to suggest that each membershipapplication was individually considered on its merits. In all of the circumstances,I am satisfied that the 52 applications were simply considered as a bundle.

[350] Furthermore, while there was no evidence in relation to whether the 52applicants were otherwise qualified for membership of YAC, the fact that thedirectors relied on the grounds set out above, rather than on non-compliance withthe membership criteria in rule 3.1 of the Rule Book, permits the inference thatthe 52 applicants were persons who otherwise met the criteria for membership ofYAC. This was a case, therefore, of the directors exercising their discretion torefuse membership of YAC to persons otherwise qualified for it.


[351] Counsel for the defendants acknowledged that the critical part of thesecond defendant’s letter to each of the 52 applicants for membership was thestatement that the directors believed that the 52 applications were made for anulterior purpose, namely to take control of YAC and secure the execution of theFMG Agreement, which would be detrimental to the interests of YAC and of thecommon law holders.466 They submitted that the belief held by YAC’s directorswas reasonable, having regard to the terms of the FMG Agreement.467

Consequently, they submitted that the directors’ refusal of the 52 applications didnot constitute either a failure to exercise their powers in good faith in the bestinterests of the corporation for a proper purpose, nor was it conduct caught bys 166-1 of the CATSI Act.468 I am unable to accept those submissions.

[352] In my view, the evidence supports the conclusion that the decision by thedirectors of YAC to reject the 52 applications was conduct which was contrary tos 265–5 of the CATSI Act, in that the directors’ power to deny membership wasnot exercised for a proper purpose. In addition, the decision to refuse the 52applications was conduct of the kind described in s 166-1(1)(d) of the CATSI Act,in that it was conduct which was contrary to the interests of the members of YACas a whole. I have reached those conclusions for the following reasons.

465. Exhibit 18, Annex AS-5. There are a number of entries in the register for persons of the samename, and with the same address). There are other entries for persons with the same name, butfrom different addresses. Lyn Cheedy gave evidence that in fact there were 135 names on thatlist, with nine duplicates: Ts 1032.

466. Defendants’ closing submissions at [164].467. Defendants’ closing submissions at [167].468. Defendants’ closing submissions at [168].


[353] First, the directors dealt with the 52 applications as a bundle. They didnot consider each application on its individual merits. That is a factor which lendssupport to the conclusion that the directors exercised their power for an improperpurpose, or in a manner which was contrary to the interests of the members as awhole.469

[354] Secondly, the decision to reject the 52 applications was made to ensurethat those persons who were members or supporters of WMYAC, and whosupported entry into the FMG Agreement, were denied any chance of obtainingcontrol of YAC’s board of directors, or of the voting at a general meeting of YAC.There is some support for the view that if a corporation is subject to an attemptedhostile takeover by persons whose objects are inimical to the best interests of thecorporation, or to its continued operation, then the directors may be justified intaking steps to refuse applications for membership from those who would seek totake that course, or of cancelling the memberships of those who support theattempted takeover, without being held to have acted for an improper purpose, orin a way which is not in the best interests of the corporation. The decision inGaiman,470 upon which the defendants relied, is an example of such a case.

[355] In Gaiman the council of the association had, in effect, engaged in theblock expulsion of over 300 members, on the basis that they were known orreasonably suspected of being Scientologists in circumstances where, in thepreceding five years, the Church of Scientology had been involved in a hostiledispute with the association about the use of psychiatric medicine to treat mentalillness. The terminations of membership had occurred in circumstances wherethere had been an unusual and considerable increase in the rate of membershipapplications to the association (all of which had been accepted), where many ofthe applicants appeared to have a connection with Scientology. The associationthen received a bundle of nominations for election to the council of theassociation, from members who were Scientologists. The election for thosepositions was to take place at a forthcoming AGM of the association, at whicheach member would have one vote and voting by proxy was not allowed.

[356] The evidence established that the reason for the decision to terminate themembership of those members understood to be connected with Scientology was‘the threat that Scientology posed to the association and all that it stood for’,471

the loss of moral and active support for the association, the loss of revenue andthe association’s responsibility to those in its charge. Justice Megarry waspersuaded that this case went far beyond the situation where members of anassociation may disagree about matters concerning the association while stillsupporting the association itself. His Honour found that the evidence establishedthat ‘Scientologists have long been attacking the association in a variety of ways… and much of [the language of those attacks] cannot be described as moderateand reasoned argument designed to convert those who hold opposing views’.472

Justice Megarry held that the association’s power, under its articles, to deprive amember of membership, had been exercised by its council of management in

469. Millar at [196]; Pettit at [50], [57], [59].470. Gaiman.471. Gaiman at 331 per Megarry J.472. Gaiman at 331 per Megarry J.


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good faith for the purpose for which it was conferred, namely in the best interestsof the association and its members as a whole.473

[357] In my view, this case is not analogous to Gaiman. Unlike Gaiman, theevidence in this case does not establish that admission of the 52 applicants formembership, on the assumption that they would take control of YAC, and secureits entry into the FMG Agreement, was a course which was utterly inimical474 tothe best interests of the Yindjibarndi common law holders, or of YAC, or whichwas contrary to YAC’s objects. Admission of those persons to membership ofYAC, even if that resulted in YAC entering into the FMG Agreement, or anagreement in similar terms, would not, of itself, undermine or threaten thecontinued existence of YAC.475 So long as YAC was the Applicant in theYindjibarndi #1 claim, and the PBC in respect of the Daniel determination, thenYAC would necessarily continue to exist.

[358] Thirdly, in my view, the directors’ belief — that entry into the FMGAgreement would be detrimental to the interests of YAC and to the interests ofthe common law holders — was not one which could be said to have beenreasonable in all of the circumstances. There is no doubt that the directorsgenuinely believed that entry into the FMG Agreement would not be in the bestinterests of YAC or the Yindjibarndi common law holders. However, in my view,it was not reasonable for the directors of YAC to determine, solely by referenceto their own personal views, whether entry into the FMG Agreement was in thebest interests of YAC and the Yindjibarndi common law holders. That isespecially so in circumstances where there were differences of view withinYAC’s membership on the question as to whether YAC should enter into theFMG Agreement, and where (as I have explained) it may be inferred that thedirectors were aware, or assumed, that a not insignificant number of the existingmembers of YAC supported entry into the FMG Agreement.

[359] In my view, this case is more analogous to Millar.476 In that case, five lifemembers of a table tennis club complained about the manner in which the club’smanagement committee, at one particular meeting in March 2002, dealt with 201membership applications which the club had received. The evidence was that atabout that time, the club was proposing to sell a property, namely a hall, and tomove its activities to a sports complex stadium nearby. At the meeting, themanagement committee refused all 201 membership applications which had beensubmitted. Justice Besanko found that the management committee rejected themembership applications because it considered that if those applications formembership were approved, a substantial number of the new members werelikely to utilise their voting rights at a proposed special general meeting in April2002 to prevent the club from selling the hall.477

[360] One of the grounds on which the members challenged the managementcommittee’s decision was that it was unfairly prejudicial to them or contrary tothe interests of the members of the club as a whole.478 His Honour rejected the

473. Gaiman at 330-1 per Megarry J.474. Compare ASC v MS Society (Tas) at 510 per Zeeman J.475. Millar at [149] per Besanko J; compare Gaiman at 331 per Megarry J.476. Millar.477. Millar at [176] per Besanko J.478. Section 61 of the Associations Incorporation Act 1985 (SA) permitted a member of an

incorporated association to apply to the Supreme Court for an order on the ground that theassociation had engaged, or proposed to engage, in conduct that was “oppressive or


plaintiffs’ contention that the sale of the hall would be contrary to the interests ofthe members as a whole. Justice Besanko concluded that there was nothing in theassociation’s constitution to suggest that the retention of the hall was critical tothe continued existence of the club.479 His Honour found that the proposal to sellthe hall was not one motivated by a purpose foreign to the association’soperations, affairs and organisation, nor was it one that no reasonable personcould have reached.480 His Honour pointed out that it was not appropriate for theCourt to make a judgment about the merits of the underlying dispute:481

Members might no doubt hold differing views as to the merits or otherwise of sellingthe hall property. I have no doubt that there are views on either side, and that they areheld in good faith and with a good deal of passion. However, … the Act does not givethe Court the power to adjudicate between the two views. That is a decision for themembers in general meeting. Were it otherwise, it would mean in this case, for example,the Court would become embroiled in issues which in all likelihood go to the verysurvival of the Club.

[361] This case also bears some parallels with ASC v MS Society (Tas).482 Inthat case, a resolution made by some, but not all, of the elected members of thecouncil of the MS Society, at a meeting held at short notice to cancel themembership of a person who had nominated for election as a member of thecouncil, was held to be oppressive. The council’s stated reason for that decisionwas that the member’s continued membership would put him in a position ofconflict, by virtue of litigation which his wife had indicated she intended tocommence against the Society. Justice Zeeman held that the board was notauthorised to cancel the member’s membership for that reason, or for the realreason, which he concluded was uppermost in the minds of at least the majorityof the directors, namely to prevent the member from becoming a director.

[362] His Honour observed that the power to elect members to be directors wasreposed by the articles of that company in the hands of the members acting in anAGM and it was for them to determine who ought to be elected to govern theaffairs of that company. Justice Zeeman concluded that there was no reason forthe board to take away the right of the AGM to elect the member as a director,if that is what the meeting determined. It was not for the board to decide that itwas not in the best interests of that company that the member be a director. HisHonour concluded that483

To take away that right from the members in the circumstances was a serious abuseof power. This was not a case where there had been an organised attempt by a grouphaving interests utterly inimical to the objects of the [company] attempting a takeover,as was the case in Gaiman v National Association for Mental Health…. It was a caseof a member who had been attempting to advance the interests of the sufferers ofmultiple sclerosis … by endeavouring to have the [company] adopt policies which hesaw as appropriate. … Nevertheless, the board considered him to be a troublemaker and

unreasonable”. Besanko J noted that that section was in similar, although not identical, terms toss 232, 233, and 234 of the Corporations Act 2001 (Cth), and that the principles developed inthe context of the oppressive conduct provision in the companies legislation should be appliedto s 61: Millar at [121]–[123] per Besanko J.

479. Millar at [149] per Besanko J.480. Millar at [152] per Besanko J.481. Millar at [150] per Besanko J.482. ASC v MS Society (Tas).483. ASC v MS Society (Tas) at 510 per Zeeman J.


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determined to rid themselves of him. … the members were entitled to judge whether

[he] ought to be a director. In preventing that occurring the directors were not acting in

the best interests of the [company].

[363] I emphasise that it is neither necessary nor appropriate in this case for thisCourt to express any view about whether YAC, on behalf of the Yindjibarndicommon law holders, should enter into an ILUA with any party in respect of theuse of land over which they have been found to hold native title rights. Nor is itfor this Court to express any view as to whether any terms of such an agreementwould, or would not, be in the best interests of the Yindjibarndi common lawholders, or of YAC itself. There is no doubt that those are questions over whichreasonable minds may differ (as the evidence established here). The question issimply whether the directors were entitled to proceed solely on the basis of theirown personal views as to what was in the best interests of YAC and the commonlaw holders. They were not.

[364] Fourthly, for the same reasons, the decision to reject the 52 applications,in all the circumstances, cannot be said to have been made in the interests of themembers as a whole. In so far as the directors contended that 52 applicants didnot share the objects of YAC, that view was based on the directors’ own view ofwhether the FMG Agreement was consistent with those objects, and disregardedthe contrary views of other members of YAC. In those circumstances, the propercourse would have been to admit the 52 applicants (on the basis that theyotherwise met the criteria for membership of YAC) and thereby enable thosepersons to participate in decision making by the members of YAC as a whole, andby that means, to determine what was in the best interests of YAC.

[365] Fifthly, any decision by YAC to enter into an ILUA in respect of acts inthe Yindjibarndi #1 claim area would arguably constitute a ‘native title decision’(as defined in YAC’s Rule Book), namely a decision to ‘do, or agree to do, anyother act that would affect native title rights and interests’.484 That being the case,before YAC could enter into such an ILUA, its directors would need to complywith the requirements of YAC’s Rule Book to consult with the common lawholders and obtain their consent to enter into the ILUA. If the common lawholders did not give their consent, the directors would be obliged to reject theproposed native title decision.485 Even if entry into the FMG Agreement did notconstitute a ‘native title decision’ for the purposes of YAC’s Rule Book, it wouldundoubtedly relate to the native title rights and interests of the common lawholders, in which case the directors would, at the least, be obliged to consult withthe common law holders.486 Even if the 52 applicants were admitted tomembership of YAC, and ‘took control’ of YAC by electing directors sympatheticto entry into the FMG Agreement, there is nothing in the evidence to support the

484. Rule 22 of the YAC Rule Book. “Native title rights and interests” were defined in YAC’s RuleBook to include “rights and interests determined by a court of competent jurisdiction to be heldby the Yindjibarndi people” for any area in the “determination area” (which was defined toinclude the area described in Annex A to the rule book, and “any other area where it may bedetermined by a court of competent jurisdiction that the Yindjibarndi people hold native titlerights and interests” (my emphasis). That definition appears sufficiently broad to encompass theYindjibarndi #1 claim area.

485. Rule 15.2 of the YAC Rule Book.486. Rule 13.1 of the YAC Rule Book; reg 8 of the Native Title (Prescribed Body Corporate)

Regulations 1999 (Cth).


inference that those persons would ignore the obligations on YAC, and itsdirectors, to consult with the common law holders as to what they considered tobe in their best interests.

[366] Sixthly, in my view, for the reasons outlined above at [311], it is not inthe best interests of the members of an ATSI corporation, nor is it consistent withthe objects of YAC, for the directors of the corporation to use their powers toadmit members for the purpose of stifling debate, and to silence views whichdiffer from their own. In my view, that was the effect of the decision to refuse the52 applications in this case.

[367] Accordingly, in my view, the directors’ decision to reject the 52applications constituted the exercise of their power for an improper purpose,contrary to s 265–5 of the CATSI Act, and a decision which was contrary to theinterests of the members of YAC as a whole, contrary to s 166-1(1)(d) of theCATSI Act.

What relief, if any should be granted in respect of this incident of oppressive

conduct?

[368] The defendants submitted, in the alternative, that if the rejection of the 52applications was an abuse of power and conduct caught by s 166-1 of the CATSIAct, then the Court should not make an order in its discretion under s 166-5, oron any other basis. That submission was advanced on the basis that the 52applicants re-submitted their applications and these were determined as part ofthe membership process in the Settlement Deed. The defendants submitted thatto the extent that any of those re-submitted applications were deferred in thatprocess, they were determined by the directors at their meeting on 29 June2016.487

[369] I accept that it is neither necessary nor appropriate to grant any reliefdirected to the directors’ decision to reject the 52 membership applications,because that refusal was remedied by the directors’ decision to admit members inthe process under the Settlement Deed, or alternatively because that decision wasovertaken by the decision of the directors on 29 June 2016, which is underseparate challenge in these proceedings.

[370] I will, however, consider the conduct of the directors further below, indetermining whether YAC’s conduct, overall, warrants the making of ordersunder s 166-5 of the CATSI Act.

(ii) YAC’s failure to deal with membership applications made to it between7 November 2011 and August 2013 (when the parties entered into the settlementdeed)


[371] The plaintiffs contended that YAC failed to deal with a large number ofapplications for membership which were made between November 2011 andAugust 2013. They contended that 36 applications for membership wereforwarded to YAC on 7 November 2011, and by October 2013, there were nearly200 unresolved membership applications. The plaintiffs contended that many ofthese applications were not determined until late 2013 or early 2014, pursuant tothe process established under the Settlement Deed entered into in August 2013,

487. Defendants’ closing submissions at [169].


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and that others were not determined until June 2016.488 The plaintiffs did notexpressly advance any contention that the delay in determining thesemembership applications constituted oppressive conduct under s 166-1(1) of theCATSI Act. However, the plaintiffs did plead that persons whose membershipapplications had not been determined, or had been rejected, by the time of YAC’sAGM (that is, the 2012 AGM, which was held on 27 March 2013) were notnotified of the AGM, nor were they given the opportunity to attend andparticipate as members.489

[372] The defendants contended that between November 2011 and May 2012,YAC received 122 membership applications.490 They also contended thatbetween 9 May 2012 and 31 October 2013, YAC received 198 membershipapplications from WMYAC members.491

[373] The defendants’ case was that at the meeting of the directors of YAC heldon 9 May 2012, the directors dealt with 122 membership applications (whichwere all of the membership applications outstanding at that point in time).492 Thedefendants contended that 11 applications were granted, 37 were decided to beunnecessary to determine because the applicant was already a member of YAC(including 17 persons whose membership had been cancelled in December 2010,but subsequently reinstated), and the remaining 75 applicants were advised thatthe directors required further information to determine their application, and theywere invited to attend a meeting with the board.493 (The defendants alsocontended that YAC determined the further 198 applications (along with othersreceived after 31 October 2013) in the course of the membership process agreedunder the Settlement Deed.)

[374] The defendants denied that the determination of any of these applicationswas oppressive within the meaning of s 166-1(1) of the CATSI Act, or otherwiseunlawful.494

Factual findings

[375] Mr Gallagher (a consultant engaged by Corser & Corser, the plaintiffs’then solicitors) deposed that he attended a meeting of Yindjibarndi people inRoebourne on 6 November 2011, and collected application forms from 36Yindjibarndi people who wanted to become members of YAC. He posted theseapplication forms to YAC the following day.495 A copy of each of the applicationforms was annexed to Mr Gallagher’s affidavit. I note that a number of theapplicants stated in the form that their address was care of WMYAC.

[376] There was no evidence to suggest that any of those applications wereconsidered by YAC at any time prior to 9 May 2012. I infer that thoseapplications were not dealt with until 9 May 2012.

[377] A meeting of the directors of YAC was held on 9 May 2012.496 Agendaitem 7 concerned a review of membership applications made since 30 November2011, by 130 persons whose names are listed in the minutes. (In fact some of the

488. PSIFC at [157].489. PSIFC at [53].490. DSIFC at [45], [135].491. DSIFC at [135].492. DSIFC at [51].493. DSIFC at [51].494. DSIFC at [143].495. Exhibit 29 at [4]–[6].496. Exhibit 1.552.


names are duplicated, and the defendants say that there were, in fact, 122applications considered at this meeting.497) The names of those listed includepersons whose application forms were submitted to YAC by Mr Gallagher. Theminutes record the following consideration of this agenda item:498

Because of the legal cases being brought by the [WMYAC] the YindjibarndiDirectors decided to review the YAC membership applications made to YAC whichhave been considered since the YAC Directors meeting held on 30/11/11.

These membership applications now appear to be the subject of the legal challengepurportedly being brought by [the plaintiffs], however, the Yindjibarndi Directors agreethat it is FMG which is behind these legal challenges to YAC, who are simply utilisingthe two old ladies and [WMYAC] as a front — therefore the group considered each ofthe membership applications within this legal context guided by the legal adviceprovided by Mr George Irving — YAC In-House Legal Counsel. There was a lot ofdiscussion around each of the applications, and each applicant is to receive a letter inresponse to their application so they can understand their standing in relation to theirYAC membership application.

[378] However, the minutes do not record the outcome of the directors’consideration of those membership applications.499 As I have noted, thedefendants contended that 11 applications were accepted, 37 applications wereunnecessarily made because the applicant was already a member of YAC(including those whose memberships had been cancelled in December 2010 andthen reinstated), and 75 applications about whom the directors required furtherinformation to make a decision, and who were requested to attend a meeting withthe board. There was, however, no direct evidence as to the outcome of each ofthose latter applications. What was in evidence was a copy of a sample letterfrom each of these groups of applicants.500 It is not necessary to make a findingas to how many, and whose, applications were accepted or deferred for furtherconsideration. It suffices to make a finding that some applications were accepted,others were found to be unnecessary, so that no decision was required, and theremainder were deferred, pending a meeting between the applicant and the board.

[379] The defendants’ case is that none of the persons whose applications weredeferred contacted YAC to arrange a meeting. There was no evidence whichsuggested any such contact between any of those applicants and the board ofdirectors. However, the defendants’ case was that those applications werere-submitted to YAC before 31 October 2013, and then were considered as partof the membership process agreed to under the Settlement Deed.

[380] There was no other evidence to suggest that membership applicationswere dealt with by YAC’s board of directors between May 2012 and October2013, when the membership process agreed under the Settlement Deed gotunderway.

Did YAC’s conduct constitute oppressive conduct of the kind described ins 166-1(1) of the CATSI Act?

[381] As I have already observed, it is not clear whether the plaintiffs contendthat the manner in which YAC dealt with these membership applications (or atleast those which were deferred) constituted oppressive conduct of the kind

497. DSIFC at [51].498. Exhibit 1.552.499. Exhibit 1.552.500. Exhibit 1.78. Each of those letters refers to consideration of the membership applications at a

meeting of the directors on 5 May 2012. However this appears to be an error.


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described in s 166-1(1) of the CATSI Act. The defendants clearly apprehendedthat the plaintiffs alleged oppression, and apprehended that that may have beenbecause of the delay in determining the applications. In my view, in the absenceof a particularised allegation of oppression by the plaintiffs, and in the absenceof any evidence as to the surrounding circumstances which would be necessaryto determine whether any oppression had occurred, it is neither necessary norpossible to make any determination that YAC’s conduct in dealing with (orfailing to deal with) membership applications sent to it between 7 November2011 and August 2013 constituted oppressive conduct on its part.

[382] In view of that conclusion, no question of relief arises.

(iii) YAC’s treatment of membership applications following its entry into thesettlement deed between August 2013 and 2014


[383] The parties reached an agreement to settle the present action in August2013, and on 21 August 2013, entered into the Settlement Deed. Settlement of theaction was contingent on certain events taking place before YAC’s AGM for2013. Those events included the resolution of the dispute over membershippursuant to a process established under the Settlement Deed. I discuss the termsof the Settlement Deed below. The plaintiffs’ case was that the defendants couldnot demonstrate that the events on which settlement was contingent had occurred,and that the Settlement Deed therefore did not effect any settlement.501 By thetime of the trial, the question whether the proceedings were settled, by virtue ofperformance of the parties’ obligations in the Settlement Deed was both legallyand practically moot.

[384] The plaintiffs pleaded that by October 2013, there were nearly 200unresolved membership applications, and by May 2014, there were still about130 unresolved applications.502 That period represents the period of time duringwhich membership applications were dealt with pursuant to the membershipprocess under the Settlement Deed. The plaintiffs did not expressly contend thatthe manner in which YAC dealt with the membership applications, pursuant tothe membership process under the Settlement Deed, the delay in resolvingmembership applications while that process was undertaken, or the fact that thatprocess did not finally resolve the membership dispute, constituted oppressiveconduct on the part of YAC, within the meaning of s 166-1(1) of the CATSI Act.

[385] Perhaps as a matter of caution, the defendants denied that thedetermination of the membership applications in the course of the membershipprocess under the Settlement Deed constituted oppressive conduct for thepurposes of s 166-1(1) of the CATSI Act, or was otherwise unlawful.503

[386] The defendants’ case was that under the Settlement Deed, the partiesreached an agreement on the process for resolving all outstanding membershipapplications. They also pleaded that on or about 31 July 2014, the parties enteredinto a further agreement concerning outstanding membership applications. Theypleaded that consideration of membership applications pursuant to that agreedprocess commenced in October 2013 and continued until August 2014.504

501. PSIFC at [56].502. PSIFC at [48].503. DSIFC at [143].504. DSIFC at [58].


[387] The defendants’ case was that at the commencement of the membershipprocess, there were 198 outstanding membership applications, and thatapproximately 122 further applications were received by YAC during themembership process. The defendants say that most of those 320 membershipapplications were provided to YAC by Integra Legal, acting on behalf ofWMYAC.505

[388] The defendants contended that the results of the membership processunder the Settlement Deed were that approximately 320 membership applicationswere considered; YAC accepted 233 membership applications, refused 47membership application and deferred a decision on a further 40 membershipapplications, pending further consideration after the Federal Court delivered itsdecision in TJ v Western Australia.506

[389] The defendants contended that 221 persons, whose applications formembership were accepted, had been added to the Register of Members prior itnotified members of the AGM for 2013.507 The defendants also contended thatthe remaining 12 persons whose applications were accepted were added to themembership register after it notified members of the 2013 AGM, but before thatAGM took place.508

[390] The defendants also contended that there was considerable overlap inthose membership applications, and earlier membership applications submitted toYAC, but not previously determined. In particular, the defendants contended that50 of the 52 applications which were refused in or around July 2011 wereresubmitted before 31 October 2013, and the 75 applications which were deferredon 9 May 2012, pending further consideration, were also re-submitted before31 October 2013.509

Factual findings

[391] Counsel for the defendants submitted that while the parties had adduceda considerable volume of evidence about the membership process under theSettlement Deed, most of that was relevant only as background, and only a smallpart of that evidence was directly relevant to the plaintiffs’ specific contentionson membership issues.510 That submission is undoubtedly correct. It isappropriate, however, to set out my findings — largely by way of overview —of what occurred during that membership process, to the extent that YAC’sconduct might be said to be relevant to the Court’s overall exercise of discretionto grant relief for oppressive conduct relating to the membership dispute.

[392] The Settlement Deed was entered into on 21 August 2013.511 The parties’agreement was not confined to the means by which their membership disputemight be resolved, but extended to all aspects of the dispute between them.(Other aspects of the Settlement Deed are considered later in these reasons.)

[393] The Settlement Deed provided that the board of YAC would establish asub-committee of Yindjibarndi Elders (Elders’ Sub-committee) to review andconsider all membership applications which, to that point, had been received by

505. DSIFC at [59].506. DSIFC at [60], [136].507. DSIFC at [60].508. DSIFC at [60].509. DSIFC at [137].510. Defendants’ closing submissions at [22].511. Exhibit 7 at [2]–[3].


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YAC, but had not yet been processed, and any applications received after the dateof execution of the Settlement Deed and prior to YAC giving notice of its nextAGM. The Deed contemplated that if the Elders’ Sub-committee was satisfiedthat an applicant was a person eligible for membership in accordance with theprovisions of the YAC Rule Book, the Sub-committee would make arecommendation to the board that that applicant be eligible for membership.512

[394] The Settlement Deed provided that, in the event that the Elders’Sub-committee could not reach agreement in respect of whether an applicant waseligible for membership in accordance with the YAC Rule Book, any suchapplication would be referred to Mr Mark Chambers or Mr Robin Stevens (bothof whom were anthropologists) to determine whether that applicant was aYindjibarndi person who holds in common the body of traditional law and culturegoverning the Daniel Determination Area and who identified as Yindjibarndi.513

[395] It was agreed that YAC’s board would accept as a member of YAC anyperson in respect of whom the Elders’ Sub-committee made a recommendationof eligibility for membership or who was determined, by Mr Chambers orMr Stevens, to be a Yindjibarndi person who held in common the body oftraditional law and culture governing the Daniel Determination Area and whoidentified as Yindjibarndi.514

[396] The Elders’ Sub-committee established under the Settlement Deedcomprised Ms Pansy Sambo, Ms Joyce Hubert, Ms Sylvia Allan and Ms DianaSmith.

[397] The Elders’ Sub-committee met on 30 October 2013 and on 10 January2014.

[398] As at the date of the Settlement Deed, 112 membership applications wereawaiting determination, and were referred to the Elders Sub-committee forconsideration.515 Further applications for membership were submitted forconsideration by the Elders’ Sub-committee on 16 December 2013, by whichpoint it appears that there were 220 applications in total for consideration by theElders’ Sub-committee.516 By the time the Elders’ Sub-committee met on10 January 2014, there were 227 outstanding membership applications forconsideration.517 Accordingly, the final position was that in addition to the initial112 membership applications referred for consideration by the Elders’Sub-committee, a total of 198 additional membership applications (and thus 320applications in total) were referred by YAC for consideration by the Elders’Sub-committee.518

[399] Ms Allan deposed that on 30 October 2013, she attended a meeting of theElders’ Sub-committee in Roebourne. At that meeting, the Elders’ Sub-committeeconsidered 198 applications for membership of YAC. She deposed that theprocess adopted by the Elders’ Sub-committee was that the Elders consideredeach applicant’s application, and recorded the outcome of each application on alist by writing next to the applicant’s name ‘Y’ if they recommended the applicantshould be accepted as a member, ‘N’ if they recommended the applicant should

512. Exhibit 1.97; rr 5.1 and 5.2 of the YAC Rule Book: Ex 1.292.513. Exhibit 1.97; r 5.4 of the YAC Rule Book: Ex 1.292.514. Clause 5.5 of the deed of settlement and release: Ex 1.97.515. Exhibits 1.60, 1.61, and 1.99.516. Exhibit 1.179.517. Exhibits 1.181, 1.183, and 1.186.518. See, for example, Ex 1.139.


not be accepted, and a ‘?’ or ‘N?’ or ‘Y?’ if they were not sure. Ms Allan andMs Smith kept a record of those conclusions, as did Ms Pansy Cheedy andMs Hubert. A copy of the record prepared by Ms Allan and Ms Smith, on the onehand, and Ms Cheedy and Ms Hubert, on the other hand, was annexed toMs Allan’s affidavit.519 The outcomes recorded in each document, which wereprovided to the YAC directors, were not identical.520

[400] A meeting of the directors of YAC was held on 7 November 2013.521 Oneof the items for discussion at the meeting was the progress made by the Elders’Sub-committee. Pansy Sambo reported to the directors about the meeting of theElders’ Sub-committee on 30 October 2013. The minutes record the followingdiscussion:522

Philip Davies tabled the two spreadsheet printouts which held the names of thepeople applying for YAC memberships that were considered at the MembershipCommittee meeting. …

There was much discussion on the two tabled spreadsheets.

The two spreadsheets do not match, particularly regarding the applications whereagreement was reached on seeking further information [from an anthropologist]. TheDirectors decided to seek further clarification on the agreement reached by theMembership Committee on each of the applicants, so that one agreed document can befinalised, and signed by each member of the membership committee, so that subsequentagreed action can be taken.

[401] The directors resolved to postpone any decision on the YAC membershipapplications which had been considered by the Elders’ Sub-committee so that theSub-committee’s determination could be clarified and signed off by each of themembers of the Sub-committee.

[402] A further meeting of the Elders’ Sub-committee was held on 10 January2014, at which 227 applications for membership were considered (orre-considered). Once again, Ms Smith and Ms Allan recorded the outcome of theSub-committee’s deliberation on each application, as did Ms Cheedy andMs Hubert. Copies of the records made by them were also in evidence. Again, theoutcomes recorded on each list were not identical.523

[403] Regrettably, a dispute or disputes then arose between the plaintiffs andthe defendants in relation to the outcome of the deliberations of the Elders’Sub-committee. A dispute arose in respect of the number of applications thatwere recommended for acceptance for membership and the numberrecommended for rejection, or, alternatively, which were unresolved.524 Therewas also a dispute as to whether the members of the Elders’ Sub-committeeshould be permitted to have a support person present with them during theirdeliberations. There was also a dispute as to whether the YAC board should dealwith any membership applications at all, until the Elders- Sub-committee hadentirely completed its task.525

519. Exhibit 8, Annexes SA 4 and SA 5.520. Exhibit 51 at [11(i)].521. Exhibit 1.555.522. Exhibit 1.555.523. Exhibit 8 at [18]–[20]; Ex 52, Annexes GMI 2 and GMI 3.524. See, for example, Exs 1.181, 1.182.525. Exhibit 1.205.


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[404] It is apparent from the evidence that the disagreements between themembers of the Elders’ Sub-committee about which applicants were Yindjibarndipeople reflect differing views about what it means to be a Yindjibarndi personwho is a descendant of a Yindjibarndi ancestor, who identifies as Yindjibarndiand who is recognised as a member of the Yindjibarndi community. Some insightinto the basis for this disagreement was disclosed by Ms Allan’s evidence. Sheexplained that in many of the cases where the Elders disagreed, ‘the argumentwas whether someone could be a Yindjibarndi person if part of their family wasfrom another group such as Ngarluma’.526 By way of example, Ms Allan referredto the application by Derryn Churnside for membership of YAC. Ms Allanexplained that she and Ms Smith considered Mr Churnside to be Yindjibarndibecause his grandfather, Jimmy Horace, was a senior Yindjibarndi man, andbecause Mr Churnside had been through the Yindjibarndi laws. However,Ms Sambo and Ms Hubert were of the view that Mr Churnside was notYindjibarndi because his mother was Ngarluma.527

[405] Similarly, Ms Allan explained that they had put a ‘Y’ (for Yes) next to thename of Cindy Adams, who is Ms Allan’s niece, because her mother wasYindjibarndi.528 In contrast, they had put a letter ‘N’ (for No) next to the nameof Lorraine Allan, because Lorraine (who is Ms Allan’s daughter) followed theKariyarra way, which was the way of Lorraine Allan’s paternal grandmother.529

Similarly, Ms Allan was aware that Lorraine Allan’s daughters, Cassandra, Dianaand Jenna (who had also applied for membership of YAC) followed the Kariyarraway, and as a result, Ms Allan and Ms Smith put an ‘N’ (for No) next to theirnames on the list of applicants for membership of YAC.530

[406] Ms Allan deposed that after the meeting of the Elders’ Sub-committee on10 January 2014, Mr Irving prepared a document which purported to record theoutcomes of the Sub-committee’s deliberations. Ms Allan’s evidence was thatthat document was inconsistent with the outcomes that she and Ms Smith hadrecorded at the meeting.531 The plaintiffs’ view was that that document listed‘many applications as having been rejected despite the fact that at the earliermeeting in October 2013, all members of the Elders’ Sub-committee hadaccepted these applications for membership’.532

[407] The directors of YAC met on 23 January 2014.533 One of the items fordiscussion at the meeting concerned the outcome of deliberations of the Elders’Sub-committee on 10 January 2014. The minutes record that the directorsunderstood that the members of the Sub-committee had signed off on theirdecisions and had informed the board that the outcomes were agreed by all fourmembers of the Sub-committee. (Regrettably, it appears that the board acted oninformation provided by Ms Sambo and Ms Hubert, as to the outcome of theElders’ Sub-committee meeting, when in fact those outcomes were not agreed byMs Allan and Ms Smith.) The directors then resolved as follows:534

526. Exhibit 10 at [65].527. Exhibit 10 at [65]–[73].528. Ts 685–6.529. Ts 687.530. Ts 691–2.531. Exhibit 8 at [22].532. Exhibit 1.205.533. Exhibit 1.556.534. Exhibit 1.556.


That the YAC Directors in accordance with the recommendations made by the Elderssubcommittee … at their meeting held on 10 January 2014, accept the followingapplicants for membership in YAC; noting however, that:

1 Of the 104 people approved for acceptance by the Elders subcommittee, 5 ofthese people are already members.

2. That 9 of the applicants did not have addresses attached to their applicationsand therefore, unless otherwise advised, they cannot be entered into theRegister of Members.

[408] The minutes then record the names of 99 persons whose applications hadbeen approved for membership.

[409] The directors also resolved:

That in accordance with the recommendations made by the Elders subcommittee …at their meeting held on 10 January 2014, the following 123 applicants for membershipin YAC be rejected.

[410] The 123 applicants whose applications were rejected were listed in anattachment to the minutes. The minutes also recorded that 10 of those applicantsdid not include their address in their application. (That had the consequence thatthey could not be immediately notified of the outcome of their application.)

[411] For completeness, I note that a further agenda item from the samemeeting concerned additional applications for YAC membership received byYAC. The minutes record that 49 named persons were accepted as members ofYAC.535 There was no evidence as to why those membership applications weredealt with outside the membership process under the Settlement Deed. Theadmission to membership of applicants outside the Elders’ Sub-committeeprocess during this period was also the subject of complaint by the plaintiffs.536

[412] Mr Irving deposed that after the Elders’ Sub-committee meeting inJanuary 2014, there remained 131 applications about which the Elders wereunable to agree.537 The YAC board engaged Mr Robin Stevens, ananthropologist, to attempt to assist the Elders to reach agreement, and then later,to provide an opinion on whether any of the outstanding applications formembership should be accepted by the YAC board. The board also requested thatthe Sub-committee reconvene on 19 February 2014, to consider all membershipapplications, and to provide the board with a single report signed by eachmember of the Elders’ Sub-committee which contained the Sub-committee’srecommendation in respect of each membership application.538

[413] The board’s decisions on membership at its meeting on 23 January 2014,and its resolutions as to how outstanding membership applications should bedealt with, were not favourably received by the plaintiffs and their solicitors. Thesolicitors for the plaintiffs in this action, Integra Legal wrote to Mr Irving, thesolicitor for YAC, by letter dated 17 February 2014, to advise539

it is not for the Board of YAC to determine how the Elders Sub-Committee is to dealwith the task specified in Clause 5 of the [Settlement Deed]. Accordingly, theresolutions noted in the letter of 14 February 2014 are irrelevant and of no force andeffect.

535. Exhibit 1.556.536. Exhibit 1.205.537. Exhibit 51 at [11(i)].538. Exhibit 1.193.539. Exhibit 1.193.


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[414] The Elders’ Sub-committee was scheduled to meet 19 February 2014.540

The plaintiffs’ solicitors advised that Ms Allan and Ms Smith were not availableto attend on that occasion.541 However, Ms Hubert and Ms Sambo met, and theydiscussed a list of 312 applications with Mr Robin Stevens, the anthropologist.542

[415] Further disputes then arose. The plaintiffs did not consider that it wasappropriate that Mr Stevens meet separately with Ms Sambo and Ms Hubert.543

Further, the plaintiffs then sought to obtain a copy of the list of 312 membershipapplications, which had been discussed between Mr Stevens and Ms Sambo andMs Hubert.544 A further meeting of the Elders’ Sub-committee was proposed for27 February 2014. Ms Smith and Ms Allan refused to participate in that meetingunless they first received the list of 312 applications for membership consideredat the meeting on 19 February 2014. (They were not provided with a copy of thatlist until 14 March 2014.545)

[416] After the unsuccessful attempt to reconvene the Sub-committee on27 February 2014, Mr Stevens offered to provide the YAC board with a report onhis observations of the process to date, from an independent anthropologicalstandpoint.546

[417] Mr Irving, as in-house counsel for YAC, requested that the plaintiffsconsider that report and Mr Stevens’ recommendations with a view todetermining whether the plaintiffs were amenable to adopting a process, goingforward in accordance with Mr Stevens’ recommendations.547

[418] The plaintiffs disputed both Mr Stevens’ interim conclusions and hisimpartiality. By letter dated 21 March 2014, the plaintiffs’ solicitors, IntegraLegal contended that548

… Mr Stevens has clearly exceeded any “authority” he may have had to be involved inthe process, has displayed complete lack of impartiality and can no longer be describedor considered as “independent”.

[419] Further, Ms Allan’s evidence was that she considered that Mr Stevens hadmade mistakes in his reference to Yindjibarndi ancestors. Ms Allan claimed thather views about Yindjibarndi ancestry were based on the genealogies which hadbeen prepared for the Yindjibarndi people’s original native title determination.549

[420] There was, however, a further attempt at deliberations by the Elders’Sub-committee. On about 31 March 2014, Ms Allan and Ms Smith approved a‘membership application action list’ which provided for a process to deal with theremaining membership applications, and met to review a list of 325 membershipapplications and to confirm their opinion as to the outcome of eachapplication.550

540. Exhibit 1.196.541. Exhibit 1.205.542. Exhibit 1.999.543. Exhibit 10 at [59].544. See, for example, Ex 1.205.545. Exhibit 1.207.546. Exhibit 1.207.547. Exhibit 1.207.548. Exhibit 1.208.549. Exhibit 10 at [56]–[58].550. Exhibit 8 at [44]–[45].


[421] By letter dated 3 April 2014, Ms Allan and Ms Smith provided theirviews in respect of the list.551 On 9 April 2014, Ms Sambo and Ms Hubert metto review the list of 325 applications.552 While the Sub-committee had reachedthe same conclusion in respect of a considerable number of applicants, they wereunable to reach either a view, or consensus, in respect of a large number ofapplicants. It appears that there were between 129 and 131 applications on whichthe Elders had not been able to reach a view.

[422] The plaintiffs’ solicitors proposed that the Elders’ Sub-committee meeton 1 May 2014 to consider those applications.553 However, in the end, the Elders’Sub-committee did not meet again. Instead, it appears that YAC took the viewthat the view expressed by each of Ms Allan and Ms Smith on 31 March 2014,and by Ms Hubert and Ms Sambo on 9 April 2014, constituted their ‘finalposition’ in respect of each of the 325 membership applications which had beenconsidered. The board then requested that Mr Stevens provide a final report inrespect of the membership applications on which the Elders had been unable toreach a decision. The YAC board determined that it would consider themembership applications, in light of this information, and purportedly inaccordance with cl 5.5 of the Settlement Deed.554 Mr Stevens was instructed thatthe Elders’ Sub-committee had previously reached agreement in respect of 192applicants for membership and he was asked to consider a further 131applications.555

[423] A copy of Mr Stevens’ final report dated 1 May 2014 was in evidence.556

Mr Stevens indicated he was not able to identify a genealogical link to aYindjibarndi apical ancestor for a number of applicants. He recommended thattheir membership applications be rejected, on the basis that they should beinvited to provide evidence of a genealogical link to a Yindjibarndi apicalancestor if they wish to pursue membership further.

[424] For other applicants, Mr Stevens was able to identify a Yindjibarndiancestor, but he was unable to form a view as to whether these persons had metthe other criteria for membership of YAC. Consequently, Mr Stevens recordedthese applications for membership as remaining ‘undetermined’ as of the date ofhis report. As Mr Stevens explained the existence of a genealogical link to aYindjibarndi ancestor was not enough in itself to determine whether someonewas Yindjibarndi, that is, someone who holds in common the body of traditionallaw and culture. Mr Stevens explained that the indigenous people of the Pilbaraare likely to have ancestors from multiple tribal groups, including Yindjibarndiancestors:557

The key question is, which line of ancestors does an individual follow in terms ofLaw and culture. It is their Yindjibarndi ancestors … or some other ancestor? Bylooking at the genealogies alone an anthropologist (or anyone else) cannot determinethis without further enquiry. If, of course, a person does not even have a genealogicallink (apical ancestor) to a particular group (eg Yindjibarndi) any claim to belong to thatgroup is hollow. …

551. Exhibit 1.209.552. Exhibit 1.210.553. Exhibit 1.212.554. Exhibit 1.214.555. Exhibit 1.214.556. Exhibit 1.213.557. Exhibit 1.213.


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…To expand very briefly, to be enculturated into a particular group, in the case of

Indigenous people — to follow traditional Law and culture, is to have been raised andimmersed in the traditional customs, lore, ritual Law and belief, among other things ofa particular group. While every Indigenous person in the Pilbara will have relatives andancestors in other (tribal) groups, whom they may respect and feel a personal sense offamily connection, that is not the prime criteria for cultural affiliation. Otherwiseeveryone would be Yindjibarndi …. One culture group is primary for every individual.And one would expect an individual who is Yindjibarndi, for example, to have anYindjibarndi ancestor in every generation above them from whom they inherited theirLaw and culture; one would expect them to be part of or at least supportive of theYindjibarndi native title claims or other land management/land affiliation matters, andnot be party to another native title claim; one would expect them to have a long historyof participation in Yindjibarndi Law and practice, and so on. ….

In short, working with genealogies alone I can determine that an individual is NotYindjibarndi if they have no clear Yindjibarndi ancestor. But I cannot determinesomeone is Yindjibarndi even if they do have an Yindjibarndi ancestor. That requiresfurther investigation, involving extensive fieldwork, and is probably beyond the scopeof YAC to undertake.

[425] For those applicants with a genealogical link to a Yindjibarndi apicalancestor, Mr Stevens expected that some would be Yindjibarndi, and some wouldnot.558

[426] That determination prompted the plaintiffs’ solicitors to propose thatMr Stevens be given time to allow him to properly undertake, within a reasonabletime, the tasks required under the Settlement Deed of release, including time tomake such other enquiries as he reasonably determined to enable him todetermine the undetermined membership applications.559

[427] A meeting of the directors of YAC was held on 5 May 2014.560 Theprimary items of business concerned determination of membership applications.At this meeting, the directors considered the report on membership applicationsprepared by Mr Stevens on 1 May 2014. The minutes record the followingdiscussion and resolutions:561

YAC Membership Issue number One

… 17 persons whose applications were previously approved in error on 22 October2013 (and whose details were entered into the Register) but whose applications havebeen left ‘Undetermined’ by Robin Stevens, along with the person whose applicationwas previously in error but has since been rejected by Robin Stevens, be given writtennotice, under Rule 3.7 of YAC’s constitution, to the effect of that:

a) their membership application was approved in error;b) (in respect of [one applicant], whose application was rejected by Robin

Stevens) that an expert anthropologist has been unable to find any link to aYindjibarndi apical ancestor;

c) (in respect of the 17 persons whose applications were left ‘Undetermined’ byRobin Stevens) that an expert anthropologist has been unable to determinewhether or not they are eligible for membership under Rule 3.1; and

d) (in respect of all 18) unless they can provide evidence to the satisfaction ofRobin Stevens that they are eligible for membership in YAC, under Rule 3.1,within 14 days, their membership in YAC may be cancelled.

558. Exhibit 1.213.559. Exhibit 1.215.560. Exhibit 1.557.561. Exhibit 1.557.


[428] The directors resolved that they would write to those 18 persons referredto and state that unless they could prove they were a Yindjibarndi person within14 days, then their membership may be cancelled.562

[429] The directors then resolved:563

That the Board rescinds the decisions made by the Board on 23 January 2014 thatrelate to:

a) the 49 applications received directly by YAC, which were approved by theBoard …;

b) the 99 applications forwarded by Integra [the solicitors for WMYAC], whichwere approved by the Board …; and

c) the 123 applications forwarded by Integra, which were rejected by the Board….

[430] The directors then further resolved:564

That the Board approves the 172 applications unanimously recommended foracceptance by the Elders Sub-Committee, as indicated on the list of all 325 membershipapplications, signed by each member of the Elders Sub-Committee; and the 3applications recommended for acceptance by Robin Stevens.

…

That the Board rejects the 20 applications unanimously recommended for rejectionby the Elders Sub-Committee, as indicated on the list of all 325 membershipapplications, signed by each member of the Elders Sub-Committee, and requests YACwrite to each of them, in accordance with Rule 3.2, explaining the reason for rejectionis that they are ineligible for membership under Rule 3.1.

…

That the Board rejects the 52 applications recommended for rejection by RobinStevens, … and requests YAC write to each of them, in accordance with Rule 3.2,explaining that the reason for rejection is that an expert anthropologist has been unableto link them to an Yindjibarndi apical ancestor.

[431] Finally, a further 74 membership applications were deferred.565

[432] As a result of the disputes in relation to performance of the parties’obligations under the Settlement Deed, the plaintiffs served on the defendants anotice of default dated 27 June 2014.566

[433] The parties subsequently endeavoured to achieve a mediated outcome totheir disputes in relation to membership. For that purpose, they entered into anagreement dated 31 July 2014, which supplemented the Settlement Deed.567

Under that agreement, the parties agreed that the Elders’ Sub-committee wouldmeet again in Roebourne in early August 2014, with Mr Stevens and in thepresence of a mediator, for the purpose of determining whether or not torecommend to the board of YAC that any of the persons whose membershipapplications had not been finally determined should be accepted as a member ofYAC. The parties agreed that Mr Stevens would record in writing the outcome ofall decisions reached, and that that record of the decisions would be signed byboth him and by the mediator, before being delivered to the board of YAC.

562. Exhibit 1.557.563. Exhibit 1.557.564. Exhibit 1.557.565. Exhibit 1.557.566. Exhibit 7 at [4], Annex SA 2.567. Exhibit 1.223.


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[434] As part of that agreement, YAC agreed that it would accept as a memberof YAC any person for whom there was a recommendation that the applicantshould be approved as a member. YAC also agreed that the board would ensurethat YAC’s Register of Members was amended before notice of the 2013 AGMwas given to members.568

[435] On 4 August 2014, Ms Allan, Ms Smith, Ms Cheedy and Ms Hubert met,together with Mr Stevens and Chaney J of this Court (who acted as the mediator).At that meeting, the Sub-committee considered 128 membership applications andrecorded the outcomes of each application on a single list.569

[436] In accordance with the determinations reached in that process, the YACboard met on 11 August 2014, and resolved that 58 persons whose membershipapplications had been recommended for acceptance be accepted as members, that27 persons whose membership applications had been recommended for rejectionbe rejected; and that 40 persons whose membership applications had been left‘undecided’ were deferred for further consideration by the board followingYAC’s 2013 AGM.570 In addition, the board resolved to remove the names of twopeople from YAC’s Register of Members, and to cancel their membership, on thebasis that one had been found ineligible for membership, and the eligibility of theother person was in doubt and needed to be determined.571

[437] Mr Irving, in-house counsel for YAC, confirmed that on 11 August 2014,the YAC board accepted the 58 persons whose membership applications had beenrecommended for acceptance by the Elders’ Sub-committee. Mr Irving confirmedthat with the exception of 12 members whose membership applications did notinclude their addresses, YAC’s Register of Members was updated at that stage.Having confirmed the accuracy of the contact addresses for the remaining 12members, Mr Irving advised them that they were entitled to attend YAC’s 2013AGM.572

[438] Notwithstanding the completion of the further mediated process forresolving membership applications, the plaintiffs considered that there had beenfurther defaults by the defendants in the performance of their obligations underthe Settlement Deed. These were set out in a notice of default issued by theplaintiffs on 4 August 2014.573

[439] The plaintiffs contended that YAC had entered into the Register ofMembers of YAC persons whose membership claims were rejected by membersof the Elders’ Sub-committee established under cl 5 of the Settlement Deed, andby Mr Stevens, and in circumstances where the board of YAC rejected, orotherwise did not approve, that person being admitted to membership and thatYAC had failed to correct the register; that YAC had failed to enter into theregister of current members the names of persons whose membership claimswere accepted by the members of the Sub-committee, and in respect of whom theYAC board had approved membership; and that YAC had removed the names ofcertain persons from the register of current members without justification.574

568. Exhibit 1.223.569. Exhibit 8 at [52]–[53]; Ex 1.223, Annex A to the agreement dated 31 July 2014.570. Exhibit 1.229.571. Exhibit 1.229.572. Exhibit 51 at [11]–[15].573. Exhibit 1.231.574. Exhibit 1.231.


[440] On 19 August 2014, Mr Irving, YAC’s in-house counsel, advised thesolicitors for the plaintiffs that the failure to include on the Register of Membersthe names of persons whose applications for membership had been approved wasdue to the fact that YAC had contacted each of those persons, requesting that theyconfirm their address so that their details could be included in the Register ofMembers, and no response had yet been received from any of those persons.Mr Irving also advised that in respect of those persons whose names had beenremoved from the Register of Members, those names had been removed becausethe individuals in question were deceased.575

[441] On about 4 September 2014, the board of YAC subsequently resolved toadmit to membership those individuals who were previously accepted formembership without addresses and to enter those persons’ details into theRegister of Members.576

[442] Nevertheless, on 16 September 2014, the plaintiffs served a notice oftermination and notice in respect of the Settlement Deed.577


[443] As the plaintiffs do not contend that YAC’s conduct in dealing withmembership applications in the process adopted under the Settlement Deed wasoppressive, no question of relief for oppression arises out of this aspect of thefacts.

[444] One matter which should be noted, however, is that YAC’s decision toadmit persons to membership in accordance with the process in the SettlementDeed appears to have been made despite the continued perception that theapplicants were largely WMYAC members who sought membership of YAC witha view to taking over YAC. Mr Woodley’s view was that the applicants whosubmitted their applications through WMYAC’s solicitors had never approachedYAC directly to become members.578 In these circumstances, YAC’s decision toadmit members despite its continuing concerns about WMYAC’s desire to ‘takecontrol’ of YAC is significant for the purposes of the overall question of whether,and what, relief should be granted for those instances of oppressive conductconcerning membership which have been made out.

(d) Wrongful denial of membership to persons approved by the board in 2014 tobe eligible for membership


[445] The plaintiffs contend that at its meeting on 5 May 2014, the YAC boardapproved applications for membership from a number of persons, including 17individuals, namely Nathan Baron, Conroy Bobby, Jannalee Mather, AdrianRanger, Alex Ranger, Alfred Ranger, Davina Ranger, Margaret Ranger, RobinRanger, Sarah Ranger, Sasha Ranger, Tara Ranger, Yasmine Ranger, AnthonyMurray Wheelock, Clifford Larry, Katrina Larry and Samantha Norman (17applicants).579 The plaintiffs contend that Clifford Larry, Katrina Larry andSamantha Norman were not persons whose applications were recommended for

575. Exhibit 1.232.576. Exhibit 1.237.577. Exhibit 7 at [4]–[5].578. Exhibit 41 at [36].579. PSIFC at [167], [169.1]–[169.2].


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acceptance by the Elders’ Sub-committee, but rather were persons who, on anobjective construction of Mr Stevens’ report, were recommended formembership.580 The plaintiffs contend, in any event, that those persons, inaddition to the other 14 persons, were accepted for membership by the board, andwere then entitled to have their names entered onto the membership register.581

The plaintiffs contend that the 17 applicants were not included within themembership register in a reasonable time, and were not included before20 August 2014, when notice of the AGM for 10 September 2014 was given.582

[446] The plaintiffs contend that the 17 applicants did not receive notice, oradequate notice, of the AGM.583 The plaintiffs concede that 12 of the 17applicants had their names entered onto the membership register by 7 September2014.584

[447] The plaintiffs acknowledge that Katrina Larry was added to themembership register by a resolution on 16 December 2015, but her name waslater removed, along with 45 others, in accordance with orders made by LeMiere J on 9 March 2016585 (I discuss that matter further below from [996]). Theplaintiffs also acknowledged that Alex Ranger, Clifford Larry and SamanthaNorman re-submitted applications for membership prior to 1 June 2016, but werenot admitted to membership on that occasion.586

[448] The plaintiffs contend that the failure to include the 17 applicants’ nameson the membership register within 14 days was a breach of s 144–10(5) of theCATSI Act. They also contend that a failure to include the 17 applicants’ nameson the membership register within a reasonable time was also a breach of rule 3.2of YAC’s Rule Book.587 They say YAC’s conduct constituted conduct caught bys 166-1(1)(d) and (e) of the CATSI Act.

[449] The defendants do not dispute that the 17 applicants were not added tothe membership register when YAC updated its membership register followingthe directors’ meeting on 5 May 2014.588 They say that 12 of those persons didnot include on their membership application a residential address, thatinformation provided by the plaintiffs’ solicitors was that two of the persons(namely Adrian Ranger and Alex Ranger) were deceased, and that YACconcluded that three of the applications (Clifford Larry, Katrina Larry andSamantha Norman) had been accepted for membership by mistake.589

[450] The defendants say that YAC did not accept Clifford Larry and KatrinaLarry’s applications for membership. In relation to Samantha Norman, thedefendants say that the Elders’ Sub-committee did not recommend her formembership of YAC, and consequently that the directors deferred considerationof her application for membership.590

580. PSIFC at [169.3].581. PSIFC at [169.3].582. PSIFC at [55.1] and [169.4].583. PSIFC at [169.6].584. PSIFC at [169.7].585. PSIFC at [169.10].586. PSIFC at [169.11].587. PSIFC at [173].588. DSIFC at [65(e)].589. DSIFC at [69(f)].590. DSIFC at [144].


[451] The defendants’ case is that on 7 August 2014, YAC wrote to those 12persons for whom it did not have a residential address and requested that theyprovide a residential address, and that following the provision of that informationby the plaintiffs’ lawyers on 2 September 2014, YAC updated its membershipregister to include those persons on 7 September 2014.591 The defendants’ caseis that that was within 14 days of YAC having been provided with all informationrequired in a membership application, and in any event within a reasonabletime.592 The defendants also say that YAC advised those 12 persons that theywere entitled to attend the AGM on 10 September 2014, and that 4 of thosepersons attended and 2 others appointed a proxy.593

[452] The defendants say that YAC’s conduct did not involve any contraventionof s 144–10(5) of the CATSI Act, or rule 3.2 of the Rule Book, and was notoppressive conduct within the meaning of s 166-1(1) of the CATSI Act.594 In thealternative, the defendants say that even if YAC’s conduct in relation to the 17applicants was oppressive, the Court should not grant relief because any suchoppression has ceased and has been remedied by the addition of 12 of thosepersons’ names and details to the Register of Members, and the invitation ofthose persons to attend AGM on 10 September 2014.595

Factual findings

[453] I make the following findings about the facts underlying this part of thecase.

[454] There is no dispute that the 17 applicants were persons whose nameswere included in the 172 applications accepted at the directors’ meeting on 5 May2014. That was clearly the case.596

[455] The names of the 17 applicants were not included in YAC’s updatedmembership list as at 7 July 2014.597

[456] As for the 12 persons who YAC says did not include residential addressesin their membership applications, I note that each of these was the subject ofcomplaint in the notice of default served by the plaintiffs in respect of theSettlement Deed, and to which I have already referred.598

[457] On 10 December 2013, YAC’s in-house counsel sent an email to theplaintiffs’ solicitors, drawing their attention to the absence of a residential addressfor a number of those applicants, and noting that the absence of an address wouldmean that they could not be properly entered into the Register of Members, andcould not be provided with notice of any AGM.599 There was no evidence tosuggest that that omission as rectified before August 2014.

591. DSIFC at [69(g), (l) and (m)].592. DSIFC at [145], [146].593. DSIFC at [69(n) and (o)].594. DSIFC at [148].595. DSIFC at [149].596. See Ex 1.557 and the attached list of applications and outcomes.597. Exhibit 1.221.598. Exhibit 1.231.599. Exhibit 1.177.


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[458] YAC wrote to the 12 applicants in question on 7 August 2014, at theaddress provided with their membership applications, requesting that theyconfirm their address within 7 days, to enable their name and details to beincluded in YAC’s membership register. No responses were received within thatperiod.600

[459] On 18 August 2014, the plaintiffs’ solicitors emailed Mr Irving, in-housecounsel for YAC, to complain that the names of those persons had not beenincluded in YAC’s membership register.601 By letter dated 19 August 2014,Mr Irving wrote and explained the position in respect of those 12 applicants.

[460] By email dated 2 September 2014, the plaintiffs’ solicitors providedclarification of the 12 applicants’ residential addresses.602

[461] The names of those 12 applicants were included in YAC’s membershipregister as updated on 7 September 2014.

[462] Mr Irving’s evidence was that those persons were subsequently advisedthat they were entitled to attend the next AGM on 10 September 2014.603

[463] In relation to the membership applications for Adrian Ranger and AlexRanger, the plaintiffs’ solicitors advised YAC, on 16 December 2013, that bothapplicants were deceased.604

[464] It is not entirely clear what the position was in respect of the applicationsof Clifford Larry, Katrina Larry and Samantha Norman, because although theirapplications were among those accepted by the directors on 5 May 2014, theirapplications were considered at the meeting on 4 August 2014 which wasmediated by Justice Chaney. The inclusion of their names in that process is notedas pursuant to a letter from Mr Irving dated 10 July 2014, but that document wasnot in evidence.605 Whatever occurred, I infer that no final determination wasmade in respect of those three applicants prior to 4 August 2014.

[465] What is clear is that the outcome of the mediated process on 4 August2014 was that the Elders’ Sub-committee determined that Clifford Larry andKatrina Larry would not be recommended for membership of YAC, whileSamantha Norman’s application was recorded as ‘undecided’.606


[466] In my view, the plaintiffs have not established a breach of s 144–10(5) ofthe CATSI Act, or rule 3.2 of the Rule Book in relation to the alleged failure byYAC to advise the 17 applicants that their applications for membership had beenaccepted. In addition, the plaintiffs have not established that YAC’s conductconstituted oppressive conduct of the kind described in s 166-1(1) of the CATSIAct.

[467] In so far as the 12 applicants whose residential addresses were notprovided with their membership applications, in my view, YAC took reasonablesteps, as early as December 2013, to advise the plaintiffs’ solicitors that it did nothave residential addresses for a number of the applicants, and after having

600. See Ex 1.232.601. Exhibit 1.231.602. Exhibit 1.235.603. Exhibit 51 at [15].604. Exhibits 1.178, 1.179.605. See Ex 1.223 and 1.229.606. Exhibit 1.229.


determined that their applications should be accepted, YAC wrote to thoseapplicants requesting clarification of their residential addresses. There was somedelay in YAC doing so, but given that the applicants concerned did not respond,at least within the time requested by YAC, when YAC wrote seeking clarificationof their addresses, the delay does not, in my view, amount to oppressive conductin all of the circumstances.

[468] In so far as Adrian Ranger and Alex Ranger are concerned, the plaintiffshave no basis for any complaint. As the information made available to YAC, fromthe plaintiffs, albeit erroneously, was that those two persons were deceased, anycriticism for YAC in failing to include their names in its membership registerwould be absurd.

[469] Finally, in so far as Clifford Larry, Katrina Larry and Samantha Normanare concerned, as clearly no final determination had been made in respect of thosethree applicants prior to 5 August 2014, no criticism can be levied at YAC forfailing to include those names in its membership register prior thereto. As noneof their membership applications were accepted prior to 10 September 2014, nocomplaint can be made by the plaintiffs that they were not given notice of theAGM on that date.

What relief, if any, should be granted in respect of this incident of oppressive

conduct?

[470] Given my conclusions, no question of relief arises for consideration.

(e) Approval (in November 2015) of membership applications by YAC’spurported board, and subsequent registration of the membership applicants asmembers of YAC, for an improper purpose


[471] The plaintiffs’ case is that YAC had scheduled the AGMs for the 2014 and2015 years to be held concurrently on 30 November 2015. At that meeting,motions for the appointment of directors were put to the meeting, but no personobtained the necessary majority of votes to secure appointment. YACsubsequently scheduled a further AGM for 1 February 2016.

[472] The plaintiffs’ case is that YAC’s directors met on 15 December 2015 andadmitted 46 new members to membership of YAC (46 members).607 Proceedingsin this Court were then commenced by John Sandy for an injunction to restrainYAC from proceeding with the AGM on 1 February 2016. The plaintiffs rely onthe fact that on Le Miere J found that the purported directors’ resolution to admitthe 46 members was passed for an improper purpose.608 The plaintiffs say that

607. PSIFC at [147], [175]–[176]. The 46 members named in the PSIFC are Jackalyn Cameron,Barbara Cindy Coppin, David Coppin, James Coppin, Kelvin James Dingo, Leslie John Dingo,Alwi Drummond, Richard Egan, Jamie Allan Graham, Estelle Guiness, Christine AnneHarman, Irene Hayes, Christopher Hubert, Jordan Hubert, Kerry Adelle Hubert, Lyn BronwynHubert, Naradene Lin Hubert, Priscilla Celeste Hubert, Winston Hubert Jnr, Winston HubertSnr, Denise Kelly, Katrina Larry, Tenellia Lockyer, Anne-Marie Mack, Princie Mack, SarahMack, Rickiesha Ann McDonald, Gavin Niel Mippy, Errol Munda, Joshua Pat, Robert WaynePhillips, Landon Punch Jnr, Cedina Delta Ranger, Dion Ranger, Stuart Kenneth Ranger Jnr, ToriRickerby, Sharon Roebourne, Yasim Roebourne, Kalmia Sambo, Debbie Simons/Lockyer,Viviane Irene Trigwell, Karen True, Tina True, Daisy Anne Walker, Samara Walker, JamesBevan Wally.

608. PSIFC at [59]; Sandy (No 2) at [8] per Le Miere J.


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the admission of the 46 members to membership of YAC was conduct which wasunjustified, unlawful and oppressive for the purposes of s 166-1(1) of the CATSIAct.609

[473] The defendants say that the YAC directors met on 16 December 2015,considered 90 membership applications, and admitted the 46 members.610 Theirnames were added to YAC’s membership register on 24 December 2015.611

There is no dispute that Le Miere J held that the resolution to accept themembership applications from the 46 members was passed for an improperpurpose, and was therefore invalid.612

[474] The defendants do not deny that the directors’ resolution accepting the 46members was oppressive within the meaning of s 166-1(1) of the CATSI Act,because the resolution was passed for an improper purpose.613 However, thedefendants say that no relief should be granted under s 166-5 of the CATSI Actbecause the oppression has ceased and was remedied by the orders made by LeMiere J, and by the action taken by the Registrar.614

Factual findings

[475] Although there is no dispute that the admission to membership of the 46members was for an improper purpose, and constituted oppressive conduct forthe purposes of s 166-1(1) of the CATSI Act, it is appropriate — for the purposeof considering whether any relief should be granted — to consider the conductof YAC in its context, and having regard to the findings made by Le Miere J.

[476] The AGMs for the 2014 and 2015 years were held, concurrently, on30 November 2015 at the 50 Cent Hall in Roebourne. Agenda item 8 concernedthe appointment of directors. A motion was put that the incumbent directors(other than Ms Tucker) be re-appointed as directors. That vote did not achieve therequisite special majority. A motion was then put that 12 persons who weremembers of WMYAC be appointed. That vote also did not achieve the requisitespecial majority. Justice Le Miere concluded that from that day onwards, YAChad no validly elected directors.615

[477] At the meeting, and just prior to the vote for directors, Charmaine Adams,May Adams, Rodney Adams and Cindy Adams had signed a note, which washanded to Mr Davies, to indicate that they wished to resign from membership ofYAC. The same note bore the names of Michelle Adams, Vincent Adams andBrenton Mills, although none of them had signed the note and none of them werepresent at the AGM. (The same note also bore the name of Renee Wally, but hername and signature had been crossed out.)616 Discord within YAC’s membershipwas evidently running high.

The directors’ meeting on 16 December 2015

[478] A meeting of the directors of YAC was purportedly held on 16 December2015.617 One of the items of business was the resignation, or purportedresignation, of various members, on 30 November 2015. The directors agreed

609. PSIFC at [180].610. DSIFC at [93], [151].611. DSIFC at [94], [150].612. DSIFC at [100].613. DSIFC at [152].614. DSIFC at [153].615. Sandy (No 2) at [31].616. Exhibits 1.271, 1.550.617. Exhibit 1.561.


that Michelle Adams, Vincent Adams and Brenton Mills should not be regardedas having resigned from membership of YAC, given that the purportedresignation note had not been signed by them and they were not at the meetingon 30 November 2015.618 The directors noted that Charmaine Adams hadconfirmed her resignation from YAC in an email to Mr Davies on 3 December2015. However, on 3 December 2015 Mr Davies had received a letter, signed byMay Adams, Rodney Adams, Cindy Adams and Renee Wally, seeking towithdraw their letter of resignation which was submitted at the AGM on30 November 2015. In those circumstances, the directors agreed that by virtue oftheir written resignation, and in the absence of a new membership application,May Adams, Rodney Adams and Cindy Adams would not be considered formembership at the meeting, but were welcome to re-apply for membership ofYAC. (In relation to Renee Wally, the directors did not act on her purportedresignation because her name and signature were crossed out on the note handedto Mr Davies on 30 November 2015, and they concluded that she remained amember of YAC.619)

[479] Further discussion of membership applications then ensued. The minutesindicate that the directors considered the 40 membership applications whichremained undetermined at the conclusion of the process under the SettlementDeed, and which had been deferred for future consideration at the directors’meeting on 11 August 2014. In the end, the directors considered a total of 51membership applications.620 Three applicants were identified as persons whowere already members of YAC. Of the remaining applicants, the directorsresolved to accept the applications for membership by the 46 members, to rejectone application, and to seek further information from the final applicant.621

[480] The directors further resolved that a special general meeting should beheld on 1 February 2016, and that the business of that meeting should include theappointment of directors.622

The challenge brought by John Sandy as to the validity of the resolutionspassed on 16 December 2015

[481] One of YAC’s members, Mr John Sandy, then brought proceedings tochallenge the validity of the resolutions passed at the purported meeting of thedirectors on 16 December 2015. Mr Sandy contended that the meeting was notvalidly convened for a variety of reasons.

[482] First, Mr Sandy contended that the terms of appointment of all of YAC’sdirectors had expired on 10 September 2015. By virtue of s 246-25(4) of theCATSI Act, the terms of the directors were extended until the next generalmeeting, which was held on 30 November 2015. However at that meeting,motions for the appointment of directors were put, but not passed. Mr Sandycontended that that left YAC without validly appointed directors, andconsequently, the directors’ meeting on 16 December 2015 was not called by avalid director. Justice Le Miere accepted that contention623 and concluded thatthe purported meeting of directors held on 16 December 2015 and the resolutions

618. Exhibit 1.561.619. Exhibit 1.561.620. Exhibit 1.561 (the names of the applicants for membership are set out in a table annexed to the

minutes of the meeting).621. Exhibit 1.561.622. Exhibit 1.561.623. Sandy (No 2) at [9].


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passed at that meeting were invalid, because the person who called the meetingand the persons who attended had ceased to be directors on 30 November2015.624

[483] Secondly, Mr Sandy contended that the directors’ meeting on16 December 2015 was invalidly held because reasonable notice of the meetingwas not given to one of the directors, Ms Tucker. Justice Le Miere held thatreasonable notice of the directors’ meeting was not given to Ms Tucker, as shehad not been given the usual seven days’ notice of a board meeting.625 HisHonour held that this was an irregularity that could not have been remedied byan order of the court and, had it been necessary to do so, he would have declaredthe meeting of the directors on 16 December 2015 to have been invalidly held byreason of this procedural irregularity.626

[484] Finally, and relevantly for present purposes, Le Miere J held that theresolution to accept applications from the 46 members was put and passed for animproper purpose, namely to influence the outcome of motions to be consideredat the AGM on 1 February 2016 and, in particular, the election of directors whosupported the CEO and the previous directors of YAC (other than Ms Tucker).His Honour held that the directors had passed that resolution and had resolved tohold a special general meeting early in 2016 in the belief that the new memberswould support the incumbent directors, other than Ms Tucker, in the vote on theboard composition at that special general meeting.627

[485] Among the factors relied upon by Le Miere J in reaching that conclusion,his Honour noted that the 46 members ‘would be a significant addition to theYAC membership’ but that then would not, of itself, be sufficient to obtain amajority vote in favour of the re-appointment of the incumbent directors.628

However, in concluding that the 46 members were admitted for an improperpurpose, his Honour relied on evidence that of the 154 applications of WMYACmembers for membership of YAC since 2012, 61 applications had been rejected,and 81 applications had not yet been dealt with by the board,629 and he held thatin considering membership applications on 16 December 2015, the directors hadapproved only the applications of members who were believed to be supportersof the incumbent directors, and did not consider other membership applicationsthat had been outstanding since at least 2014.630 His Honour held that YAC’sRule Book:

conferred on the directors the power to accept or refuse a membership application. Toexercise the power for the purpose of manipulating the voting power of members, orcreating a new majority of members, is foreign to the purpose of the power.631


[486] As I have said the defendants did not dispute that the admission of the 46members to membership of YAC was oppressive conduct for the purposes ofs 166-1 of the CATSI Act. That concession was properly made. The admission of

624. Sandy (No 2) at [31].625. Sandy (No 2) at [44].626. Sandy (No 2) at [49].627. Sandy (No 2) at [64].628. Sandy (No 2) at [56].629. Sandy (No 2) at [57].630. Sandy (No 2) at [59], [63].631. Sandy (No 2) at [55].


those members was clearly for the purpose of marshalling sufficient votes infavour of the incumbent directors as to outweigh those members who opposedthem. That conduct clearly constitutes conduct which was wrongful and unfairlyprejudicial to the members of YAC who did not share the views of the incumbentboard.

[487] The key question is, however, whether any relief should be granted inrespect of that oppression.


[488] In my view, no relief should be granted in respect of this incident ofoppressive conduct. Justice Le Miere made a declaration that the resolutionsmade at the meeting on 16 December 2015 — including the resolution to admitthe 46 members to membership — were invalid. The 46 members in questionthus were not actually admitted to membership on this occasion. Most of thoseapplications were considered again at a meeting of the directors on 29 June 2016,which is discussed below from [556]. Furthermore, YAC’s conduct at the AGMon 30 November 2015, and the conduct of the directors on 16 December 2015,was expressly drawn to the attention of ORIC, and the only action taken by theRegistrar was to issue the second compliance notice, the terms of which arediscussed below. That action by the Registrar militates against the conclusion thatany further action is required to address the oppressive conduct found to havetaken place on 16 December 2015.


(f) Apparent bias in dealing with membership applications in June 2016


[490] The plaintiffs plead that on 16 May 2016, the Registrar issued the secondcompliance notice to YAC which required it, amongst other things, to preparedraft policies and procedures that provided for all applications for membership tobe considered and decided upon by the directors in a directors’ meeting within areasonable time after each application for membership was received; and toconvene a directors’ meeting, to be held by 30 June 2016, to consider and decideupon all known applications for membership submitted to YAC before 1 June2016 that had not previously been accepted or rejected.632

[491] The plaintiffs contend that between 25 May and 31 May 2016, YACreceived a total of 130 applications for membership, lodged by the plaintiffs’ thensolicitors, or WMYAC, comprising 44 applications for persons whoseapplications YAC had previously purported to reject or which had previouslybeen left undecided, and a further 86 applications. Of these, three applicationswere for persons who were already members of YAC, and one application wasduplicated, so that there remained 126 applications.633

[492] The plaintiffs contend that on 13 July 2016, YAC admitted 26 persons tomembership of YAC, including 16 applicants whose applications were found byLe Miere J to have been invalidly accepted on 16 December 2016, as his Honour

632. PSIFC at [60], [209].633. PSIFC at [61]–[64].


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found that those persons were likely to support Mr Woodley and the previousincumbent directors of YAC.634 The plaintiffs say that all of these 26 people wereclose relatives of the members of YAC’s board, or of other members of YAC whohad not supported WMYAC candidates for the election of directors at theconcurrent YAC AGMs held in November 2015.635

[493] The plaintiffs also contend that in June 2016, YAC refused applicationsfor membership by 125 persons who were members of WMYAC.636

[494] The plaintiffs’ case is that in accepting only the 26 applicants, andrejecting the 125 WMYAC applicants, the directors of YAC acted in a biasedfashion that was oppressive to a member or members of YAC, because the effectof those decisions was to dilute the voting power of members of YAC whosupported WMYAC and to shore up support for the then board of directors ofYAC.637 The plaintiffs contend that that conduct was conduct caught bys 166-1(1)(d) and (e) of the CATSI Act.638

[495] In advancing that contention, the plaintiffs also rely on the fact that inJune 2016, 8 of the 12 directors of YAC were persons who had purported to actas directors between 30 November 2015 and 9 March 2016, and who were foundby Le Miere J to have used their power to admit members for an improperpurpose.639

634. PSIFC at [65], [182]. The plaintiffs say that the 26 persons were Jackalyn Cameron, MichaelCharlton, Barbara Cindy Coppin, Eric Distel, Patrick Distel, Richard Egan, Jamie AlanGraham, Estelle Guiness, Isaac Guiness, Tremeune Guiness, Christie Anne Dawn Harman,Irene Hayes, Christopher Hubert, Kerry Adelle Hubert, Denise Kelly, Justin Kelly, RikieshaAnn McDonald, Pamela Anne Marie Mingo, Gavin Niel Mippy, Kendall Nannup, Cedina DeltaRanger, Dion Ranger, Stuart Kenneth Ranger, Tracen Ranger, Debbie Simons/Lockyer andJayden Wilson.

635. PSIFC [183].636. PSIFC at [67]. The plaintiffs say that those 125 persons were: Clinton Abdullah, Cindy Adams,

May Adams, Nathan Adams, Rodney Adams, Reikesha Aubrey, Janine Bailey, Brenda Baites,Jacinta Bennell, Laurissa Bobby, Miranda (Rhonda) Bobby, Gee-Ella Bropho, Jesse Bropho,Shannen Bropho, Simone Bropho, Barbara Churnside, Imaan Coffin, Rachael Cooyou, MayKooyou-Mowarin, Don Coppin, Kimitha Coppin, Heather Dale, Julius Dale, Terry Dale,Richard Dann, Brian Dhu, Christopher Dhu, Teneille Dhu, Christine Douglas, ElizabethDouglas, Ryan Craige Douglas, Alwi Drummon, Jamilla Eaton, Keanne Eaton, Eugene Evans,Maxine Evans, Shane Fielding, Jamie Graham, Cameron Guiness, Cassandra Halden, DeannaHalden, Phyllis Harris, Robert Harris, Aaron Hicks, Ashwyn Hicks, Bevan Hicks, DennisHicks, Sherul Hicks, Taylah Hicks, Denise Hubert, Karen Hubert, Malcolm Hubert, ShaneHubert, Tiffany Hubert, Cecil Ingie, Maureen Lorraine James, Geraldin Jenkins, Helen Jenkins,Vanessa Jones, Elijah KniL ong, Amber McHugh, Rhys Melissen, Brayden Mills, AmishMoody, Kade Moody, Kayla Moody, Symaya Moody, Claudia Mourambine, Belinda Munda,Cyril Munda, Errol Munda, Justina Munda, Margaret Munda, Phillip Munda, Wesley Munda,Samantha Norman, Darren Park, Fiona Park, Kaelum Park, Shaun Park, Shona Park, TerrencePark, Roderick Parker, Rosita Parker, Shelley Parker, Treinaya Phillips, Alex Ranger, BradleyReed, Michelle Reed, Janice Roebourne, Alicia Sandy, Emerson Sandy, Madeline Sandy,Payden Sandy, Bobb-Jo Sedgwick, Natasha Smith, Shanna Stevens, Trenton Stevens, TaliaStratton, Galeena Taylor, Caroline Todd, Jamie Todd, Jay Todd, Joshua Todd, Lindsay Todd,Margaret Todd, Myline Todd, Natasha Todd, Rosie Todd, Serena Todd, Shavarn Todd, BradenWatson, Leanne Whitby, Paul Whitby, Phillip Whitby, Kevin Wilson, Curil Wonadon andMichael Wonadon.

637. PSIFC at [184].638. PSIFC at [186].639. PSIFC at [181].


[496] Although not expressly pleaded in their SIFC, as I understood theplaintiffs’ case, at least as it was summarised in closing,640 the plaintiffs alsoclaimed that in determining the membership applications on 29 June 2016, thedirectors of YAC applied membership policies which enabled them to refusemembership to WMYAC members and supporters.

[497] Further, the plaintiffs contend that YAC did not issue letters to at leastsome of the rejected applicants until 22 July 2016.641 They say that thatconstituted a failure to comply with the requirements of the second compliancenotice, in that notice of the directors’ decision to reject those applications was notgiven within a reasonable time of their decision, contrary to s 144–10(6) and (7)of the CATSI Act. The plaintiffs contend that that contravention of the CATSI Actalso constituted conduct caught by s 166-1(1)(d) and (e) of the CATSI Act.642

[498] The defendants do not dispute that the Registrar issued the secondcompliance notice, as the plaintiffs contend.643 The defendants also do notdispute that the plaintiffs’ solicitors, or WMYAC, submitted 126 membershipapplications at the end of May, as the plaintiffs contend.644

[499] The defendants’ case is that on 29 June 2016, the directors considered184 outstanding membership applications,645 comprising the 40 membershipapplications that were undecided as part of the membership process under theSettlement Deed; 44 membership applications resubmitted by Integra Legal inlate May 2016; 45 of the membership applications invalidly accepted on16 December 2015 (between which categories there was some overlap); and 86membership applications provided to YAC by WMYAC in late May 2016.646

[500] The defendants say that the directors accepted 25 applications647 andrefused 146 applications. The defendants say that the details of those 25 newmembers were included in YAC’s membership register on 13 July 2016.648

[501] The defendants also say that the directors did not consider and determinethe 44 membership applications submitted by the plaintiffs’ solicitors on 29 June2016, because YAC misplaced an envelope containing those applications and itwas not discovered until after that date. However, the defendants say that YAChad in fact already considered 33 of those applications because they wereduplicated in the 40 membership applications left undecided following themembership process under the Settlement Deed, which were considered anddetermined by the directors on 29 June 2016. A further application (from AlexRanger) had previously been accepted, but his name and details had not beenadded to the Register of Members.649

[502] The defendants do not dispute that the applications refused on 29 June2016 included applications from persons named in the plaintiffs’ list of 125unsuccessful applicants, other than for 11 applicants identified by the

640. Plaintiffs’ closing submissions at [131].641. PSIFC at [68].642. PSIFC at [210]–[211].643. DSIFC at [106].644. DSIFC at [107].645. DSIFC at [108].646. DSIFC at [109].647. The defendants say that the 25 applicants accepted were all of those set out in footnote dcxxxiv

above, except for Michael Charlton: DSIFC at [114].648. DSIFC at [114].649. DSIFC at [113].


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plaintiffs.650 The defendants’ case appeared to be that those 11 applications wereamong those in the envelope which was misplaced.651

[503] The defendants also say that of the outstanding membership applicationswhich were considered by the directors at their meeting on 29 June 2016, fourapplications were from persons who were already members of YAC; sevenapplications were duplicates; and two applicants were deceased.652

[504] The defendants contend that of the 146 applications which were refused:

(a) 47 were refused because the directors were not satisfied that theapplicant in each case was a descendant of a Yindjibarndi apicalancestor (including a number of members of the Todd family, whoseclaim to be Yindjibarndi people was advanced in the Yindjibarndi #1claim, and disputed by the Applicant in that claim653);

(b) 66 were refused because the directors were not satisfied that theapplicant in each case recognised him or herself as a Yindjibarndiperson and the directors did not recognise the applicant in each case asa Yindjibarndi person;

(c) six were refused because the directors were not satisfied that theapplicant in each case recognised him or herself as a Yindjibarndiperson;

(d) four were refused because the directors were not satisfied that theapplicant in each case had attained 18 years of age; and

(e) 23 were refused because the directors were not satisfied that theapplicant in each case followed and upheld Birdarra Law654 and wouldsupport and uphold YAC’s objectives and policies.655

[505] The defendants contend that on or about 22 July 2016, YAC wrote to allpersons whose membership applications had been determined to advise them ofthe outcome of their application, including (if applicable) the reasons for refusal,and wrote to ORIC to report on YAC’s compliance with the second compliancenotice in relation to outstanding membership applications.656 In relation to thepersons whose applications were refused because the directors were not satisfiedthat they followed Birdarra Law and would support and uphold YAC’s objectivesand policies, 16 of them were advised that this was the reason, and in addition,that in reaching that conclusion, the directors had taken into account eachapplicant’s involvement in the June 2015 ballot (to which I referred to at[186]).657

650. DSIFC at [115]. The defendants say that the applications refused on 29 June 2016 did notinclude applications from Cameron Guiness, Aaron Hicks, Ashwyn Hicks, Troy James Long,Shanna Stevens, Galeena Taylor, Serena Todd, Cyril Wonadon, Michael Wonadon, CliffordLarry and Alex Ranger.

651. DSIFC at [115].652. DSIFC at [110]–[111].653. DSIFC at [115].654. The meaning of “Birdarra Law” is discussed from [622].655. DSIFC at [112], [115].656. DSIFC at [116].657. DSIFC at [117].


[506] The defendants contend that on about 28 July 2016, Mr Armstrong, adelegate of the Registrar, wrote to YAC to advise that he was satisfied that YAChad satisfied the requirements of the second compliance notice, except for therequirement that YAC hold its next AGM by no later than 30 November 2016.658

[507] The defendants deny that the directors of YAC acted in a biased fashionin accepting 25 applications and refusing 125 WMYAC applications, and denythat YAC engaged in oppressive conduct within the meaning of s 166-1(1) of theCATSI Act, on the grounds of bias or otherwise, in summary because:659

(a) the current directors were appointed by majority vote at a generalmeeting of YAC called and chaired by the Registrar on 19 April 2016;

(b) the comments and findings by Le Miere J in Sandy (No 2)660 were notmade in relation to the currently composed board of directors;

(c) in determining the 184 membership applications, the directors admitted25 members, refused 146 members, and the other applications werefrom existing members, were duplicates, or were from applicants whohad passed away; and

(d) in refusing the 146 applications the directors took into account only themembership criteria and discretionary matters referable to YAC’sobjects.

[508] The defendants contend that by the end of June 2016, they had compliedwith all of the requirements of the second compliance notice which had arisen atthat date, and that Mr Armstrong’s acknowledgment that that was the case meantthat there was no oppression within the meaning of s 166-1(1) of the CATSI Actor, alternatively, to the extent there was oppression, it is was not ongoing.661

[509] Finally, the defendants contend that, having regard to the high number ofmembership applications determined by the YAC directors on 29 June 2016,YAC notified unsuccessful applicants of the directors’ decision within areasonable time.662

[510] In response to the plaintiffs’ allegations concerning membershipgenerally, the defendants say that since the plaintiffs commenced this proceeding,YAC has ‘determined approximately 663 membership applications’comprising:663

(a) 52 applications, received from WMYAC on about 17 June 2011, whichwere refused;

(b) 122 applications, received from WMYAC between 31 October 2013 and4 August 2014, which were considered on about 9 May 2012, whenYAC accepted 11 applications, deferred 75 applications, and did notneed to deal with 20 applications from people who were alreadymembers or with a further 17 applications from persons whosemembership was purportedly cancelled on 15 December 2010 but whoremained members of YAC;

(c) 198 applications from WMYAC, received between 9 May 2012 and31 October 2013, and a further 122 applications from WMYAC receivedbetween 31 October 2013 and 4 August 2014, all of which were dealt

658. DSIFC at [118].659. DSIFC at [154]–[156].660. Sandy (No 2).661. DSIFC at [175]–[176].662. DSIFC at [177].663. DSIFC at [136]–[137].


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with in accordance with the membership process in the SettlementDeed, and as a result of which YAC accepted 233 applications, refused47 applications, and deferred making a decision on 40 applicationspending a decision by the Federal Court in the Yindjibarndi #1 claim;

(d) 50 applications, of which 46 were initially, and invalidly, accepted on16 December 2015, and of which 45 were re-considered by the directorson 29 June 2016; and

(e) 119 applications, comprising 33 applications received from theplaintiffs’ solicitors in late May 2016 (which were part of the 44included in the envelope which was misplaced) and 86 which YACreceived from WMYAC in late May 2016, all of which were determinedat the directors’ meeting on 29 June 2016, and of which 25 wereaccepted and 146 were refused.

[511] However, the defendants acknowledge that the 663 applications receivedand processed by YAC in fact involved a considerable overlap of applications,given the number of applications which were submitted more than once, or werenecessary for the directors to reconsider.664

Factual findings

[512] Following the publication of his reasons in Sandy (No 2), Le Miere Jdirected that a copy of those reasons be provided to the Registrar to enable himto consider whether to take action to deal with the position which YAC founditself in, namely that it had no validly appointed directors. Rather than appointinga special administrator, the Registrar determined instead to exercise his powersunder the CATSI Act to amend YAC’s Rule Book to replace the requirement fora 75% majority to pass resolutions at a general meeting with a requirement fora simple majority only, and then to call a general meeting of YAC’s members toappoint directors of YAC.665 Having regard to other concerns which had come tothe Registrar’s attention — namely delays in the calling of AGMs andconsideration of applications for membership — the Registrar proposed thatfollowing the election of new directors for YAC, he would issue a compliancenotice which required YAC to hold its AGM prior to the end of November 2016,and to consider and finalise all outstanding applications for membership of YACby 30 June 2016.666

[513] The Rule Book was amended, and directors of YAC were subsequentlyelected at a general meeting of YAC.

[514] The directors met on 21 April 2016.667 Membership of YAC wasdiscussed. In view of the earlier position taken by various members of the Adamsfamily to membership of YAC, the directors adopted the same approach to theirmemberships which had been adopted by the then directors on 16 December2015. In so far as the membership applications awaiting determination wereconcerned, the directors decided not to make any decision about those at thatstage. Having regard to the minutes of the directors’ meeting, I find that thatdecision was made because the directors had been advised that the Registrarintended to issue a compliance notice which required them to determine policiesand procedures in relation to membership applications, and to determine all

664. DSIFC at [137].665. Exhibit 1.294.666. Exhibit 1.294.667. Exhibit 1.562.


outstanding membership applications by 30 June 2016. The directors agreed thatthey would not determine any membership applications prior to receiving thatcompliance notice, and prior to developing new policies and proceduresconcerning membership.668

[515] On 5 May 2016, the Registrar advised YAC’s directors that he proposedto issue a compliance notice under the CATSI Act and provided a draft copy ofthat notice for comment by the directors.669 On 13 May 2016, Mr Davies of YACresponded to the Registrar on YAC’s behalf. In that letter, Mr Davies set out thehistory of the membership dispute since 2011 and the way in which membershipapplications had been dealt with since that time. Mr Davies advised that thedirectors understood that there were, at that stage, 95 outstanding membershipapplications, comprising the 40 applications deferred for further consideration on11 August 2014, the 51 applications considered at the invalid directors’ meetingon 16 December 2015, and four other applications received since then.670

[516] On 16 May 2016, the Registrar issued the second compliance notice toYAC pursuant to s 439-20(1) of the CATSI Act. The second compliance noticerequired that the directors and YAC take certain action including thefollowing:671

3 By the close of business on Wednesday 1 June 2016, the corporation and thedirectors of the corporation must prepare draft policies and procedures for thecorporation to hold its AGMs before 30 November in each year, unless anexemption or extension is approved by the Registrar pursuant to the CATSIAct ….

4 The corporation must hold its 2016 AGM by no later than 30 November 2016,unless an exemption or extension is approved by the Registrar pursuant to theCATSI Act ….

…

5 By the close of business on Wednesday 1 June 2016, the corporation and thedirectors of the corporation must prepare draft policies and procedures thatprovides for all applications for membership to be considered and decidedupon by the directors in a directors’ meeting within a reasonable time aftereach application for membership is received.

The corporation and the directors of the corporation must forward a copyof the draft policies and procedures to the Registrar for review and approvalby the close of business on Friday, 17 June 2016.

6 Before the close of business on Thursday, 30 June 2016, the corporation andthe directors of the corporation must convene a directors’ meeting or meetingsto consider and decide upon all known application for membership submittedto the corporation before the close of business on Wednesday, 1 June 2016,that have not been previously accepted or rejected.

[517] For the avoidance of any doubt,672 I do not rely on the fact that theRegistrar issued the second compliance notice as evidence of any oppressiveconduct by YAC. However, the fact that the second compliance notice was issuedis relevant to understanding and assessing the conduct of YAC in response to thenotice. I have taken it into account for that purpose.

668. Exhibit 1.562.669. Exhibit 1.303.670. Exhibit 1.305.671. Exhibit 1.306.672. Compare defendants’ closing submissions at [241]–[242].


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[518] The YAC directors met again on 20 May 2016. They agreed to abide bythe second compliance notice and to develop the necessary policies andprocedures and submit them to ORIC in accordance with the notice.673

The directors’ meeting of 9 June 2016 — Adoption of policies concerning

membership

[519] The directors of YAC met on 9 June 2016.674 On that occasion, theydiscussed policies and procedures concerning YAC’s AGMs, and membership ofYAC. In so far as membership of YAC was concerned, the directors adopted adraft membership application policy (membership policy), a draft policyconcerning support for the United Nations Declaration on the Rights ofIndigenous Peoples (UNDRIP) (UNDRIP policy),675 a draft code of conduct towhich all new YAC members would be required to commit, and a newmembership application form. I will call these documents, collectively, the newpolicies. The directors proposed to refer the new policies to ORIC for approval,in compliance with the second compliance notice.Membership policy

[520] The draft membership policy began by noting that:676

The roles and responsibilities of YAC as trustee and agent include special duties

owed to YAC’s members and to all present and future members of the Yindjibarndi

people including the duty to at all times act in their best interests in relation to any

proposed developments in Yindjibarndi country and in relation to any benefits derived

from developments agreements affecting Yindjibarndi country. …

Recognising such obligations, as well as certain issues that have risen in the

community of the Yindjibarndi people and the YAC membership, since 2011, regarding

how YAC ought properly and fairly consider and decide upon applications for

memberships; and recognising the [second compliance notice], this document sets out

the policy and procedures for considering any pending and/or future applications for

membership of YAC, and deciding upon those applications, in a timely and fair manner.

[521] The draft membership policy expressly referred to s 144–10 of theCATSI Act, and noted that an application for membership could be refused, evenif an applicant met the eligibility criteria in YAC’s Rule Book, but that in sucha case, written notice of the refusal was to be given to the person who made theapplication, together with reasons for the refusal of the application.677

[522] The draft membership policy also contemplated that the determination ofeligibility required the assistance of Yindjibarndi Elders:678

The determination of eligibility based on the criteria and r 3 of the constitution, whichrelate to the body of traditional and to culture, requires involvement and participationby members of the Yindjibarndi people who are senior traditional law men to assist theboard in determining whether any particular applicant for membership does hold incommon the body of traditional law and culture of the Yindjibarndi people.

673. Exhibit 1.563.674. Exhibit 1.564.675. Exhibit 38.676. Exhibit 1.311.677. Exhibit 1.311.678. Exhibit 1.311.


[523] The draft membership policy then set out a process for consideration ofmembership applications. That policy contained, amongst other things, thefollowing elements:679

1 An application for membership must be submitted to YAC in the form ofSchedule 1 to the YAC Constitution … The Applicant may attach supportinginformation to the application.

2 Upon receipt, an application … must be date-stamped …3 In addition to the criteria set out at rule 3 of the corporation’s constitution, the

YAC directors will consider each application for membership on the basis ofinformation available to YAC with a view as to whether or not theApplicant:680

3.1 has agreed to abide by all conditions set out on the corporation’smembership application form;

3.2 is descended from one of the persons set out in Annexure A;3.3 is ascertained by the current YAC directors who agree by consensus

that they identify the Applicant as an Yindjibarndi person;3.4 will act in the best interests of the corporation.

4 If the YAC directors are unable to form an opinion based upon 3 above, orwish to authenticate the information contained in the application form or anysupporting information provided with the application, then the YAC directorswill either:

4.1 request the applicant in writing to provide supporting informationwithin a period of one calendar month from the date of the request; or

4.2 refer the application for membership to the Senior Birdarra LawCarriers Committee for their recommendation.

5 The YAC Directors will consider any applications for membership …within two months of the date stamped on the application form.

…7 The directors may by resolution refuse an application for membership

if they are not satisfied that the Applicant meets the conditions set outat 3 above.

8 The directors may by resolution accept an application for membershipif they are satisfied that the Applicant meets all of the criteria in 3above.

9 As outlined at 4.2 above, if the directors are uncertain about whetheran applicant hold in common the body of traditional law and culture ofthe Yindjibarndi people, or consider that the Senior Birdarra LawCarriers Committee should be consulted with reference to amembership application, in the exercise of their discretion, then thedirectors shall by resolution refer the application to a committee ofSenior Birdarra Law Carriers Committee, along with a written requestfrom the chairperson that the Senior Birdarra Law Carriers Committeeconsider the application at their next meeting. In such circumstances,the corporation must advise the Applicant accordingly, in writing.

10 The Senior Birdarra Law Carriers Committee shall be comprised ofsuch members of the Yindjibarndi people as are members of YAC, whothe directors regard as being the most qualified and respected holdersand custodians of the traditional law and culture of the Yindjibarndipeople.

…12 The chairperson or their delegate must arrange to meet the Senior

Birdarra Law Carriers Committee to discuss any membership

679. Exhibit 1.311.680. Exhibit 1.311.


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application referred to the Senior Birdarra Law Carriers Committee bythe board and shall ask for Senior Birdarra Law Carriers Committee toask the chairperson or their delegate, within one month, whether intheir opinion:

12.1 any such applicant is a Yindjibarndi person who holds in common thebody of traditional law and culture of the Yindjibarndi people;

12.2 any application should be accepted or refused on any other ground;12.3 the Senior Birdarra Law Carriers Committee has been unable to reach

agreement about an application.13 By no later than one week after the Senior Birdarra Law Carriers Committee

meeting, the chairperson, or their delegate, … shall make a written record ofthe recommendation given by the Senior Birdarra Law Carriers Committee inrespect of each membership application …. The written record of the SeniorBirdarra Law Carriers Committee must be tabled … and the directors shall byresolution accept or refuse each application.

14 Following the final determination of the board, in respect of any application,the corporation shall advise the applicant of the board’s decision; and, if theapplication was refused, the reasons for refusing the application.

Draft UNDRIP policy

[524] The directors also adopted the draft UNDRIP policy.681 The draftUNDRIP policy indicated that ‘in carrying out its duties as trustee and agent forthe Yindjibarndi people, [YAC] shall at all times, and to the greatest extentpossible, observe, uphold and advance the minimum standards of the [UNDRIP]including’ the various rights summarised in the draft UNDRIP policy. Thoserights included the rights of self-determination of the Yindjibarndi people; theright of the Yindjibarndi people to freely pursue their economic, social andcultural development; the right of the Yindjibarndi people to just, fair andequitable compensation for any part of the Yindjibarndi country which has beentaken, occupied, used or damaged without their free, prior and informed consent;and the right of the Yindjibarndi people to maintain and strengthen theirdistinctive spiritual relationship with Yindjibarndi country and to practice,develop and teach their spiritual and religious traditions, customs andceremonies.682

[525] The draft UNDRIP policy also provided:683

A threshold issue for YAC, with respect to all future development proposals affectingYindjibarndi Country, shall be the willingness of the proponent to both acknowledge theabove minimum standards, and to commit to negotiating in good faith (in the senserequired by Article 46 of the [UNDRIP]_ to achieve an agreement which honours andrespects those standards.

681. Exhibit 1.564.682. Exhibit 1.310.683. Exhibit 1.313.


Draft code of conduct

[526] The directors also agreed to adopt the draft code of conduct to which allmembership applicants would be required to commit. The draft code of conductrequired the applicant to make a pledge in the following terms:684

As a member of the Yindjibarndi Aboriginal Corporation (YAC) I endorse, agree to,and will act according to the following code of conduct. Accordingly, I pledge myallegiance to the following statement:

1 I will unconditionally uphold and defend the Yindjibarndi people’s native titlerights and interests in the areas recognised and mapped [in the Daniel andMoses decision] and the Yindjibarndi #1 claim ….

2 At all times, I will act in the best interests of the Yindjibarndi people inrelation to any proposed developments in Yindjibarndi country and in relationto any benefits derived from development agreements affecting Yindjibarndicountry.

3 I will always work to positively enhance and add value to the social, cultural,religious, environmental, economic and political condition and circumstancesof the Yindjibarndi people.

4 I will always put the Yindjibarndi people’s interests ahead of my personalinterests.

5 I will always respect the decisions made by the YAC board of directors.6 I will always respect the decisions made by my elders in the Senior Birdarra

Law Carriers Committee.7 I will always abide by and respect Yindjibarndi-Birdarra law and Galharra

relationship.8 I will not be a member of any other prescribed body corporate (PBC) or

native title groups.9 I agree to, and will abide by, the YAC policy in relation to the [UNDRIP].

New membership application form

[527] The directors proposed that a new membership application form beincluded in YAC’s Rule Book, and that that form be completed by applicants formembership.685 That form required that applicants answer the followingquestions (in addition to providing their name, address and date of birth):

Do you agree to abide by the YAC code of conduct? Yes or NoAre you a member of another Prescribed Body Corporate (PBC)? Yes or NoWhich Yindjibarndi Apical Ancestor/s are you connected to and how? Yes or NoPlease fill in the Yindjibarndi Connection and Family Form Yes or NoWill you defend the rights and interests of the Yindjibarndi people? Yes or NoDo you support YAC’s policy in relation to the [UNDRIP] Yes or No

ORIC’s review of the draft policies

[528] On 17 June 2016, Mr Davies, on behalf of YAC, forwarded the newpolicies to ORIC, in compliance with the second compliance notice.686

Mr Davies advised that YAC’s directors proposed that the membership formwhich was included in YAC’s Rule Book be replaced with the amendedapplication form, and if that proposal was approved, then the directors proposedan alternative process to that specified in the second compliance notice. Thatalternative process was that instead of dealing with all membership applicationsby 30 June 2016 (as required by the second compliance notice), YAC would writeto all applicants requesting that they submit a new membership application in the

684. Exhibit 1.315.685. Exhibit 1.310.686. Exhibit 1.310.


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amended form; that the board would then assess all applications by reference tothe draft policies; and that the board would deal with the membershipapplications within sufficient time to enable any applicants admitted tomembership to attend the 2016 AGM (which the second compliance noticerequired should be held before 30 November 2016).687

[529] On 22 June 2016, Mr Armstrong, a delegate of the Registrar, wrote toYAC to advise that he had reviewed the draft membership policy, that theproposed period of two months within which the directors would consider anddeal with applications for membership was a reasonable period, and that theamended application form ‘appear[ed] to be a suitable form to replace the currentapplication for membership form in the corporation’s rule book’.688 However,Mr Armstrong advised that it was not possible for the Registrar to amend YAC’sRule Rook to include the amended membership application form, and that thiswould need to be approved by the members in accordance with the CATSI Actand rule 22 of YAC’s Rule Book.689 Finally, Mr Armstrong was at pains toremind YAC that it was necessary for YAC to convene a directors’ meeting priorto 30 June 2016 to consider and decided upon all known applications formembership which had been submitted to YAC before 1 June 2016 but which hadnot been previously accepted or rejected.690

[530] What was apparent from that letter was that the proposal contained inMr Davies’ letter of 17 June 2016 — namely that membership applicants berequired to submit an amended application form, which would then be consideredin accordance with the proposed membership policy, but not before 30 June 2016— had not been approved by the Registrar. It was apparent that YAC’s directorsunderstood that they were obliged to determine all extant membershipapplications within the time required in the second compliance notice, namely by30 June 2016, because they held a directors’ meeting on 29 June 2016 to considerthe membership applications then awaiting determination.

Preparation of the new policies adopted by the directors on 9 June 2016

[531] The plaintiffs’ case was that the new policies which were adopted by thedirectors in draft form on 9 June 2016 were applied by the directors indetermining membership applications on 29 June 2016, and that the very purposebehind the adoption of the new policies was to ensure that WMYAC memberscould be refused membership of YAC. Consequently, YAC’s directors,Mr Woodley and Mr Irving were cross-examined as to how the new policiescame into existence, and the purpose behind their adoption.

[532] The evidence established that the directors of YAC, and YAC’s CEO,Mr Woodley, had input into the general thrust of the new policies, with advicefrom YAC’s lawyer, Mr Irving. Mr Mack’s evidence was that the membershippolicy was decided on by ‘all directors’.691 Ms Cheedy also said that it was the‘the whole of the directors’692 who decided on the policies. Her evidence was that‘all the directors … discussed and decided the policy for considering anddeciding pending membership applications … with advice from George Irving,

687. Exhibit 1.310.688. Exhibit 1.317.689. Exhibit 1.317.690. Exhibit 1.317.691. Ts 983.692. Ts 1094–5.


the YAC lawyer’693 and that it was the directors ‘along with our legal team, andour legal in-house counsel, we sort of come up with the draft.’694 She alsoexplained that:695

We go to the board and we say we need to do a policy for this and do a policy forthis. And then we all sit down and, along with advice from our legal counsel, andMichael [Woodley], we discuss on how things should be written. … Like I say,everybody brings something to the table and say, well, maybe we should do this.

[533] The minutes of the directors’ meetings also provide some support for thisconclusion. The minutes of the meeting of the directors held on 20 May 2016, forexample, indicate that ‘the directors discussed the idea of setting up aYindjibarndi senior law man committee to assist the board with assessing YACmembership applications’.696 That proposal was included within the draftmembership policy which was approved by the board on 9 June 2016.

[534] The evidence suggested that Mr Irving prepared drafts of the newpolicies which were discussed by the directors, including as to whether anyamendments were required. Mr Mack said that Mr Irving attended the directors’meeting with those draft policies.697 Mr Irving gave evidence that when themembership policy was discussed at the directors’ meeting on 9 June 2016, ‘acouple of amendments’ were discussed.698 One such amendment was to includea reference to Birdarra Law, and to the UNDRIP, in the list of the sources ofYAC’s duties to its members. Mr Irving’s evidence was that that amendment wasmade after discussion with the directors.699 Mr Irving made these amendments tothe draft policies, but only after Mr Davies had forwarded the drafts to ORIC.700

[535] It was clear that it was Mr Irving who was responsible for the detail inthe draft policies which were submitted to the board for its approval. Ms Cheedyacknowledged that at its meeting on 9 June 2016, the board reviewed draftpolicies which were put before it for its consideration.701

[536] That it was Mr Irving who was responsible for the detail of the newpolicies was particularly clear in relation to the formulation of YAC’s draftUNDRIP policy. There was some evidence to suggest that the adoption by YACof the principles in the UNDRIP had been discussed on occasion in the past.Ms Cheedy’s evidence was that the board had been discussing the adoption of theUNDRIP as a policy for several years.702 Mr Woodley’s evidence was that YAChad adopted the UNDRIP as a policy in 2008.703 Mr Irving also said that theUNDRIP policy had been adopted by YAC for some time prior to June 2016.704

He claimed that he had drafted a policy document on the UNDRIP as early asJune 2012, and referred to it in correspondence with the National Native Title

693. Exhibit 39 at [14].694. Ts 1094.695. Ts 1108.696. Exhibit 1.563.697. Ts 953.698. Ts 1451.699. Ts 1452.700. Ts 1452.701. Ts 1095.702. Ts 1131.703. Exhibit 41 at [71]; ts 1190.704. Ts 1419.


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Tribunal.705 He also recalled that copies of that policy had been used at YAC’soffices in Roebourne in 2012.706 However, Mr Irving accepted that he could notidentify any resolution by YAC in 2012 which formally adopted such a policy.707

Mr Irving also recalled that the UNDRIP had been referred to as early as 2009or 2010, in the context of YAC’s negotiations with Rio Tinto in relation to theParticipation Agreement.708 However, the reference to the UNDRIP in the lattercontext concerned the development of institutions for the governance of YACwhich were framed by the principles in the UNDRIP, rather than the adoption ofa policy of support for the principles in the UNDRIP as a criterion for eligibilityfor membership of YAC. There was no evidence to suggest that a pledge ofsupport for the UNDRIP had been suggested as a membership criterion for YACat any stage prior to June 2016.[537] It was clear that Mr Irving was the primary proponent of the inclusion ofthe draft UNDRIP policy as a criterion for membership of YAC. AlthoughMs Cheedy initially claimed that the draft UNDRIP policy had been agreed tofollowing a discussion of the directors,709 she eventually conceded that thedirectors did not assist in drafting the UNDRIP policy, and that they simplyreviewed it and adopted it (as the minutes of the directors’ meeting on 9 June2016 suggested).710 Mr Mack’s evidence was that he could not recall having seenthe UNDRIP before the meeting on 9 June 2016, but that Mr Irving told thedirectors about the UNDRIP, and that he had always mentioned and reminded thedirectors about it.711 Mr Mack acknowledged that the UNDRIP was not beforethe directors on 9 June 2016, and said that the board were relying on what theywere told by Mr Irving about the UNDRIP when considering the content of thedraft UNDRIP policy.712

[538] Mr Irving’s evidence was that he drafted the draft UNDRIP policyfollowing a discussion by telephone with Mr Woodley, in which Mr Mack and acouple of other directors, including possibly Middleton Cheedy and StanleyWarrie, also participated. He recalled that there was a discussion about the policyto be used for the purpose of determining outstanding membershipapplications.713 Mr Irving’s evidence was that he sent the draft UNDRIP policyby email to YAC’s CEO, Mr Woodley, and Mr Philip Davies, on 31 May 2016.714

It appears that that draft was then considered by the directors on 9 June 2016.However, the version of the draft UNDRIP policy which Mr Davies sent to ORICon 17 June 2016 was an amended version of that earlier draft. Mr Irving’sevidence was that he had made amendments to the draft after it had beenconsidered by the directors, to reflect their comments.715

What was the objective behind the adoption of the new policies?

[539] It was put to the defendants’ witnesses in cross examination that the newpolicies were adopted in order to provide a basis for refusing membership ofYAC to members and supporters of WMYAC. Mr Mack denied that the terms of

705. Ts 1419–20.706. Ts 1448.707. Ts 1420.708. Ts 1421–3, 1439; see also Exs 1.631, 8747.709. Ts 1100–1.710. Ts 1103.711. Ts 954.712. Ts 958.713. Ts 1439.714. Ts 1462, 1483.715. Ts 1447, 1448.


the draft code of conduct were designed to stop WMYAC members joiningYAC,716 or to cause applicants for membership to have to resign as members ofWMYAC if they wanted to become members of YAC.717 He also denied that thepledge, in the code of conduct, that an applicant would not be a member of anyother PBC or native title group was directed at the exclusion of WMYACmembers, because WMYAC was not a PBC or native title corporation.718

Mr Mack claimed that that pledge referred to ‘these other native title groups[such as] Ngarluma …, Banyjima, Innawonga and Guruma’.719 Mr Irving alsodenied that he had prepared the new policies to enable the board to refusemembership of YAC to any applicant who support WMYAC.720

[540] I am unable to accept that those denials reflect the true position. In myview, the evidence supports the conclusion, and I find, that the new policies wereadopted in order to provide a basis for YAC’s directors to refuse an applicationfor membership made by any person who was a member or supporter ofWMYAC, or any person who was thought to take a different view from that ofthe directors of YAC in relation to entry into the FMG Agreement. I have reachedthat conclusion for three reasons.

[541] First, the new policies represented a significant departure from theapproach which previously appears to have been taken to membership eligibility.By way of example, support for the UNDRIP had never been a membershipcriterion. In addition, in so far as the proposed new membership form requiredapplicants to indicate whether they were members of another native title claimgroup, that consideration had never been expressly taken into account before.Ms Cheedy acknowledged that in September 2014, when she became a boardmember of YAC, YAC’s policy was that anyone who had a Yindjibarndi ancestorcould apply to be a member of YAC and would be accepted.721 She recalled thatin 2014, 21 people who were listed as members of the Ngarluma AboriginalCorporation were admitted to membership of YAC on the basis that they had aYindjibarndi ancestor.722 It is difficult to see what relevance a question aboutmembership of another ATSI corporation could have had to a person’sapplication for membership of YAC, other than as a disentitling criterion.

[542] Furthermore, the directors who gave evidence did not appear tounderstand what some of the new policies meant, nor were they able to explainwhat the inclusion of the new policies in YAC’s membership process added tothat process. Mr Mack was unable to explain what the UNDRIP policy meant.The evidence of Mr Vincent Adams was that he had no idea what the UNDRIPwas, and he did not know how the Yindjibarndi community had been canvassedto adopt it as a policy.723 Similarly, the evidence of Mr John Sandy was that hewas not aware that the UNDRIP policy had been put out for comment within theYindjibarndi community at any stage, or discussed at any meeting of YAC.724

716. Ts 968.717. Ts 968.718. Ts 968, 969.719. Ts 969.720. Ts 1454.721. Ts 1134.722. Ts 1133–4.723. Exhibit 3 at [44].724. Exhibit 31 at [13]–[14].


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[543] Mr Mack agreed that it was not fair on an applicant for membership tobe asked whether they supported the UNDRIP when he, as a director of YAC,was unable to tell the Court what he understood that policy to mean.725 Mr Mackalso agreed that it was not fair to ask an applicant for membership to abide by thecode of conduct, and by that, to pledge their allegiance to the statement that theywould agree to and abide by the UNDRIP policy.726

[544] Ms Cheedy’s evidence was that she wanted to make sure that YAC’spolicy on membership was upheld because ‘upholding the policy includesmaking sure that an applicant for membership protects and advances Yindjibarnditraditional law, culture and customs; and supports Yindjibarndi people havingaccess to minimum standards of living for survival, dignity and wellbeing’.727

How that would be the case was not clear on the face of the new policiesthemselves.

[545] Ms Cheedy was asked why it was that the board had decided that supportfor the UNDRIP should become part of the membership criteria for YAC. At thatpoint in the cross-examination, Ms Cheedy became rather emotional,728 and theCourt adjourned briefly to enable her to regain her composure.729 Ms Cheedylater explained why she had become upset in the discussion of the draft UNDRIPpolicy. Her explanation was that ‘I get a bit passionate’730 and that:731

All people that I know that have passed on and they have been forever — have beenforever — since my parents — you know, growing up in the stations, we never hadrights from the beginning and at least — at least this thing can give us some justice, sortof thing, that we are able — we can be freely to practise what we — like going to achurch, we can do what we want to do — not want to do, but be able to be free and dothings without having a chained hand, sort of thing. That is — that is — that is mybelief. I’ve always thought about my old people. That makes me upset and I’m sorry forbeing upset.

[546] She later confirmed that the achievement of the aims of the UNDRIPwere important to her from the perspective of Aboriginal people being able tolive and practise their culture.732 Ms Cheedy also said that Mr Irving hadexplained to YAC’s directors that the UNDRIP was important to assist theYindjibarndi #1 claim.733

[547] However, in his evidence, Mr Irving claimed that while the UNDRIP wasrelevant to the Yindjibarndi #1 claim, it was not integral to that claim. (However,Mr Irving ultimately accepted that the UNDRIP was not relied upon at all in theYindjibarndi #1 claim proceedings in the Federal Court because it was not of anyrelevance to that determination.734) As I understood Mr Irving’s evidence, it wasthat the significance of the UNDRIP lay in its relevance to an argument, advancedin proceedings in the National Native Title Tribunal in 2011, in relation towhether future acts (that is, mining) should be permitted in the area of theYindjibarndi #1 claim. The UNDRIP was relied upon to support the claim by the

725. Ts 964.726. Ts 964.727. Exhibit 39 at [17].728. Ts 1104.729. Ts 1104.730. Ts 1105.731. Ts 1105.732. Ts 1105.733. Ts 1105.734. Ts 1443.


Yindjibarndi people that mining leases should not be granted to FMG, becausemining activities would interfere with the right of the Yindjibarndi people tocarry out religious ceremonies which were not connected to particular religioussites,735 and thus with the religious freedom of the Yindjibarndi people.736

However, Mr Irving acknowledged that that argument had been pursued in thelitigation before the Tribunal, and on appeal to the Federal Court, had beenresolved in that litigation.737

[548] Mr Woodley’s evidence was that the UNDRIP was adopted as a policy in2008 because the directors of YAC thought it would be ‘best practice, in termsof dealing with mining companies and also governments, that we have the[UNDRIP] … enshrined in our policies moving forward’.738 That hardlyexplained, however, why it was necessary to include support for the UNDRIP asa criterion for membership of YAC.

[549] Secondly, there was no suggestion that YAC intended to apply the criteriain the new policies to any existing members of YAC. For example, Mr Mack wasasked about the pledge that membership applicants would be asked to make, tothe effect that they would not be a member of any other PBC or native title group.Mr Mack agreed that that policy did not apply to existing members of YAC.739

Similarly, Ms Cheedy confirmed that there was no intention to cancel themembership of any existing member of YAC who no longer complied with thecriteria for membership under the new policies.740 Yet there was evidence thatexisting members of YAC had been accepted into YAC ‘notwithstanding theyidentify with a language group other than Yindjibarndi’.741 In his affidavit,Mr Sandy referred to a number of persons who had been accepted for YACmembership who he knew to identify themselves as Ngarluma people.742 Thatthat was the case tends to support the conclusion that the new policies wereadopted solely to screen out persons whom the directors did not wish to admit tomembership, rather than to reflect criteria genuinely thought to bear upon aperson’s eligibility to be a member of YAC.

[550] Thirdly, and most significantly, the directors admitted that the newpolicies were adopted in order to provide a basis to refuse YAC membership toWMYAC members and supporters. By way of example, Mr Mack was askedabout his understanding of the purpose behind asking applicants to promise thatthey would respect the decisions of the YAC board. Mr Mack denied that joiningWMYAC, or being a member of WMYAC, would signal that that person did notrespect the decisions of YAC’s board.743 Nor did he regard disagreeing with thedecision of YAC’s board as indicating a lack of respect for the board’sdecisions.744 However, Mr Mack was of the view that ‘going against our decisionof … what we’re trying to do’ amounted to not respecting the decisions made by

735. Ts 1441.736. Ts 1443.737. Ts 1442–3.738. Ts 1190–1.739. Ts 970.740. Ts 1123.741. Exhibit 31 at [20]–[21].742. Exhibit 31 at [21]–[22].743. Ts 972.744. Ts 972.


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YAC’s board.745 He said that the pledge by an applicant that he or she wouldalways respect the decisions made by the YAC board of directors was directed toprotecting YAC from attacks by FMG and WMYAC.746

[551] By way of example of what he meant, Mr Mack referred to the conductof the plaintiffs in bringing actions against the directors in the present action.747

It was Mr Mack’s view that a WMYAC member who acted with the backing orsupport of FMG would be acting in a manner contrary to that pledge ofallegiance.748

[552] It was apparent that Ms Cheedy saw the pledge to support YAC’s policiesas directed to ensuring that only those who agreed with the views of the directorswould be eligible for membership. Her evidence was:749

I understand it to be — do they want to be able to — I don’t know — move forward— not move forward … [A]re they prepared to — is this person prepared to — to beon the same page as us sort of thing, or do they want to move forward …

[553] The next exchange in Ms Cheedy’s cross-examination was particularlyrevealing:750

So anyone who supported Wirlu-murra would not comply, as you call it, with thesepolicies that you’re adopting? — Well, you are, these policies that we — we — thatwe’ve come up with was in relation to a — and ILUA that was signed back in 2011 byWirlu-murra and that ILUA had given away the whole of Yindjibarndi country. Theyhad taken away the voice of the Yindjibarndi person, they have taken away theYindjibarndi rights, they’ve taken away the Yindjibarndi culture — that ILUA. So wehave been trying to move forward and be able to build a relationship with miningcompanies and to be able to get members to support YAC and to be able to moveforward. At the back of our minds, we’ve got this ILUA that’s lingering over our head.If — it — it has taken away — it sort of killed me. If — if that ILUA goes ahead, I couldbe nobody. I’m Yindjibarndi person first and if that ILUA had — were not — what —if that ILUA goes ahead, I will be just a drop in the ocean, and nobody.

So you didn’t want anyone who supported that to become a member? — I could saythat. Yes.

These policies … and the code of conduct where they pledge — they were requiredto pledge to always respect the decisions made by the YAC board of directors … theywere designed to ensure somebody who supported Wirlu-murra could not become amember? — Yes (indistinct) yes.

[554] Mr Irving’s evidence as to his understanding of why the draft UNDRIPpolicy was adopted as a criterion for membership of YAC was also revealing.Mr Irving’s evidence was that the directors with whom he spoke by telephone751

were very concerned to ensure that there was some standard put into the policy onmembership applications that would require people to look after Yindjibarndi countryand the continuation of Yindjibarndi law and custom. … We just had a discussion abouthow they [could] ensure that … people who joined the corporation would uphold thestandards that the corporation had been following.

745. Ts 972.746. Ts 968.747. Ts 973.748. Ts 974.749. Ts 1112.750. Ts 1113.751. Ts 1444–5.


[555] In my view, it is apparent that the directors of YAC were of the view thatentry into the FMG Agreement was not consistent with those ‘standards’. Viewedin that light, the requirement that an applicant for membership pledge theirsupport for the UNDRIP is consistent with ensuring that applicants did not takea view different from that of the directors. Further, Mr Irving’s view was thataspects of the draft UNDRIP policy may be relevant to the future acts being doneon Yindjibarndi country and possibly to a future compensation claim.752 Fromthat perspective, an applicant’s support for the FMG Agreement may be seen asinconsistent with support for the UNDRIP.

The directors’ meeting of 29 June 2016 to consider membership applications

[556] In this section of the reasons, I set out my findings in relation to thefollowing:

(i) The decisions in relation to membership made at the meeting;(ii) How the directors approached the task of determining the membership

applications;(iii) The reasons given to the applicants whose membership applications

were rejected; and(iv) The Registrar’s conclusion in relation to YAC’s compliance with the

second compliance notice.(i) The decisions in relation to membership made at the meeting

[557] The evidence established that the YAC directors met on 29 June 2016.They considered 184 YAC membership applications which had been receivedprior to 1 June 2016. Of those 184 applications, the directors noted that sevenapplications were duplicates, two applicants were deceased and four applicantswere already YAC members. The YAC directors considered the remaining 171applications, and accepted 25 applications and rejected 146 applications formembership.753 A table of those persons who had applied for membership and theoutcome of each application was attached to the minutes of the meeting.754 Thereis no dispute between the parties as to whose applications were accepted andwhose applications were rejected. I find that the applicants who were refusedmembership on 29 June 2016 are those who are noted in that table as having hadtheir application rejected.

[558] The minutes of the meeting also recorded that one further membershipapplication had been received since 1 June 2016 and the directors resolved toaccept that application for membership.755

(ii) How the directors approached the task of determining the membershipapplications

[559] The evidence established that in determining membership applications atthe meeting on 29 June 2016, the directors adopted the following process. Theevidence of Ms Cheedy, Mr Mack and Mr Irving, which was consistent with theminutes of the meeting,756 established that at the start of the meeting Mr Irving‘read out the policy that the directors had approved for determining theoutstanding applications and asked if there were any questions’.757 He and

752. Ts 1449.753. Exhibit 1.565; Ex 39 at [20].754. Exhibit 1.565.755. Exhibit 1.565.756. Exhibit 1.565.757. Exhibit 53 at [39].


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Mr Davies then took turns in calling out the names of each applicant. Inapplicable cases, the directors went through the history of those applicationspreviously considered by the Elders’ Sub-committee. In addition, Mr Davies hadvolumes of Yindjibarndi family connection forms, which showed genealogicallinks to the Yindjibarndi apical ancestors, to which the directors could haveregard if necessary. (Mr Irving’s recollection, however, was that in most cases thefemale directors knew each applicant’s ancestral links without having to resort tothose forms,758 and Ms Cheedy confirmed that she and the other directors wereknowledgeable about Yindjibarndi families.759)

[560] Mr Irving’s evidence was that:760

Once an applicant’s links with Yindjibarndi apical ancestors was agreed upon, thedirectors then went through each of the other policy considerations. I recall there wasin some cases robust conversation about whether particular applicants identifiedthemselves as Yindjibarndi or whether they identified with some other group byfollowing a non-Yindjibarndi ancestral link; and likewise there was some robustconversation about whether the directors identified a couple of applicants asYindjibarndi; however, the bulk of such discussions were conducted in Yindjibarndilanguage. The same thing occurred in respect of some of the other policy considerationssuch as who had actively worked to support FMG and WMYAC during theauthorisation meeting that was the foundation for the interlocutory application made byRodney Adams et al, which was dismissed by Rares J; and who was likely to upholdand support YAC’s policies.

[561] Mr Mack’s evidence was that the directors:761

went through each application. For each application we looked at the applicationform and family connection form. We talked about each one, the rules and the policy,and made a decision for each one together. We followed the rules and policy. …

It took most of the day to go through all of the applications because there were somany of them.

[562] Once a decision was reached for each application, the directors’ decisionwas recorded on a separate spreadsheet, and in those cases where the applicationwas refused, a note was made of the particular policy consideration which hadbeen applied to support the refusal of the application.762

[563] In reaching a view on each application, the directors relied on theinformation put before the board in each application form, and any informationsubmitted with it, plus their own knowledge of the person.763

[564] The evidence leaves no doubt that in considering each membershipapplication the directors applied a membership policy. However, it is also clear,and I find, that the policy which was applied was not in the same terms as the newpolicies adopted by the directors on 9 June 2016, and submitted for theRegistrar’s approval on 17 June 2016.

[565] Having regard to the minutes of the directors’ meeting of 29 June 2016,and to the evidence of Mr Mack and Mr Irving (to which I will refer in moredetail in a moment), I find that the policy which was used by the directors inconsidering the membership applications on 29 June 2016 was a policy set out in

758. Exhibit 53 at [39].759. Exhibit 39 at [15].760. Exhibit 53 at [39].761. Exhibit 33 at [36]–[39].762. Exhibit 53 at [39].763. Ts 1461.


a document entitled ‘YAC membership application policy for PendingMembership Applications’ (Pending Applications Policy). Mr Mack confirmedthat that was the case.764

[566] A copy of the Pending Applications Policy was attached to the minutesof the meeting held on 29 June 2016, and set out within the body of the minutesalso.765

[567] The Pending Applications Policy was in similar, but not identical, termsto the draft membership policy approved by the directors on 9 June 2016 andsubmitted to ORIC on 17 June 2016. It purported to set out the policy andprocedures for considering all pending membership applications which had beenreceived prior to 1 June 2016, and which were required to be determined by30 June 2016 in accordance with the second compliance notice. The PendingApplications Policy set out the following process for dealing with thoseapplications:

Process for Considering and Deciding upon Pending Membership Applications

1. The YAC Directors will meet to consider and decide upon all PendingMembership Applications prior to close of business on 30 June 2016.

2. The YAC Directors will decide upon each Pending Membership Applicationon the basis of information and knowledge available to the directors at thetime of their meeting, which is relevant to the following considerations:

2.1 Is the applicant descended from one of the apical ancestors that wereidentified in the Daniel hearing as the ‘Yindjibarndi Apical Ancestors’,a list of whom is attached as Annexure A?

2.2 Is the applicant at least 18 years old?

2.3 Apart from the membership application form, has the applicantrecognised himself as Yindjibarndi?

2.4 Is the applicant recognised by the Directors as being Yindjibarndi?

2.5 Does the applicant follow and uphold Birdarra Law, including Galharraand Nyinyadt.

2.6 Is the applicant a person who, in the Directors’ opinion, will supportand uphold YAC’s objectives and policies; in particular, to:

2.1.1 protect, preserve and advance the traditions, laws, language,culture and customs of the Yindjibarndi People;

2.1.2 maintain, protect, promote and support the culture, native titletraditions and customs, economic development, interests andsocial progress of the Yindjibarndi People, and,

2.1.3 uphold and advance the minimum standards for the survival,dignity and well-being of all present and future members of theYindjibarndi People as set out in the [UNDRIP] and formallyadopted by YAC in YAC’s [UNDRIP policy] dated 9 June 2016.

3. The directors may by resolution refuse a Pending Membership Application ifthey are not satisfied that the Applicant fulfils each of the requirements set outin paragraph 2 above.

4. The directors may by resolution accept a Pending Membership Application ifthey are satisfied that the Applicant fulfils each of the requirements set out inparagraph 2 above.

5. The directors may by resolution refuse a Pending Membership Application ifthey are uncertain about whether the Applicant fulfils each of therequirements set out in paragraph 2 above.

764. Ts 995.765. Exhibit 1.565.


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6. The corporation shall, by no later than close of business on 1 July 2016 givewritten notice to each of the Pending Membership Applicants, advising themof the Board’s decision, and, if the application was refused, the reasons for it.

7. The corporation shall, by no later than close of business on 14 July 2016 enterthe details of each successful applicant into YAC’s Membership Register.

8. The corporation shall, by no later than close of business on Friday 22 July2016, provide to the Registrar:

8.1 a copy of the minutes of the directors’ meeting which considered anddecided upon the Pending Membership Applications; and

8.2 written confirmation that:8.2.1 all known Pending Membership Applications have been

considered and decided upon;8.2.2 each of the Pending Membership Applicants has been given

written notice of the outcome of their application and, if theirapplication was refused, the reasons for it;

8.2.3 the details of each successful applicant have been entered intoYAC’s Register of Members.

[568] As I have said, the Pending Applications Policy was not in precisely thesame terms as the new policies adopted on 9 June 2016, and so the processenvisaged in the new policies was not precisely that which was followed on29 June 2016. By way of example, those whose applications were considered hadnot had to comply with the requirements of the new policies in submitting theirapplication (because their applications were submitted prior to the adoption ofthe new policies). Further, the Pending Applications Policy did not require that inthose cases where there was uncertainty as to whether the applicant met theeligibility criteria for membership, the applications should be considered by a‘Senior Birdarra Law Carriers Committee’. Mr Mack’s evidence was that thedirectors were going to ‘set up two separate senior lawmen to look at it’, but theboard did not do so because they did not think they had the time in order toprocess the membership applications before June 2016.766 Mr Irving’s evidencewas to similar effect.767 That evidence was consistent with Mr Davies’ proposalto ORIC on 17 June 2016 — for more time in order to apply the new policies todetermine the applications — which had not been accepted by the Registrar,meaning that the directors remained obliged to make a decision in respect of allof the membership applications by 30 June 2016.

[569] Mr Irving was asked why the new policies sent to ORIC on 17 June 2016included a reference to the Senior Birdarra Law Carriers Committee when thedirectors were concerned that there would not be time to involve that Committeein resolving applications before 30 June 2016. Mr Irving’s evidence was that heconsidered that there were two quite different aspects of compliance with thesecond compliance notice, in so far as it concerned membership. The first wasthat all outstanding membership applications had to be dealt with by 30 June2016. The second was the development of a membership policy. Mr Irving’sunderstanding was that the Registrar did not require that the outstandingmembership applications, which had to be dealt with by 30 June 2016, beresolved in accordance with the new policies. His view was that the new policieswould be applied to all future applications for membership.768 I accept thatexplanation.

766. Ts 999.767. Ts 1485.768. Ts 1486.


[570] That explanation is also consistent with Mr Mack’s evidence. Mr Mackconfirmed that the current membership application form769 was not themembership application form annexed to YAC’s Rule Book.770 But nor was YACusing the membership application form submitted to ORIC as part of the newpolicies, as that was a draft document only.771 However, he confirmed that YACwas receiving the family connections form in order to identify the family historyof membership applicants.772 That appears to have been because YAC’s membershad not yet passed a resolution to amend YAC’s Rule Book, in order to substitutethe draft membership form for that previously included in the Rule Book.773

[571] It was not entirely clear from the evidence, however, when and how thedirectors determined to adopt the Pending Applications Policy for the purpose ofresolving membership applications in accordance with the second compliancenotice. Be that as it may, I find that the limited time between YAC’s receipt ofMr Armstrong’s letter of 22 June 2016, and YAC’s deadline to deal with alloutstanding membership applications, explains why the directors adopted thePending Applications Policy to deal with those applications. That, to my mind,explains why the Pending Applications Policy was in a form which was notidentical to the new policies, but reflected a number of the themes in the newpolicies, and why the Pending Applications Policy provided that the directorswould reject any application about which there was uncertainty as to whether theapplicant met the criteria for membership of YAC.

[572] As I have said, the Pending Applications Policy reflected a number of thethemes contained in the new policies, and especially those underlying the draftcode of conduct, which included a requirement to abide by Birdarra Law andGalharra, and to abide by the UNDRIP policy. It is also apparent from the reasonsgiven by the directors for refusing membership to applicants on 29 June 2016 (towhich I refer at [576] below) that the directors drew on the criteria in the draftcode of conduct when they refused those applications.

[573] In my view, the short time frame between the directors’ adoption of thenew policies, their receipt of ORIC’s response of 22 June 2016 and their meetingon 29 June 2016, and the consistent themes between the Pending ApplicationsPolicy and key elements of the new policies, including those in the draft code ofconduct to which I have referred, support the conclusion, and I find, that inadopting and applying the Pending Applications Policy the directors’ objectivewas the same as it had been in adopting the new policies, namely to provide abasis for them to refuse an application for membership made by any person whowas a member or supporter of WMYAC or who was thought to take a differentview from the directors of YAC in relation to entry into the FMG Agreement.(iii) The reasons given to the applicants whose membership applicationswere rejected

[574] The table attached to the minutes of the directors’ meeting on 29 June2016 contains a list of each member, and notes as to whether the directors weresatisfied that the member met each of the criteria referred to in paragraphs2.1–2.6.3 of the Pending Applications Policy. I find that those applications whichwere refused were refused on the basis that the directors were not satisfied that

769. Exhibit 1.320, 4194–5.770. Ts 989-990.771. Ts 988.772. Ts 990.773. Ts 991–2.


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the applicant met the individual criteria, for which the applicant was noted as‘NS’ (which I infer means ‘Not Satisfied’) or ‘N’ (which I infer means ‘No’) inthat table.[575] That table also indicates the source of the membership applications —that is, whether they were submitted via WMYAC or its solicitors Integra Legal,or whether the application was submitted to YAC directly by the applicant. Of the146 applications which were rejected, that table indicates, and I find, that 112 ofthose were applications submitted through WMYAC or Integra Legal. Of the 25applications which were accepted, that table indicates, and I find, that only 2 ofthose accepted applications were submitted through WMYAC or Integra Legal.Accordingly, although it is not the case that all applications submitted byapplicants associated with WMYAC were rejected, a very high proportion ofthose applicants whose applications were associated with WMYAC were rejectedfor membership.[576] After the meeting, each applicant whose application was rejected wassent a letter which explained the reason for that rejection.774 Copies of thatcorrespondence were in evidence, and indicated that each application wasrejected for one or more of the following reasons:775

• The directors were not satisfied that the applicant was at least 18 yearsof age, as required under rule 3.1 of YAC’s Rule Book. (Each of theseapplicants was advised that they were entitled to re-apply in the future,and to provide proof of their age with their application.)

• The directors were not satisfied that the applicant was a Yindjibarndiperson in view of the absence of any evidence that the applicant wasdescended from one of the persons identified in the Danieldetermination as a Yindjibarndi apical ancestor.

• In relation to those applicants who were members of the Todd family,the directors were not satisfied that the applicant met the eligibilitycriteria in rule 3.1 of YAC’s Rule Book, namely that the applicant wasdescended from one or more Yindjibarndi ancestors. The directorsacknowledged that the question whether members of the Todd familyshould be regarded as members of the group of Yindjibarndi people whoclaimed to be the common law holders in the Yindjibarndi #1 claim areahad not yet been resolved by the Federal Court. However, in view of therequirements of the second compliance notice, it was not open to thedirectors to defer a decision on the applications for membership madeby the Todd family. Those persons were advised that they could reapplyfor membership if they wished to do so, following determination of theissue by the Federal Court.

• The directors were not satisfied that the applicant was a person whorecognised themselves as a Yindjibarndi person, as they were unawareof any evidence (apart from the application form itself) to support thateligibility requirement.

• The directors refused the membership application in the exercise of theirdiscretion under s 144–10 of the CATSI Act on the basis that they werenot satisfied that the applicant:

currently followed and upheld Birdarra Law, including Galharraand Nyinyadt, and were therefore not satisfied that the applicantwas a Yindjibarndi person who held in common the body of

774. Exhibit 39 st [18].775. Exhibit 1.335.


traditional law and culture governing the Daniel DeterminationArea as required by rule 3.1 of YAC’s Rule Book; andwas a person who would support and uphold YAC’s objectivesand policies; in particular, to protect, preserve and advance thetraditions, laws, language, culture and customs of the Yindjibarndipeople; to maintain, protect, promote and support the culture,native title traditions and customs, economic development,interests and social progress of the Yindjibarndi people; and touphold and advance the minimum standards for the survival,dignity and well-being of all present and future members of theYindjibarndi people, as set out in the UNDRIP.

• The directors refused the membership application in the exercise of theirdiscretion under s 144–10 of the CATSI Act on the basis that they werenot satisfied that the applicant:

• currently followed and upheld Birdarra Law, including Galharraand Nyinyadt, and were therefore not satisfied that the applicantwas a Yindjibarndi person who held in common the body oftraditional law and culture governing the Daniel DeterminationArea as required by rule 3.1 of YAC’s Rule Book;

• was a person who would support and uphold YAC’s objectivesand policies; in particular, to protect, preserve and advance thetraditions, laws, language, culture and customs of the Yindjibarndipeople; to maintain, protect, promote and support the culture,native title traditions and customs, economic development,interests and social progress of the Yindjibarndi people; and touphold and advance the minimum standards for the survival,dignity and well-being of all present and future members of theYindjibarndi people, as set out in the UNDRIP; and

• in reaching this decision, the directors took into account theapplicant’s involvement in the June 2015 ballot, organised byWMYAC and FMG, which led to the s 66B application which wasdismissed by the Federal Court in TJ v Western Australia.

[577] I note that these reasons for refusing the membership applicationsreflected the criteria set out in paragraphs 2.1–2.6 of the Pending ApplicationsPolicy set out above.

[578] Under the Pending Applications Policy, all of the reasons relied uponwere criteria for membership of YAC, rather than disqualifying criteria. The firstfour of the bases for refusal were thus stated to be on the grounds that theapplicant did not meet the eligibility criteria for YAC.

[579] However, in respect of the last two stated bases for refusal (set outabove), the stated position was that the directors refused membership in theexercise of their discretion. That suggests that the directors formed the view thatthe applicant met the eligibility criteria for membership, but was thoughtunsuitable for membership for the reasons set out.


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(iv) The registrar’s conclusion in relation to YAC’s compliance with the

second compliance notice

[580] In a letter dated 22 July 2016 which Mr Davies, the contact officer atYAC, sent to the Registrar, Mr Davies advised that776

all known applications for membership … submitted to the corporation before theclose of business on Wednesday, 1 June 2016, have been considered and decided uponby the directors.

…

In respect of all known applications, I confirm that subsections 144–10(5) — (7) ofthe CATSI Act have been complied with by the corporation and directors of thecorporation.

[581] By letter dated 28 July 2016, ORIC wrote to the directors of YAC inresponse to that letter, and its enclosures. Mr Armstrong, a delegate of theRegistrar, advised that777

after reviewing these documents, I confirm that the corporation has now satisfied theaction items in the [second compliance notice] numbered 1, 2, 3, 5, 6, 7 and 8 (sic).

However, it would be appreciated if the directors could send the Registrar a sampleof the letters sent to the applicants whose application for membership was rejected bythe directors on 29 June 2016.

I also confirm that the directors still have one action item to complete all of therequirements which was set out in the compliance notice.

…

I remind the directors that under point 4 of the [second compliance notice], thecorporation must hold its AGM for the year ending 30 June 2016 before 30 November2016 unless an exemption or extension is approved by the Registrar pursuant to theCATSI Act.

[582] By email dated 28 July 2016, Mr Irving forwarded to ORIC copies ofsample letters which were sent to the persons whose membership applicationswere refused by YAC’s directors on 29 June 2016.778 (The terms of those sampleletters were set out above at [576].) By email dated 29 July 2016, Mr Armstrong,a delegate of the Registrar, advised Mr Irving that he was ‘satisfied with thesample provided’.779

[583] I find that the Registrar was satisfied that YAC had complied with thesecond compliance notice, in so far as it concerned the requirement that YAC dealwith outstanding membership applications.

Did the plaintiffs establish that the directors were biased in their rejection ofapplicants for membership on 29 June 2016?

[584] The heart of the plaintiffs’ case is that the directors purported to apply thePending Applications Policy, but did so in a way which excluded those personswho were members or supporters of WMYAC. The plaintiffs’ case is that in sodoing, the directors used their power to admit members for an improper purpose,namely to prevent WMYAC members and supporters from being in a position totake over YAC, and thereafter to enter into the FMG Agreement, or an agreementin similar terms.



[585] The plaintiffs led evidence from a number of witnesses, including Elderswithin the Yindjibarndi community, who expressed their opinion that applicantsrefused membership did, in fact, meet YAC’s eligibility criteria. I deal with thatevidence in a little more detail below.

[586] Some of the plaintiffs’ witnesses also expressed their opinion that someof the applicants granted membership did not meet the eligibility criteria. By wayof example, Ms Karen Toby’s unchallenged evidence was that she knew anumber of the 26 members of YAC who were added to YAC’s Register ofMembers on 13 July 2016, and knew that they were supporters of MichaelWoodley or of the board of YAC.780 While I have taken this evidence intoaccount I have not given it much weight in my overall assessment of theplaintiffs’ case. That is because Ms Toby did not suggest that those persons whowere admitted were persons who, objectively, did not meet the criteria formembership of YAC, and there is nothing, of itself, untoward about admittingpersons to membership who satisfy the criteria for membership, simply becausethey may be supporters of the CEO, or of the incumbent board, or of a particularposition taken by the board of YAC.

[587] Another of the plaintiffs’ witnesses, Mr John Sandy, expressed theopinion that not all of the 26 new members added to YAC’s Register of Membersafter the directors’ meeting on 29 June 2016 practised Birdarra Law.781 I have notplaced any weight on this aspect of Mr Sandy’s evidence. While this evidencedemonstrated that there is a perception on the part of some YAC members that thecriteria for membership of YAC were not consistently applied by the directors on29 June 2016, other evidence (which I discuss below) established that there areclearly differences of view within the Yindjibarndi community about what itmeans to follow Birdarra Law. It is neither appropriate, nor is it possible, for theCourt in the present context to make a determination as to whether any particularindividual follows Birdarra Law.

[588] Mr Mack and Ms Cheedy explained how the directors reached theconclusion that applicants did not meet particular criteria for eligibility formembership of YAC. Mr Irving also gave evidence as to the process adopted bythe directors in considering membership applications on 29 June 2016. BothMr Mack and Ms Cheedy gave evidence that the directors considered eachapplication and applied the criteria for eligibility set out in the PendingApplications Policy. Mr Mack’s evidence, for example, was:782

We look at the Yindjibarndi — Yindjibarndi people. … [It] is not Wirlu-murra … justYindjibarndi people and we had a policy and procedure to follow as well. We didn’treject them because of “Ok. This is a Wirlu-murra person.” We had a policy — we hada procedure.

[589] Mr Mack and Ms Cheedy each denied that the directors looked to refusemembership to any applicant considered to be associated with WMYAC, becausethe board did not want WMYAC’s supporters to be members of YAC, and to bein a position to take control of YAC.783

780. Exhibit 20 at [7].781. Exhibit 31 at [17]–[18].782. Ts 1003.783. Ts 1003, 1119, 1122.


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[590] Mr Irving’s evidence was that membership applications ‘weren’t refusedon the basis of somebody just belonging as a member to another corporation’.784

He asserted that he

was very much concerned to ensure that each application was considered on its ownmerits in accordance with the proper policy that was adopted by the board … and eachapplication was considered in accordance with that policy and it had nothing to do withwhether someone was simply a member of [WMYAC].785

[591] It is neither possible, nor is it necessary in the circumstances of this case,to reach any view about whether the grounds for eligibility for membership ofYAC were met in the case of any individual applicant whose application wasrefused. The only question which needs to be determined is whether the plaintiffshave established that it is more likely than not that the directors used their powerto admit members to YAC, or to reject applications for membership, for theimproper purpose for which the plaintiffs contend. In order to determine thatquestion, however, it is necessary to make some findings in relation to theapplication of the membership criteria on which the directors relied, or purportedto rely.

[592] The plaintiffs focused, in particular, on the directors’ application of themembership criteria with respect to three categories of applicants as evidence ofthe directors’ pursuit of the improper purpose for which the plaintiffs contend.There was some evidence about the position of those whose applications wererejected on the basis that they did not have a Yindjibarndi apical ancestor, andespecially the members of the Todd family. However, the plaintiffs did not appearto rely, either at all or at least to any significant extent, on that category ofapplications in support of their claim of oppression. In any event, there wasnothing in the evidence concerning applicants refused on this basis whichsupports any finding of bias by the directors, or which constituted oppressiveconduct.

[593] It is therefore not necessary to consider the position of the members ofthe Todd family here. For completeness, I note that on 20 July 2017, the FederalCourt published its reasons for decision in the Yindjibarndi #1 claim. On13 November 2017, Rares J made orders giving effect to those reasons fordecision. In addition, Rares J had to determine a claim by members of the Toddfamily that they were Yindjibarndi people and entitled to be recognised asmembers of the Yindjibarndi people as the holders of the common law native titlerights recognised by the Court. His Honour concluded that the Todd familymembers had failed to prove that they were members of the Yindjibarndi people.His Honour found:786

that evidence of the traditional laws acknowledged and traditional customs observedby the Yindjibarndi people established that, first, mere birth on Yindjibarndi countrycannot make a person, neither of whose parents is Yindjibarndi, are Yindjibarndi and,secondly, a child of parents one of whom is, and the other is not, Yindjibarndi, can elect,once and for all, to follow the language or country group of the Yindjibarndi parent orthe other parent. The Yindjibarndi had, and have, no law or custom of ‘naturalisation’for persons of two non-Yindjibarndi parents. Therefore, the only way that a person in

784. Ts 1454.785. Ts 1454–5.786. Warrie.


a position of the Todd respondents and their family can be identified by others as

Yindjibarndi is by acknowledgment and observance of the Yindjibarndi people’s

traditional laws and customs.

[594] His Honour was not satisfied, on the evidence, that the Todd respondentshad an apical Yindjibarndi ancestor.787 That decision resolves the question ofmembership of YAC for the members of the Todd family who rely on the sameancestry as the parties considered in the decision of Rares J.

[595] The applications on which the plaintiffs focused were those applicationsrejected on the basis that the applicants did not meet the following criteria:

(i) The criterion in clause 2.2 of the Pending Applications Policy, that theapplicant has reached 18 years of age (age criterion);

(ii) The criteria in clauses 2.3 and 2.4 of the Pending Applications Policy,namely whether each applicant regarded themselves, and was regardedby the directors, as a Yindjibarndi person (identification criteria); and

(iii) The criteria in clauses 2.5 and 2.6 of the Pending Applications Policy,namely that the applicant follow Birdarra Law, including Galharra andNyinyadt (Birdarra Law criterion), and that the directors consider thatthe applicant will support and uphold YAC’s objectives and policies(loyalty criterion).

(i) Age criterion (cl 2.2 of the Pending Applications Policy)

[596] The directors rejected four applications — namely those from Gee-EllaBropho, Don Coppin, Kade Moody and Symaya Moody — on the basis that theywere not satisfied that the applicant was 18 years of age.788 Mr Mack andMs Cheedy explained that the directors were not satisfied that each of thoseapplicants was over 18 years of age and explained that the applicants had notrecorded their date of birth on their application forms.789 Ms Cheedy deniedknowing that these applicants were 18 years of age.790

[597] The plaintiffs adduced evidence to establish that each of these applicantswas 18 years of age as at 29 June 2016, and that they were otherwise qualifiedfor membership of YAC. By way of example, Ms Symaya Moody’s evidence wasthat she was 18 years old when she applied for membership and ‘it annoys methat they say that they are not satisfied I am 18 and I am therefore unable tobecome a member’.791 Ms Moody’s evidence was that she is a Yindjibarndiwoman, and had been brought up as a Yindjibarndi person. She also deposed thatshe is a member of WMYAC.792 Further, Ms Allery Sandy deposed that DonCoppin, Kade Moody and Symaya Moody are her grandchildren, all of whom areover the age of 18 and have Yindjibarndi mothers and Yindjibarndigrandparents.793 Finally, Ms Karen Toby gave evidence that Don Coppin, KadeMoody and Symaya Moody were all 18 years of age, and that each of them werepart of the Sandy family and were Allery Sandy’s grandchildren.794

787. Warrie at [508].788. Exhibit 1.565.789. Exhibit 33 at [44]–[45]; Ex 39 at [20.3].790. Ts 1115.791. Exhibit 21 at [7].792. Exhibit 21 at [1], [3], [4].793. Exhibit 19 at [24]–[25].794. Exhibit 20 at [8].


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[598] I note that the table of decisions attached to the minutes of the directors’meeting of 29 June 2016 notes that the membership application for each of theseapplicants was submitted through WMYAC or Mr Rodney Adams.

[599] In a small community like the Yindjibarndi community in Roebourne,and in circumstances in which Ms Cheedy acknowledged that she knew of theseapplicants, and their families, and could have sought advice from Elders or seniormembers of the applicants’ families to confirm their age, it might seem surprisingthat the directors did not make further enquiries to ascertain the age of theseapplicants.

[600] However, I am not persuaded that there is any basis for doubting thecredibility of the directors’ evidence as to their reason for rejecting the applicantsin this category, for two reasons. First, when the directors met on 29 June 2016,they had 171 applications to deal with, and it was necessary that they make adecision on each of those by the following day, in order to comply with therequirements of the second compliance notice. The evidence of Mr Mack wasthat the process of dealing with the applications took most of the day. It isapparent that had the directors wished to make further enquiries about anyapplicant at that stage, there would not have been time to do so. Secondly, theletter sent to the applicants in this category invited them to submit an applicationin the future which contained proof of their age. There was no limit on the timewithin which it would have been open to them to do so. It is not apparent whya further application could not have been made prior to the next AGM for YAC.The latter criterion, in particular, strongly militates against the conclusion that thedirectors’ decision was made for the improper purpose for which the plaintiffscontend.(ii) Identification criteria (cll 2.3 and 2.4 of the Pending Applications Policy)

[601] I turn next to those applicants whose applications were rejected on thebasis of the identification criteria. In total, 53 of the 72 applications rejected onthese bases were from persons whose applications were (according to the tableattached to the minutes of the meeting on 29 June 2016) submitted throughWMYAC.

[602] Mr Mack explained that in Yindjibarndi culture, a person will choose tofollow the way of their mother or their father, so that in order to be Yindjibarndi,a person must have a mother or a father who is Yindjibarndi, and must choose tofollow the Yindjibarndi way.795

The evidence on which the plaintiffs relied

[603] The plaintiffs adduced evidence from a number of persons to demonstratethat a large number of the persons whose applications were rejected on the basisof the identification criteria, in fact satisfied, or at least appeared to satisfy, theidentification criteria. Ms Allery Sandy referred to 42 of the persons whoseapplications were rejected on these bases — including Nathan Adams, ReikeshaAubrey, Laurissa Bobby, and Jesse, Shannen and Simone Bropho — asYindjibarndi people.796 In most of these cases, Ms Sandy referred to their parentsor grandparents who were Yindjibarndi people.797 Other witnesses who areYindjibarndi people, and members of YAC, namely Ms Sally Anne Walker798 and

795. Exhibit 33 at [41].796. Exhibit 19 at [26].797. Exhibit 19 at [26].798. Exhibit 23.


Ms Karen Toby,799 similarly expressed the opinion that applicants rejected onthese bases were in fact Yindjibarndi people and regarded as Yindjibarndi people,and were entitled to membership of YAC. It is not necessary to set out theirevidence in full. By way of example, Ms Toby deposed that Malcolm Hubert wasthe brother of Jason Hubert, who had been accepted as a member of YAC.800

Similarly, Ms Walker referred to other applicants whose applications had beenrefused because they did not meet the identification criteria, namely BevanHicks, Dennis Hicks and Roderick Parker. Ms Walker’s evidence was that theywere her nephews, that each of them recognised themselves as Yindjibarndi, hadbeen put through the law by their grandfather, a senior Yindjibarndi law man, andthat she knew that Roderick and Bevan, in particular, followed Birdarra Law.Ms Walker’s evidence was that ‘for the directors of YAC to say that [they] are notYindjibarndi is not right’.801 She said that the decision to reject their applications‘does not make sense to me. I do not understand why they are being rejected’.802

[604] Finally, Mr Wesley Munda, whose application was rejected on thesegrounds,803 gave evidence that he identified himself as a Yindjibarndi person, thathis mother is Aileen Sandy (one of the plaintiffs in this action), that he wasinitiated as a Yindjibarndi man at law ceremonies at Woodbrook, that he attendedBirdarra Law ceremonies, that he speaks the Yindjibarndi language, and that heknows and respects the traditions, culture and customs of the Yindjibarndipeople.804 Mr Munda also deposed that he is a member of WMYAC.805

[605] The evidence of the plaintiffs’ witnesses is not determinative of thequestion whether the persons whose applications were rejected on these groundsare in fact entitled to membership. The relevance of this evidence, however, isthat it demonstrated that a large number of the applicants rejected on the basis ofthe identification criteria regarded themselves as Yindjibarndi, and were regardedas Yindjibarndi people by others in the Yindjibarndi community, including thosewho are members of YAC. Of itself, that cast a question mark over the directors’rejection of these applications, particularly when this evidence is viewed inconjunction with the evidence that a large proportion of the persons whoseapplications were rejected on this basis were associated with WMYAC.The evidence on which the defendants relied

[606] Mr Mack and Ms Cheedy both gave evidence that the directors were notsatisfied that each applicant rejected on this ground ‘followed the Yindjibarndiside of his or her family’.806 Mr Mack explained:807

The rules and the policies say that a person has to recognise him or herself asYindjibarndi. And the directors have to recognise that person as Yindjibarndi. We talkedabout the family connections for each person. Usually, a person chooses to follow themother or the father. My mother is Ngarluma and my father was Yindjibarndi. I choseto follow Yindjibarndi through my father. My eldest sister chose to follow Ngarluma

799. Exhibit 20.800. Exhibit 20 at [8].801. Exhibit 23 at [23].802. Exhibit 23 at [27].803. Exhibit 22 at [10].804. Exhibit 22 at [1]–[7].805. Exhibit 21 at [8].806. Exhibit 33 at [43].807. Exhibit 33 at [41].


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through our mother. I do not get involved in Ngarluma native title business. That isbecause I follow Yindjibarndi. I identify as a Yindjibarndi person and other personrecognise me as Yindjibarndi.

[607] Ms Cheedy also explained how the directors determined whethersomeone was a Yindjibarndi person who was eligible for membership of YAC:808

Knowledge of people in the Roebourne community and their links to their ancestorsthrough both their parents is well known amongst many Yindjibarndi people … In ourYindjibarndi community people will choose one Aboriginal group’s way for native titlepurposes when they turn 18 years old. They are not allowed to double dip because ifsomeone did that with a lot of their different ancestors some of them could choose fourways because they’d go back to their great grandmothers and great grandfathers.

[608] Ms Cheedy referred to a number of applicants who were rejected becausethe directors did not recognise them as being Yindjibarndi, on the basis that theyfollowed the way of another Aboriginal group, even if they had a parent orgrandparent who was Yindjibarndi. By way of example, Ms Cheedy’s evidencewas that Nathan Adams follows his mother’s Ngarluma side, Reikesha Aubreyfollows her mother’s Mardudhunera side, Laurissa Bobby follows her father’sNyaparli side and Jessie, Shannen and Simone Bropho follow their Gurumaside.809

[609] However, in cross examination, Ms Cheedy confirmed that, as at June2016, there were many members of YAC who were also members of other nativetitle groups or PBCs.810

[610] It was put to Ms Cheedy that, when the board was dealing withmembership applications in June 2016, if they were able to find the basis forrejecting someone they thought would be a supporter of WMYAC, they reliedupon that basis. She initially denied that that was the case:811

No. We had a — we had our own policy and procedure that we had to do. That wasone of the things that we had to do from that —

That was the policy that we’ve just been talking about, that you designed to try andensure that no supporter of Wirlu-murra could be eligible to be a member, isn’t it? —Yes.

[611] However, Ms Cheedy also gave evidence that supports the conclusionthat at least some applications in this category were rejected on the basis that theapplicant was a member or supporter of WMYAC. By way of example,Ms Cheedy referred to the directors’ rejection of an application from Mr MalcolmHubert on the basis that the directors did not recognise him as Yindjibarndibecause he did not follow the Yindjibarndi way.812 Ms Cheedy explained thatMr Hubert’s application:813

raised the question of whether the applications are about supporting YAC and beinga true member of YAC, or are about WMYAC trying to take over YAC to get moneyand decision making powers in YAC. Malcolm Hubert made an application throughWMYAC.

808. Exhibit 39 at [15].809. Exhibit 39 at [20].810. Ts 1114.811. Ts 1114–15.812. Exhibit 39 at [20.1].813. Exhibit 39 at [20.1].


[612] Another applicant to whom Ms Cheedy referred was Ms Maxine Evans.Ms Evans’ application — according to the table attached to the minutes of thedirectors’ meeting of 29 June 2016814 — was rejected on the basis of theidentification criteria. Ms Cheedy acknowledged that Ms Evans’ mother isYindjibarndi.815 However, in her affidavit, Ms Cheedy explained that Ms Evans’application ‘was refused because it was part of the block application that wasdesigned for WMYAC to take control of YAC and to do things that are not in thebest interests of the Yindjibarndi people under clause 2.6 of the Policy’.816

Conclusion in relation to the application of the identification criteria

[613] In my view, five aspects of the evidence cast doubt on the evidence of thedefendants’ witnesses that the identification criteria were genuinely applied bythe directors.[614] First, in so far as Mr Mack and Ms Cheedy claimed that the directorsrejected applications by persons who were understood to be members of anotherPBC under the NT Act, that approach is quite inconsistent with the approachtaken by YAC’s board in the past. It was put to Ms Cheedy that many otherapplicants had been granted membership of YAC, notwithstanding that they weremembers of the Ngarluma Aboriginal Corporation, and that those persons wereadmitted to membership because they supported Mr Woodley and the incumbentboard. While she did not deny that members of the Ngarluma AboriginalCorporation were also members of YAC, Ms Cheedy’s explanation was thatadmission to membership depended on the view of the entire YAC board, at thetime a membership application was considered, as to whether the applicant wasa Yindjibarndi person.817 With respect, that was not a convincing explanation.[615] Secondly, there was no suggestion by any of the defendants’ witnessesthat YAC’s board intended to revisit the membership of any existing members ofYAC who were also found to be members of another PBC under the NT Act. Ifthe directors genuinely believed that persons who were members of other PBCscould not be regarded as Yindjibarndi, then those persons could no longer beregarded as meeting the identification criteria for YAC. The inconsistentapplication of the identification criteria casts doubt on the genuineness of thedirectors’ application of these criteria on 29 June 2016.[616] Thirdly, Ms Cheedy’s evidence in relation to Mr Hubert and Ms Evansstrongly supports the inference that while the directors purported to reject theirapplications on the basis that they did not identify those applicants asYindjibarndi, in fact the real reason for the rejection of their applications was thatthe directors were of the view that they would not act in the best interests of theYindjibarndi people. The fact that the directors would rely on one basis forrefusal of their membership applications, when in fact those applications wererejected because of the applicants’ association with WMYAC, seriouslyundermines the genuineness of the directors’ claims that they applied the PendingApplications Policy.[617] Fourthly, the fact that existing members of YAC regarded a number of theapplicants as Yindjibarndi people casts doubt on the directors’ claim that theygenuinely did not regard those applicants as Yindjibarndi people, especially in theabsence of any detailed explanation as to why the identification criteria were notmet.

814. Exhibit 1.565.815. Exhibit 39 at [20.11].816. Exhibit 39 at [20.11].817. Ts 1118–19.


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[618] Fifthly, the fact that a significant proportion of the applicants rejected onthese bases were also expressly identified as members of WMYAC supports theinference that their association with WMYAC was the real reason that theirapplications were rejected.

[619] In view of all of this evidence, I am satisfied that it is more likely thannot that the real reason why at least some of the applicants in this category wererefused membership was that they were considered to be members or supportersof WMYAC.

[620] Before leaving this topic, I should mention that the evidencedemonstrated that there is a division of opinion among the members of theYindjibarndi community about aspects of Yindjibarndi law and customconcerning how a person identifies as a Yindjibarndi person. By way of example,Ms Allery Sandy’s understanding was that if a child’s parents were from differentAboriginal groups, and the child did not choose to follow one cultural group inparticular, ‘they follow both laws. They have traditional law and rights in thefather’s country and mother’s country.’818 A different opinion was identified byMr Vincent Adams. His understanding was that Yindjibarndi law and custommeant that a person would follow their mother for their kinship group,819 so thatto be a Yindjibarndi person, it was simply necessary to have a Yindjibarndimother.820

[621] It is not necessary to resolve any question about how, as a matter ofYindjibarndi law and custom, a person comes to be regarded as Yindjibarndi.What this evidence does illustrate, however, is that membership disputes withinthe Yindjibarndi community exist, and should preferably be resolved by theElders of that community.(iii) The Birdarra Law criterion and the loyalty criterion (cll 2.5 and 2.6 of

the Pending Applications Policy)

Evidence as to what it means to follow Birdarra Law

[622] The evidence of the witnesses illustrates that there are some significantdifferences of view within the Yindjibarndi community about Yindjibarndi lawand custom concerning the observance of Birdarra Law, including Galharra andNyinyadt. As I understood the evidence, in broad terms Birdarra Lawencompasses the requirements of religious and law ceremonies and meetings, andthe initiation of young men into Yindjibarndi culture, Galharra refers toYindjibarndi law and custom concerning inter-personal relationships within theYindjibarndi community, and Nyinyadt refers to the spiritual belief or guidingprinciple that Yindjibarndi people care for each other by sharing what they havewith each other.

[623] Ms Cheedy explained that ‘every Yindjibarndi person is taught from asmall age their language, their culture, their relationship with other Yindjibarndipeople. You know how each family fits together and who the outside partners arefrom other groups.’821 She explained that ‘the Galharra system is how we all fittogether so you know who you can talk to and who you can’t and who you can

818. Exhibit 19 at [29]–[30].819. Ts 530.820. Ts 530.821. Exhibit 39 at [9].


marry and who you can’t. … The Galharra does many things also tells you aboutyour roles and responsibilities in all parts of life’.822

[624] Mr Mack explained Galharra and Nyinyadt in the following way:823

People who go to Woodbrook for Birdarra Law are expected to uphold it byfollowing Galharra (respecting yourself and everyone within the Galharra relationshipsystem) and Nyinyadt (caring and sharing for one another). It is part of their role at thelaw ground. Galharra and Nyinyadt doesn’t stop at the law ground. It is part ofYindjibarndi culture. Yindjibarndi people are expected to carry it on in all parts of theirlife; on the law ground, on country, in town and in native title.

[625] Mr Mack also explained Nyinyadt as meaning that ‘you have to beresponsible for your country. Whatever is in that country, you have to shareeverything’.824

[626] However, it was apparent from the evidence that some members of theYindjibarndi community, and Mr Woodley in particular, took a strict view of theimportance of observing Birdarra Law, Galharra and Nyinyadt. Mr Woodley’sevidence was that:825

Gahlarra is one of the four Yindjibarndi pillars. The others are language, Birdarra andNyinyadt. Without one of these pillars, you do not have a society that is governed bystrict rules, authority, relationships and reciprocity.

Gahlarra is crucial to Yindjibarndi people. Gahlarra is made up of four groups —Banaga, Burungu, Balyarri, Garimarrda. A Burungu man must marry a Banaga womanand vice versa. A Garimarrda man must marry a Balyarri woman and vice versa. Mixedmarriage is going against Yindjibarndi law. When you marry wrong way you breakYindjibarndi law. Some people in our community are married the wrong way. Justbecause they are, it does not make it right. These people, when they have kids, will benamed and shamed in Birdarra law.

[627] Other witnesses were of the view that a more flexible approach tocompliance with the requirements of Birdarra Law was accepted in Yindjibarndiculture. By way of example, Mr Vincent Adams, who is a senior Yindjibarndi lawman,826 explained that with the advent of modern times it was not possible topractise traditional Birdarra Law in the way it was practised centuries ago.Mr Adams’ evidence was that827

in the Pilbara our law is the only law where we take a boy and keep him for one dayand return him as a man. … Law meetings are essentially for the purpose of initiatingboys into men. … If parents choose not to initiate a boy the Elders tried to persuade theparents that it is important for future families that a boy go through initiation either inone day or the full Birdarra ceremony. The full ceremony would take up to six weeks.

… These Birdarra ceremonies are practised at Woodbrook (about 15 km fromRoebourne) and in the area surrounding Woodbrook.

[628] Mr Adams’ view was that the division within the Yindjibarndicommunity is a division about the requirements of Birdarra Law:828

As a result of this disagreement with Michael [Woodley] there is a division in theYindjibarndi community. It is not about relationship with FMG. It is much deeper and

822. Exhibit 39 at [7].823. Exhibit 33 at [46].824. Ts 1004.825. Exhibit 41 at [65].826. Exhibit 3 at [1]–[2].827. Exhibit 3 at [17]–[25].828. Exhibit 3 at [32]–[33].


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more profound than that. I have experienced myself within the Yindjibarndi communitythat there is a division between what Michael Woodley is saying is Birdarra Law andwhat I know to be Birdarra Law.

For example, in the modern practice of Birdarra Law it is not mandatory to attendevery meeting. … It simply is not possible …. They [men] practice the law whereverthey are. They are welcome to come back to law ceremonies whenever they areavailable and able to come.

[629] It was apparent from his evidence in cross-examination that Mr Adams’view was that a person’s observance of Birdarra Law and of Galharra should notbe determinative of whether that person was recognised as a Yindjibarndi person.He noted, for example, that there were members of the stolen generation who hadlost their language, law and custom, and it was his view that those persons shouldnot be denied membership of their Aboriginal community.829

[630] Mr John Sandy expressed a similar view:830

As a Yindjibarndi law man I am concerned at [Michael Woodley’s] assertion and theboard of YAC’s assertion that applicants don’t protect, preserve and advance thetraditions, laws, language, culture and customs of the Yindjibarndi people or follow anduphold Birdarra Law. To my knowledge it is not mandatory or essential that aYindjibarndi man attend every law ceremony. This is particularly the case when someof our Yindjibarndi men may be in jail or working or have left the Roebournecommunity for work or for other reasons. They are always welcome to return.

[631] Ms Allan also shared the view that Birdarra Law was no longer practisedas strictly as it had been in the past:831

In respect of law making it is not essential for every Yindjibarndi person to attendevery law meeting.

If you are sick, do not have a car or some other problem has arose then you do nothave to attend the meeting.

Some people move away for a while and come back.

If they shift to another town … they can still follow the Yindjibarndi laws. You stillfollow the law wherever you are.

[632] As for Galharra, Ms Allan’s view was:832

In relation to Galharra, although it is important it is by no means as important as itwas in the past.

Galharra remains important during the law ground time. It determines where you sitin various groups of the law grounds. The four skin types for the Yindjibarndi regionare Banaga, Burungu, Balyirri and Garimarra.

The elder women will direct you to sit at the law grounds.

In the old days it used to be that you had to marry a complementary skin group.

Galharra has been relaxed because of the number of different marriages betweenlanguage groups in the modern times. Some people do not believe in Galharra but stillobserve the laws.

[633] Ms Allery Sandy’s view was similar. Her evidence was ‘everyone who isborn Yindjibarndi is Yindjibarndi, and if they marry somebody from a differentAboriginal group, they are still respected as Yindjibarndi’.833

829. See generally ts 527–8.830. Exhibit 31 at [12].831. Exhibit 10 at [75]–[84].832. Exhibit 10 at [75]–[84].833. Exhibit 19 at [6].


[634] Another of the plaintiffs’ witnesses, Ms Sally Anne Walker, expressed asimilar view about Galharra and Nyinyadt:834

Galharra (the skin groups) … has gotten all mixed up and nobody really uses itanymore. It died out years ago. People go by relationships now — their mothers’ andtheir fathers’ family line.

I do not know what Nyinyadt is. I have spoken to Yindjibarndi elders such as SylviaAllan and Diana Smith and they do not what it was either. We think the directors meanYinyard, which means giving gifts to people after you have been traveling.

[635] The fact that the witnesses in this case expressed different views aboutthe detail of the content of the traditional laws and customs of the Yindjibarndipeople was not surprising. As French J observed in Sampi v Western Australia:835

Within a single coherent system of traditional law and custom there may bedifferences of interpretation and different versions of particular stories told. An appositeanalogy may be seen in the differences of view among those directly involved in theadministration of the Australian legal system and commentary on it in connection withmatters such as the interpretation of the common law and equity and even of theConstitution and statutes. There are sometimes debates about the origins and content ofparticular rules of judge-made law. And outside the very small population of personsinvolved in the administration of the law, there is, in the wider community, a range ofawareness of the law from the well-informed to the profoundly ignorant. None of thatdetracts from the existence and validity of the legal rules by which our society isgoverned. In a system of law and custom transmitted by oral tradition these generalpropositions have even greater force.

[636] To similar effect, the full Federal Court in Northern Territory v Alyawarr,Kaytetye, Warumungu, Wakaya Native Title Claim Group836 recognised that themembership of any indigenous society can be defined by a variety of rules, andthat there may be differences of view in relation to the content or nature of thoserules, or the strictness with which they should be applied. The Court observedthat in the resolution of membership disputes,837

it is not … productive of any practical benefit to require that the laws and customsof indigenous society and the rights and interests arising under them be presented assome kind of organism in amber whose microanatomy is available for convenientinspection by non-indigenous authorities.

[637] The differences of view expressed by the witnesses in relation to thecontent of, and the importance of observing, Birdarra Law, Galharra andNyinyadt suggest that caution should be applied in considering the evidence ofthe directors as to their application of the Birdarra Law criterion for membershipof YAC. These are questions over which minds may (and in this case, do) differ.Consequently, it would be appropriate to grant some latitude to the directors’views about satisfaction of this criterion, in so far as the Court concludes that thiscriterion was in fact applied by the directors.

[638] These differences of view also serve to highlight the fact that determiningquestions such as whether a person is a Yindjibarndi person according toYindjibarndi law and custom are questions which, preferably, should be

834. Exhibit 23 at [14]–[15].835. [2005] FCA 777 at [1016].836. (2005) 145 FCR 442; 220 ALR 431; [2005] FCAFC 135 (Alyawarr) at [114].837. Alyawarr at [116].


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determined by Elders within the Yindjibarndi community.The evidence on which the plaintiffs relied

[639] Ms Sally Anne Walker and Ms Karen Toby gave evidence as to theirbelief that a number of the individuals whose applications were refused on thebasis of the Birdarra Law criterion in fact observed Birdarra Law. By way ofexample, Ms Walker deposed that an application by her niece, Janine Bailey, hadbeen rejected on the ground that Ms Bailey ‘does not follow Birdarra law and willnot support and uphold YAC’s objectives and policies’.838 Ms Walker’s evidencewas that she considered that her niece practised Yindjibarndi law and culture, andthat she went to law meetings when possible, but she had been away for a longtime.839

[640] Similarly, Ms Allery Sandy deposed that840

In respect of the applicants who were refused membership on the basis that they donot follow Birdarra law, in my opinion every person on the list does follow Birdarra law.They all attended law meetings and, insofar as they are young women, they attend themeetings to support their brothers.

[641] Other witnesses, such as Mr Payden Sandy,841 gave evidence that theyobserve Birdarra Law but were refused membership of YAC on the basis thatthey did not meet the Birdarra Law criterion for membership. Mr Sandy deposedthat he is:842

an initiated Yindjibarndi man. My dad especially and my uncles, John Sandy andRicky Sandy, brought me up in accordance with Birdarra law.

Whenever I am able to, I attend law ceremonies. …

I speak Yindjibarndi language and I have been brought up in accordance with andrespect for traditions, language and culture and customs of the Yindjibarndi people.

[642] Mr Payden Sandy acknowledged that he was a member of WMYAC,843

but his evidence was that he wanted ‘to be a member of YAC so I can be therewith my dad. He raised me as a Yindjibarndi man in accordance withYindjibarndi law. I want to be there to help Yindjibarndi people’.844

[643] Mr Payden Sandy’s father, Mr Ken Sandy, who is a member of YAC,disagreed with the rejection of applications for membership by both Payden, andby his daughter, Emerson Sandy, on the basis that they did not follow BirdarraLaw. His evidence was:

I have raised all of my children to follow Birdarra law. I have put them throughBirdarra law, especially my boys. I know this reason to be false.845

[644] Perhaps the starkest example of the application of the Birdarra Lawcriterion concerned the application for membership made by Mr Rodney Adams.Mr Adams applied for membership of YAC on 14 March 2016.846 His application

838. Exhibit 23 at [9].839. Exhibit 23 at [9]–[12].840. Exhibit 19 at [26].841. Exhibit 24 at [6]–[7].842. Exhibit 24 at [6]–[8].843. Exhibit 24 at [5].844. Exhibit 20 at [19].845. Exhibit 27 at [25]–[26].846. Exhibit 14 at [12], Annex RA 1.


was refused on the basis that he did not meet the Birdarra Law criterion, and onthe basis that he did not meet the loyalty criterion.847

[645] Mr Adams gave evidence that he was raised as a Yindjibarndi man,initiated as a Yindjibarndi man and that he follows Yindjibarndi law. He deposedthat he attends law meetings at Woodbrook Station and ‘I generally takeresponsibility for preparing Woodbrook for meetings and cleaning up aftermeetings’.848 He also deposed that he had ‘always practised Birdarra Law andtaught Birdarra Law. My grandfathers … put me through the law.’849

[646] Mr Adams had previously been admitted to membership of YAC in2014.850 However, he signed a letter of resignation from YAC in the course of theYAC AGM on 30 November 2015, apparently in frustration at the division withinYAC’s membership between those who supported Michael Woodley, and thosewho supported WMYAC.851 His application for membership in March 2016 wasthus an application to be re-admitted to membership of YAC.

[647] There was nothing to indicate that between 2014 (when he was initiallyadmitted to membership of YAC) and June 2016 (when his application forre-admission to YAC was refused) Mr Adams’ observance of the customaryrequirements of Birdarra Law had changed in any way. Indeed, there wasevidence that nothing about Mr Adams’ observance of the requirements ofBirdarra Law had changed in the interim. Mr Ken Adams gave evidence that hedid not understand why Mr Rodney Adams had been refused membership ofYAC. He explained that he knew852

Rodney to be a Yindjibarndi man. He has been through Yindjibarndi laws. He isalways the one who has cleaned at Woodbrook and made it available for our lawmeetings. I know him to be involved with the Yindjibarndi people on a daily basis.

[648] However, one significant intervening development between 2014 and2016, was that Mr Adams had what he accepted was a ‘serious falling out’ withYAC.853 That appears to have occurred after Mr Adams participated in theunsuccessful s 66B application in July 2015.The evidence on which the defendants relied

[649] The table appended to the minutes of the directors’ meeting on 29 June2016 indicated that every applicant whose application for membership wasrejected on the basis that they did not meet the Birdarra Law criterion was alsorejected on the basis that they did not meet the loyalty criterion.854

[650] Mr Mack confirmed that the directors had rejected a number ofapplications because855

we were not satisfied that the person followed and upheld Birdarra Law and becausewe did not think that the person would uphold YAC policies and objectives.

847. Exhibit 14 at [13], Annex RA-2.848. Exhibit 14 at [4].849. Exhibit 14 at [14]–[15].850. Exhibit 14 at [5].851. Exhibit 14 at [6]–[11].852. Exhibit 27 at [29].853. Ts 724.854. Exhibit 1.565.855. Exhibit 33 at [46].


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[651] Mr Mack explained that the applicants rejected for these reasons includedCecil Injie, Rodney Adams, Payden Sandy, Emerson Sandy and Janine Bailey.However, his explanation for the directors’ conclusion revealed that it was theapplicants’ membership of, and support for WMYAC, and in turn their supportfor the FMG Agreement, that was the issue:856

These people know Birdarra Law. They know Galharra and Nyinyadt. But we werenot satisfied that they followed it all the time in respect to their behaviour on how theytreat all of YAC — the members, the directors, the staff. We thought that these peoplewere involved in the section 66B meeting and this was not supporting YAC objectives.Trying to replace the applicants like that is throwing Birdarra, Galharra and Nyinyadtout the window. If Wirlu-murra gets all the benefits in an agreement with FMG, that isnot a fair deal, that is not Nyinyadt. And that is not showing respect to all Yindjibarndipeople.

[652] Mr Mack also deposed that he had read the decision of Rares J in TJ vWestern Australia. Mr Mack’s view, apparently in light of that decision, was thatsupporters of WMYAC, with FMG behind it, were

trying to close down YAC as the [PBC] and have [WMYAC] represent Yindjibarndipeople in the Daniel determination area and in the Yindjibarndi #1 claim. Also, theywanted to replace YAC under the [Participation Agreement].857

[653] Mr Mack was cross-examined about this aspect of his evidence. It wasput to him that the issue was with membership of WMYAC. He denied that thatwas the issue:858

It’s not about that. … We have been supporting them, Wirlu-murra. We’re notWirlu-murra. … Wirlu-murra is trying to take over YAC, because of the agreement, andthese are the people FMG paid and other big supporters, that they don’t respect our law,Birdarra law. They don’t have (indistinct) upholding our agreement through that system.

[654] However, Mr Mack considered that WMYAC members were not loyal toYAC. He agreed that ‘they’re not loyal with [our] corporation. … That’s why Igot — that’s why we got elected for … we’re here for all Yindjibarndi, to protectour native title’.859

[655] In cross examination, Mr Mack confirmed that he saw the applicationsunder consideration at the meeting on 29 June 2016 as consistent with theprevious attempts by WMYAC to take over YAC:860

Wirlu-murra is trying to take over YAC, because of agreement, and there are thepeople FMG paid and the big supporters, but they don’t respect our law, Birdarra Law.They don’t have (indistinct) upholding our agreement through that system.

[656] Mr Mack confirmed in cross examination that his view was that in so faras WMYAC members had participated in the s 66B application, and proposed toenter into the FMG Agreement, that was inconsistent with Birdarra Law andNyinyadt. His evidence was:861

… you share and caring, and look after and respecting old people; elders. That’s partof Birdarra society. … All people learn this — about this and that. How to respect each

856. Exhibit 33 at [48].857. Exhibit 33 at [25]–[29].858. Ts 1008.859. Ts 1009.860. Ts 1008.861. Ts 1008.


other. How to preserve what’s now, future. For our generation and next generation …and it includes Galharra Nyinyadt as well. Nyinyadt is, you know, I just told you. Youshare one thing … Rod Adams was a member. We don’t see him as a Wirlu-murra, wejust saw him as a person who was trying to take over a corporation — YAC corporation,and a few other members as well, which it was Rod, Payden, Emerson, Janine. — Theydo not all hold the Birdarra law or even culture through Nyinyadt. Nyinyadt — if theywere to — if they were to replace us at the — Rodney — especially Rodney, he wasthe application — applicant, applying for application to replace us at the s 66B. It comeback to the signing of agreement with FMG. He was — if he would have got anapplication of applicant, he would sure enough have signed agreement with FMG. Assigning the agreement, it goes, the document say … it goes to Wirlu-murra people. …Wirlu-murra members. … Not YAC or Yindjibarndi. Yindjibarndi is one. That’s not ourlaw, that’s not the Wirlu-murra law.

[657] Mr Mack went on to say:862

Wirlu-Murra is just — we heard — we hear that it’s a day to day corporation run —I don’t know what it’s called, but a day to day be called, but we know they’re — they’vebeen getting support from FMG, the section 66B shows it, to take over YAC for theagreement, to take over the Yindjibarndi claim. If they’re — and come back with my— they’re come back to what I am saying earlier. They’re wanting to take — if theysign the agreement, Nyinyadt, what we’re trying to — you know, we made the rule for,you know, upheld the Birdarra Law through Nyinyadt, and that’s — you know, they’renot showing a true Yindjibarndi person of a person who is, you know, wanting to shareand care for all Yindjibarndi. They want to grab for themself … they’re not loyal withthe corporation … with our corporation.

[658] It was apparent from Mr Mack’s evidence that in his view, disagreeingwith the position taken by YAC’s board in relation to entry into the FMGAgreement was inconsistent with upholding Birdarra Law. He explained thatview in the following part of his cross examination:863

So is it that they — you don’t think that they’re being loyal to the YindjibarndiAboriginal Corporation and that’s not upholding Birdarra law? — Upholding Birdarralaw, yes.

Have I got that right, to be clear on that? So, because they don’t support theYindjibarndi Aboriginal Corporation, they’re not upholding Birdarra law? Is that a fairsummary? — Yes, through Nyinyadt.

Yes? — And they — through that Nyinyadt and Galharra. They’re only respectingthemselves. They don’t even respect us, what we’re trying to do for them. It’s a deal foreveryone, not for individuals. So Nyinyadt is — it comes into play if they want to signthe deal, FMG will give Wirlu-murra and their members. We’re not a member of … thewhole of Yindjibarndi is not a — with Wirlu-murra Aboriginal Corporation. It’s onlyabout a few of them. … Nyinyadt is a big part of why — and the Birdarra law(indistinct) Birdarra law (indistinct) the policy, it’s a big — plays a big part.

[659] Mr Mack’s evidence was that he did not think that entry into the FMGAgreement was Nyinyadt for Yindjibarndi people:864

Why do you say that was — meant that all the benefit will go to Wirlu-murra and tonobody else in the community and, therefore, it wasn’t sharing in the YAC manner? —Well the … speculating (indistinct) if they do — if they do get in, form this corporation

862. Ts 1008–9.863. Ts 1009.864. Ts 1015.


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… sign the deal … with FMG it’s — it brings back that same thing then. It’s (indistinct)

for all Yindjibarndi people. It’s Nyinyadt for you, Nyinyadt for us, Nyinyadt for our

kids, Nyinyadt for today’s people.

[660] It was apparent from Mr Mack’s evidence that it was for this reason thathe took the view that Mr Rodney Adams did not uphold Birdarra Law.865

[661] Ms Cheedy did not go so far as to equate an applicant’s support for theFMG Agreement as an indication that the applicant did not follow Birdarra Lawor Nyinyadt. There was no evidence to suggest that other directors held the sameview as Mr Mack.

[662] In so far as Ms Cheedy’s evidence was that the directors refusedapplications on the basis that the applicant did not follow Birdarra Law, she didnot identify any separate basis for that conclusion, as distinct from the directorsconclusion that the applicant did not meet the loyalty criterion.

[663] By way of example, Ms Cheedy explained why it was that applicationsfrom Payden Sandy and Emerson Sandy were rejected. Her evidence was thatthat was because ‘they do not uphold Birdarra Law and because they do notsupport and uphold YAC’s objectives and policies. They were involved in theattempt to remove the decision makers for the Yindjibarndi #1 claim last year’.866

[664] For completeness, I note that in cross examination, Ms Cheedy sought toadd to her explanation for why applications by Payden Sandy and EmersonSandy were rejected, by suggesting that they were rejected ‘because we havebeen told that they follow their mother’s side — Ngarluma side’.867 Thatexplanation was inconsistent with Ms Cheedy’s other evidence, and with thereasons identified in the table attached to the minutes of the directors’ meeting of29 June 2016. In the end, Ms Cheedy confirmed that the only reasons for therejection of Mr Payden Sandy’s application were those which she had identifiedin her affidavit, namely that he did not meet the Birdarra Law criterion and theloyalty criterion.868 Counsel for the Defendants submitted869 that Ms Cheedybecame confused about the directors’ reasons for rejecting these applicants. I donot accept that submission. In my view, this was an occasion on whichMs Cheedy sought to cast the decision of the directors in a more positive light.Consequently, I do not place any weight on her suggestion that the applicationsby Mr Payden Sandy and Ms Emerson Sandy were rejected because they did notmeet the identification criterion.

[665] Turning to Ms Janine Bailey’s application, Ms Cheedy explained that herapplication was rejected:870

because WMYAC and [Rodney Adams] made the application on her behalf. She hadnever made an application to be a member of YAC before. The board did not considerthat [Ms Bailey’s] application should be accepted as she is an avid supporter ofWMYAC and her family have always been part of WMYAC. She would not support anduphold YAC’s objectives and policies under clause 2.6 of the policy.

865. Ts 1004.866. Exhibit 39 at [20.28].867. Ts 1121.868. Ts 1121–2.869. Defendants’ reply submissions at [35]–[36].870. Exhibit 39 at [20.29].


[666] Finally, Ms Cheedy also referred to Mr Rodney Adams’ application. Shenoted that Mr Adams had resigned from YAC,871 and noted that Mr Adamshad872

tried to come back and be a member of YAC again … [but that] under 2.6 of thePolicy he cannot be a member of YAC because he does not support and uphold YAC’sobjectives and policies. He and others started an application in the Yindjibarndi #1proceeding to replace the current applicants with himself and Sylvia Allen, MaudieJerrold, Francis Phillips, Allery Sandy, Ken Sandy and Diana Smith … I know from thes 66B application in July 2015 that [Rodney Adams] wants to replace YAC with anotherPBC and take the Rio Tinto agreement money and settle the Yindjibarndi #1 claim fornon-exclusive native title like the Ngarluma Yindjibarndi determination.

[667] The only other evidence which directly bears on the bases for therejection of applications in this category is that which was given by Mr Irving.He was present during most of the directors’ deliberations on 29 June 2016.Mr Irving explained that part of the discussion he witnessed was conducted inYindjibarndi language, but that nevertheless he understood the gist of thediscussion overall.873 Mr Irving’s recollection was that strongly held views wereexpressed by some of the directors — including Ms Cheedy, Mr Stanley Warrieand Ms Tootsie Daniel — to the effect that ‘we’ve got to be able to protect ourcountry’.874 He accepted that what was said was to the effect that anyone whosupported WMYAC in the June 2015 ballot prior to the s 66B application wouldnot support the YAC board in protecting Yindjibarndi country.875 I understoodthat to be a reference to the view taken by YAC’s board that entry into the FMGAgreement was not in the best interests of YAC, so that to permit that to occurwould not protect Yindjibarndi native title rights in respect of the Yindjibarndi #1claim.

[668] Finally, in assessing the evidence as to how the directors dealt with theapplications in this category, the broader context cannot be overlooked. Themembership decisions made on 29 June 2016 followed the decision of Le Miere Jearlier in 2016 that the directors had used their power to admit members for animproper purpose, namely to influence the vote at the next general meeting, andto ensure support for the then incumbent board of directors. Notwithstanding thecriticism by Le Miere J of the then directors’ conduct, it is apparent that the CEOof YAC, and the directors who were elected subsequent to that decision, remainedof the view that WMYAC members and supporters continued to seek to join YACbecause they wanted to take control of YAC, and that if they did so, they wouldseek to enter into the FMG Agreement. Mr Mack’s evidence in cross examinationwas that following the decision of Le Miere J:876

Maybe we were still — we still want to, you know, continue the fight with … FMGand John Sandy case.

871. Exhibit 39 at [20.4].872. Exhibit 39 at [20.4].873. Ts 1458.874. Ts 1458.875. Ts 1458.876. Ts 951.


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[669] He agreed that the directors thought that they ‘still had to continue thefight’877 and that that was despite what Le Miere J had found in the Sandy (No2) case. Mr Mack’s response to that line of questioning suggested that he was ofthe view that that ‘fight’ was justified given the conduct of WMYAC:878

yes. And, yes, what — you know, what’s Wirlu-murra doing to our corporation, or thecorporation we represent?

[670] Mr Woodley’s evidence demonstrated that the membership applicationsreceived from WMYAC’s solicitors prior to the directors’ meeting on 29 June2016 were submitted as part of the continuing attempts by WMYAC to takecontrol of YAC. He said:879

I believe that this membership drive is ongoing. The basis for my belief is theapplications YAC received in May this year from Integra Legal. … Integra Legalre-submitted 44 applications and lodged 86 new ones. I do not believe that 130 peopleapproached Aileen Sandy and Sylvia Allan and asked them to lodge the applications ontheir behalf. I believe that Wirlu-murra is behind them.

[671] I find that in June 2016, YAC continued to approach membershipapplications from individuals regarded as members or supporters of YAC as partof a continuing attempt by WMYAC and its supporters to take control of YAC forthe purpose of securing entry into the FMG Agreement.Conclusion in relation to the application of the Birdarra Law criterion andthe loyalty criterion

[672] Counsel for the defendants submitted that in relation to the rejection ofapplicants in this category, Mr Mack’s evidence established that the directorswere not satisfied that Mr Rodney Adams and others followed Birdarra Lawbecause the directors believed that those persons were trying to take over YAC,replace it as the Applicant in the Yindjibarndi #1 claim, and then enter into anagreement with FMG that would benefit only a minority of Yindjibarndi people,and that this was not Nyinyadt.880

[673] Apart from the evidence given by Mr Mack, there was no other evidenceto suggest that supporting the objectives and policies of YAC, as determined bythe board of YAC from time to time, was in fact a requirement for followingBirdarra Law. Nor was there any evidence (apart from that given by Mr Mack)that any person who supported entry into the FMG Agreement did not, for thatreason, follow Birdarra Law. Having regard to the way in which the otherwitnesses (for the plaintiffs and for the defendants) described Birdarra Law intheir evidence, I agree with the submission of counsel for the plaintiffs881 thatMr Mack’s evidence on these issues represented his own personal, and unique,view of what it means to follow Birdarra Law. In addition, having regard to theevidence of Ms Cheedy, I do not accept that Mr Mack’s evidence in thisparticular respect can be considered evidence of the views held by the directorsof YAC as a whole.

[674] In my view, Ms Cheedy’s evidence supports the conclusion that it is morelikely than not that when the directors (apart from Mr Mack) refused membershipto those applicants in this category, their primary reason for doing so was because

877. Ts 951.878. Ts 952.879. Exhibit 41 at [37].880. Defendants’ closing submissions at [196].881. Ts 1637.


the directors concluded that the applicants did not meet the loyalty criterion —that is, that they would not support the objectives and policies of the incumbentboard of YAC. I find that the directors treated that conclusion as indicating thateach of the applicants did not follow Birdarra Law, without turning their mindsto what Birdarra Law required, and then relied upon that conclusion to determinethat they were not satisfied that the applicant did follow Birdarra Law.

[675] At least in relation to the applicants whom the directors regarded assupporters of WMYAC, I find that the directors’ conclusion that these applicantsdid not meet the loyalty criterion was entirely attributable to their support forWMYAC. Furthermore, in the case of those who, like Mr Rodney Adams, andPayden Sandy and Emerson Sandy, were understood to have participated in, orsupported, the s 66B application, I find that that was an additional reason whythey were refused membership on the basis that they did not meet the loyaltycriterion.

[676] Furthermore, having regard to the evidence of Mr Mack, Ms Cheedy, andMr Irving, and to the other evidence as to the directors’ objectives in adopting thePending Applications Policy, to which I referred above at [572]–[573], I find thatthe directors’ motivation was to deny membership of YAC to those personswhom they identified as supporters of WMYAC, and who they regarded assupporting YAC’s entry into the FMG Agreement, so as to prevent the supportersof WMYAC from taking control of YAC.

[677] In making these findings, I make no findings about what it means tofollow Birdarra Law, or as to the requirements or principles of Birdarra Law. Itis not necessary or appropriate to make any such findings in this case.

The misplaced applications

[678] There was little direct evidence in relation to the 10 applications whichhad not previously been considered or determined, and which were in theenvelope sent to the defendants at some stage before 29 June 2016, but whichthey say was misplaced.

[679] Ms Cheedy was unable to recall the applications that were lost.882

Counsel for the plaintiffs described that evidence as ‘extraordinary’,883 to theextent that it suggested that ‘[b]etween the date of the pleading and the date ofMs Cheedy giving evidence apparently no-one had informed the Chairperson ofYAC of the facts pleaded by YAC in the case’.884 There is some merit in thesubmission, albeit that it was rather overstated. The fact that Ms Cheedy knewnothing of the missing applications was surprising. However, in my view, thatfact is more consistent with the inexperience and lack of sophistication of thedirectors of YAC, and their tendency to leave matters of the day to dayadministration of YAC (and to some extent, other more significant matters suchas the conduct of this litigation, with its complexities) to others, including theCEO and YAC’s lawyers.

[680] Mr Mack was unable to say where the 10 applications had gone andexplained that he only dealt with those membership applications that Mr Daviesincluded in the papers for the directors’ meeting on 29 June 2016.885 Counsel for

882. Ts 1123.883. Plaintiffs’ closing submissions at [141].884. Plaintiffs’ closing submissions at [144].885. Ts 1001–2.


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the plaintiffs submitted that Mr Mack’s evidence in this respect was evasive,886

because Mr Mack said he was unable to recall whether the board had determinedany membership application since 29 June 2016, when in fact four applicantswere admitted to membership as recently as 4 November 2016.887 I do not acceptthat Mr Mack was deliberately evasive on this particular issue. My impressionwas that he was focused on trying to recall anything about the missingapplications, and genuinely did not know anything about them, and that hisanswer concerning more recent applications reflected confusion rather thanevasiveness.

[681] Mr Irving recalled that the envelope containing the applications wasdiscovered after the directors’ meeting on 29 June 2016, somewhere in the officesof YAC or Juluwarlu.888 His understanding was that of the 44 applicationscontained in the envelope, many of them had already been considered.889

[682] The letter dated 22 July 2016, from Mr Philip Davies, the contact officerat YAC, to the Registrar sheds some light on what occurred and how the 10applications were dealt with by YAC. Mr Davies advised that890

Unfortunately, 11 applications that may have been received by YAC before 1 June2016 did not become known to YAC until well after the directors’ meeting on 29 June2016 because they were in an envelope that was misplaced in YAC and only discoveredin the last few days, and therefore the names of the 11 applicants do not appear in theYAC membership applicant spreadsheet. The 11 unknown applications were included ina batch of 44 membership applications that were posted to YAC by Integra Legal on26 May 2016. Thirty-three of these 44 applications were known because they had beenleft undecided by the directors on a previous occasion and so they were dealt with at thedirectors’ meeting on 29 June 2016.

However, of the 11 unknown applications, 10 of the applicants … had previouslybeen rejected by the Yindjibarndi membership committee as at 28 July 2014. … Thefinal outstanding one of the 44 applications, being Mr Alex Ranger, was previouslyconsidered accepted by the YAC members’ sub-committee and is included in theanthropologists’ final report, which is attached to this letter. I don’t know why he hadnot been added at an earlier time to the YAC member list, but I will check to ensure Alexis not deceased, and if not, I will add his name to the YAC member list online early nextweek.

[683] Mr Mack was asked whether, since 29 June 2016, the board had met toconsider those 10 applications which had been misplaced, and which had notbeen determined by YAC’s board. He was unable to remember whether the boardhad determined any membership applications since 29 June 2016,891 nor was heable to explain why it was that the board had not made a decision in respect ofthose 10 applications. His evidence was that ‘as a director he saw nominationsand accepted them or rejected them but did not deal with the paperwork’.892

[684] I find that while YAC received 44 applications for membership at somestage prior to 29 June 2016, the envelope containing those applications wasmisplaced and not discovered, so that the directors did not consider thoseapplications at their meeting on 29 June 2016. I also find that of the 44

886. Plaintiffs’ closing submissions at [134].887. Ts 1000–1.888. Ts 1459.889. Ts 1459.890. Exhibit 1.332.891. Ts 1000.892. Ts 1001.


applications, 34 had previously been determined. However, as there was noevidence to suggest that the remaining 10 applications for membership had beenconsidered by the directors after 29 June 2016, I find that those 10 applicationsremained outstanding as at the date of trial.


s 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act?

[685] It is useful, at this point, to recall precisely what the plaintiffs’ case is, inrespect of the decisions made on 29 June 2016. The plaintiffs’ case is that thedirectors’ conduct on 29 June 2016, in accepting 26 applications for membershipand rejecting 125 applications from WMYAC members, was oppressive conductcontrary to s 166-1(1)(d) and (e) of the CATSI Act. The plaintiffs contend that thedirectors acted in a biased fashion that was oppressive to a member or membersof YAC, because the effect of those decisions was to dilute the voting power ofmembers of YAC who supported WMYAC and to shore up support for the thenboard of directors of YAC. The plaintiffs did not seek to prove that everyapplicant whose application was rejected was entitled to membership. Rather,although they adduced some evidence to demonstrate that some of the applicantsappeared to meet the criteria for membership, or were perceived by somemembers of YAC as meeting those criteria, their focus was on the directors’application of membership policies.893 The plaintiffs submitted that thosepolicies were drafted in such a way as to ensure that no member or supporter ofWMYAC could satisfy those requirements and thereby gain membership ofYAC,894 and that the policies were not applied in good faith, but rather wereapplied with a view to ensuring that WMYAC members were excluded frommembership.

[686] The plaintiffs also contended that YAC’s delay in issuing letters to at leastsome of the rejected applicants until 22 July 2016 constituted a failure to complywith the requirements of the second compliance notice, in that notice of thedirectors’ decision to reject those applications was not given within a reasonabletime of their decision, and that that was contrary to s 144–10(6) and (7) of theCATSI Act.895 The plaintiffs contend that that contravention of the CATSI Actconstituted conduct caught by s 166-1(1)(d) and (e) of the CATSI Act also.896

[687] The defendants’ position, in summary, is that the conduct of the directorson 29 June 2016 cannot be regarded as a biased exercise of their power to admitmembers, and that their conduct was not oppressive for the purposes ofs 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act. They rely on the fact that theboard was not the same board as was the subject of criticism by Le Miere J inSandy (No 2), that the directors accepted some applications and rejected others,and that of the 146 applications which were refused, the directors took intoaccount only the membership criteria for YAC and discretionary matters whichwere referable to YAC’s objects. The defendants submitted that there was nobasis for asserting that that policy was not formulated and adopted in good faith,or that it was applied in a biased and discriminatory way.897 The defendants

893. Plaintiffs’ closing submissions at [131].894. Ts 1431.895. PSIFC at [68].896. PSIFC at [210]–[211].897. Defendants’ opening submissions at [42].


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submitted that the content of the policy which was applied was entirely consistentwith YAC’s membership rules in the YAC Rule Book, and with its objects.898

[688] In relation to the persons whose applications were rejected on the basisthat they did not identify as Yindjibarndi, and were not regarded by the directorsas Yindjibarndi, counsel for the defendants accepted that there were differencesof view in the evidence as to whether it was consistent with the Yindjibarndi wayto follow more than one Aboriginal group, but submitted that that was to beexpected in any oral culture.899 Counsel for the defendants also submitted that theexplanation for why existing members of YAC were also members of theNgarluma, when on 29 June 2016 applicants were refused membership on thebasis of that they were members of another native title group or PBC, was thatmany of those people were accepted for membership by the Elders’Sub-committee under the Settlement Deed and the subsequent mediation,900 andthat at that time, YAC’s policy was that a person could become a member simplyif they had a Yindjibarndi ancestor.901

[689] In relation to those rejected on the Birdarra Law criterion or the loyaltycriterion, counsel for the defendants submitted that there was ‘ample evidence todemonstrate that in rejecting this group of applications the directors did sobecause they honestly and reasonably believed that these applicants were notfollowing and upholding Birdarra law and would not support and uphold YAC’sobjectives’.902 They also pointed out that had the s 66B application succeeded,YAC would have been stripped:903

of its only functions (to hold on trust and to manage the native title rights andinterests in the Daniel determination area and to act as the agent of the Applicant for theYindjibarndi #1 claim), taken from it its primary source of income (the ParticipationAgreement) and consistent with the case advanced by FMG in the Yindjibarndi #1claim, conceded that the Yindjibarndi People possess no more than non-exclusive nativetitle rights and interests in the Yindjibarndi #1 claim area. Those actions, if successful,would have destroyed YAC and would have substantially weakened the YindjibarndiPeople’s negotiation position over mining and compensation for mining, on theYindjibarndi #1 claim area.

[690] Their case was that in those circumstances, the directors acted reasonablyto exclude from membership those persons who they did not believe would actin the best interests of YAC and in accordance with its policies and objectives.

[691] I am unable to accept the defendants’ submissions. In my view, theplaintiffs have established that the conduct of the directors in determining themembership applications on 29 June 2016 was oppressive for the purposes ofs 166-1(1)(d) and (e) of the CATSI Act. I have reached that view for thefollowing reasons.

[692] First, I am satisfied that the decision to refuse membership to WMYACsupporters on the identification criteria, the Birdarra Law criterion, or the loyaltycriterion, constituted the exercise by the directors of their power for an improperpurpose.

898. Defendants’ opening submissions at [42].899. Defendants’ closing submissions at [193].900. Defendants’ closing submissions at [197]; defendants’ reply submissions at [37].901. Defendants’ reply submissions at [36].902. Defendants’ closing submissions at [196(a)].903. Defendants’ closing submissions at [196(c)].


[693] The power being exercised was the power to admit persons tomembership, which was to be exercised by reference to the criteria formembership in rule 3.1 of the Rule Book, and subject to the directors’ residualdiscretion to refuse membership to a person who otherwise met those criteria.904

I discussed that power above at [221] and [225]–[226].

[694] As I have found, the evidence established that there was a difference ofview within YAC’s members as to whether YAC should enter into an agreementin terms similar to the FMG Agreement. The question whether YAC should enterinto an agreement with FMG in relation to the area the subject of the Yindjibarndi#1 claim, in advance of the determination of the Yindjibarndi #1 claim, and if so,on what terms, was an issue over which there were clear differences of opinionas to what would be in the best interests of the Yindjibarndi people. The evidencewas that a number of Yindjibarndi people who were in favour of entry into theFMG Agreement were members or supporters of WMYAC. The evidenceestablished that the existing membership of YAC comprised persons who weremembers of WMYAC. The evidence also established that the directors of YACwere opposed to entry into the FMG Agreement. If the directors refusedmembership to those persons who were also members or supporters of WMYAC,it followed that the directors would be able to reduce the prospect that WMYACmembers or supporters would achieve the necessary majority to appoint thedirectors or YAC, or to secure a vote in favour of entry into the FMG Agreement.

[695] I have found that the directors decided to exercise their power to admitmembers to YAC by reference to the Pending Applications Policy (which drewon the new policies which were adopted on 9 June 2016). I have found that thedirectors adopted the Pending Application Policy and the new policies for thesame objective, namely to provide a basis for YAC’s directors to refuse anapplication made by any person who was a member or supporter of WMYAC,and who it was presumed would take a different view from that of the directorsin relation to entry into the FMG Agreement.

[696] I have found that the directors did not genuinely apply the identificationcriteria within the Pending Application Policy. I am satisfied that the real reasonwhy at least some of the applicants in that category of applicants were refusedmembership was that they were considered to be members or supporters ofWMYAC. I have also found that the directors (apart from Mr Mack) purportedto apply the Birdarra Law criterion as well as the loyalty criterion, but in factrefused applicants in this category because they did not meet the loyalty criterion.I have found that in doing so, their conclusion that those applicants did not meetthe loyalty criterion was entirely attributable to their support for WMYAC, andin the case of those who had participated in the s 66B application, they were alsorefused membership on that basis. I am satisfied, in all the circumstances, that thedirectors’ objective in refusing membership to those persons identified assupporters of WMYAC was to prevent WMYAC members and supporters fromattaining a majority of the membership of YAC, so as to be in a position todetermine the constitution of the board, or otherwise to bring about YAC’s entryinto the FMG Agreement, or an agreement in similar terms.

904. Rule 3.1 of the YAC Rule Book: Ex 1.292.


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[697] To exclude applicants for membership simply because those personsmight pursue YAC’s adoption of policies with which the directors did not agreewould not be a proper exercise of the power to admit members.905

[698] In my view, the plaintiffs have established that the decisions made by thedirectors to refuse membership on the identification criteria, or the Birdarra Lawand loyalty criteria, were decisions of a kind that no board acting reasonably orrationally could have made. (That conclusion is not referable to the merits of theterms of the FMG Agreement, save that it recognises that the merits of thatAgreement were matters of legitimate differences of view.906) At its mostfundamental, the conduct of the directors in refusing the membershipapplications was designed to stifle dissent, within YAC’s membership, from theirview that entry into the FMG Agreement was not in the best interests of YAC.The merits of that agreement were, however, matters about which there werestrongly held differences of view within YAC’s membership. In my view, it is inthe interests of all members of YAC to be able to freely debate issues of suchsignificance to the Yindjibarndi people as whether to enter into ILUAs withmining companies, and if so, on what terms, and to seek to persuade others oftheir own views about the merits of such proposed entry, with a view togalvanising support for their preferred course of action.

[699] In my view, the plaintiffs have established that the directors did not actin good faith, and that their approach to the membership applications was suchthat no reasonable board could not have made them. I am satisfied that byapplying their membership power in that way, the directors’ conduct was contraryto the interests of the members as a whole, contrary to s 166-1(1)(d) of the CATSIAct.

[700] Secondly, and contrary to the submission of counsel for the defendants,this was not a case where there was an organised attempt, by a group havinginterests utterly inimical to the objects of YAC, to take control of YAC. That isnot to deny that that was the view held by the directors of YAC. There is no doubtthat they genuinely considered that WMYAC’s supporters were trying to joinYAC in sufficient numbers to elect directors to the board of YAC, or at least tosecure sufficient votes to pass a motion at a general meeting in support ofexecuting the FMG Agreement, or an agreement in similar terms. However, I amnot persuaded that support for the FMG Agreement can properly be characterisedas a position which was inimical to the objects of YAC, so as to warrant thedirectors taking the step of endeavouring to exclude WMYAC members andsupporters from membership of YAC.

[701] The objects of YAC are set out at [21]–[22] above. They includeproviding relief from poverty, misfortune and destitution among Aboriginalpeople, advancing and promoting the wellbeing of Aboriginal people, providingeconomic benefits to Aboriginal people, and protecting, preserving andadvancing the traditions, laws, culture and customs, economic development andinterests of Aboriginal people. Those objects can clearly be pursued in a varietyof ways. It cannot be said that those who thought that the best way to advanceYAC’s objects was to pursue the FMG Agreement, or an agreement in similarterms, had interests which were utterly inimical to the objects of YAC.

905. Compare ASC v MS Society (Tas) at 510.906. See Westpac v Bell Group (No 3) at [923] per Lee AJA, [1988] per Drummond AJA, [2772] per

Carr AJA.


[702] Counsel for the defendants submitted that WMYAC and its supporters‘intended to strip YAC of its functions and take its major source of income’.907

In my view, that submission overstated the position as at 2016. By then, the s 66Bapplication had been rejected by the Federal Court. As for the FMG Agreement,nothing in the terms of that Agreement sought to strip YAC of its functions, nordid that Agreement create any obligation to remove YAC as the Applicant in theYindjibarndi #1 claim, or as the PBC in respect of the Daniel determination.

[703] I have discussed the terms of the FMG Agreement above at [145]–[151].It is true that under the FMG Agreement, compensation payable under thatAgreement was to be paid to WMYAC, rather than to YAC. In contrast, if adetermination of native title were made in the Yindjibarndi #1 claim area, anycompensation which might be payable for FMG’s activities within that areawhich interfered with those native title interests would be paid to a corporationnominated to act as the PBC and trustee of the native title rights of the commonlaw holders. The assumption appears to have been that that corporation would beYAC. To that extent, the payment of compensation to WMYAC, rather than toYAC, could be seen to deprive YAC of compensation which might otherwisehave been payable to it, or at the least, from which it might benefit. However,nothing in the FMG Agreement would have deprived YAC of any existingentitlement to compensation.

[704] In so far as compensation for any activities by FMG in the Daniel

Determination Area was concerned, there was no evidence to suggest that entryinto the FMG Agreement (or a similar agreement) would see YAC deprived ofany compensation which it was already receiving (there being no evidence thatYAC had an existing agreement with FMG in respect of the Daniel

Determination Area). However, entry into such an agreement would have theresult that any future compensation for activities by FMG in the Daniel

Determination Area would not be paid to YAC, but would be paid to WMYAC.

[705] To my mind, the continued assumption, in 2016, by YAC’s directors, thatif the FMG Agreement (or an agreement in similar terms) were entered into, thatthat Agreement would require the payment of compensation to WMYAC, ratherthan to YAC, had an air of unreality about it. If WMYAC supporters wereadmitted to membership of YAC in sufficient numbers to constitute a majority, soas to be able to take control of the Board, or otherwise to obtain sufficient supportfor a motion in favour of entry into an agreement consistent with the FMGAgreement, it is far from clear why it would then be necessary or appropriate forany payment of compensation under such an agreement to be made to WMYACrather than to YAC. The only reason why the payment of compensation, under theFMG Agreement as drafted, was to WMYAC, was because the members ofWMYAC had negotiated the agreement, and they did not, at that stage, constitutea majority of the membership of YAC. But if those in favour of the FMGAgreement secured a majority of YAC’s membership, and control of the board,and were then free to secure YAC’s entry into an agreement with FMG, it is farfrom clear why, at that stage, it would be necessary for the payment ofcompensation under such an agreement to be made to another ATSI corporation,like WMYAC, rather than to YAC itself.

907. Defendants’ reply submissions at [45(b)].


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[706] Counsel for the defendants also submitted that if WMYAC’s supporterswere able to compel YAC to enter into the FMG Agreement, then ‘YAC and thenative title claimants would have surrendered all of their valuable negotiationrights under the NT [Act] and in return would have received nothing’.908 It is truethat entry into an agreement with FMG, for the provision of compensation formining-related activities in the Yindjibarndi #1 claim area, in advance of thedetermination of that claim, would involve a judgment that it was moreadvantageous to the Yindjibarndi people to receive compensation in advance ofthe time frame within which they would otherwise receive compensationfollowing a determination of native title. It would also necessarily involve ajudgment about the value of the rights — not yet recognised as native title rightsunder the NT Act — which were the subject of that bargain. However, those werematters of commercial judgment. While minds may (and did) differ aboutwhether, and on what terms, such a decision should be made, a decision of thatkind could not, in my view, be described as inimical to the interests of YAC’smembership (namely its present and future members).

[707] Thirdly, in my view, YAC’s conduct was oppressive to a minority of themembers of YAC, namely to those existing members of YAC who were alsomembers and supporters of WMYAC, and who did not support the incumbentboard. While much of the focus of the evidence at the trial was on the directors’concern that WMYAC supporters would support entry into the FMG Agreement,that was not the only concern that members of YAC, who were also members ofWMYAC, had expressed about YAC and its management. As I discussed aboveat [122] and following, their concerns extended to the financial management ofYAC, and the management style of Mr Woodley as its CEO. To deny membershipof YAC to persons who might take a different view from the incumbent directorsof YAC, and their supporters, about the financial management, and approach, ofYAC, meant that it would be more difficult for those members in the minority tohave their concerns addressed. From that perspective, the directors’ approach tomembers did not constitute a fair or reasonable approach to the positionsupported by a minority of its members. The directors’ conduct was, for thatreason, also oppressive conduct within s 166-1(1)(e) of the CATSI Act.

[708] However, I am not persuaded that YAC’s delay in issuing letters to atleast some of the rejected applicants until 22 July 2016 constituted a breach ofs 144–10(6) and (7) of the CATSI Act, or oppressive conduct under s 166-1(1)of the CATSI Act. Given the number of applications involved, I am not persuadedthat the period of just over three weeks between the date of the decision onmembership, and the date on which the letters appear to have been sent,constitutes a failure to comply with the requirement under the CATSI Act, andYAC’s Rule Book, to advise an applicant in writing of the reason for rejectingtheir membership application. In reaching that view, it is relevant that there is nosuggestion that that delay was regarded by the Registrar as a contravention of thesecond compliance notice. No basis has been established for taking a differentview. In my view, this conduct was not conduct which could, in thecircumstances, be properly described as oppressive conduct under eithers 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act.

[709] I turn to consider the question of relief.

908. Defendants’ reply submissions at [45(a)].


What relief, if any, should be granted in respect of this oppressive conduct?

[710] In my view, relief should be granted in respect of this conduct. However,I am not persuaded that the appropriate relief is the appointment of a receiver. Myreasons for that view are set out in detail below, when I consider the question ofthe overall relief which should be granted for all oppressive conduct.

[711] I turn next to consider the various allegations made by the plaintiffsconcerning the conduct of meetings of YAC and the administration of YAC’sfinances.

7.2 Alleged failure to conduct or manage meetings properly and allegedimproper administration of YAC’s finances

[712] The plaintiffs allege that a number of meetings of YAC were not properlyor fairly conducted, so as to amount to conduct which was not in the interests ofthe members as a whole, or which was oppressive to a member or members, forthe purposes of s 166-1(1) of the CATSI Act.

[713] The conduct of YAC at some of those meetings is also alleged toconstitute an instance of improper administration of YAC’s finances.

[714] The defendants submitted that none of the matters relied upon by theplaintiffs was conduct within s 166-1(1) of the CATSI Act.909

[715] Before turning to consider each of the plaintiffs’ allegations it isappropriate to briefly recall the requirements of the CATSI Act in relation tomeetings of ATSI corporations.

[716] The CATSI Act contains a number of requirements in relation tomeetings of ATSI corporations. Ordinarily, 21 days’ notice of a general meetingmust be given to the members.910 The notice must set out the details of themeeting and the general nature of the meeting’s business.911 The purpose behindthe requirement for notice is that ‘the members enjoy a full and properopportunity by notice to consider the business of the meeting before they attendand then vote upon that business.912

[717] A general meeting must be held for a proper purpose.913

[718] In addition to any other meetings held by an ATSI corporation duringeach year, and subject to any extension granted by the Registrar,914 thecorporation must hold an AGM within 5 months of the end of the financialyear.915 The business of the AGM may include consideration of reports requiredto be laid before the meeting pursuant to the CATSI Act, the election of directors,and the appointment of the corporation’s auditor.916

[719] The corporation must keep a minute book in which it records, amongstother things, the proceedings and resolutions of all general meetings, and ofdirectors’ meetings.917

909. Defendants’ closing submissions at [199], [206].910. Section 201-25 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)

s 201-20(1).911. Section 201-35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).912. Adams at [126] per K Martin J.913. Section 201-55 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).914. Section 201-155 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).915. Section 201-150(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).916. Section 201-160 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).917. Section 220-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).


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(a) Failure to conduct meetings properly — Failure to explain YAC’s annual

financial report or provide members an opportunity to ask questions or make

comments at the AGM held on 21 March 2012; and

Improper administration of finances — Failure to explain YAC’s annual financial

report or provide members an opportunity to ask questions or make comments at

the AGM held on 21 March 2012

[720] As the two of these allegations arise from the same meeting, and allegethe same conduct, it is convenient to deal with them together.

[721] The plaintiffs’ case is that at YAC’s AGM on 21 March 2012, Mr Daviestabled YAC’s annual financial report for the year to 30 June 2011, but did not gothrough YAC’s accounts or explain them. They say that neither Mr Davies, northe Chairperson, invited questions from members, and that members were notgiven a reasonable opportunity to ask questions, or to make comments about, themanagement of YAC, or to ask the representative of YAC’s auditor any questions.They say that consequently, discussion of the financial report was hindered.918

[722] The plaintiffs say that YAC’s failure to provide members with theopportunity to ask questions or to make comments about the management ofYAC constituted a breach of s 201-165 of the CATSI Act, and that YACs failureto permit members the opportunity to ask questions of YAC’s auditor or theauditor’s representative was a breach of s 201-170 of the CATSI Act.919

[723] The defendants deny that YAC’s conduct constituted a breach of itsstatutory obligations under s 201-165 or s 201-170 of the CATSI Act, or conductof the kind described in s 166-1(1) of the CATSI Act. The defendants say that atthe meeting, Mr Davies tabled copies of YAC’s financial report for the yearending 30 June 2011, and proposed that if no one wanted to go through thereports, he would not go through them, and the meeting would proceed to thenext item of business. The defendants say that no one objected to that proposal,or sought to ask any questions. The defendants deny that discussion at themeeting was hindered in any way. They acknowledge that members were notinvited to ask questions about, or comment on, the management of YAC at thispoint during the meeting, and they acknowledge that neither YAC’s auditor, nora representative of the auditor, attended the meeting. However, the defendantssay that over the course of the meeting as a whole, members were given anopportunity to ask questions or comment on YAC’s management. The defendantsalso rely on the fact that Mr Greg McIntyre SC attended the meeting to representWMYAC members, and that he did not raise any objection on the basis thatmembers were not given a reasonable opportunity to ask questions or makecomments on the management of YAC.920

Factual findings

[724] The AGM of YAC was held on 21 March 2012 at the 50 Cent Hall inRoebourne. The meeting, which lasted for approximately two hours, wasrecorded on video, and the video, and a lengthy transcript of it, was inevidence.921

918. PSIFC at [52], [69], [187].919. PSIFC at [69], [190].920. DSIFC at [49], [157], [160].921. Exhibit 1.634; Ex 62.


[725] One of the items of discussion at that meeting concerned the accounts ofYAC. Mr Phillip Davies tabled copies of the audited and signed YAC accountsfor the year ending 30 June 2011.922 What occurred is set out in the followingportion of the transcript of the video recording of that meeting:923

Michael Woodley: We’re go to number nine on the agenda now, and that’s to present theYAC management account and Phil will do that.

Phil Davies: What I did before was I printed off fifteen copies of the YAC managementaccounts. There’s fifteen copies over on the table for anyone who’d like to read them.I’ll just table them and that’s been audited by our auditor David Swords and ouraccountant Garry Slee. And I think, um, it’s probably too much to take it in now,because you might of have just seen them. There’s certainly a few to be read and they’recertainly at the office for anyone, for any member who wants to read them and they’realso on the ORIC website for anyone to read. Um, put simply I’d say that the auditedaccounts say exactly what has been going on in YAC over the last year. Ah, we had themready …

From the floor: Can you use the microphone?

Phil Davies: Yep, sorry about that and we had them ready for the last AGM so they beensitting around for a while and they’re just available for anybody who would like to readthem. Yep. If there is no one that wants to talk anymore about that, we will just go onto the next one which is number ten, which is to elect the directors.

[726] No questions were asked in relation to the accounts, and the meetingproceeded to deal with the next item of business.

[727] It is clear that the financial report was tabled, but no motion was movedthat the report be accepted. It is apparent that Mr Davies appreciated thatmembers of YAC were unlikely to be in a position to ask any questions about thereport until they had had the opportunity to consider it. That is consistent with theapproach taken that the report was simply tabled, and that copies were madeavailable so that members could take a copy of the report away to consider.Mr Greg McIntyre SC, who was at the meeting representing WMYAC members,took a copy of the report.924

[728] Nothing in the evidence indicated that discussion of the accounts wasprevented or hindered in any direct way by any officer or director of YAC.Moreover, it is apparent from the transcript of the video recording of the meetingthat the meeting was one in which there had been a free ranging and lengthydiscussion of various items on the agenda, involving a number of the memberswho were present, and without any particular formality involved; there is noindication that any member felt reticent about asking a question or making acomment.

[729] In my view, it is significant that none of the plaintiffs’ witnesses gaveevidence that they were inhibited or prevented from asking a question about thereport which was tabled. Ms Allery Sandy’s evidence was that Mr Davies tabledthe YAC management accounts at the meeting, but did not go through them;925

however she did not go on to say that she was prevented from asking a questionor making a comment about them.

922. Exhibit 1.384.923. Exhibit 1.634, TB 8840.924. Exhibit 1.545.925. Exhibit 18 at [62].


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[730] As I have already mentioned, Mr McIntyre SC, who was acting forWMYAC, was present at the meeting. At the outset of the meeting, he intervenedto clarify the approach which was to be taken at the meeting to confirm theminutes of the previous AGM for YAC, which was held on 15 December 2010,and which had prompted the application for injunctive relief which was grantedby Master Sanderson (and to which I earlier referred). Against that background,it is not insignificant that Mr McIntyre did not make any objection to the mannerin which the financial report was tabled, or to Mr Davies’ proposal that if no onewished to ask any questions, or make any comments, then the discussion wouldmove to the next agenda item.

[731] It was apparent from the submissions of counsel for the plaintiffs thattheir case was not that discussion of the accounts was positively hindered, butrather that there was no proper opportunity given to the members to consider, andthen to ask questions about, the accounts. Counsel for the plaintiffs submitted thatwhen Mr Davies tabled the financial report he ‘did not invite discussion’926 andthat

Supplying accounts at (and during) a meeting held 9 months after the conclusion of

the accounting period is a manifest failure to comply with YAC’s obligations. A member

would have to pick up the accounts, read them, formulate questions and ask them

simultaneously with attending at a meeting. The nature of the meeting was such that the

suggestion this afforded a reasonable opportunity for members to ask questions about

the financial affairs of their corporation is untenable.

[732] In so far as counsel appeared to place some emphasis on the fact that theAGM was being held nine months after the conclusion of the accounting period,it must be borne in mind that the AGM was to have been held on 30 November2011, but YAC was restrained by an order of this Court from proceeding with theAGM, in view of the dispute over the cancellation of memberships on15 December 2010.

[733] In so far as counsel sought to suggest that there was an unfairness intabling the accounts and then expecting members to be in a position to askquestions, that is, with respect, an unfair characterisation of what occurred. It isapparent from the excerpt of the transcript that I have reproduced above thatMr Davies appreciated that members at the AGM would need the opportunity totake a copy of the report away and consider it. In those circumstances,Mr Davies’ proposal, that unless members had an (immediate) question orcomment, the discussion move on, reflected the unlikelihood that the memberswould be in a position to discuss the report at that time.

[734] Counsel for the defendants relied on the fact that after tabling the report,Mr Davies said ‘if there is no one that wants to talk anymore about that, we willjust go on to the next one which is [agenda] number ten’. He submitted that noone objected to this proposal or asked any questions. He also referred to the factthat Mr McIntyre SC, who was representing WMYAC members, took a copy ofthe report, and that a copy of the report was attached to the minutes of themeeting. The implication appeared to be that the members of YAC were able toobtain the report, in order to consider its contents, if they so chose.

926. Plaintiffs’ closing submissions at [93].



[735] There is no doubt about the importance of ensuring that the members ofa corporation have the opportunity to ask questions about, or to comment on, themanagement of the corporation, and that they are provided with a report, eachyear, of the finances of the corporation. The importance of those matters isreflected in ss 201-65 and 201-70, and in Div 333 of Pt 7 of the CATSI Act(which deals with financial reports).

[736] The plaintiffs contended that YAC’s conduct of the meeting constituted abreach of ss 201-165 and 201-170 of the CATSI Act. Section 201-165 requiresthat the chair of an AGM ‘must allow a reasonable opportunity for the membersas a whole at the meeting to ask questions about or make comments on themanagement of the corporation’. It is an offence not to do so. Having reviewedthe entire transcript of the AGM, I am not persuaded that there is any merit incounsel’s submission. As for s 201-170, it provides that if an ATSI corporation’sauditor or auditor’s representative is at an AGM, the chair of the meeting mustallow a reasonable opportunity for the members as a whole to ask the auditor ortheir representative questions relevant to the audit. It is an offence not to do so.There was no evidence to suggest that YAC’s auditor, Mr Swords, or hisrepresentative, was present at the AGM. There is no merit in counsel’ssubmission.

[737] In my view, the plaintiffs have not established that YAC’s conduct inrelation to the tabling of the financial report at the AGM, was conduct which wasnot in the interests of the members as a whole, or oppressive, or unfairlyprejudicial to a member or members of YAC, for the purposes of s 166-1(1)(d)or s 166-1(1)(e) of the CATSI Act. There was no evidence to support theconclusion that the discussion at the AGM in relation to the management of YACwas hindered in any way. Members were given the opportunity to take a copy ofthe financial report away and consider it. There is nothing to suggest that theywere prevented from asking questions or making comments at that stage,although clearly the expectation was that before asking any questions or makingany comments, members would first need to consider the report.

What relief, if any, should be granted?

[738] Even if I am wrong in this conclusion, I would not have granted reliefunder s 166-5 of the CATSI Act, or otherwise, in respect of the conduct thesubject of complaint by the plaintiffs. The AGM was held over four years beforethe trial. The conduct the subject of complaint has not been shown to have anyongoing adverse consequences for the members. No relief could have beengranted in respect of that conduct which would have had any practical utility.

(b) Discussion about financial issues hindered at the AGM held on 10 September2014; and

Issues arising out of the Korda Mentha report tabled at the AGM held on10 September 2014

[739] As these two allegations arise from the same meeting, it is convenient todeal with them together.


[740] It was not in dispute that under the Settlement Deed (to which I havealready referred), YAC was obliged to instruct a forensic accountancy firmnominated by the plaintiffs to investigate the financial affairs of YAC for the


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period 1 December 2010 to 15 September 2013 and to prepare a report. It was notin dispute that YAC instructed Korda Mentha to do this work, and it produced areport (Korda Mentha Report).

[741] The plaintiffs say that the Korda Mentha Report related to aninvestigation concerning payments made by YAC to Juluwarlu, to officers,members, employees, consultants or corporations related to Juluwarlu, and inrespect of any invoices in the sum of, or exceeding, $100,000.927 The plaintiffssay that the conclusions reached in the Korda Mentha Report included that therewere deficiencies in relation to the approval process for payments made by YACwhich were indicative of poor governance and lack of financial control withinYAC’s accounts payable function; that the benefits received from the paymentsmade by YAC, and the question whether those payments were in the interests ofYAC, were difficult to assess given their subjective nature and the informationprovided by YAC; and that in certain instances there was insufficientconsideration by YAC’s board as to whether costs to be incurred were reasonable,a lack of sufficient supporting information on how payments were to be used, anda lack of information being provided to YAC at the time of approval to assessbenefits received.928

[742] The plaintiffs’ case is that the Korda Mentha Report was presented atYAC’s AGM on 10 September 2014. The plaintiffs allege that discussion aboutissues arising from the Korda Mentha Report was hindered, and not facilitated,by YAC and the chairperson,929 in the following ways:930

(i) the Korda Mentha Report dealt with numerous issues, including thatpayments by YAC to Juluwarlu during the period 1 December 2010 to15 September 2013 were in the sum of approximately $3.4 million, andduring the discussion of the Korda Mentha Report, a member of YAC,Charmaine Adams, asked the Chairperson and the board of YAC onnumerous occasions to explain why YAC’s money was paid to or goingto Juluwarlu;

(ii) in response to Ms Adams’ questions, Mr Woodley, the CEO of YAC,responded to the effect that the questions Ms Adams raised were out oforder, and that the issue she raised should be deferred because he had apresentation later in the meeting to explain it; the Chairperson alsostated the matter in question was coming up for discussion later in theagenda; and discussion of that issue, and further discussion of it byMs Adams, was brought to an end, or was limited, and was not thenfacilitated;

(iii) a member of YAC, Mr Paul Aubrey, asked whether Korda Mentha hadestablished any fraudulent use of YAC’s money, and in response,Mr Woodley indicated that he would be giving the meeting a reportabout the payments made by YAC to Juluwarlu, and discussion of theissue raised by Mr Aubrey, including further discussion of it byMr Aubrey, was brought to an end, or was limited, and was not thenfacilitated;

927. PSIFC at [191].928. PSIFC at [157].929. PSIFC at [55], [70].930. PSIFC at [188].


(iv) Mr Woodley did not make a presentation to the meeting or give anexplanation to address the issues raised by Ms Adams or Mr Aubrey, andthe Chairperson did not return the meeting to either of those issues;

(v) Mr Woodley did not make any substantive report to the AGM in hiscapacity as the CEO of YAC, despite the fact that the meeting agendaincluded an item of business for the presentation of a reports by theCEO; and

(vi) in the circumstances, YAC and the Chairperson failed to do all thingsreasonably necessary to facilitate a full discussion at the AGM of issuesarising from the Korda Mentha Report.

[743] The plaintiffs also referred to the conclusions reached in the KordaMentha Report. They say that that Report made a number of generalobservations, including that:931

(i) 61% of YAC payments during the period the subject of the KordaMentha investigation were made to Juluwarlu or related parties; therewere numerous relationships between YAC and Juluwarlu at both themember and board level; the approvals for payments to Juluwarlu andrelated parties were generally at the board level of YAC rather than fromthe members; and that the management agreement between YAC andJuluwarlu, which also covered expense reimbursements, was onlyapproved by members in December 2009, which was more than a yearafter the management agreement commenced;

(ii) individual approvals for payments by YAC to Juluwarlu were authorisedby individuals who also acted in an official capacity in Juluwarlu, andthose payments often related to payments by Juluwarlu to other relatedparties, such as the reimbursement of expenses to members of theJuluwarlu board and wages to related individuals;

(iii) particular approvals (for example, the management agreement in respectof expense reimbursements) did not provide specificity as to what wascovered by the approval; and

(iv) a total of $826,980 was expended on payments made prior to an invoicebeing received, $282,048 was expended on payments without anyspecific board approval and $922,930 in payments was expended priorto board approval.

[744] The plaintiffs also contended that the Korda Mentha report concludedthat there were deficiencies in relation to the approval process for payments madeby YAC which were indicative of poor governance and lack of financial controlwithin YAC’s accounts payable function; that it was difficult to assess whatbenefits were received from the payments made by YAC, and whether they werein the interests of YAC, because of their subjective nature and the informationprovided by YAC; and that in certain instances there was insufficientconsideration by YAC’s board as to whether costs to be incurred were reasonable,a lack of sufficient supporting information on how payments were to be used anda lack of information being provided to YAC at the time of approval to assessbenefits received.932

931. PSIFC at [193].932. PSIFC at [194].


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[745] While the plaintiffs did not contend, at least in express terms, that thefindings made by Korda Mentha provided a basis for a finding that YAC hadengaged in conduct that fell within s 166-1(1) of the CATSI Act, it appeared thatthe plaintiffs sought to rely on the findings in the Korda Mentha Report, togetherwith a number of other matters to which the plaintiffs’ referred in this part of thePSIFC, as evidence of improper administration of YAC’s finances. It appearedthat the plaintiffs’ case was that the overall improper administration of YAC’sfinances, when considered in conjunction with the allegations of ongoingnon-compliance by YAC with the requirements of the CATSI Act and the RuleBook, amounted to conduct that fell within s 166-1(1) of the CATSI Act.933

[746] The defendants deny that discussion of the Korda Mentha Report washindered, and not facilitated, by YAC, and that in the circumstances, membershad a reasonable opportunity to discuss the Report and ask questions about it atthe meeting. They say that:934

(i) YAC posted copies of the Korda Mentha Report to members with thenotice for the meeting;

(ii) two representatives from Korda Mentha attended the meeting to give apresentation and answer questions;

(iii) YAC staff and directors were available at the meeting to answerquestions;

(iv) the Korda Mentha presentation went for about 15 minutes;(v) the discussion and questions went for nearly an hour;

(vi) any person who wanted to make a comment or ask a question had theopportunity to do so;

(vii) the discussion and questions ended only when there were no morecomments or questions from meeting attendees; and

(viii) the meeting resolved to table the Report and acknowledge therecommendations given by the Korda Mentha representatives in theirreport to the meeting.

[747] The defendants also say that there were questions raised by membersabout payments made by YAC to Juluwarlu, and that Mr Woodley indicated thathe would answer those questions when he gave his CEO’s report, howeverMr Woodley did not give his report at the meeting.935

[748] The defendants say that the fact that Mr Woodley did not give his CEO’sreport and address questions concerning payments from YAC to Juluwarlu doesnot mean that YAC and the Chairman hindered discussion of the Korda MenthaReport.936

[749] The defendants’ case, overall, was that none of the findings in the KordaMentha Report, either of themselves, or considered in conjunction with the otherconduct on which the plaintiffs relied in relation to the meetings and financialadministration of YAC, constituted conduct within s 166-1(1) of the CATSIAct.937

[750] Furthermore, the defendants say that during their presentation at theAGM, Korda Mentha’s representatives made suggestions for good governanceand improved financial control of YAC, and that YAC acted on those suggestions,

933. PSIFC at [233].934. DSIFC at [66], [158].935. DSIFC at [67].936. DSIFC at [158].937. Defendants’ closing submissions at [208].


including by appointing KPMG as its accountants.938 The defendantsparticularised the action YAC has taken, at the suggestion of Korda Mentha, asfollows:939

(i) YAC terminated its management agreement with Juluwarlu in or aboutJune 2013 and appointed its own financial controller (Chris Harrison) inor about July 2013 to perform its accounting function. WhenMr Harrison left YAC in 2015, YAC appointed KPMG to perform itsaccounting function;

(ii) With the assistance of KPMG, YAC now prepares full year budgets forapproval by its board. YAC’s management is required to manage thebusiness of YAC within the constraints of the budget and explain to theboard on a monthly basis any variances over the budget expenditure;

(iii) With the assistance of KPMG, YAC has implemented a procedure tosegregate the authorisation of payments and the processing of suchpayments;

(iv) With the assistance of KPMG, YAC has implemented a system requiringapproval by one its directors for the issue of vouchers to Yindjibarndicommunity members to spend YAC funds; and

(v) YAC has required Juluwarlu to prepare supporting documentation forcosts which are invoiced to YAC (such as costs for running camps oncountry, cultural research work and rental of premises to YAC).

Factual findings

[751] I make the following findings concerning the facts relevant to this aspectof the plaintiffs’ case.

The Korda Mentha Report

[752] It was a term of the Settlement Deed that the plaintiffs would nominatea suitable, qualified and available forensic accountancy firm to YAC and thatYAC and the plaintiffs would instruct that firm to conduct an investigation andprepare a written report into aspects of the financial affairs of YAC for the periodfrom December 2010 until 15 September 2013. In particular, those investigationswere to consider what authority was provided by the board of directors of YACfor any payments made to Juluwarlu or any person related to Juluwarlu, whatauthority was provided by the board of directors of YAC for any other paymentsmade by YAC in respect of any invoice in the sum of at least $100,000, whatbenefits were received by YAC for any payments made falling within either ofthose categories, and whether each such payment was consistent with theinterests of YAC.940

[753] The plaintiffs nominated Korda Mentha as the accounting firm to conductthe investigation.941

[754] The Korda Mentha Report contained a number of findings, including thefollowing. Korda Mentha ascertained that 61% of YAC’s payments during theperiod of its investigation were made to Juluwarlu, or related parties, and thatthere were numerous relationships between YAC and Juluwarlu at both themember and board level. In ascertaining the authority provided for those

938. DSIFC at [161]–[162].939. DSIFC at [162].940. Exhibit 1.97.941. Exhibit 1.98.


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payments, Korda Mentha observed that ‘YAC’s board provided some level orapproval for the majority of the payments’.942 However, Korda Menthaconcluded that ‘the identified deficiencies in relation to the approval process forpayments made by YAC are indicative of poor governance and lack of financialcontrols within YAC’s accounts payable function’.943 As to the benefits receivedfrom the payments and whether they were in the interests of YAC, Korda Menthaconcluded that it was difficult to make an assessment, given the subjective natureof the payments, and the information provided by YAC. Based on the informationprovided, however, Korda Mentha observed that in certain instances therewas:944

a. Insufficient consideration by YAC’s board as to whether costs to be incurredwere reasonable.

b. A lack of sufficient supporting information on how payments were to be used.c. A lack of information being provided to YAC at the time of approval in order

to assess benefits received.

The AGM for YAC on 10 September 2014

[755] An AGM for YAC was held on 10 September 2014 at the 50 Cent Hallin Roebourne. The minutes record that 219 YAC members attended the meetingin person. A large number of proxies were also received.945

[756] A copy of the Korda Mentha Report was sent to all members of YAC atthe same time as the notice of the AGM.946

[757] Prior to the AGM, members of YAC who were also members of WMYACprepared a document entitled ‘Important questions for YAC to answer’ forconsideration at the AGM. Those questions concerned YAC’s financialmanagement, arising from issues raised in the Korda Mentha Report.947

[758] At the commencement of the AGM, Ms Michelle Adams gave thatdocument to Ms Charmaine Adams, who in turn passed it to the chair of themeeting, Mr Middleton Cheedy.948

[759] The meeting was also attended by two representatives of Korda Mentha.The minutes of the meeting indicate that the meeting commenced at 10.37 amand concluded at 7.36 pm. About fifteen minutes after the AGM commenced, itwas suggested that the item of business involving a presentation by therepresentatives of Korda Mentha should be dealt with before other business. Thatsuggestion appears to have been adopted by consensus.

[760] Ms Adams’ evidence was that those attending the meeting were told thatafter the presentation by two members of Korda Mentha, everybody would havean opportunity to ask questions and have their say.949

[761] Save where I indicate to the contrary, the following summary of whatoccurred at the meeting is drawn from my observation of the video recording ofthe AGM. Korda Mentha’s representatives gave a powerpoint presentation inwhich they outlined what they were asked to investigate, how they carried out the

942. Exhibit 1.176, TB 2435.943. Exhibit 1.176, TB 2435.944. Exhibit 1.176, TB 2435.945. Exhibit 1.548.946. Exhibit 51 [10].947. Exhibit 1.239.948. Exhibit 4 at [22].949. Exhibit 4 at [21].


investigation, their findings, and the suggestions and recommendations made inthe Korda Mentha Report. That presentation took approximately 15 minutes.

[762] Questions were then invited from YAC’s members in relation to theKorda Mentha Report. A very lengthy discussion ensued, in which numerousquestions were asked and comments made by members of YAC. Although thosepersons are not identified in the video recording, it appears that they includedMs Charmaine Adams and Ms Michelle Adams. The questions and concernsraised by YAC members with the Korda Mentha representatives concernedmatters such as: the amount paid by YAC to Juluwarlu; concerns about staff ofYAC, including Mr Woodley and Mr Davies, being employees of Juluwarlu, andapproving payments from YAC to Juluwarlu; where the money went once it waspaid to Juluwarlu; what financial records of YAC were disclosed to KordaMentha; why YAC money was always being paid to Juluwarlu; the cost of theKorda Mentha Report; what benefits YAC members received for the money paidto Juluwarlu; questions about properties owned by Juluwarlu; whether thedirectors were aware of the money being paid to Juluwarlu; and Mr Woodley’salleged conflict of interest and what was being done about it. At times, the tenorof the questions and the responses from Mr Woodley became quite heated, andduring the discussion, there were also exchanges between the members of YACsitting in the body of the meeting.

[763] Ms Michelle Adams’ evidence was that ‘Mr Woodley interrupted thediscussion whenever anyone asked where YAC’s money had gone’,950 thatMr Woodley, Mr Irving and Mr Harrison continued to interrupt the discussionthroughout question time, and that Mr Woodley shouted at members, includingher, and said ‘don’t ask questions about fraud, because you’ll get yourself introuble’.951

[764] At several stages during the discussion, when questions were asked aboutwhy YAC money was being paid to Juluwarlu and for what purpose, and aboutthe total revenue received by Juluwarlu from YAC and the properties it owned,Mr Woodley (and on one occasion, Mr Cheedy) told the audience that thosematters were outside the scope of the Korda Mentha Report, and thatMr Woodley would deal with them later in the meeting when he presented hisreport. Korda Mentha’s representatives also confirmed that their investigation didnot consider those matters.

[765] After all questions were exhausted, Ms Michelle Adams move that theKorda Mentha Report be tabled, and accepted by YAC, including anyrecommendations in it. There was a discussion about whether the Korda MenthaReport contained any recommendations, before eventually a resolution waspassed simply to table the Korda Mentha Report.

[766] There was then a short break of a few minutes. Discussion of the agendaitems then resumed, commencing with a very lengthy process of dealing withapologies and proxies. There was then a discussion about other matters, includingthe membership of YAC, and the process in the Elders’ Sub-committee. At about4.30 pm, Mr Woodley asked the members if they would like to adjourn themeeting, given the hour, but no one moved a motion to that effect. The discussionthen turned to the election of directors. That also was a very lengthy process asthe meeting considered the nomination of individual directors, rather than blocks

950. Exhibit 4 at [20]–[32].951. Exhibit 4 at [34].


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of nominations. Eventually, Ms Michelle Adams and Mr Aubrey moved a motionto adjourn the meeting to a later date. Ms Adams’ evidence was that she proposedthe adjournment because she was concerned that the process for consideringnominations was not being done correctly and that there was ‘a lot of shoutinggoing on’.952 The motion to adjourn was lost. A large number of the members ofYAC then walked out of the meeting. (According to the minutes, approximately31 members then left.953) Further discussion in relation to the election of thedirectors ensued, before the meeting closed.

[767] Ms Michelle Adams954 and Ms Allery Sandy955 gave evidence that thequestions WMYAC members had prepared, and the questions asked by membersof YAC, were not answered, either during the presentation by Korda Mentha’srepresentatives, or at any later stage in the meeting.

[768] In his evidence, Mr Woodley acknowledged that YAC members hadasked questions about the funds being paid by YAC to Juluwarlu. Mr Woodley’sevidence was that he was956

happy to explain that relationship in my CEO presentation, which I did not have theopportunity to give. I did not get the opportunity because Charmaine [Adams] wantedto have a conversation about how to bring Yindjibarndi people back together. Thatconversation happened.

[769] I should say that Mr Woodley’s explanation for why he did not get topresent his CEO’s report is not accurate. The position instead was that not all ofthe business on the agenda for the AGM was completed before the meeting wasadjourned, due to the lateness of the hour.

[770] I turn next to consider the evidence relating to the defendants’ contentionthat YAC took action to remedy the deficiencies in financial administrationidentified in the Korda Mentha Report.YAC’s response to the deficiencies in financial administration identified inthe Korda Mentha Report

[771] As I have already noted, the defendants claimed that they took a varietyof actions at the suggestion of Korda Mentha, which in summary were as follows.First, the defendants claimed that YAC appointed Mr Chris Harrison, and later,KPMG to perform its accounting work. Secondly, the defendants claimed thatwith the assistance of KPMG, annual budgets are now prepared for considerationby the board, so that YAC’s business is conducted within the constraints of thatbudget. Thirdly, the defendants claimed that with the assistance of KPMG, asystem for approval of the issue of vouchers to Yindjibarndi community membershas been implemented. Finally, the defendants claimed that YAC now requiresJuluwarlu to prepare supporting documentation for the costs which its invoices toYAC.

[772] Most of the defendants’ particulars as to how YAC had implemented thesuggestions in the Korda Mentha Report were not supported by the evidence.Counsel for the defendants conceded in closing that ‘the evidence does notestablish particulars 1, 4 and 5’957 of the particulars to [162] of the DSIFC.

952. Exhibit 4 at [105].953. Exhibit 1.548.954. Exhibit 4 at [35], [68].955. Exhibit 19 at [20].956. Exhibit 41 at [40].957. Defendants’ closing submissions at [210].


[773] That concession was properly made. In cross-examination, Mr Woodleywas asked about the defendants’ claims that YAC implemented the suggestionsmade in the Korda Mentha Report. It was apparent from his evidence that YAChad not, in fact, implemented those suggestions in the terms pleaded in [162] inthe DSIFC. Mr Woodley said:958

We took great, I think, direction from Korda Mentha’s Report in terms of what —where the corporation was — was heading in terms of our financial matters. We thoughtwe set up a structure for the corporation to run its own affairs. … The report obviouslygave some suggestions in terms of how we managed the affairs of the corporation, butwe thought that we had a structure that would carry on in terms of how we would, youknow, better represent the people. We didn’t [have] a problem with any of the — anyof the — with the financial issues that we were — we were working towards anddeveloping and — and making sure that we had a process with employing a chieffinancial officer to manage our affairs from an accounting point of view. And, look, wetook it on, but we had some other plans in terms of how we thought what would be inthe best interests for the corporation.

[774] Mr Woodley was asked whether it was the case that YAC had not, in theend, implemented any of the Korda Mentha suggestions, because the boardthought it had structures in place already that adequately dealt with financialgovernance. Mr Woodley’s answer was:959

Well, I can’t tell you for sure in terms of what was implemented. That’s obviouslysomething that we left to our CFO and the accountant team, to make sure that they takesome of those points that Korda Mentha raised, but to also put in a structure that would— that was satisfying to the corporation at the time in terms of how it was managingour affairs.

[775] As for the defendants’ claim that in response to the Korda MenthaReport, YAC had terminated its management agreement with Juluwarlu in aboutJune 2013 and appointed its own financial controller, Mr Chris Harrison, in aboutJuly 2013 to perform YAC’s accounting functions, Mr Woodley acknowledgedthat that claim was not correct, because the Korda Mentha Report was notdelivered until 10 September 2014.960 Mr Woodley also acknowledged that whileMr Harrison’s employment was terminated in November 2014, KPMG was notengaged to carry out YAC’s accounting functions until, at the earliest, 3 July2015.961 (In the interim between the termination of Mr Harrison’s employmentand the engagement of KPMG, YAC’s accounting functions were performed bya bookkeeper.962)

[776] Mr Woodley was also asked whether it was the case that the appointmentof KPMG was made in response to a suggestion in the Korda Mentha Report. Hisevidence was:963

Well, not in so many words, no. I mean, at the end of the day, the board had [its] ideasin terms of what we was going to do in terms of employing a professional accountingfirm to manage our affairs.

958. Ts 1209–10.959. Ts 1210.960. Ts 1211.961. Ts 1211.962. Ts 1214.963. Ts 1214.


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[777] As for the defendants’ claim that YAC has implemented a systemrequiring approval by one of its directors for the issue of vouchers to Yindjibarndicommunity members to spend YAC funds, Mr Woodley acknowledged that thesystem for the authorisation of one director for the issuing of vouchers had beenimplemented prior to the appointment of KPMG, and that KPMG had notassisted YAC to implement that system prior to its appointment as YAC’saccountants.964

[778] Finally, in relation to the defendants’ claim that YAC had requiredJuluwarlu to prepare supporting documentation for those of its costs which areinvoiced to YAC, the defendants’ witnesses did not make good that claim.Mr Woodley’s evidence Mr in respect of payments to Juluwarlu was vague andunpersuasive. He clearly sought to distance himself from the authorisation of anypayment to Juluwarlu, as his wife, Lorraine Coppin, was the chief executiveofficer of Juluwarlu. At the same time, he claimed that ‘everything is done aboveboard in terms of what — what the project — YAC want Juluwarlu to do’,965 and‘there are … documents … that support it’.966 However, when asked aboutexamples of payments made to Juluwarlu and the supporting documentation inrelation to those payments, he had no specific knowledge of those matters.

[779] Ms Cheedy’s evidence did not advance the matter. She claimed that YACrequired Juluwarlu to prepare supporting documentation for the costs that theyinvoiced to YAC,967 however, she was unable to specify the form of thatsupporting documentation,968 and she accepted that in respect of payments madeto Juluwarlu in October 2014, the board did not seek or obtain any documentationshowing the expenses incurred which were the subject of the invoices.969

[780] Nevertheless, it was clear that on about 30 June 2015, YAC engagedKPMG to act as its accountants and tax agents.970 KPMG’s responsibilities nowinclude maintaining YAC’s accounting records, preparing its financial statements(commencing with the year ending 30 June 2015), and providing servicesincluding bookkeeping, processing invoices, credit cards and other forms ofexpenditure, payment of creditors, preparation of pay roll and budgeting.971

[781] In addition, KPMG personnel now attend all board meetings of YAC topresent the financial position for each period and for the year to date, and toaddress performance against budget and respond to any questions of the boardregarding financial matters.972 KPMG staff also now ‘interact with managementfrequently in a managerial capacity providing face to face feedback on thefinancial position of YAC’.973 Mr Sheard, a partner of KPMG who gave evidencefor the defendants, confirmed that during the 2017 financial year he had

964. Ts 1215.965. Ts 1223.966. Ts 1223.967. Ts 1063.968. Ts 1063.969. Ts 1085.970. Exhibit 49 at [2].971. Exhibit 49 at [3]–[4].972. Exhibit 49 at [7].973. Exhibit 49 at [9].


observed the management of YAC work to stay within the budget agreed withmanagement and approved by the board. This is a strong control over what is essentiallya ‘small business’.974

[782] Mr Sheard’s evidence was that while KPMG had not designed systems toaddress matters which were the subject of comment by Korda Mentha, they haddesigned systems to assist in preparing YAC’s accounts,975 such as a payrollsystem.976

[783] In terms of the payment of accounts and processing such payments,Mr Sheard’s evidence was that KPMG processed all payments that were to bemade by YAC, which included raising payment vouchers for approval by YAC’smanagement.977 (Mr Sheard had no knowledge of whether there was arequirement that, before payment was made, two directors approve thepayment.978)

Did YAC’s conduct at the AGM on 10 September 2014 constitute conduct of

the kind described in s 166-1(d) or s 166-1(e) of the CATSI Act?

[784] Counsel for the plaintiffs submitted that the evidence established thatMs Adams’ questions were not addressed, and that the Defendants did not disputethat Mr Woodley failed to answer questions concerning YAC’s payments toJuluwarlu.979

[785] Counsel for the defendants submitted that neither YAC nor theChairperson hindered discussion of issues arising out of the Korda MenthaReport at the AGM, that the discussion of the issues lasted for nearly an hour, inwhich members had the opportunity to ask questions, that the discussion endedonly when there were no more questions, and that in the circumstances.

members had a reasonable opportunity to discuss the report and ask questions aboutit at the meeting. The fact that Michael Woodley did not give his chief executiveofficer’s report and address questions concerning payments from YAC to Juluwarlu init does not mean that YAC and the Chairman hindered discussion of the report.980

[786] I am unable to accept the submission of counsel for the defendants.YAC’s conduct of the meeting — by the Chairperson, and by Mr Woodley —was, in my view, conduct which was oppressive to those members of YAC whohad raised concerns about YAC’s payments to Juluwarlu. It is apparent that themost pressing issues for discussion at the AGM were the matters related to theKorda Mentha investigation, but which were not investigated by Korda Mentha,such as why and for what reason YAC had paid money to Juluwarlu, and themeans within YAC for reviewing the propriety of claims for payment made byJuluwarlu, having regard to the actual, or perceived, conflicts of interest on thepart of those officers of YAC (who were also employed by Juluwarlu) whoauthorised payment to Juluwarlu. It was apparent that this was no minor issue interms of the quantum of payments involved, or in terms of the degree of concernwithin YAC’s membership about that issue.

974. Exhibit 49 at [10].975. Ts 1384–5.976. Ts 1385.977. Ts 1386, 1388.978. Ts 1388.979. Plaintiffs’ closing submissions at [94].980. Defendants’ closing submissions at [203].


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[787] In so far as Mr Woodley, and the Chairperson, sought to defer discussionof those issues until later in the meeting, that conduct clearly hindered thediscussion of members’ concerns. No reason was advanced — either at themeeting, or in evidence — about why the questions and concerns of members hadcould not have been dealt with immediately, whether by Mr Woodley, or by anyof the other directors of YAC.

[788] In my view, the concerted approach by Mr Woodley, assisted by theChairperson, to defer the discussion of those issues — particularly incircumstances in which, as the meeting progressed, items on the agenda took alengthy time to resolve, progress through the agenda was slow, and it must havebecome apparent that there was a real risk that there would not be sufficient timeto return to those issues — was unfair to the members of YAC who had raisedthose concerns. In my view, a reasonable Chairperson of the meeting, and areasonable CEO, would have dealt with the concerns raised by responding tothem immediately. The failure to do so had the consequence that the real issuesof concern to members were simply not dealt with. That approach fell short of thestandard of reasonable conduct which the members were entitled to expect in theconduct of YAC’s affairs.

[789] In my view, YAC’s conduct of the AGM in this respect was conduct ofthe kind described in s 166-1(1)(e) of the CATSI Act.

[790] I turn, next, to consider the balance of the plaintiffs’ allegations arisingfrom the Korda Mentha Report.

Are the findings in the Korda Mentha Report evidence of conduct of YACwhich fell within s 166-1(1) of the CATSI Act?

[791] In my view, the plaintiffs cannot rely on the findings in the Korda MenthaReport as evidence of improper administration of YAC’s finances. No evidencewas adduced in support of the findings made in that Report.

[792] The defendants’ counsel submitted that the Korda Mentha Report was‘only relevant in the sense that in accepting its contents, the YAC directors at thetime can be taken to be aware of the deficiencies in financial administrationidentified in it’.981 They also submitted that

the fact that YAC did not act on the Korda Mentha suggestions … or that the evidencedoes not establish some of the Defendants’ particulars do not mean that YAC hasengaged in conduct caught by s 166-1 of the CATSI Act. … To make that propositiongood there would need to be a factual foundation to establish that YAC has breached alaw, which the Korda Mentha report does not do. In any event, this is not the plaintiffs’case.’982

[793] I accept that submission.

[794] The evidence which established that YAC has engaged KPMG to act asits accountants, however, is relevant to the question of relief. I return to that issuelater in these reasons.

What relief, if any, should be granted?

[795] In my view, notwithstanding that YAC’s response to questions about theKorda Mentha Report, and associated issues, at the AGM on 10 September 2014constituted conduct which fell within s 166-1(1)(e) of the CATSI Act, I am not

981. Defendants’ closing submissions at [209].982. Defendants’ closing submissions at [211].


persuaded that any relief should be granted in respect of that conduct. Theconduct in question is now long past and there was no suggestion that thatparticular instance of oppression was continuing.

[796] I will, however, return to consider this conduct further below, indetermining whether YAC’s conduct, overall, warrants the making of ordersunder s 166-5 of the CATSI Act, or other relief.

(c) Failure to report to members in compliance with subdiv 333-A of theCorporations (Aboriginal and Torres Strait Islander) Regulations 2007 (Cth) dueto the failure to prepare consolidated accounts

Some background

[797] All ATSI corporations are obliged to keep written financial records thatrecord and explain their transactions and financial position and performance, andwhich would enable true and fair financial reports to be prepared and audited.983

[798] Upon the registration of an ATSI corporation, the Registrar must registerthe corporation as a small, medium or large corporation.984 That decision may bealtered in subsequent years.985 That decision determines the reportingrequirements which apply to the particular corporation.

[799] The decision whether to register an ATSI corporation as a small, mediumor large corporation is made by reference to the ‘consolidated gross operatingincome’ (CGOI) of the corporation and the entities it controls (if any), and thevalue of its assets and those of any entities it controls, at the end of each financialyear.986

[800] YAC is registered as a medium corporation for the purposes of the CATSIAct.987

[801] An ATSI corporation is required to prepare reports, including suchreports as are required by the regulations made under the CATSI Act (CATSIRegulations).988 Subdivision 333-A of the CATSI Regulations applies to smalland medium corporations with a CGOI (of the corporation and any entities itcontrolled) of $5,000,000 or more. At all relevant times, the CATSI Regulationsrequired that all corporations of that kind, and all medium ATSI corporations witha CGOI of less than $5,000,000, prepare a financial report and a directors’ reportfor the financial year.989

[802] Those financial statements were required to contain the financialstatements required by the Accounting Standards (as defined990). Significantly forpresent purposes, if compliance with those Standards required the corporation to

983. Section 322-10(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).984. Section 37-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).985. Section s 37-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).986. Section 37-10 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). An

“entity” includes a natural person, a body corporate, a partnership or a trust, and in the case ofa trust, includes the trustee of the trust: s 694-40 of the Corporations (Aboriginal and TorresStrait Islander) Act 2006 (Cth).

987. Section 37-10 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth); Ex1.347.

988. At the time of the events the subject of the trial, the regulations in force were the Corporations(Aboriginal and Torres Strait Islander) Regulations 2007 (Cth), as amended from time to time.

989. Regulation 333-5.01(3) of the Corporations (Aboriginal and Torres Strait Islander) Regulations2007 (Cth); reg 333 16.01(3).

990. The “accounting standards” are those standards in force under s 334 of the Corporations Act2001 (Cth) or the provisions of those standards which have effect: s 700-1 of the Corporations(Aboriginal and Torres Strait Islander) Act 2006 (Cth).


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include other entities in its financial statements, the corporation was required toprepare consolidated financial statements for the corporation and its entities.991

[803] The financial report of an ATSI corporation must be prepared inaccordance with all applicable Accounting Standards capable of application to anATSI corporation, regardless of whether or not the corporation would be regardedas a ‘reporting entity’ within the meaning of that term in the AccountingStandards.992

[804] The CATSI Regulations also required that an ATSI corporation must haveits financial report audited by an independent auditor, and that the corporationmust obtain an auditor’s report.993

[805] Financial reports and auditor’s reports must be lodged with the Registrarwithin three months of the end of the financial year.994

[806] Critical for present purposes is what it means for an entity to ‘control’another entity. That term is defined in s 689–25 of the CATSI Act. Relevantly forpresent purposes, an entity ‘controls’ another entity ‘if the first entity has thecapacity to determine the outcome of decisions about the second entity’s financialand operating policies’. Determining whether that is so requires consideration ofthe practical influence that the first entity can exert (rather than the rights it canenforce), and any practice or pattern of behaviour affecting the second entity’sfinancial or operating policies, even if that involves a breach of an agreement ora breach of trust.995

[807] In determining whether an ATSI corporation ‘controls’ another entity, theAccounting Standards made for the purposes of s 295(2)(b) of the CorporationsAct 2001 (Cth) are applied.996 In consolidating the gross income and value of theATSI corporation and any entities it controls, the Accounting Standards in forceat that time are to be applied.997


[808] The plaintiffs allege that without taking into consideration the income ofYindjibarndi Wealth, Yindjibarndi Capital and Yurra (which the plaintiffs say didnot publish any financial reports), YAC’s CGOI exceeds $5,000,000 andaccordingly YAC must comply with subdivision 333-A of the CATSIRegulations.998 The plaintiffs based that conclusion on the following informationprovided in financial reports published for the financial year ending 30 June2015:999

(i) YAC reported a gross operating income of $4,486,724 in its annualfinancial report;

(ii) YCCL as trustee for YPCT reported a gross revenue of $3,587,300 in itsannual financial report; and

991. Regulation 333 10.01(2) of the Corporations (Aboriginal and Torres Strait Islander)Regulations 2007 (Cth); reg 333 16.02(2).

992. Regulation 333 15.01(4) of the Corporations (Aboriginal and Torres Strait Islander)Regulations 2007 (Cth); reg 333 16.02(2).

993. Section 333-15 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth);reg 333-15.01 of the Corporations (Aboriginal and Torres Strait Islander) Regulations 2007(Cth); reg 333 16.02(3).

994. Section 348-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).995. Section 689-25 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).996. Section 37-15 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).997. Section 37-25 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).998. PSIFC at [80], [199].999. PSIFC at [79].


(iii) YCCL as trustee for YCT reported a gross revenue of $2,316,966 in itsannual financial report.

[809] The plaintiffs say that Accounting Standard AASB 10 ConsolidatedFinancial Statements (AASB 10) requires an entity that is a parent entity, namelyYAC, to present consolidated financial statements, subject to limited exceptions(which they say do not apply to YAC). The plaintiffs’ case is that in every annualfinancial report prepared by YAC since June 2013 — after the incorporation ofYindjibarndi Capital, Yindjibarndi Wealth, Yurra and YCCL (collectively, YAC’sSubsidiaries) — YAC has failed to prepare consolidated accounts in breach of therequirements of the CATSI Act, and in circumstances where YAC’s Subsidiariesown significant assets and operate significant businesses.1000

[810] The plaintiffs noted that YAC’s General Purpose Financial Report for thefinancial year ending 30 June 2015 stated that:

YAC is a not-for-profit private sector entity and consequently is reporting under thereduced disclosure framework for eligible corporations that currently prepare generalpurpose financial statements. The Corporation has applied the Australian financialreporting standard AASB 1053 Tier 2 reduced disclosure level.

However, the plaintiffs say that applying the Tier 2 reduced disclosurerequirements under Australian Standard AASB 1053 (AASB 1053) does notexempt YAC as a parent company from preparing consolidated financialstatements. The plaintiffs’ case was that AASB 1053 did not absolve YAC fromthe requirements of AASB 10 (which I discuss further below), with the result thatYAC is required to prepare consolidated financial statements including YAC’sSubsidiaries.1001 (I did not understand the operation of AASB 1053 to be in issue.The focus was on the requirements of AASB 10.)

[811] The plaintiffs contend that the members of YAC have no information inrelation to the financial position or performance of Yindjibarndi Wealth,Yindjibarndi Capital and Yurra, because the accounts of YAC’s Subsidiaries havenever been disclosed to members of YAC. The plaintiffs also contend that theconsequence of YAC’s failure to prepare consolidated financial statements is thatmembers of YAC are not adequately informed as to how YAC’s money and themoney of YAC’s Subsidiaries is actually spent.

[812] The plaintiffs contend that YAC’s conduct in failing to provide financialinformation to its members, its lack of transparency about the group ofcompanies’ financial affairs, and the mismanagement of YAC’s financial affairsamounts to conduct captured by s 166-1(1)(d) and (e) of the CATSI Act.1002

[813] The defendants did not admit that subdiv 333-A of the CATSIRegulations applied to YAC in the 2015 financial year. However, the defendantsaccepted that regs 333-10.01 and 333-15.01(4) of the CATSI Regulations appliedto the financial report it prepared for the 2015 financial year, which meant that itwas required to prepare its financial report in accordance with all applicableAccounting Standards.1003

[814] In the course of their closing submissions, counsel for the defendantsmade clear that ‘an implication of YAC’s contentions is that it does not contendthat it prepared its financial statements in accordance with all applicable

1000. PSIFC at [87].1001. PSIFC at [84]–[86].1002. PSIFC at [199]–[202].1003. DSIFC at [168]–[169].


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accounting standards’.1004 However, they submitted that ‘YAC’s contentions arenot an admission that YAC has failed to prepare its financial statements inaccordance with all applicable accounting standards’.1005

[815] The defendants contended that in relation to the 2014 and 2015 financialyears, YAC relied on its accountants and auditors to prepare its financialstatements in accordance with applicable Accounting Standards. The defendantssay that in those circumstances, any failure by YAC to prepare its financialstatements in accordance with all applicable Accounting Standards was notconduct that fell within s 166-1(1) of the CATSI Act.1006 Counsel for thedefendants submitted that ‘it would be an absurd result if the directors of YACwere required, in effect, to form their own view about the meaning of theAustralian Accounting Standards’.1007

Factual findings

[816] In this section of my reasons, I deal with the following matters:(i) Overview of the evidence;

(ii) Overview of the requirements of the relevant Accounting Standards;(iii) The approach taken in YAC’s accounts for the financial years ending

30 June 2014 and 30 June 2015;(iv) The expert evidence — what was not in issue;(v) The expert evidence — the matters in dispute;

(vi) Whether the financial statements of YAC for the 2014 and 2015financial years complied with AASB 10; and

(vii) The directors’ role in the preparation of YAC’s reports, and their relianceon YAC’s accountants and auditors.

(i) Overview of the evidence

[817] The plaintiffs and the defendants called expert accounting witnesses(experts) to give evidence in relation to the operation of AASB 10 in respect ofthe various entities which the plaintiffs claimed were controlled by YAC. Each ofthe witnesses provided reports. The plaintiffs relied on the evidence of Ms SusanOldmeadow-Hall1008 and the defendants relied on the evidence of Ms NikkiShen.1009

[818] The defendants also relied on the evidence of Mr Graeme Sheard.1010

Mr Sheard is a partner in the Perth Office of KPMG Australia (KPMG).Mr Sheard was cross-examined by counsel for the plaintiffs.

[819] Mr Mack, Ms Cheedy and Mr Woodley were also cross-examined bycounsel for the plaintiffs in relation to their knowledge of the AccountingStandards, and of their responsibilities in relation to the preparation of YAC’saccounts.

(ii) Overview of the requirements of the relevant accounting standards

[820] AASB 10 establishes principles for the preparation and presentation ofconsolidated financial statements when an entity controls one or more otherentities. AASB 10 requires an entity (known as the parent) that controls one or

1004. Defendants’ closing submissions at [227].1005. Defendants’ closing submissions at [228].1006. DSIFC at [170]–[171].1007. Defendants’ closing submissions at [229].1008. Exhibits 43, 44 and 46.1009. Exhibit 47.1010. Exhibit 49.


more other entities (the subsidiaries) to present consolidated financial statementsfor itself and all of its subsidiaries. While there are certain exceptions to thatrequirement, it was not suggested that any of those were applicable in this case.

[821] Under AASB 10, the criterion which determines whether an entity mustpresent consolidated financial statements for itself and other entities is that of‘control’ by one entity over another. AASB 10 requires that ‘an investor,regardless of the nature of its involvement with an entity (the investee), shalldetermine whether it is a parent by assessing whether it controls the investee’.1011

The considerations which inform that determination are set out in the followingclauses of AASB 10:

(6) An investor controls an investee when it is exposed, or has rights, to variablereturns from its involvement with the investee and has the ability to affectthose returns through its power over the investee.

(7) Thus, an investor controls an investee if and only if the investor has all thefollowing:

(a) power over the investee …;(b) exposure, or rights, to variable returns from its involvement with the

investee …; and(c) the ability to use its power over the investee to affect the amount of the

investor’s returns ….(8) An investor shall consider all facts and circumstances when assessing

whether it controls an investee. The investor shall reassess whether it controlsan investee if facts and circumstances indicate that there are changes to oneor more of the three elements of control listed in paragraph (7) ….

(9) Two or more investors collectively control an investee when they must acttogether to direct the relevant activities. In such cases, because no investorcan direct the activities without the cooperation of the others, no investorindividually controls the investee. Each investor would account for its interestin the investee in accordance with the relevant Australian accountingstandards, such as AASB11 Joint Arrangements, AASB128 Investments inAssociates and Joint Ventures, AASB9 Financial Instruments.

[822] What it means for an investor to have power over an investee is explainedin AASB 10 in the following way:

(10) An investor has power over an investee when the investor has existing rightsthat give it the current ability to direct the relevant activities ie the activitiesthat significantly affect the investee’s returns.

(11) Power arises from rights. Sometimes assessing power is straightforward, suchas when power over an investee is obtained directly and solely from thevoting rights granted by equity instruments such as shares …. In other cases,the assessment will be more complex and require more than one factor to beconsidered, for example, when power results from one or more contractualarrangements.

[823] The requirement that the investor have exposure, or rights, to variablereturns from its involvement with the investee is explained in AASB 10 in thefollowing way:

(15) An investor is exposed, or has rights, to variable returns from its involvementwith the investee when the investor’s returns from its involvement have thepotential to vary as a result of the investee’s performance. The investor’sreturns can be only positive, only negative or both positive and negative.

1011. Exhibit 1.531, cl 5.


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(16) Although only one investor can control an investee, more than one party can

share in the returns of an investee.

[824] Finally, the ability of an investor to use its power to affect the amount ofthe investor’s returns is explained in AASB 10 in the following way:

(17) An investor controls an investee if the investor not only has power over the

investee and exposure or rights to variable returns from its involvement with

the investee, but also has the ability to use its power to affect the investor’s

returns from its involvement with the investee.

[825] AASB 10 provides examples by way of guidance for how each of thesecriteria may be assessed. For example, AASB 10 provides that consideration ofa number of factors may assist in making the determination as to whether aninvestor exercises control over an investee. This includes the purpose and designof the investee; what the relevant activities of the investee are (for example, inorder to identify the relevant activities of the investee, how decisions about thoseactivities are made, who has the current ability to direct those activities, and whoreceives returns from those activities);1012 how decisions about those activitiesare made (for example, how decisions are reached as to operating and capitaldecisions, including budgets, and the appointment and remuneration of keymanagement personnel or service providers);1013 whether the rights of theinvestor give it the current ability to direct the investee’s relevant activities;whether the investor is exposed or has rights to variable returns from itsinvolvement with the investee; and whether the investor has the ability to use itspower over the investee to affect the amount of the investor’s returns.1014

[826] In order to determine whether the rights of the investor give it the currentability to direct the relevant activities, AASB 10 provides examples of suchrights. They include, but are not limited to, rights in the form of voting rights,rights to appoint, reassign or remove members of the investee’s key managementpersonnel who have the ability to direct the relevant activities, rights to appointor remove another entity that directs the relevant activities, rights to direct theinvestee to enter into, or veto any changes to, transactions for the benefit of theinvestor and other rights (such as decision-making rights specified in themanagement contract) that give the holder the ability to direct the relevantactivities.1015

[827] Similarly, for the purpose of determining whether an investor is exposed,or has rights, to variable returns from its involvement with the investee, AASB10 provides examples of the sorts of returns which might be involved. Theyinclude dividends, other distributions of economic benefits such as interests fromdebt securities issued by the investee, and changes in the value of the investor’sinvestment in the investee; remuneration for servicing an investee’s assets orliabilities; residual interests in the investee’s assets and liabilities on liquidationof that investee; and access to future liquidity that an investor has from itsinvolvement with an investee and returns not available to any interest holders

1012. Exhibit 1.531, cll B3(a) and B5.1013. Exhibit 1.531, cll B3(b), B11 and B12.1014. Exhibit 1.531, cl B3(c)–(e).1015. Exhibit 1.531, cl B15.


such as might be achieved by combining the assets of the investor with those ofthe investee to achieve economies of scale or costs savings, or to enhance thevalue of the investor’s other assets.1016

[828] For the purpose of determining whether an investor has the ability to useits power over the investee to affect the amount of the investor’s returns, AASB10 contains a number of provisions providing guidance in how the exercise ofpower, as between an investor and an investee, may be assessed. AASB 10provides that when an investor with decision-making rights assesses whether itcontrols an investee, it shall determine whether it is a principal or an agent.Sometimes the principal’s power may be held and exercisable by an agent.1017

The scope of the decision-making authority will also be relevant. That willrequire consideration of the activities that are permitted according to thedecision-making agreements and as specified by law, and the discretion that thedecision-maker has when making decisions about activities.1018 Further,substantive rights held by other parties may affect a decision-maker’s ability todirect the relevant activities of an investee. For example, AASB 10 providesthat1019

when a single party holds substantive removal rights and can remove thedecision-maker without cause, this, in isolation, is sufficient to conclude that thedecision-maker is an agent …. In addition, the greater the number of parties required toact together to exercise rights to remove a decision-maker and the greater the magnitudeof, and variability associated with, the decision-maker’s other economic interests ieremuneration and other interests, the less the weighting that should be placed on thesefactors.

[829] AASB 10 provides specific guidance for how its terms should be appliedin the case of not-for-profit entities.1020 These guidelines recognise that aninvestor need not have financial investment in an investee in order to be in aposition of control with respect to that investee. AASB 10 points out that ‘ingeneral terms, an investor and an investee are merely entities that have arelationship in which control of one entity (the investee) by the other (theinvestor) might arise’.1021

[830] In so far as the criterion of power over the investee is concerned,Appendix E to AASB 10 explains how that criterion might operate in the contextof a not-for-profit entity. It provides:1022

As an example, a not-for-profit investor would have power over an investee when theinvestor can require the investee to deploy its assets or incur liabilities in a way thataffects the investee’s returns (for example, in providing goods or services to the investoror other parties that assists in achieving or furthering the investee’s objectives).

… For many not-for-profit entities, rights arising from administrative arrangements orstatutory provisions will often be the source of power. Assessing the purpose and designof an investee will assist an investor to identify who has power over the investee, ie thecurrent ability to direct the relevant activities ….

1016. Exhibit 1.531, cl B57.1017. Exhibit 1.531, cll B58, B59.1018. Exhibit 1.531, cl B62.1019. Exhibit 1.531, cl B65.1020. Exhibit 1.531, App E.1021. Exhibit 1.531, cl IG4.1022. Exhibit 1.531, cll IG5, IG6.


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[831] In so far as rights may give an investor power over an investee, AppendixE to AASB 10 notes that1023

In relation to not-for-profit investors, additional examples of such rights include:

[a] rights to give policy directions to the governing body of the investee thatgives a holder the ability to direct the relevant activities of the investee;

[b] rights to approve or veto operating and capital budgets relating to the relevantactivities of the investee.

A not-for-profit investor can have power over an investee even if it does not haveresponsibility for the day-to-day operation of the investee or the specific manner inwhich prescribed functions are performed by the investee.

[832] In so far as the exposure, or rights, to variable returns from an investeeare concerned, the examples given in AASB 10 in relation to not-for-profitentities emphasise that1024

the broad scope of the nature of returns encompasses financial, non-financial, directand indirect benefits, whether positive or negative, including the achievement orfurtherance of the investor’s objectives.

An investor’s exposure, or rights, to variable returns from its involvement with aninvestee may give rise to indirect, non-financial returns, such as when achieving orfurthering the objectives of the investee contributes to the objectives of the investor. Forexample, the provision of goods and services by the investee to its beneficiaries mayaffect the extent to which the investor’s social policy objectives are furthered.

[833] Finally, the guidelines in relation to not-for-profit entities note that thereare a variety of ways in which an investor may have an ability to use its powerover an investee to affect the amount of an investor’s returns. One example givenis where an investor can direct the investee to work with the investor or to engagein particular activities to further the investor’s objectives. Appendix E contains anumber of implementation examples demonstrating how all of the factorsrelevant to assessing control may apply in the practical operation of not-for-profitentities.1025

(iii) The approach taken in YAC’s accounts for the financial years ending30 June 2014 and 30 June 2015

[834] The evidence was that YAC’s accounts for the 2014 and 2015 financialyears did not consolidate the accounts of any related entities.

[835] At least in respect of the 2015 financial year (the first year in which itappears that KPMG prepared YAC’s accounts), the failure to include the accountsof any related entities appears to have reflected the considered view of KPMG’sstaff that no consolidation was required. Mr Sheard’s evidence was that ‘theapplicability [of AASB 10] is a matter that has gone to the highest parts of KPMGand … we have formed a view … that it should not be consolidated’.1026

However, there appears to have been some movement away from that view.Mr Sheard acknowledged that in the draft accounts for the 2016 financial year,the accounts of Yindjibarndi Wealth and Yindjibarndi Capital had beenconsolidated with those of YAC.1027

1023. Exhibit 1.531, cll IG9, IG10.1024. Exhibit 1.531, cll IG18, IG19.1025. Exhibit 1.531, see, for example, Example IG1, IG2, in particular.1026. Ts 1380.1027. Ts 1381–2.


[836] Counsel for the plaintiffs submitted that no weight should be attached toMr Sheard’s evidence, because the opinion given was not Mr Sheard’s opinion;the person who formed the relevant opinion was not identified; the basis for theopinion was not disclosed; and, in any event, the content of the draft financialreport for 2016 indicated that the view was no longer held.1028 I do not acceptthat no weight should be attached to Mr Sheard’s evidence. The evidence wasadduced in the cross-examination of Mr Sheard. I am not persuaded that it wasunreliable. The evidence simply confirmed what was, in any event, apparent fromthe evidence of the expert witnesses, namely that there is room for different viewsin relation to the question of consolidation of YAC’s accounts.

(iv) The expert evidence — What was not in issue

[837] Ms Oldmeadow-Hall and Ms Shen met and conferred, and, as a result ofthat conferral, provided a joint memorandum outlining the areas of agreementand disagreement.1029 The experts also gave evidence in a concurrent sessionwhich was of assistance in further highlighting the reasons why they disagreed.

[838] Ms Oldmeadow-Hall and Ms Shen agreed that, for the 2015 financialyear, AASB 10 applied, and for the 2014 financial year, Accounting StandardAASB 127 (AASB 127) applied.1030 Both experts agreed that, for presentpurposes, there was no real difference between both Standards, save that AASB10 expanded the scope of consolidation, elaborated on the definition of powerand control, and addressed not-for-profit activities in more detail. The variationsbetween the two Standards did not materially affect the opinions held by eitherwitness.1031 In this case, the experts’ analysis of the extent to which consolidationof the accounts of YAC and related entities should have occurred centred on therequirements of AASB 10.1032 For present purposes, therefore, I have simplyreferred to the requirements of AASB 10.

[839] Both of the experts agreed that Appendix E to AASB 10 — TheAustralian Implementations Guidance for Not-For-Profit Entities — was anintegral part of AASB 10 which explained and illustrated its principles as theyapplied to not-for-profit entities.1033 I accept that evidence. I also accept thatAppendix E provides very useful examples and explains why particular factorsmay have significance in determining the question of control by one entity overanother.

[840] Both Ms Oldmeadow-Hall and Ms Shen agreed that, in the interpretationof the Accounting Standards, particularly in terms of consolidation, and in theapplication of those Standards to particular circumstances, there was room fordifferences of opinion between accountants as to whether or not to consolidateaccounts.1034 Ms Oldmeadow-Hall thought that differences of opinion in relationto the application of the Accounting Standards were likely to be ‘very rare’

1028. Plaintiffs’ closing submissions at [56].1029. Exhibit 45.1030. As the experts pointed out, other accounting standards were relevant to the preparation of

YAC’s accounts, namely AASB 1004 (in relation to contributions), and AASB 1053, whichdealt with the application of tiers of Australian Accounting Standards. It is not necessary to dealwith the terms of those standards for present purposes.

1031. Ts 1265–6.1032. Ts 1268.1033. Exhibit 45 at [11].1034. Ts 1319.


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because the Standards were intended to be robust and clear.1035 However,Ms Shen was of the view that consolidation questions were a ‘critical judgementarea … just because it’s subject to different interpretations and judgmentaldecision calls’.1036

[841] The differences of view between Ms Oldmeadow-Hall and Ms Shen inthis case, and the fact that YAC’s accountants, KPMG, had formed a differentview in relation to the application of AASB 10 to YAC and its related entities,illustrate that the present case is one of those where there is scope for differencesof view about how AASB 10 applies. That is hardly surprising. The conclusionwhether one entity ‘controls’ another, in the relevant sense, will be reached byweighing up all of the various factors identified in AASB 10. An analysis of thatkind inevitably leaves room for differences of view.

[842] The experts agreed that YAC ‘controls’ (in the sense referred to in AASB10) the following entities: Yindjibarndi Wealth, Yindjibarndi Wealth Trust,Yindjibarndi Capital, and Yindjibarndi Capital Trust.1037 The basis for that viewwas set out in Ms Oldmeadow-Hall’s first report, and Ms Shen agreed with herconclusions.1038 In summary, their reasoning was as follows.

[843] In relation to Yindjibarndi Capital, Ms Oldmeadow-Hall and Ms Shenagreed that YAC held 100% of the shareholding in Yindjibarndi Capital PtyLtd.1039

[844] Ms Oldmeadow-Hall concluded that YAC controlled YindjibarndiCapital because it was the sole shareholder in Yindjibarndi Capital.1040 Ms Shenagreed with Ms Oldmeadow-Hall’s view that Yindjibarndi Capital was acontrolled entity of YAC, on the basis that not only was all of the equity interestin that company wholly owned by YAC, but also because one out of the twodirectors of Yindjibarndi Capital was also a director of YAC.1041

[845] In respect of the Yindjibarndi Capital Trust, the experts determined thaton the records produced to them, 21 out of 100 units were held by YAC, and thebalance of the units were held by YCT.1042

[846] Ms Oldmeadow-Hall noted that Yindjibarndi Capital was the trustee ofthe Yindjibarndi Capital Trust. Ms Oldmeadow-Hall relied on cl 21 of theYindjibarndi Capital Trust Deed, which gives Yindjibarndi Capital exclusivemanagement rights over the Yindjibarndi Capital Trust, providing it with1043

all the powers over and in respect of the investments assets and property of the TrustFund which it would have if it were the absolute and beneficial owner of the entiretyof every such investment asset ….

[847] Furthermore, under cl 27.1.3 of the Yindjibarndi Capital Trust Deed, theordinary unit holders (namely YAC and YCT, which is a wholly ownedsubsidiary of YAC) can remove the trustee by an ordinary resolution.1044

Accordingly, Ms Oldmeadow-Hall concluded that YAC has the power to appoint

1035. Ts 1319.1036. Ts 1320.1037. Exhibit 45 at [8].1038. Exhibits 43 and 47, 3.1039. Ts 1271.1040. Exhibit 43 at [80].1041. Exhibit 47, 3.1042. Ts 1271.1043. Exhibit 1.91.1044. Exhibit 1.91.


the trustee of Yindjibarndi Capital Trust. Consequently, Ms Oldmeadow-Hall’sview was that for the purpose of AASB 10, YAC controlled the YindjibarndiCapital Trust, and therefore YAC should have prepared consolidated accountswhich encompassed the position of the Yindjibarndi Capital Trust for the 2014and 2015 financial years.1045

[848] Ms Shen was of the view that because Yindjibarndi Capital was thetrustee of the Yindjibarndi Capital Trust, YAC had the power to direct theactivities of the Trust and YAC was exposed, and had rights, to variable returnsfrom the Trust from its units held in the Trust.

[849] In relation to Yindjibarndi Wealth, the experts agreed that YAC held100% of the share capital in Yindjibarndi Wealth.1046

[850] Ms Oldmeadow-Hall concluded that YAC exercised control, in the senserequired under AASB 10, because it was the sole shareholder of YindjibarndiWealth.1047 Ms Shen agreed that YAC controlled Yindjibarndi Wealth, not onlybecause the equity interest of that company was wholly held by YAC, but alsobecause one out of the two directors of that company was a director of YAC.1048

[851] In relation to the Yindjibarndi Wealth Trust, the experts both agreed thatthe Yindjibarndi Capital Trust held all of the units in the Yindjibarndi WealthTrust.1049

[852] Ms Oldmeadow-Hall noted that Yindjibarndi Wealth was appointed asthe trustee of the Yindjibarndi Wealth Trust, and Ms that the Yindjibarndi WealthTrust Deed contained clauses identical to cl 21 and cl 27 of the YindjibarndiCapital Trust Deed (to which I have referred above). For the same reasons as sheset out in respect of the Yindjibarndi Capital Trust, therefore,Ms Oldmeadow-Hall concluded that for the purpose of AASB 10, YAC exercisedcontrol over the Yindjibarndi Wealth Trust. Accordingly, Ms Oldmeadow-Hallconcluded that for the financial years ending 30 June 2014 and 30 June 2015,YAC should have prepared consolidated accounts which included its controlledentity, the Yindjibarndi Wealth Trust.1050

[853] Ms Shen was of the view that because Yindjibarndi Wealth was a trusteeof the Yindjibarndi Wealth Trust, YAC had the power to direct the activities of theTrust, and YAC was exposed, and had rights, to variable returns from the Trustfrom its units held in the Trust.

[854] The reasoning adopted by the experts in relation to Yindjibarndi Wealth,Yindjibarndi Wealth Trust, Yindjibarndi Capital and Yindjibarndi Capital Trustwas clear and cogent, and I accept their conclusion that YAC can be regarded asexercising control in respect of each of those entities for the purpose of AASB 10.(I note that my acceptance of this conclusion only relates to the ‘control’ of YACover these entities in the AASB 10 sense, and should not be construed as anacceptance of a broader conclusion as to ‘control’ as a matter of law).

(v) The expert evidence — The matters in dispute

[855] The areas of dispute between the experts concerned whether YACcontrolled YCCL, YPCT and YCT.

1045. Exhibit 44 at [13]–[16].1046. Ts 1271.1047. Exhibit 43 at [80].1048. Exhibit 47, 3.1049. Ts 1271–2.1050. Exhibit 44 at [17]–[19].


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[856] The position in relation to Yurra was not entirely clear, and I deal with itseparately.

YCCL, YPCT and YCT

[857] The experts agreed that YAC held 100% of the capital in YCCL.1051

YCCL is the appointed trustee for YPCT and YCT.1052

[858] The experts provided detailed evidence in relation to their assessment ofthe application of the various indicia of control set out in AASB 10. For thereasons which I set out below, in relation to each of those indicia, I am of theview that although both Ms Shen and Ms Oldmeadow-Hall demonstratedconsiderable expertise, Ms Oldmeadow-Hall’s analysis was more comprehensive(because she had regard to relevant documents which were not provided toMs Shen), and her analysis of factors relevant to YAC’s control over YCCL, YCTand YPCT was more persuasive.

YAC’s power over YCCL

[859] Ms Oldmeadow-Hall’s view was that YAC controlled YCCL for thefollowing reasons. First, she noted that YCCL is a company limited by guarantee,and under YCCL’s constitution, YAC is the sole member of YCCL. She explainedthat ‘that was the reason why it was my belief that YAC does control [each]trust’.1053 Her view was that because YAC is the sole member of YCCL, itappointed the trustee of YCT and YPCT, and the Trustee was the entity whichwould make decisions in relation to how money received by the Trusts wasspent.1054

[860] Ms Shen did not, however, take into account the fact that, under theconstitution of YCCL, the only member of the company was YAC (or if YACceased to meet the requirements of a local Aboriginal corporation under theParticipation Agreement, a replacement local Aboriginal corporation).1055 In myview, that was a significant omission. As a starting point, the fact that YAC is thesole member of YCCL suggests that it is likely to have significant influence in thedecisions of YCCL.

[861] The experts also considered the manner in which the directors of YCCLwere appointed. Under YCCL’s constitution,1056 the directors of the companymust comprise between two and five non-independent directors, including at leastone person who is a member of the board of YAC, at least one person who is amember of the local implementation committee established under theParticipation Agreement, and two independent directors appointed by the boardfrom a list of at least four and no more than eight persons compiled by Rio Tinto,who Rio Tinto considers eligible to be candidates for those positions.1057

However, it is apparent that those independent directors are not appointed by RioTinto, but rather are selected by the board and then, it appears, formallyappointed by an ordinary resolution of the members of YCCL (that is, YAC) ata general meeting.1058

1051. Ts 1271.1052. Ts 1272.1053. Ts 1278.1054. Ts 1278.1055. Ts 1278.1056. Exhibit 1.278, cl 8.2.1057. Exhibit 1.278, cl 8.4.1.1058. Exhibit 1.278, cll 82, 8.3.


[862] Ms Oldmeadow-Hall’s view was that the appointment of directors wasvitally important and, as YAC controlled the appointment of the majority of thedirectors of YCCL, it controlled that composition of the board which, in turn,meant that YAC had the ability to direct the activities of each Trust because of itscontrol of the Trustee.1059

[863] Ms Shen placed emphasis on the fact that AASB 10 made clear that aninvestee may be designed so that voting rights are not a dominant factor indeciding the question of control, and that it was necessary to understand all of thecontractual arrangements that are in place. For that reason, in her view, votingrights and board composition could not be the only determinants in assessingcontrol of an entity. If the focus was solely on board composition, then she wouldhave agreed with Ms Oldmeadow-Hall’s opinion. However, the benefitsmanagement scheme established under pt 6 of the Participation Agreement(BMS) led her to the view that ‘there are other contractual arrangements in placethat redirected the power and control … away’.1060

[864] The key differentiating factor between Ms Shen andMs Oldmeadow-Hall was that Ms Shen took the view that under the ParticipationAgreement, and under YCCL’s constitution, YCCL was obliged to consult withthe Yindjibarndi people. In so far as YCCL’s constitution stipulated that YCCLmust recognise, respect and support the decision-making processes determinedby the Yindjibarndi people for the BMS, Ms Shen understood YCCL to berequired to consult with the Yindjibarndi people in relation to the formulation ofpolicy and the direction of the YPCT and YCT.1061 As I understood the importof her evidence, she saw this requirement as displacing YAC’s ability to controlwhat YCCL did as the Trustee of YCT and YPCT.

[865] Under the BMS in the Participation Agreement, the money payable byRio Tinto to the Yindjibarndi people pursuant to that Agreement is paid to YCTand YPCT. Ms Shen relied1062 on the preamble to pt 6 of the ParticipationAgreement (which established the BMS), and which provided that the BMS isdesigned1063

to look after the money that [Rio Tinto] pays the Yindjibarndi people under … theagreement. This structure is made up of a commercial trust and community trust. … Thetrustee is responsible for looking after the community trust and the commercial trust. Itis not a party to this agreement, but it is a party to the trust deeds …. It can only takeaction to enforce the payment of money under the agreement with the consent and underthe direction of the Yindjibarndi people.

[866] By virtue of the BMS and the provisions of pt 6 of the ParticipationAgreement, and the fact that YCCL can only take action to enforce the paymentof money under the Participation Agreement with the consent of the Yindjibarndipeople, Ms Shen was of the view that YCCL does not have the ability to use itspower to affect the nature and amount of its returns from YCT and YPCT.1064

1059. Ts 1291.1060. Ts 1288.1061. Exhibit 47, 2.1062. Exhibit 45 at [14].1063. Exhibit 1.94, preamble to Pt 6.1064. Exhibit 45 at [19].


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[867] With respect, it is not apparent why the requirement for YCCL to consultwith the Yindjibarndi people means that YAC does not control YCCL. Havingregard to the powers of YCCL as the Trustee of YCT and YPCT under the YPCTTrust Deed and YCT Trust Deed, I am unable to agree with Ms Shen’sconclusion.

[868] Ms Oldmeadow-Hall relied on cl 5.2 of YCCL’s constitution, which sheread as giving YCCL ‘the sole discretion to direct the activities of YCT andYPCT, notwithstanding its obligations to act for the benefit of the Yindjibarndipeople’.1065 I agree with that view. Clause 5.2 of YCCL’s constitution statesthat:1066

(a) The company must (subject to this constitution) recognise, respect andsupport the decision-making processes determined by the TraditionalOwner Group for the Benefits Management Structure.

(b) Nothing in this chapter has the effect of limiting or restricting the classof beneficiaries of the [YCT] or [YPCT] or fettering the absolutediscretion of the trustee of the [YCT] or [YPCT].

[869] As for the preamble to pt 6 of the Participation Agreement,Ms Oldmeadow-Hall’s opinion was that the preamble relates to YCCL’s right toenforce Rio Tinto’s obligations to provide money to YCT and YPCT. Her viewwas that1067

In the event that [Rio Tinto] does not pay YCT and YCPT, YCCL cannot enforce [RioTinto’s] obligations under the [Participation Agreement]. It is the Aboriginal people thatenforce payment. Accordingly, … pt 6 of the Participation Agreement is not relevant tothe consideration of whether YAC has the power of an investee over YCCL.

[870] I prefer the opinion of Ms Oldmeadow-Hall that the preamble to pt 6 ofthe Participation Agreement was not relevant to the question of YAC’s powerover YCCL. To my mind, the critical question is the power of YCCL, as theTrustee of each Trust, to determine how the funds of each Trust are expended. AsYAC is the sole member of YCCL, it is able to determine how YCCL willexercise its powers under each Trust Deed.

[871] Ms Oldmeadow-Hall also took into account whether the Yindjibarndipeople were able to block the decisions made by YCCL as to the conduct of therelevant activities of YCT and YPCT, namely the decisions concerning where andwhen funds received from Rio Tinto are spent.1068 Ms Oldmeadow-Hall’s viewwas that the relevant activity (from the perspective of AASB 10) for YCCL as thetrustee of YPCT was to decide where and when to spend the Rio Tinto funds inaccordance with the requirements of the Trust Deed. Ms Oldmeadow-Hallpointed to cl 2.5(a) of the YPCT Trust Deed, which states:1069

The Trust Fund will be applied by the Trustee in accordance with the terms of thisDeed exclusively for the Trust objects which are the provision of money, property orbenefits to other persons or entities for the promotion and advancement of CharitablePurposes that benefit current and future generations of Community members.

1065. Exhibit 45 at [23].1066. Exhibit 1.278, cl 5.2 of the YCCL Constitution.1067. Exhibit 45 at [16].1068. Exhibit 45 at [24].1069. Exhibit 1.89, cl 2.5(a) of the YPCT trust deed.


[872] Ms Oldmeadow-Hall’s view was that the relevant activity (from theperspective of AASB 10) for YCCL as the Trustee of YCT was to decide whereand when to invest, distribute or otherwise deal with the Rio Tinto’s funds inaccordance with the requirements of the Trust Deed. In that respect, she referredto cl 2.1(b) of the YCT Trust Deed, which states:1070

The Settlor and the Trustee declared that the Trustee will hold the Trust Fund and theincome from the Trust Fund on trust for the benefit of the Beneficiaries, with the powersand subject to the provisions of this Deed.

[873] Furthermore, cl 2.3 of the YCT Trust Deed states that:1071

Without limiting the provisions of clause 2.1(b) above or the operation of anyapplicable law, the Trustee must hold, invest, distribute or otherwise deal with the TrustFund …

[874] It was Ms Oldmeadow-Hall’s view that while YCCL was required torecognise, respect and support the decision-making processes of the Yindjibarndipeople, nothing in the YPCT Trust Deed or the YCT Trust Deed was inconsistentwith the ability of YCCL to determine where and when to spend the Rio Tintofunds paid into each Trust.1072

[875] Using the YPCT Trust Deed as an example, the recitals to the Trust Deedacknowledged that the Yindjibarndi people and the Yindjibarndi PBC (that is,YAC) wished to create a trust to be known as the Yindjibarndi PeopleCommunity Trust, for the promotion and advancement of the charitable purposesthat benefit the community (including the Yindjibarndi people). Further, therecitals recognised that the Yindjibarndi people and the Yindjibarndi PBC (YAC)desired that the trustee will recognise, respect and support Yindjibarndi peopleand traditions (including Birdarra Law) and the involvement of the Yindjibarndipeople, and their PBC (that is, YAC), in decision-making in accordance with theTrust Deed.1073

[876] Consistent with those objectives, cl 3.2 of the YPCT Trust Deed requiresthat the Trustee (YCCL) must recognise, respect and support the decision-makingprocesses determined by the Yindjibarndi people for the BMS under theParticipation Agreement, including the decision-making processes of theYindjibarndi PBC (that is, YAC). In addition, YCCL, as the Trustee, is requiredto develop appropriate mechanisms by which to promote the participation of,consultation with, and information dissemination to, the Yindjibarndi people.1074

[877] However, in circumstances where there is only one Yindjibarndi PBC, theTrust Deed makes clear that the Trustee is entitled to deem a meeting of themembers of the Yindjibarndi PBC (that is, YAC) held in accordance with its RuleBook, to be a meeting of the Yindjibarndi people; that references in the TrustDeed to the ‘Yindjibarndi people’ are to be understood as references to themembers of the Yindjibarndi PBC (that is YAC); and that a decision made at ameeting of the Yindjibarndi PBC (that is, YAC), or consultation at that meeting,constitutes the consent of, or consultation with, the Yindjibarndi people.1075 In

1070. Exhibit 1.90, cl 2.1(b) of the YCT trust deed.1071. Exhibit 1.90, cl 2.3 of the YCT trust deed.1072. Exhibit 45 at [23], [25], [27], [30].1073. Exhibit 1.89, Recitals E and F.1074. Exhibit 1.89, cl 3.4(a).1075. Exhibit 1.89, cl 3.5(a).


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other words, the consultation the Trustee is required to undertake with theYindjibarndi people is effected at a meeting of YAC.

[878] Ms Shen did not consider that these provisions of the Trust Deedsupported the conclusion that YAC was in a position to control YPCT, becauseshe regarded YAC as ‘just a registered body to administer and convenemeetings’.1076 I am unable to agree. In so far as Ms Shen placed emphasis on therequirement under the BMS for consultation with the Yindjibarndi people as afactor which detracted from YAC’s power to determine how funds from theTrusts should be expended, the provisions of the YPCT Trust Deed, to which Ihave referred by way of example, make clear that in practical terms, therequirement for consultation with the Yindjibarndi people does not undermineYAC’s control over YCCL’s activities in relation to the distribution of funds fromthe Trusts.

[879] The experts also considered the question of whether, and how, YAC couldbe removed as the member of YCCL, as a factor relevant to its control of YCCL.Under YCCL’s constitution, YAC can only be removed as the member of YCCLif it resigns, ceases to meet certain other requirements, or if it is deregistered orotherwise dissolved. Ms Oldmeadow-Hall took the view that those removalrights were protective rights in accordance with AASB 10.1077

[880] Another factor relied upon by Ms Oldmeadow-Hall in relation to thequestion of YAC’s power over YCCL was the question whether YCCL could beremoved as Trustee of YCT or YPCT. Ms Oldmeadow-Hall noted that theYindjibarndi people do not have the power to remove YCCL as a Trustee.1078

Ms Oldmeadow-Hall concluded that nothing in the YCT Trust Deed gave theYindjibarndi people, or any other party, the general right to replace YCCL as theTrustee. Ms Oldmeadow-Hall referred to cl 5 of the YPCT Trust Deed and cl 5of the YCT Trust Deed (which are in identical terms), which deal with theappointment and removal of the trustee. Under cl 5.1 of the YPCT Trust Deed,YCCL is appointed as the Trustee of the YPCT. Clause 5.3 provides that certainpeople, including the Yindjibarndi PBC (that is, YAC), are able to notify theauditor of a ‘removal event’. Ms Oldmeadow-Hall noted that that initiated aprocess whereby the auditor was to investigate the ‘removal event’ which could,in certain circumstances, give the Yindjibarndi people a right to remove thetrustee. However, she noted that1079

there is nothing cl 5 of the trust deed which gives the Yindjibarndi people (or anyother party) a general right to replace the trustee in the absence of a removal event.

The removal rights contained in the trust deed are only protective rights inaccordance with AASB 10. YCCL, being a wholly owned subsidiary of YAC … has thesubstantive rights of control of YPCT.

[881] In my view, the issues going to removal of YAC as a member of YCCL,and removal of YCCL as the Trustee of the Trusts strongly supported theconclusion that YAC exercises power over YCCL (and in turn over YPCT andYCT).

1076. Ts 1296.1077. Exhibit 43 at [76].1078. Exhibit 45 at [24].1079. Exhibit 43 at [70], [71].


[882] For all of these reasons, I preferred the analysis of Ms Oldmeadow-Hallto that of Ms Shen in relation to YAC’s power over YCCL, and in turn, its powerover YCT and YPCT.

Whether YAC derives variable returns from its involvement with YCCL,

YCT and YPCT

[883] As for the second criterion relevant to the question of control underAASB 10, namely whether the investor derives variable returns from itsinvolvement with the investee, the experts referred to two factors: whether YACderived a financial return from YCT and YPCT, and whether it derived a returnin the form of the advancement of its objectives, by virtue of the pursuit of thesame or similar objectives by YCT and YPCT.

[884] There was no dispute that YAC receives funds from the YCT and theYPCT. Ms Shen was of the view that although YAC derives funding from YCTand YPCT in support of its administrative functions,1080

this cannot be construed as variable returns from YCT and YPCT [because] it is verycommon for large organisations to carry out administrative support functions forsmaller independent not-for-profit organisations. This service income (sic) are to fundthe costs incurred for the supportive functions and, by definition, are not variablereturns in accordance with AASB 10.

[885] Ms Shen acknowledged that although YAC, YCCL, YCT and YPCT hadsimilar social objectives, under AASB 10, ‘congruence of objectives alone isinsufficient to conclude that one entity controls another’.1081

[886] It was Ms Oldmeadow-Hall’s opinion that1082

YAC and its controlled entities are subject to variable returns because YAC earnsincome directly from YCT and YPCT for providing services and also in its charitableobjectives to provide relief from poverty and destitution of the Aboriginal people.

[887] Ms Oldmeadow-Hall was of the view that YAC derived variable returnsfrom YCT and YPCT. She relied, in particular, on the guidance provided byAppendix E to AASB 10 in relation to not-for-profit entities. In particular, shereferred to paragraphs IG18 and 1G19 (to which I have already referred).Ms Oldmeadow-Hall was of the view that the relevant activities of YCCL, YCTand YPCT were consistent with the YAC’s stated objectives in rule 2 of the YACRule Book.1083 It was Ms Oldmeadow-Hall’s opinion that the consistentobjectives shared by YCCL, YCT, YPCT and YAC meant that it could be saidthat YAC would derive variable returns from its involvement with YPCT’s andYCT’s objectives.1084

[888] With respect to Ms Shen, I did not find her explanation for why YACdoes not derive variable returns — both in terms of financial returns and theachievement of common objectives — from YCT and YPCT to be compelling.That was especially so, in view of other evidence (to which the experts referred,and which I discuss below) which was to the effect that YAC also receivedsignificant financial returns from YCT and YPCT which could not be regarded as

1080. Exhibit 45 at [33].1081. Exhibit 45 at [34].1082. Exhibit 45 at [40].1083. Exhibit 45 at [30].1084. Exhibit 45 at [38].


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payment for administrative services. Accordingly, I preferredMs Oldmeadow-Hall’s analysis of this aspect of ‘control’.

YAC’s ability to use its power over YCCL to affect the returns it receives

from YPCT and YCT

[889] In assessing whether YAC had the ability to use its power over YCCL toaffect the returns it received, the experts had regard to the fact that YAC receivedmoney from YCT and YPCT, and the basis on which that money was paid.

[890] One of the requirements of the BMS under the Participation Agreementis that the trustee (that is, YCCL) be given1085

power to provide funding to YAC for YAC’s administration purposes from the

commercial trust, and where the power is exercised, then such funding shall not in any

financial year exceed the lesser of:

(A) an amount that is 20% of the [payments] made to the trustee during the

previous financial year; or

(B) $1 million (CPI adjusted).

[891] Ms Oldmeadow-Hall had regard to YAC’s financial reports for the 2014and 2015 financial years, and noted that the financial report for the 2014 financialyear stated that:1086

As per the terms of the BMS, the trusts made the following distributions to the [YAC](as stated in this report):

Yindjibarndi Commercial Trust — Funding $233,116

Yindjibarndi Community Trust — Ngarda Media $364,000

Yindjibarndi Community and Commercial Trust — Joint funding $2,358,126

[892] Ms Oldmeadow-Hall noted that for the 2015 year, YAC’s financial reportindicated that under the terms of the BMS under the Participation Agreement,1087

The trusts made the following distributions to [YAC] (as outlined in this report):

Yindjibarndi Commercial Trust — Funding $233,816

Yindjibarndi Community Trust — Ngarda Media $222,868

Yindjibarndi Community and Commercial Trust — Joint funding $3,008,250

[893] Ms Oldmeadow-Hall’s evidence was that if YAC had received moneyfrom YCT and YPCT merely for the purpose of distributing that money to theYindjibarndi people, and merely acting as an agent of the Trustee in distributingthose funds, those payments would not have been reflected in YAC’s accounts atall.1088 In her view, the fact that payments from the Trusts had been recognisedas revenue in YAC’s accounts indicated that those who prepared the accountsconcluded that, in receiving that money, YAC was not acting merely as the agentof the Trusts.1089 Ms Shen agreed with that analysis.1090 In my view, that factoris of some significance, in that it illustrated YAC’s own view of its ability tocontrol what it received, as revenue, from the Trusts.

1085. Exhibit 1.94, cl 17.1 (c)(vii).1086. Exhibit 1.387.1087. Exhibit 1.388.1088. Ts 1322–3.1089. Ts 1323.1090. Ts 1323.


[894] In relation to the revenue YAC received from the Trusts, which wasreflected in YAC’s accounts for the 2014 and 2015 financial years, Ms Shen wasof the view that there was ‘uncertainty as to exactly what it relates to’.1091

Ms Shen was of the view that she could not conclude that each payment was‘entirely a return because it seemed like that their costs of service is quiteexcessive as well’.1092 However, in my view, nothing in the evidence suggestedthat the payments identified as ‘joint funding’ from the Trusts could be regardedas payments for administrative services provided by YAC to the Trusts.

[895] Ms Oldmeadow-Hall concluded that the payment to YAC from YPCTcould not be regarded as a payment for administrative functions carried out byYAC in support of YPCT, because under the BMS in the ParticipationAgreement, there was a limit on the quantum of administrative fees which couldbe paid of not more than $1 million per year. Ms Oldmeadow-Hall concluded that‘the fact that the income in 2014 and 2015 accounts was in excess of $3 millionindicates that it is more than just administration services that YAC provided to theTrust or got paid for by the Trust. I think YAC was a beneficiary from the Trustand received income’.1093 Ms Oldmeadow-Hall took the view that ‘YACreceived the return from the Trust, getting income from the Trust and that assistedin its furtherance of its objectives’.1094 The quantum of the funds, and theabsence of evidence to suggest that YAC was merely acting as an agent for theTrusts in distributing funds, support the conclusion that YAC was able to use itspower over YCCL to affect the returns it received from the Trusts.

[896] The experts were asked for their views on the relevance of a resolutionof the directors of YCCL, made on or about 21 August 2015, which providedthat1095

due to the continued success and demand of the recently established communityoutreach program discussed at the YCCL board meeting (19 August 2015), and basedupon careful consideration of what is best for the Yindjibarndi community, the boardhas resolved to allocate up to another $100,000 to be administered by YAC.

[897] Ms Shen did not consider that this document was evidence of adecision-making process of any particular significance for the question of controlunder AASB 10, because it ‘just tells me that YCCL has gone through a processto approve a payment of money to YAC’.1096 I am unable to agree. In my view,the resolution provided support for the view that YAC — by its control of theboard of YCCL — had the ability to influence its return from the Trusts for itsown objectives. Consequently, I prefer the evidence of Ms Oldmeadow-Hall,who observed:1097

The payment — it doesn’t look as though this is a reimbursement for administrationcosts that YAC has incurred, this is a payment to establish a community outreachprogram. So this is a payment whereby YAC is getting a variable benefit to further itsobjectives which … [are] to assist the Yindjibarndi people. …

And that is relevant because when looking at control you look at is there the powerto control the entity via the board or voting rights? And then the next thing is is there

1091. Ts 1326.1092. Ts 1327.1093. Ts 1311.1094. Ts 1309.1095. Exhibit 1.599.1096. Ts 1302.1097. Ts 1302.


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actually a way of getting variable interest benefits, and, you know, assisting the entity,specifically in the not-for-profit sector, in the furtherance of its objectives. And so I dothink this $100,000 payment goes to the heart that YAC was receiving money from thetrust for the furtherance of its community objectives.

[898] Furthermore, Ms Oldmeadow-Hall explained that having regard to thebroad scope of the nature of ‘returns’ in the context of not-for-profit entities underAASB 10, she had had regard to the objectives of YAC under its Rule Book, andthe objectives of the Trusts, and of YCCL under its constitution, and concludedthat they were consistent in that they sought the ‘furtherance of the Yindjibarndipeople’.1098 Ms Oldmeadow-Hall’s view was that because the objectives ofYPCT and of YAC were consistent, by fulfilling its own objects, YPCT alsofulfilled the objectives of YAC.1099

[899] Under the YPCT Trust Deed, the trust fund is to be applied by the Trusteein accordance with the terms of the Trust Deed, exclusively for the trustobjects.1100 Further, under the Trust Deed, the Trust is to be carried out1101

without purpose of profit or private gain for the Trustee, directors or members of theTrustee. No part of the trust fund or the income may be transferred or distributeddirectly or indirectly by way of dividend, bonus or other profit distribution to theTrustee, or directors or members of the Trustee.

[900] It was put to Ms Oldmeadow-Hall that that clause prohibited the paymentof money from the Trust to YAC for its own benefit and, instead, any paymentsto YAC should be construed as the payment of funds for YAC to distribute onbehalf of YPCT. Ms Oldmeadow-Hall’s view was that the accounts only revealedthat payments had been made to YAC, and she was unable to comment onwhether those payments had been made in contravention of that provision of theTrust Deed.1102 I note, however, that s 689–25 of the CATSI Act makes clear thateven practices in breach of trust can be taken into account in determining control.

[901] Ms Shen regarded the requirement on YCCL to consult with theYindjibarndi people in relation to the formulation of policy and the direction ofeach trust1103 as negating the ability of YAC to affect the returns it received fromYPCT and YCT. Ms Shen’s view was that the BMS contemplated that the Trusteeof each Trust could not itself make the decisions to direct and make payment ofmonies out of the Trust without consulting the Yindjibarndi people.1104

Ms Shen’s view was that the entirety of cl 5.2 of YCCL’s constitution conveyedthe intention that the Trustee was not entitled to make decisions about theexpenditure of the trust funds without consultation with the Yindjibarndipeople.1105 As for YAC’s role in undertaking that consultation under the BMS,Ms Shen said:1106

I’m not disputing that YAC is not part of the decision-making process, but how Iinterpret it is they are meant to administer and convene meetings to involve theYindjibarndi people because they are the representatives of the Yindjibarndi people.

1098. Ts 1309.1099. Ts 1312.1100. Exhibit 1.89, cl 2.5(a).1101. Exhibit 1.89, cl 2.6(a).1102. Ts 1312.1103. Ts 1277.1104. Ts 1279.1105. Ts 1280.1106. Ts 1284.


[902] Ms Oldmeadow-Hall’s view was that the preamble to pt 6 of theParticipation Agreement was ‘more a holistic statement’ and that it was not asufficiently clear and legally enforceable provision as to cast doubt on the powerof the Trustee of YPCT and YCT to make decisions about how the money paidfrom each Trust was to be spent.1107 As I have already mentioned,Ms Oldmeadow-Hall pointed to cl 5.2(b) of YCCL’s constitution, which providedthat ‘nothing in this chapter has the effect of limiting or restricting the class ofbeneficiaries of the [YPCT] or [YCT] or fettering the absolute discretion of thetrustee of the [YPCT] or [YCT].1108 Consequently, Ms Oldmeadow-Hall’s viewwas that there was nothing in the BMS under the Participation Agreement, or inYCCL’s constitution, that gave the Yindjibarndi people a right to override thedecisions of the Trustee of each Trust in relation to the way trust funds should bespent. In her view, cl 5.2(b) of YCCL’s constitution would have required veryclear words to convey that intention.1109 In my view, that analysis waspersuasive.

[903] In reaching the view that YAC had the ability to use its power over YCCLto affect the returns it received, Ms Oldmeadow-Hall also looked at some of theminutes of YAC and of YCCL, and relied upon them to determine how YCCL’sdecision-making was undertaken.1110 Ms Oldmeadow-Hall also placed relianceon a resolution made by YAC’s members at a meeting of YAC held on25 November 2015. According to the minutes of that meeting, that resolution wasto the following effect:1111

The board of directors of [YAC] has considered each of the proposed resolutions tobe considered at the 2014 and 2015 annual general meetings of [YCCL] and resolvedthat nothing in the agreements or trust deeds comprising the benefit managementstructure established by YAC, the Yindjibarndi People and Rio Tinto Iron Ore requiresYAC to hold a meeting of its members or to seek the consent, endorsement, approval,decision or authorisation of its members before exercising, or authorising arepresentative to exercise, YAC rights as sole member of YCCL under the YCCLConstitution at the AGMs.

[904] Ms Oldmeadow-Hall’s view was that that resolution ‘demonstrates thatthe directors of YAC considered that they have the authority over YCCL todetermine the allocation of funds within YCT and YPCT’.1112 That suggests thatwhatever the strict legal position might have been, in practice, YAC did notregard the obligation on YCCL to consult with the Yindjibarndi people asconfining YAC’s rights as the sole member of YCCL.

[905] Ms Shen had not been provided with the minutes of YAC’s meetings, andhad therefore not been able to take them into account for the purposes of reachingher conclusion about the application of AASB 10. Ms Shen was of the view thatminutes of meetings were not an adequate and sufficient basis for a judgmentabout control, but she did accept that consideration of the minutes was relevantin the process of assessing control.1113 She also accepted that it would benecessary to look at the budget and practical decision-making in an organisation

1107. Ts 1275.1108. Exhibit 1.278; ts 1278.1109. Ts 1281.1110. Ts 1304.1111. Exhibit 1.560.1112. Exhibit 45 at [35].1113. Ts 1303.


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to ascertain ‘the process of how approval and review processes have beenundertaken, [and how] the decision-making process has [been undertaken]’.1114

She acknowledged that she had not been given the material necessary toundertake these tasks for the purposes of providing her opinion in this case.1115

[906] Ms Shen also confirmed that for the purposes of preparing her report andformulating her opinion, she had not examined the minutes of YCCL.1116

Ms Shen considered that those minutes, of themselves, would be insufficient inassessing ‘control’ for the purpose of AASB 10, but she accepted that they wouldbe part of the process of assessing whether the criteria of control were met.1117

Ms Shen accepted that because she was not provided with the minutes of YCCL,she was not in the position to assess whether representatives of YAC attended andspoke at meetings of YCCL.1118

[907] The fact that Ms Shen was not able to have regard to the minutes of YACand of YCCL, which in my view constituted a source of information relevant todetermining YAC’s control over YCCL, meant that her opinion was lesscomprehensive in its analysis, and thus less persuasive than the opinionexpressed by Ms Oldmeadow-Hall.

[908] In my view, for the reasons set out above, I prefer the opinion reached byMs Oldmeadow-Hall that YAC exercised relevant powers of control, for thepurposes of AASB 10, over YCCL, and over YPCT and YCT. I find that YACexercised control over YCCL, and in turn over YPCT and YCT, because itexercised power over YCCL; it had exposure to variable returns from itsinvolvement with YCCL; and it had the ability to use its power over YCCL toaffect the amount of its returns. (I note again that these findings only relate to the‘control’ of YAC over these entities in the AASB 10 sense, and should not beconstrued as broader findings of ‘control’ as a matter of law). Accordingly, I findthat the accounts prepared by YAC for the financial years ending 30 June 2014and 30 June 2015 should have been consolidated accounts which encompassedthe accounts for YCCL and YPCT and YCT, as well as those of YindjibarndiWealth, the Yindjibarndi Wealth Trust, Yindjibarndi Capital and the YindjibarndiCapital Trust.

Yurra

[909] In relation to Yurra, the experts determined that the Yindjibarndi WealthTrust held 50% of the issued capital in Yurra.1119

[910] Ms Oldmeadow-Hall noted that YAC had a 50% interest in Yurra, whichwas recognised in YAC’s 2013 financial statements. In the 2014 and 2015financial years, YAC’s investment in Yurra was held through its controlled entity,Yindjibarndi Wealth, and, accordingly, YAC’s interest in Yurra was not disclosedat all in YAC’s 2014 and 2015 financial statements.1120 Ms Oldmeadow-Hallnoted that the other shareholders of Yurra are the Anthony Martin Trust (25%interest) and the Right Foot Forward Trust No 2 (25% interest). She noted that

1114. Ts 1303.1115. Ts 1304.1116. Ts 1270.1117. Ts 1270.1118. Ts 1270.1119. Ts 1272.1120. Exhibit 43 at [39].


YAC’s CEO, Mr Michael Woodley, and Mr Liam Wilson, representing RightFoot Forward Trust No 2, were the directors of Yurra.1121

[911] Initially, Ms Oldmeadow-Hall was unable to determine whether YAC hadcontrol, joint control or significant influence over Yurra, so as to reach aconclusion about the appropriate accounting treatment of the interests held inYurra in the financial statements of YAC.1122 However, in her furthersupplementary report, Ms Oldmeadow-Hall was prepared to treat Yurra as acontrolled entity of YAC, having regard to Ms Shen’s conclusion that YACcontrols Yurra.1123

[912] Ms Shen concluded that as Yindjibarndi Wealth held a 50% stake in Yurraand as YAC’s CEO, Mr Woodley, was one of the two directors of Yurra, YAC hadthe power, through Yindjibarndi Wealth, to direct the activities of Yurra and hadrights to Yurra’s variable returns. Accordingly, she concluded that YACcontrolled Yurra.1124 The basis for that conclusion was not entirely clear, giventhat YAC does not appear to have a majority shareholding, or a majority ofdirectors in Yurra. Instead, YAC shares its power equally with the other Yurrashareholders, and the other director.

[913] Furthermore, Ms Shen also made the somewhat curious statement thatshe agreed with the conclusions drawn in Ms Oldmeadow-Hall’s report that Yurrais a controlled entity of YAC.1125 In fact, Ms Oldmeadow-Hall’s initial view, asI have said, had been that she was unable to reach any such conclusion.Nevertheless, Ms Oldmeadow-Hall was, subsequently, prepared to acceptMs Shen’s view that Yurra was a controlled entity of YAC.1126

[914] Given the limited information in relation to Yurra, and the apparentinconsistencies in the views of the experts, which were not resolved in theirevidence, it is undesirable to express a final view on the question whether YACexercises control over Yurra. It is also unnecessary to express any final view onthat question.

(vi) Whether the financial statements of YAC consolidated its position andthat of the subsidiaries

[915] I find that YAC did not prepare consolidated accounts which incorporatedthe position of its other controlled entities, namely YCCL, and YPCT and YCT,as well as Yindjibarndi Wealth, the Yindjibarndi Wealth Trust, YindjibarndiCapital and the Yindjibarndi Capital Trust. On that basis, YAC’s accounts did notcomply with the requirements of AASB 10 (or AASB 127) for the financial yearsending 30 June 2014 and 30 June 2015.

[916] Ms Oldmeadow-Hall prepared an example of consolidated financialstatements which consolidated YAC’s controlled entities into YAC’s accounts. Itis apparent from that example that the consolidation of YAC’s controlled entitiesinto the accounts would provide YAC’s members with a comprehensive, and farmore accurate, picture of the financial position of the group of companies subjectto YAC’s control. In particular, they would provide a means by which YAC’smembers could more readily ascertain the total revenue across the group, and

1121. Exhibit 43 at [40].1122. Exhibit 43 at [43].1123. Exhibit 46 at [4].1124. Exhibit 47, 3.1125. Exhibit 47, 6.1126. Exhibit 47, 6.


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where that income is being expended. A more accurate overall picture of theassets, liabilities and current equity across the group would clearly be providedby such consolidated accounts. Accordingly, the question of consolidation is notmerely one of technical compliance with the requirements of relevant AccountingStandards, but is important for providing YAC’s members with importantfinancial information in relation to YAC and the entities under its control.

(vii) The directors’ role in the preparation of YAC’s reports, and theirreliance on YAC’s accountants and auditors

[917] The defendants relied on evidence that YAC’s directors had relied on theadvice of YAC’s accountants, and on the audit undertaken by YAC’s auditors forthe financial years ending 30 June 2014 and 30 June 2015, in support of theirsubmission that it was open to them to do so, and that consequently, the failureby YAC to prepare consolidated reports could not constitute conduct caught bys 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act.

[918] The evidence of Mr Woodley,1127 of Mr Mack, and of Ms Cheedy, madeclear, and I find, that YAC relied on its accountants and auditors, in preparing itsfinancial statements in accordance with applicable Accounting Standards.

[919] In respect of the accounts for the 2014 financial year, those accounts wereprepared by Mr Harrison (an accountant employed, in house, by YAC), but werethen audited by YAC’s auditor, Mr Sword. Mr Woodley’s evidence was thatMr Sword’s opinion was that the accounts were properly prepared, and YAC tookthat advice.1128 The position in relation to the 2015 accounts was less clear, butit appears likely that they were prepared by KPMG, which had been engaged byYAC in June 2015 (Mr Harrison having left YAC’s employment some monthsbefore that, in 2014).

[920] Mr Woodley was cross-examined about the fact that YAC’s draft 2016accounts contained a partial consolidation of some of YAC’s Subsidiaries,namely Yindjibarndi Capital and Yindjibarndi Wealth. Mr Woodley’s evidencewas that he first learned of that partial consolidation when he saw the draftaccounts.1129 In other words, Mr Woodley, as YAC’s CEO, continued to rely onYAC’s accountants as to whether consolidation was required.

[921] Mr Mack was asked about the question of consolidation of the accountsof YAC and other entities, including YCCL, Yindjibarndi Wealth andYindjibarndi Capital. He was asked by counsel for the plaintiffs whether, as thedirector of YAC, he had inquired as to how the accounts of those entities shouldbest be dealt with. His evidence was:1130

All these [entities are] separate. … It’s all separate. It’s not under any corporation. It’snot — we haven’t got nothing to do with — it’s a trust. There’s an item here. That’s allseparate corporations. … We don’t — we don’t manage it. We don’t manage, but weeach look after the native title (indistinct) the PBC, our interests in the claim.

1127. Ts 1346.1128. Ts 1347–8.1129. Ts 1355.1130. Ts 871.


[922] It was apparent that Mr Mack did not have a sophisticated understandingof the responsibilities of directors with respect to the financial statements of acompany. His understanding of the duty of a director of a corporation was to‘protect the interests for the people and corporation’.1131

[923] Ms Cheedy was asked about her understanding of the responsibility ofYAC’s directors in relation to the preparation of its accounts, including in relationto determining whether other the accounts of other entities were required to beconsolidated with YAC’s accounts. Her evidence was ‘being a financial matter, Isuppose the YAC management do have some sort of responsibility in that, but, asI say again, we do have accountants and auditors that assist us with thatprocess’.1132

[924] The plaintiffs’ counsel sought to illustrate that the directors did not relyupon the advice of their accountants and auditors in relation to the preparation ofthe accounts for 2014 and 2015. Counsel pointed to the directors’ declaration,signed by Ms Cheedy as the Chair of YAC, in YAC’s financial reports for the2014 and 2015 financial years, to the effect that the accounts gave a true and fairview of the financial position of YAC.1133 In addition, counsel for the plaintiffspointed to the disclaimer by YAC’s auditor, Mr Swords, to the effect that ‘thedirectors are responsible for the preparation and presentation of the financialstatements and the information they contain’ and that ‘no opinion is expressed asto whether the basis of accounting used is appropriate to their needs’.1134

[925] The latter evidence must be viewed in its context. Mr Swords’ auditreport indicated that in his opinion ‘the financial statements present the financialtransactions fairly in accordance with applicable accounting standards and arebased on proper accounts and records’.1135 That statement is not inconsistent withthe directors’ claimed reliance on their accountants and auditors for the purposesof ensuring compliance with any applicable financial reporting requirements.

[926] Finally, however, I should mention that it appeared that the defendants’witnesses, in their evidence, sought to downplay the significance of YAC’s failureto produce consolidated accounts. Mr Mack’s evidence was that members couldobtain the relevant financial information for YAC’s related entities such asYCCL, and YCT and YPCT, by attending the AGM for YCCL. His evidence wasthat at the AGM for YCCL, the accounts for the Trusts were put up on a projectorscreed in the hall for people to read.1136 He was asked:1137

So you say it was clearly able to be read by anyone going to the meeting? — Yes. Andexplained as well.

[927] All that needs to be said about that evidence is that providing informationto YAC’s members about the accounts of YCCL, YCT or YPCT in that fashionhardly constitutes compliance with AASB 10. The provision of financialinformation in that way could not realistically be regarded as of any meaningfuluse to any member of YAC with an interest in understanding the overall financialpicture of YAC and all of its related entities.

1131. Ts 865.1132. Ts 1041.1133. Exhibits 1.387, 1.388.1134. Exhibit 1.387, 1.388.1135. Exhibit 1.387, 1.388.1136. Ts 876.1137. Ts 876.


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s 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act?

[928] The plaintiffs submitted that the Court should find that this aspect of theircase had been wholly made out, having regard to the evidence of the expertwitnesses. There can be no doubt that the plaintiffs have established that YACfailed to comply with the requirements of subdiv 333-A of the CATSIRegulations, in that it failed to prepare consolidated accounts in accordance withthe requirements of AASB 127 and AASB 10 for the 2014 and 2015 financialyears.

[929] The defendants’ approach to the question of what AASB 10 required wasagnostic. Counsel for the defendants submitted, in closing, that ‘the currentmanagement and directors do not have a strongly held view about the applicationof AASB 10. This is a regulatory compliance issue for YAC. If it is necessary toprepare consolidated financial statements to accord with AASB 10 then it will doso.’1138 They submitted that it was desirable for the Court to determine whetherYAC ought to have consolidated its financial statements because its auditors wereawaiting the outcome of this case to determine what was required forconsolidation in the future.1139

[930] The defendants’ position was that if AASB 10 required YAC to prepareconsolidated financial statements, the question for the Court was whether YAC’sfailure to do so, in circumstances where the evidence established that it had reliedon its accountants and auditors in relation to whether consolidated accounts wererequired, was conduct caught by s 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act.The defendants’ case is that the directors were entitled to rely, honestly and ingood faith, on their accountants to form a view about the application of AASB10, and if they did so, their conduct could not be caught by s 166-1(1) of theCATSI Act.1140

[931] In some respects, the defendants’ case appeared to draw on similarconsiderations to those set out in s 265–45 of the CATSI Act. However, thatsection does not apply, nor was it contended the defendants that it did.

[932] The question, then, is how YAC’s conduct — if it constituted a failure tocomply with subdiv 333-A of the CATSI Regulations — constituted conductcaught by s 166-1(1) of the CATSI Act. The case was not, with respect, entirelyclearly elucidated, but I have proceeded on the basis that the plaintiffs’ case is,in essence, that a failure to prepare financial reports which comply with therequirements of subdiv 333-A of the CATSI Regulations constitutes conduct ofthe corporation’s affairs which is contrary to the interests of the members as awhole.

[933] At this point, it is appropriate to say something about the role andresponsibilities of a director in relation to an ATSI corporation’s financialreporting obligations. The general principles governing the role andresponsibilities of a director in relation to a company’s financial reportingobligations under the Corporations Act 2001 (Cth) provide guidance as to howcomparable obligations under the CATSI Act apply.

1138. Defendants’ reply submissions at [20].1139. Defendants’ closing submissions at [236].1140. Defendants’ reply submissions at [21].


[934] In Australian Securities and Investments Commission v Healey,1141

Middleton J discussed the responsibilities of directors in relation to thepreparation of the financial statements of a corporation. The following statementsare drawn from his Honour’s discussion of the applicable principles.

[935] Directors of a company have an important role and responsibility toensure that the information included in the financial statements of the companyis accurate. While directors are entitled to delegate to others the preparation ofbooks and accounts, and the carrying on of the day-to-day affairs of the company,they are expected to take a diligent and intelligent interest in the informationavailable to them, to understand that information, and apply an enquiring mindto the responsibilities placed upon them.1142

[936] That responsibility applies to adopting and approving the financialstatements.1143 A director must read the financial statements to ensure, as far aspossible and reasonable, that the information included in them is accurate. Thedirectors’ scrutiny of the financial statements involves understanding theircontent, and if necessary, making further enquiries if matters revealed in thefinancial statements call for such enquiries.1144 The director should then bring theinformation known or available to them in the normal discharge of theirresponsibilities to the task of focussing upon the financial statements.1145

[937] The Corporations Act 2001 (Cth) explicitly requires that the declarationrequired by s 295(4)1146 and the annual directors’ report must be made inaccordance with a resolution of the directors.1147 In that manner, the Act imposesultimate responsibility for those matters upon the directors in a way that theycannot delegate. They must themselves determine to adopt the requiredresolution.1148 Accordingly, while the company has an obligation to prepare thedirectors’ declaration under s 295(4), the directors bear the primary responsibilityfor the declaration itself. However, as his Honour pointed out, that does not meanthat the directors are not entitled to seek assistance in carrying out theirresponsibilities, or to rely on others.1149

[938] Consequently, it is not possible for directors to simply put the dischargeof their functions into the hands of apparently competent and reliable persons,because the Corporations Act 2001 (Cth) makes the directors themselves a partof the process, by requiring them to undertake the task of approving and adoptingthe financial statements and reports.1150

[939] While directors are required to take reasonable steps to place themselvesin a position to guide and monitor the management of the company, they areentitled to rely upon others (at least except where they know, or by the exercise

1141. (2011) 196 FCR 291; 278 ALR 618; 83 ACSR 484; [2011] FCA 717 (Healey).1142. Healey at [20], [22] per Middleton J.1143. Healey at [20], [22] per Middleton J.1144. Healey at [20], [22] per Middleton J.1145. Healey at [22] per Middleton J.1146. Under s 295(4) of the Corporations Act 2001 (Cth), the directors’ declaration (which must be

included in the company’s financial reports) must include, among other things, a statement asto “whether, in the directors’ opinion, the financial statement and notes are in accordance with[the Act]” including the requirement to comply with applicable accounting standards, and therequirement that the accounts represent a true and fair view of the position of the company.

1147. Section 295(5) of the Corporations Act 2001 (Cth).1148. Healey at [125] per Middleton J.1149. Healey at [128]–[129] per Middleton J.1150. Healey at [142] per Middleton J.


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of ordinary care should know, facts that would deny reliance).1151 In this respect,it is clear that an objective standard of care is applied to company directors.1152

[940] I note that the issues in dispute in Healey did not require Middleton J toform a view as to whether directors should have a degree of accounting literacythat required a knowledge of accounting practice and of the AccountingStandards.1153 In that case, ASIC had pleaded only that a director required aroutine knowledge of and basic application of the tests for the classification ofliabilities, and it was not suggested by ASIC that directors needed to have aworking knowledge of all of the Accounting Standards, or even of some ofthem.1154

[941] In Healey, Middleton J also considered the extent to which a directorcould rely on an audit committee. His Honour observed that

whilst an audit committee has an important role of monitoring and oversight, this isnot to the exclusion of the role of a director to consider the financial accounts. This doesnot involve a director being familiar with every accounting standard, but sufficientlyaware and knowledgeable to understand what is being approved or adopted.1155

[942] Those statements are of some relevance in assessing the claim by YAC’sdirectors that they relied on their auditors (in addition to their accountants) todetermine what was required by applicable Accounting Standards.

[943] In my view, given the difference in view between the expert witnesses,and the evidence as to KPMG’s view of the requirements of AASB 10, thedirectors of YAC could not reasonably be expected to be familiar with the detailof the Accounting Standards, so as to be able to identify which AccountingStandards might be relevant to YAC’s financial reporting obligations, and inrelation to AASB 10, what the particular content of that Standard required forYAC’s financial reports. To that extent, the directors were entitled to rely uponthe expert advice of their accountants as to what Standards may apply.

[944] However, accountants (and auditors) cannot determine what Standardsmay apply, and how, without being provided with all potentially relevant factualinformation. The directors and officers of a company are clearly responsible forproviding their accountants and auditors with such factual material as they needto identify what is required to comply with the corporation’s financial reportingobligations. In assessing whether the YAC’s directors and officers havereasonably, as well as honestly, relied on their accountants’ advice, as thedefendants contend, it will be relevant to identify whether the directors andofficers have provided their accountants with all of the information required bythem to prepare the accounts, and to audit those accounts. There was nothing inthe evidence to indicate that the directors of YAC had failed to do so. That beingthe case, I do not see why the directors were not acting reasonably in relying onthe advice given by their accountants, and confirmed by the opinions given byYAC’s auditors.

[945] There are two further arguments with which I should deal, in relation tothe reasonableness of YAC’s reliance on its accountants’ advice. The first pertainsto YAC’s reliance on the advice of Mr Harrison. It was not in dispute that

1151. Healey at [167] per Middleton J.1152. Healey at [172] per Middleton J.1153. Healey at [206] per Middleton J.1154. Healey at [287]–[288] pert Middleton J.1155. Healey at [203] per Middleton J.


Mr Harrison was employed as YAC’s in-house accountant up until 2014. The factthat he prepared YAC’s accounts, without consolidation of the accounts of YAC’srelated entities, was consistent with the approach to consolidation initially takenby KPMG. In my view, in those circumstances, the fact that there was noevidence as to Mr Harrison’s qualifications, and that he was not called to giveevidence, does not, contrary to the submission of counsel for the plaintiffs,1156

preclude the Court from concluding that YAC’s reliance on his accounting advicewas reasonable.

[946] Secondly, the plaintiffs sought to rely on evidence in relation to the termsof the agreement between KPMG and YAC. They submitted that the terms of thatagreement directly contradicted the contention made by YAC that it had relied onKPMG’s advice.1157 In cross examination, Mr Woodley acknowledged that theterms of the agreement between KPMG and YAC made clear that YAC, and notKPMG, was responsible for the maintenance of written financial records thataccurately recorded and explained its transactions so as to enable financialreports to be prepared and audited; that the directors and officers assumedresponsibility for the risk of misstatements of fraud or error; that the directorstook responsibility for the completeness and accuracy of the information suppliedto KPMG, and of informing KPMG of material known to be contentious; that thedirectors were responsible for completing the directors’ declaration confirmingthat financial reports were true and fair; that the directors took responsibility forclassification of YAC as either a reporting entity or a non-reporting entity; andthat KPMG would not perform any management functions for YAC nor make anymanagement decisions.1158

[947] In my view, nothing in that agreement undermined the evidence thatYAC’s directors in fact relied upon their accountants to prepare the accountscorrectly, including to comply with Accounting Standards. Ms Cheedy’sevidence made clear that notwithstanding the terms of YAC’s agreement withKPMG, she continued to be of the view that YAC’s directors were entitled to relyon YAC’s accountants and auditors.1159

[948] In all of the circumstances, even though (by virtue of this litigation) it isnow apparent that YAC failed to comply with the requirements of subdivision333-A of the CATSI Regulations, I am not persuaded that its conduct constitutedconduct which was contrary to the interests of the members as a whole, for thepurposes of s 166-1(1)(d) of the CATSI Act. I do not see any basis on which thatconduct could be regarded as oppressive conduct under s 166-1(1)(e) either.

[949] Even if I am wrong in that conclusion, however, I would not have grantedrelief (whether the appointment of a receiver or some other relief) under s 166-5of the CATSI Act, or otherwise, in respect of this conduct by YAC.

[950] In short, that is because YAC has now engaged KPMG to act as itsaccountant, and has engaged Grant Thornton to act as its auditor. I have no reasonto doubt that those firms will assist to ensure that YAC complies with therequirements of AASB 10 in the future.

[951] I deal further with the question of relief below.

1156. Plaintiffs’ closing submissions at [67.3].1157. Plaintiffs’ closing submissions at [67.5].1158. Ts 1343.1159. Ts 1041.


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(d) Signing off on the 2014 annual financial report when it contained materialerrors

[952] The plaintiffs’ case is that the board of YAC ‘signed off’ on YAC’s annualfinancial report for the financial year ending 30 June 2014, but in the annualfinancial report for the financial year ending 30 June 2015, the same board‘signed off’ on restated financial statements for the 2014 financial year, includingrestatements whereby YAC’s total liabilities had been understated by $2.5 millionand YAC’s total equity had been overstated by $2.5 million.1160

[953] The defendants agree that the 2015 annual financial report contained arestatement of the accounts set out in the 2014 annual financial report, as assertedby the plaintiffs. However, the defendants say that the restatement was necessarybecause the accounts set out in the 2014 annual financial report incorrectlyrecorded a $2.5 million payment YAC received from Rio Tinto pursuant to theParticipation Agreement as revenue in YAC’s accounts, rather than revenue inYPCT and YCT. The defendants say that this error was identified by KPMG latein 2015 when it reconciled information it received from Rio Tinto with thebalances in the accounts of YPCT and YCT.1161

[954] The defendants also say that YAC’s 2014 accounts and the 2014 accountsof YPCT and YCT were audited by David Swords and Grant Thorntonrespectively. The defendants say that the directors relied on the representation ofYAC’s auditor that YAC’s account were stated in the report correctly.1162

[955] It was not entirely clear why the plaintiffs contended that this errorconstituted conduct falling within s 166 1(1)(d) or (e) of the CATSI Act, but Ihave assumed that it was on the basis that it is not in the interests of the membersas a whole to be presented with accounts which are incorrect, and which maytherefore be misleading as to the true financial picture of the corporation.

Factual findings

[956] I make the following findings of fact relevant to the plaintiffs’ allegation.

[957] YAC’s accounts for the 2014 financial year were prepared by ChrisHarrison, who was then YAC’s in-house accountant, and its chief financial officer,and those accounts were audited by YAC’s auditor at the time, Mr DavidSwords.1163

[958] Ms Cheedy gave evidence of her reliance on YAC’s accountants andauditor in relation to the preparation of the accounts.1164

[959] Mr Graeme Sheard, of KPMG, explained in his evidence that under theParticipation Agreement, which Rio Tinto and YAC entered into in 2013, RioTinto is required to pay a rate, determined by a formula, for every tonne of oretransported by rail across Yindjibarndi land (rail tariff). The ParticipationAgreement provides for the rail tariff to be paid to two trusts established for theYindjibarndi people, namely YPCT and YCT.

[960] Mr Sheard was of the understanding that before those trusts wereestablished, Rio Tinto paid a sum of $2.5 million to YAC as an advance againstfuture rail tariffs. At the time that that advance was made, YAC incorrectly

1160. PSIFC at [196].1161. DSIFC at [91], [163].1162. DSIFC at [91], [163]–[165].1163. Exhibit 1.387.1164. Ts 1040–1.


recognised that payment as its own revenue. Mr Sheard deposed that whenKPMG was first engaged to act for YAC, its review of YAC’s records identifiedthat the original payment of $2.5 million made by Rio Tinto to YAC had beenincorrectly recorded by YAC as its revenue, and not as an advance by Rio Tintoto YCCL as the Trustee of YPCT and YCT.

[961] Mr Sheard’s evidence was that a restatement of the accounts of thoseentities was required to reflect the correct position, and the 2015 accounts of bothYAC and of the Trusts reflected that restatement. Mr Sheard’s evidence was thatthe $2.5 million payment was thereafter reflected as a loan payable by YAC to theTrusts. Mr Sheard’s evidence was that:1165

Restatements of accounts to adjust for errors in prior years are not uncommon andoccur from time to time in public companies and more so in private companies. …

There is nothing untoward about the restatement other than it discloses an error thatwas made in a prior year that required rectification once identified in 2015.

[962] Mr Sheard’s evidence was that the loan between YAC and the Trusts wasbeing repaid by YAC by setting it off against amounts owed by the Trusts to YACfrom time to time for services rendered and invoiced by YAC to the Trusts.1166

[963] I accept Mr Sheard’s explanation for the restatement in YAC’s 2015financial report.

[964] Ms Oldmeadow-Hall’s evidence was consistent with Mr Sheard’sunderstanding of the position under the Participation Agreement. She explainedthat under the Participation Agreement, there were pre-payments of the paymentswhich would be required to be paid by Rio Tinto to YAC, and which were called‘advance payments’. The advance payments were to be set off against the benefitswhich were, in due course, paid under the Participation Agreement.1167

[965] Ms Oldmeadow-Hall confirmed that in the 2014 accounts, YAC hadoverstated its revenue by $2.5 million, and in the 2015 report that error wascorrected against the opening retained earnings (so that the error was treated asone prior to 1 July 2014).1168

[966] Ms Shen also confirmed the manner in which the error had been adjustedin the 2015 financial statements, and confirmed that the error had been rectifiedin accordance with the relevant Accounting Standards:1169

the error arose in the financial year ended 30 June 2012 and it was identified by theaccountants while preparing the 2015 financial statements. To correct this properly andbecause it was 2012 error, this adjustment was put against the opening retained earningsat 1 July 2013, which is in accordance with AASB 108 — Accounting Policies, Changesin Accounting Estimates and Errors.

[967] The existence of this error in YAC’s accounts appears to have contributedto the concerns of members of YAC about the financial management of YAC.Ms Allery Sandy explained that she was concerned about financial managementbecause at the 2015 AGM, held in November 2015, YAC informed members that‘its accounts for the previous year were wrong by $2.5 million’ and that ‘this

1165. Exhibit 49 at [19]–[20].1166. Exhibit 49 at [21].1167. Exhibit 47, 6.1168. Exhibit 43 at [51].1169. Exhibit 47, 6.


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would have shown YAC running at a loss the previous year. I do not recall anyexplanation being given for this mistake other than to blame it on the auditor’.1170


[968] Counsel for the defendants submitted that having regard to Mr Sheard’sexplanation for how the error in YAC’s accounts came to be made, and to the factthat those accounts were prepared by Mr Harrison and audited by Mr Swords, itcould not be said that the signing-off by the YAC directors on the 2014 annualfinancial report, in those circumstances, was conduct which was caught bys 166-1 of the CATSI Act.1171 However, they submitted that even if that wasconduct was caught by s 166-1(1), it ‘is not in any relevant sense continuing. Theerror has been identified, accounts restated and YAC is repaying the money toboth trusts’.1172

[969] Counsel for the plaintiffs submitted that the claim by the Defendants thatYAC had relied on its accountants and auditors in the preparation of the 2014accounts, so that any failure was not conduct caught by section 166-1(1) of theCATSI Act, was not open to be made because there was no evidence that all ofthe directors had in fact relied on the accountants and auditor, and because theauditor, Mr Swords, was not called to give evidence, nor was it shown that he wasunavailable to do so.1173 I do not accept that submission. It was clear fromMs Cheedy’s evidence that she relied on the accountants and auditors to correctlyprepare YAC’s accounts. Given her evidence that none of the directors on theboard of YAC had any financial training, I infer that the remaining directors alsorelied on the accountants and auditors to prepare the reports.

[970] The error in this case arose from a decision as to how the $2.5 millionadvance paid by Rio Tinto should be recorded — whether in the accounts of YACor of YCCL. That decision was clearly one which required a knowledge ofaccounting principles and practice. In my view, the directors could not have beenexpected to possess that degree of knowledge. For the reasons set out above at[933]–[944], I accept that the directors were entitled to rely on YAC’s accountant,Mr Harrison, to prepare the 2014 accounts in accordance with relevantaccounting standards, and on Mr Swords’ audit of those accounts by way ofconfirmation.

[971] Even if, in signing off on the 2014 financial report, the directors can besaid to have failed to comply with the CATSI Act or CATSI Regulations, I am notpersuaded that that conduct could properly be characterised as contrary to theinterests of members as a whole, or oppressive to the members, for the purposesof s 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act.

[972] Even if I am wrong in that conclusion, however, I would not have grantedrelief under s 166-5 of the CATSI Act, or otherwise, in respect of this conduct.That is because the error has been identified, and has been rectified in a mannerconsistent with the relevant Accounting Standards. No relief is necessary tocorrect the error, or to prevent similar conduct in the future. The identification ofthe error occurred because YAC engaged KPMG as its accountants, and theyreviewed documentation in relation to YAC’s financial position and the

1170. Exhibit 19 at [21]–[22].1171. Defendants’closing submissions at [214].1172. Defendants’ closing submissions at [215].1173. Plaintiffs’ closing submissions at [37].


preparation of its accounts. I accept the submission of counsel for the defendantsthat this matter was ‘an excellent illustration of the improvement in financialadministration that has taken place since the appointment of KPMG’.1174

[973] I will, however, take this conduct into account in considering whether thetotality of YAC’s conduct in relation to its conduct of meetings, and its financialmanagement, constitutes conduct of the kind described within s 166-1(1) andwarrants the grant of relief.

(e) CEO’s report not accepted on the basis that it did not relate to the affairs of

YAC in the 2014 and 2015 financial years

[974] The plaintiffs’ case is that at the AGMs for 2014 and 2015 heldconcurrently on 30 November 2015, a motion put to the meeting to accept theCEO’s report was lost. The plaintiffs’ say that CEO’s report was objected to onthe basis that it only dealt with the history of the dispute between the members,with a short section on future plans, but said nothing about what had happenedin the financial years which were the subject of the AGM.1175

[975] The defendants do not dispute that there was an objection to the CEO’sreport, and that there was a motion to accept that report. They say that a poll wascalled for on the motion and that the motion was lost when 149 members votedin favour of the motion and 104 against, with the result that the special majorityvoting requirement in the Rule Book for decisions made by poll was notachieved.1176

Factual findings

[976] I make the following findings.

[977] At the concurrent AGMs for 2014 and 2015, held on 30 November 2015,YAC’s CEO, Mr Woodley, presented his CEO’s report. That report was objectedto by Mr Bennett (counsel for the plaintiffs in the present action), who was at themeeting in the capacity of a proxy holder, and as the legal representative ofWMYAC. Mr Bennett’s objection was that the report ‘took too long and[Mr Woodley] had spoken only about the history of the dispute and with a shortsection on future plans but had said nothing about what had happened in the pastyear’.1177 One of the members of YAC then moved a motion that the CEO’sreport be accepted. The motion was seconded. Mr Bennett called for a poll, andone was taken in respect of that motion. The result of that poll was that 149members voted in favour of the motion, and 104 members voted against themotion.1178

[978] At the time, YAC’s Rule Book required a majority of three quarters of thevotes of the members present in order to pass a resolution of the members at ageneral meeting. Accordingly, while the motion had the support of a simplemajority of the members, it did not achieve the special majority required for it topass.1179

1174. Defendants’ closing submissions at [216].1175. PSIFC at [57], [189].1176. DSIFC at [88], [159].1177. Exhibit 1.550.1178. Exhibit 1.550.1179. Exhibit 1.550.


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Did this conduct constitute conduct of the kind described in s 166-1(1)(d) ors 166-1(1)(e) of the CATSI Act?

[979] For the reasons set out below at [1012]–[1014], I doubt whether theoutcome of this meeting, in so far as it concerned the CEO’s report can, of itself,constitute conduct of the kind referred to in s 166-1(1)(d) or s 166-1(1)(e) of theCATSI Act.

[980] However, it is unnecessary to determine that question because even if theoutcome of the meeting, at least in relation to the CEO’s report, constitutedconduct of the kind described in s 166-1(1)(d) or s 166-1(1)(e), I would not grantrelief in respect of it. The conduct in question has long passed, nothing can nowbe done (nor is anything required to be done, in a practical sense) to alter theresult of the vote in respect of the motion to accept the CEO’s report. Further, byvirtue of the amendment of YAC’s Rule Book, to substitute the requirement fora three quarters majority with that of a simple majority, the provisions of the RuleBook which permitted the situation to arise, whereby the CEO’s report was notaccepted by a majority of the meeting, are no longer applicable.

(f) Alleged oppressive conduct by operating without any validly appointeddirectors


[981] The plaintiffs’ case is that YAC’s AGMs for 2014 and 2015 were heldconcurrently on 30 November 2015. Their case is that at that meeting, themembers failed to appoint any directors, leaving YAC without a board (becausethe terms of the previous directors had then expired). The plaintiffs also say thatthe CEO’s Report was not accepted at the meeting (on the basis that it did notrelate to the affairs of YAC in the 2014 and 2015 financial years) and that the onlymotion which passed was one put on the recommendation of KPMG, namely toreplace YAC’s auditor, Mr David Swords, with Grant Thornton.1180

[982] The plaintiffs say that the persons who purported to hold directorshipsprior to 30 November 2015 continued to act as if they remained directors of YACuntil 9 March 2016, when Le Miere J delivered his decision in Sandy (No 2)1181.The plaintiffs contend that in Sandy (No 2), Le Miere J held that YAC had hadno directors for the period from 30 November 2015, and on 23 March 2016 heappointed a receiver over the property of YAC until new directors were electedon 19 April 2016.1182

[983] The plaintiffs’ case is that in failing to appoint directors, the manner inwhich YAC was administered and in which its affairs were conducted wascontrary to the interests of YAC’s members as a whole, even though that conductof itself may not be described as oppressive, unfairly prejudicial to, or unfairlydiscriminatory against members of the company.1183

[984] As I understand the defendants’ case, they do not dispute that there wasan AGM on 30 November 2015, a directors’ meeting on 16 December 2015,motions put and passed (or not passed) at those meetings, the findings made byLe Miere J in Sandy (No 2), or the orders made by his Honour.1184

1180. PSIFC at [57], [113].1181. Sandy (No 2).1182. PSIFC at [57], [58].1183. PSIFC at [114].1184. DSIFC at [93]–[101].


[985] However, the defendants say that while the directors appointed at YAC’s2013 AGM continued to act in their capacity as directors after the AGM on30 November 2015, they did so on the basis of their belief that s 246-25(4) of theCATSI Act applied to extend their terms until the next general meeting.1185 Theydo not dispute that Le Miere J found that s 246-25(4) operated that way, and thathis Honour found that the directors’ appointment had expired at the end of themeetings on 30 November 2015.

[986] The defendants also point to the fact that following the decision of LeMiere J, on 19 April 2016, the Registrar convened a general meeting of YAC’smembers and exercised his powers under s 69–35 of the CATSI Act to amendYAC’s Rule Book, including by replacing the requirement for a three-quartersmajority for making decisions on a poll at general meetings with a simplemajority requirement. The defendants say that at the general meeting on 19 April2016, the election of directors was undertaken by secret ballot of the members,and new directors were elected.1186

[987] The defendants agree that the failure of the members to appoint directorsat the concurrent AGMs on 30 November 2015 left YAC without any directors.However, they say that the members did not appoint directors at that meetingbecause neither the block of YAC nominees nor the block of WMYAC nomineesachieved a majority of three quarters of the votes cast on a poll. The defendants’case is that the failure of the members to appoint directors was not contrary totheir interests as a whole because the appointment process was carried out inaccordance with the Rule Book that applied at the time.1187

[988] The defendants say, in the alternative, that if the failure of the concurrentAGMs to appoint directors was oppressive within the meaning of s 166-1(1) ofthe CATSI Act, then the Court should not make an order under s 166-5 becausethe oppression has ceased and was remedied by the orders made by Le Miere Jin Sandy (No 2), and the subsequent action taken by the Registrar.1188

Factual findings

[989] I make the following findings of fact in relation to this part of theplaintiffs’ case.

[990] The YAC AGMs for 2014 and 2015 were held, concurrently, on30 November 2015 at the 50 Cent Hall in Roebourne. According to the minutes,200 members of YAC attended the meeting (out of a total membership, at thattime, of 428). Other people, including lawyers for YAC and lawyers acting forWMYAC, were present. The Directors’ Report, the CEO’s Report, the In-houseCounsel’s Report and the financial reports for the 2014 and 2015 financial yearswere presented to the meeting. All of those reports were accepted, apart from theCEO’s Report, (for which the motion for acceptance failed to secure a 75%majority of supporting votes).1189

[991] The last item of business at the meeting was the election of directors.Nominations for directors were considered in blocks of 12 members. The firstmotion that Lyn Cheedy, Middleton Cheedy, Pansy Cheedy Sambo, TootsieDaniels, Caroline Fazeldean, Kevin Guiness, Angus Mack, Camelia Miller,

1185. DSIFC at [92].1186. DSIFC at [103]–[105].1187. DSIFC at [123]–[124].1188. DSIFC at [125].1189. Exhibit 1.550.


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Russell Sandy, Stanley Warrie, Sonia Wilson, and Rosemarie Woodley beappointed as directors.1190 Ms Allan deposed that nine of the nominees in thatgroup were persons who had been acting as directors of YAC.1191 That motionwas put to a vote and the votes in favour of the motion did not constitute a 75%majority, and the motion was lost.1192

[992] The meeting then considered a motion that Michelle Adams, RodneyAdams, Gloria Lee, Jill Tucker, Ken Sandy, John Sandy, Allery Sandy, AileenSandy, Jayne Ranger, Francis Phillips, Pennoschea Little, and Jimmy Horace beappointed as directors of YAC.1193 Ms Allan recognised nine of those persons ascurrent directors of WMYAC.1194 The votes in favour of that motion failed toachieve the 75% majority required and the motion was lost.1195

[993] The consequence of those votes was that no directors were appointed on30 November 2015. The plaintiffs took the view that as a result, YAC had noboard of directors and requested that they be advised of any steps being taken byformer directors of YAC, or its current management, to secure the appointmentof a new board of directors.1196 Mr Irving, YAC’s in-house counsel, took adifferent view. He advised the plaintiffs’ solicitors that it was not the case thatYAC had been left without a board of directors following the AGM held on30 November 2015. Mr Irving contended that the terms of the previous directorswere extended, by virtue of the operation of the CATSI Act, until the next generalmeeting.1197

[994] A meeting of YAC’s directors (that is, the former directors) was held on16 December 2015. At the meeting, the directors considered 90 membershipapplications, and accepted 46. (The 90 membership applications comprised 40applications that YAC had deferred as part of the membership process under theSettlement Deed, and a further 50 applications.) The directors also resolved tocall a general meeting to be held on 1 February 2016, to appoint directors.1198

[995] The names of the 46 new members were added to YAC’s Register ofMembers on about 24 December 2015.1199

[996] On 24 December 2015, Mr John Sandy commenced proceedings in thisCourt against YAC and the persons then claiming to be the directors of YAC,seeking a declaration that on the proper construction of s 246-25(4) of the CATSIAct, the current board of YAC had not been validly appointed, a declaration thatthere were currently no directors of YAC, and an order that a receiver beappointed over the property of YAC.

1190. Exhibit 1.550.1191. Exhibit 9.1192. Exhibit 1.550.1193. Exhibit 1.550.1194. Exhibit 9.1195. Exhibit 1.550.1196. Exhibit 1.282.1197. Exhibit 1.284.1198. Exhibit 1.561.1199. Exhibit 1.283.


[997] On 6 January 2016, YAC issued a notice for a general meeting to be heldon 1 February 2016 in Roebourne.1200 After Mr John Sandy made an applicationfor an injunction to restrain YAC from proceeding with that general meeting,YAC cancelled the meeting.1201

[998] The proceedings commenced by Mr Sandy were tried in this Court on 22and 23 February 2016 before Le Miere J. Mr Sandy contended that the terms ofappointment of all of YAC’s directors had expired on 10 September 2015. Byvirtue of s 246-25(4) of the CATSI Act, the terms of the directors were extendeduntil the next general meeting, which was held on 30 November 2015. However,on that occasion, motions for the appointment of directors were put, but notpassed. Mr Sandy contended that that left YAC without validly appointeddirectors.

[999] Mr Sandy also contended that the meeting of the directors on16 December 2015 was not validly convened because it had not been called bya director, because reasonable notice had not been given to one of the directors(Ms Tucker), and because the resolution that the directors accept applicationsfrom 46 people for membership (new members) was put and passed for animproper purpose, namely to influence the outcome of motions to be consideredat a general meeting of YAC on 1 February 2016 and, in particular, the motionto be put for the election of directors who supported the CEO and the previousdirectors of YAC, other than Ms Tucker.

[1000] Justice Le Miere upheld Mr Sandy’s contentions, granted relief andordered that YAC pay Mr Sandy’s costs of that proceeding.1202 His Honour madea declaration that on the proper construction of s 246-25(4) of the CATSI Act, theterms of appointment of the former directors of YAC had expired at theconclusion of the AGMs of YAC on 30 November 2015, that there were currentlyno directors of YAC, that the purported directors’ meeting which had been heldon 16 December 2015 was not a valid meeting, that the resolutions purportedlycarried at the directors’ meeting held on 16 December 2015 were invalid and ofno effect, and that by reason of those declarations, the 46 persons who had beenadmitted to membership of YAC at that directors’ meeting were not members ofYAC.

[1001] His Honour concluded that the purported meeting of directors held on16 December 2015 and the resolutions passed at that meeting were invalid,because the person who called the meeting and the persons who attended hadceased to be directors on 30 November 2015.1203 His Honour also held thatreasonable notice of that directors’ meeting had not been given to Ms Tucker, asshe had not been given the usual seven days’ notice of a board meeting.1204 HisHonour held that this was an irregularity that could not have been remedied byan order of the court and, had it been necessary to do so, he would have declaredthe meeting of the directors on 16 December 2015 to have been invalidly held byreason of this procedural irregularity.1205

1200. Exhibit 1.287.1201. Exhibit 53 [33].1202. Exhibit 1.290.1203. Sandy (No 2) at [31].1204. Sandy (No 2) at [44].1205. Sandy (No 2) at [49].


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[1002] Justice Le Miere also held that the directors had passed the resolution toaccept the new members for membership and had resolved to hold a specialgeneral meeting early in the following year in the belief that the new memberswould support the incumbent directors, other than Ms Tucker, in the voteconcerning the composition of the board, which was to be held at that specialgeneral meeting. One of the bases on which his Honour relied in reaching thatconclusion was that the directors had approved only the applications of the newmembers, who were believed to be supporters of Mr Woodley and the incumbentdirectors, and did not consider the other membership applications that had beenoutstanding since at least 2014.1206

[1003] Justice Le Miere ordered that notice of his judgment and his reasons fordecision be given to the Registrar, and stood over the question whether a receivershould be appointed, pending a determination by the Registrar as to whether heintended to take action, namely to appoint a special administrator.

[1004] On 15 March 2016, the Registrar advised YAC that1207

while some grounds may exist for placing YAC under special administration, it is notappropriate to do so at this time.

Special administration removes control of the corporation from its members for asignificant period of time (usually a minimum of six months) and I am satisfied that thecircumstances that YAC has no directors can be addressed through the exercise by meof other powers under the [CATSI Act].

[1005] The Registrar instead determined to call a general meeting of YAC’smembers to appoint directors of YAC.

[1006] At a further hearing in March 2016, Le Miere J made orders that,pending the conclusion of a general meeting called by the Registrar unders 439-10(1)(d) of the CATSI Act for 19 April 2016, a receiver be appointed forYAC and all of its property.1208 Further orders were made by Le Miere J in April2016 to extend the powers of the receiver to investigate certain payments.1209

[1007] The Registrar subsequently gave notice of a general meeting of YAC tobe held on 19 April 2016 in Roebourne. The items for consideration at themeeting included the election of directors of YAC, and consideration of a specialresolution of members of YAC to amend YAC’s Rule Book to ensure that if theterms of directors of YAC expired, that the directors holding office immediatelybefore the expiry would continue until the members of YAC appointed newdirectors, or re-appointed existing directors, by resolution at the generalmeeting.1210

[1008] Prior to calling that meeting, the Registrar initiated changes to YAC’sRule Book.1211 Those changes included an amendment to rule 4.10.3(b) of theRule Book to replace the requirement for a majority vote of three quarters of themembers in order to pass resolutions, with a requirement for a simple majorityonly.1212 In addition, the Registrar noted that in view of the concerns about delaysin dealing with membership applications, and alleged non-compliance by YAC

1206. Sandy (No 2) at [63].1207. Exhibit 1.294.1208. Exhibit 1.290.1209. Exhibit 1.298.1210. Exhibit 1.301.1211. Pursuant to s 69-35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).1212. Exhibit 57; Ex 1.294.


with its Rule Book, he proposed to issue a compliance notice to the directors ofYAC following the election of the directors at the meeting on 19 April 2016.1213

[1009] The general meeting of YAC proceeded on 19 April 2016.1214 Theprimary item of business was the election of directors. At the conclusion ofvoting, the Registrar declared that Tootsie Daniel, Rosemarie Woodley, RoseanneMippy, Middleton Cheedy, Margaret Ranger, Kevin Guiness, Stanley Warrie,Sonia Wilson, Pansy Sambo, Lyn Cheedy, Camelia Miller and Angus Mack hadbeen elected as YAC directors.1215


s 166-1(1)(d) of the CATSI Act?

[1010] In my view, the plaintiffs have not established that relief should begranted in respect of this conduct pursuant to s 166-5 of the CATSI Act. I havereached that view for the following reasons.

[1011] First, on the one hand, there is no doubt that the result in this case — thata corporation was left without any validly appointed directors — was clearlycontrary to the interests of the members as a whole.

[1012] On the other hand, however, I have real reservations as to whether thefact that YAC was left without validly appointed directors following the rejectionof the motions put to the AGMs on 30 November 2015, in the circumstances inwhich that came about, can properly be characterised as ‘conduct’ of acorporation’s affairs. The word ‘conduct’ means ‘a way of acting’ and (in relationto a business) means the ‘direction or management; execution’ of the business1216

and ‘the action or manner of directing, managing, or carrying on (any business,performance, process, course, etc); direction, management’.1217 I do not see howit can be said that an outcome of a vote, which YAC’s directors and officers didnot seek or procure, and which in fact was contrary to the outcome they sought,can properly be described as the conduct — that is, the direction, management orcarrying on — of YAC’s affairs. To reach that conclusion would require that theword ‘conduct’ be given a meaning so broad as to encompass even unintendedconsequences of the actions of a corporation or its members.

[1013] Furthermore, the statutory context appears to be at odds with such abroad construction. The other grounds in s 166-1(1) appear to be directed tointended, or at least foreshadowed, actions or omissions by a corporation, or itsmembers. So, for example, s 166-1(1)(b) refers to ‘an actual or proposed act oromission by or on behalf of’ a corporation, and s 166-1(1)(c) refers to a‘resolution, or a proposed resolution, of members or a class of members’ of acorporation. In addition, the purpose behind ss 166-1 and 166-5 is to ensure thatthe way in which a corporation is run, and the actions of it or its members, arefair to the members as a whole, and not unfairly discriminatory or prejudicial toindividual members. The sections are directed to action by a corporation whichhas that unfair quality. To apply those provisions to the unintended consequencesof actions of a corporation does not sit comfortably with that statutory objective.

1213. Exhibit 1.294.1214. Exhibit 1.551.1215. Exhibit 1.551.1216. Macquarie Dictionary Online.1217. Oxford English Dictionary Online.


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[1014] Even if it could be said that proposing the motions for the election ofdirectors, or the outcome of the vote on those motions, is part of the ‘conduct’ ofYAC’s affairs, it is difficult to see how that ‘conduct’ could be regarded ascontrary to the interests of YAC’s members as a whole (within the meaning ofs 166-1(1)(d)) when the vote on each motion appears to have been conducted inaccordance with the provisions of YAC’s Rule Book at the time. Furthermore, inchoosing not to vote in favour of a motion, the members of YAC were eachclearly acting in a way they were entitled to act, and the fact that the motion ineach case was lost must be regarded as an outcome contemplated by the RuleBook, particularly in view of the special majority required to pass a resolution.For that outcome to come to pass cannot be characterised as ‘contrary to theinterests of the members as a whole’.

[1015] In the end, it is unnecessary to reach a firm conclusion on this aspect ofthe construction of s 166-1(1) because even if the outcome of the vote at theAGMs on 30 November 2015 indicates that the conduct of YAC’s affairs wascontrary to the interests of the members as a whole, I would not grant relief inany event.

[1016] The ‘conduct’ said to fall within s 166-1(1)(d) of the CATSI Act is notongoing. It had been remedied before the trial of the present proceedings, byvirtue of the orders made by Le Miere J, and by the election of directors on19 April 2016. Nothing more could now be done which would make any practicaldifference in relation to the ‘conduct’ or its consequences. Furthermore, in viewof the relief granted by Le Miere J (which included declaratory relief), even thegrant of declaratory relief in this case would be inutile. Finally, by virtue of theamendment of YAC’s Rule Book in relation to motions put to the vote at ageneral meeting, to substitute the requirement for a three quarters majority withthat of a simple majority, the provisions of YAC’s Rule Book which permitted thesituation to arise, whereby YAC had no validly appointed directors, are no longerapplicable.

(g) Incurring costs in defending legal proceedings without authority from theboard; and

Incurring and paying expenses in the period when YAC had no validly appointeddirectors

[1017] It is convenient to deal with these two allegations together.

[1018] The plaintiffs’ case is that in the period between 24 October 2014 and7 November 2014, the CEO of YAC, Mr Woodley, and YAC’s in-house legalcounsel, Mr Irving, incurred costs on behalf of YAC in the amount of$118,755.99, without authority from the board of YAC. The plaintiffs say thatthose costs were incurred in defending legal proceedings brought against YAC bysome of its directors and members, in circumstances where YAC was whollyunsuccessful in those legal proceedings, and was ordered to pay the costs of thesuccessful parties.1218 The proceedings to which the plaintiffs referred were thosein Adams.1219

[1019] The defendants’ case was that Ms Charmaine Adams and Ms Jill Tuckerwere appointed as directors of YAC at the AGM for YAC on 16 October 2014.They then called a general meeting of YAC to take place on 10 November 2014

1218. PSIFC at [72], [197].1219. Adams.


at Roebourne. The defendants say that the purpose of the meeting was to considerand, if it thought appropriate, pass resolutions for the removal of 10 of theirfellow directors and for the appointment of replacement directors, most of whomwere directors of WMYAC at the time.1220

[1020] The defendants say that on 28 October 2014, Ms Charmaine Adams,along with Mr Ken Sandy and Mr John Sandy (who were among the proposedreplacement directors) commenced proceedings in the Supreme Court of WesternAustralia seeking declarations as to the validity of the action taken by Ms Adamsand Ms Tucker to call the general meeting, including by reference to the materialsthey caused to be issued to YAC’s members to give notice of that meeting(Adams proceedings). YAC was the defendant to the Adams proceedings. Itopposed the relief sought by Ms Adams and the other plaintiffs to that action.1221

[1021] The defendants say that on 7 November 2014, in Adams,1222 K Martin Jconcluded that there should be declarations that the general meeting called for10 November 2014 had been validly called, and that the motions set out in thenotice for the meeting were able to be proposed at the meeting.1223

[1022] The defendants’ case is that Mr Woodley and Mr Irving were authorisedto incur expenditure on behalf of YAC in defending the Adams proceedings. TheDefendants say that some time before the Adams proceedings were commenced,YAC had authorised its executive officers to incur expenditure of up to $100,000in any single transaction.1224

[1023] The defendants say that YAC incurred $118,755.99 in costs in opposingthe Adams proceedings, comprising legal fees of under $100,000 and counselfees. The defendants also say that the issue of the authorisation of the expenditureon those legal costs was ventilated in an unsuccessful application by Ms Adams,Mr Ken Sandy and Mr John Sandy in the same proceeding for costs ordersagainst persons not party to the proceedings, namely Mr Michael Woodley andMr George Irving. The Defendants say that no finding was made that the costsincurred by YAC in the defence of the Adams proceedings were incurred withoutthe authority of the then directors of YAC.1225

[1024] The defendants also say that YAC paid its costs of opposing the Adamsproceedings, and the directors of YAC did not take any action againstMr Woodley or Mr Irving in respect of the expenditure on legal costs indefending the proceedings.1226

[1025] The defendants say that the general meeting called by Ms Adams andMs Tucker took place on 10 November 2014. They say that a poll of memberson the motion to replace 10 of the then current directors of YAC with new nameddirectors was lost.1227

1220. DSIFC at [69].1221. DSIFC at [70]–[71], [166].1222. Adams.1223. DSIFC at [72], [166].1224. DSIFC at [73], [166].1225. DSIFC at [74], [166].1226. DSIFC at [75], [166].1227. DSIFC at [76]–[80], [166].


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[1026] In relation to the balance of the allegations in this section, the plaintiffssay that in the period between 30 November 2015 to 9 March 2016, YACincurred and paid significant expenses in circumstances where YAC had novalidly appointed directors.1228

[1027] In addition, the plaintiffs say that in the period from 24 December 2015to at least 9 March 2016 (when Justice Le Miere published his reasons fordecision in Sandy (No 2),1229) YAC incurred expenses in defending the legalproceedings brought by Mr Sandy, in circumstances where YAC had no validlyappointed directors and where YAC was wholly unsuccessful in those legalproceedings, and was ordered to pay the costs incurred by the successful party inbringing those legal proceedings.1230

[1028] The defendants say that after the concurrent AGMs for 2014 and 2015,at which neither motion for the appointment of new directors was supported bythe requisite majority of the members of YAC, the directors who had beenappointed at YAC’s AGM for 2013 continued to act in their capacity as directorsof YAC. The defendants say that those directors did so on the basis of their beliefthat s 246-25(4) of the CATSI Act applied to extend their terms until the nextgeneral meeting. The defendants say that on 9 March 2016, Le Miere J publishedhis reasons in Sandy (No 2) and held that s 246-25(4) did not operate in that way,and that the directors’ terms of appointment had therefore expired at the end ofthe concurrent AGMs, with the result that YAC then had no validly appointeddirectors.1231

[1029] The defendants’ case is that between 30 November 2015 (the date of theconcurrent AGMS for 2014 and 2015) and 9 March 2016, YAC did not pay anysignificant expenses outside the ordinary course of business.1232

Factual findings

[1030] In these reasons (at [34]), I have already briefly referred to the decisionof K Martin J in Adams.1233 It does not appear that there is any dispute betweenthe parties in relation to the nature of the Adams proceedings, or the result of it.Those matters are, in any event, set out in the judgment of K Martin J.

[1031] There was no evidence to suggest that K Martin J substantively dealtwith the question whether Mr Irving and Mr Woodley were authorised to incurexpenses on behalf of YAC, in defending the Adams proceedings. I infer that hisHonour did not deal substantively with that precise question, and consequently,I have proceeded on the assumption that the issue has not been previouslydetermined by this Court.

[1032] The only additional factual findings which need to be made in relationto the plaintiffs’ allegation arising from the legal costs incurred on behalf of YACin the Adams proceedings concern the question of authority to incur those costsand expenses.

[1033] I find that YAC incurred just over $118,750 in legal costs, includingcounsel fees, in defending the Adams proceedings.1234

1228. PSIFC at [74].1229. Sandy (No 2).1230. PSIFC at [75].1231. DSIFC at [92], [167].1232. DSIFC at [102], [167].1233. Adams.1234. Exhibit 53 at [29].


[1034] I find that the plaintiffs in the Adams proceedings applied for anon-party costs order against Mr Woodley and Mr Irving, on the basis that theyhad not been properly authorised by the YAC board to incur the costs of legaladvice and representation for YAC in the Adams proceedings, and that K Martin Jdismissed that application.1235

[1035] In responding to that application, YAC filed an affidavit sworn byMr Irving in which he deposed to the basis on which he formed the view that hewas entitled to incur legal costs in considering, and then defending, the Adamsproceedings. That affidavit was in evidence in this action.1236 Mr Irving deposedthat he considered that he had authority to engage external legal advisers (ClearyHoare) on behalf of YAC for the purposes of advising on, and defending, theAdams proceedings ‘without the need for YAC’s Board of Directors to pass afresh and specific resolution for me to do so’.1237

[1036] In summary, Mr Irving relied on a resolution of YAC’s board, made on10 March 2011, that YAC would oppose the WMYAC group with every legalavenue possible to protect Yindjibarndi country; a resolution of the board ofdirectors on 22 February 2012, in which it resolved that Mr Irving, in his capacityas in-house counsel for YAC, was authorised to incur debts on behalf of YAC asnecessary for the briefing of external counsel to advise and appear in court; anda resolution of the board of directors on 23 January 2014, by which the board

in accordance with Rule 5.14 of YAC’s Constitution, delegated their powers underRules 8 and 9 of the Constitution with regard to the approval of expenditure to YAC’sexecutive staff, provided that:

(i) Such expenditure was approved by 2 members of the executive staff;

(ii) Any single expenditure did not exceed $100,000; and

(iii) All such expenditures were ratified by the YAC Directors on a quarterly basisfollowing the presentation of a quarterly payments schedule.1238

[1037] Mr Irving also deposed, in his affidavit in the Adams proceedings, thatin their capacity as the executive staff of YAC, he and Mr Woodley had approvedeach of the invoices for Cleary Hoare in relation to the Adams proceedings, noneof which was more than $100,000.1239

[1038] Mr Irving also deposed that the YAC board met on 23 October 2014, atwhich time he provided the board with advice (including from Cleary Hoare) thatthe notice of the general meeting issued by Ms Adams and Ms Tucker wasinvalid. Mr Irving deposed that ‘none of the directors … raised any issue at themeeting with respect to the engagement of Cleary Hoare to provide advice inrespect of the Notice’.1240 Mr Irving also deposed that the board met on31 October 2014, after the Adams proceedings had been commenced, and headvised the board that he had briefed Cleary Hoare to act on YAC’s behalf in theaction. He deposed that ‘no member of YAC’s Board or executive raised anyobjection to YAC defending the [Adams proceedings] or to the engagement ofCleary Hoare for this purpose’.1241

1235. Exhibit 53 at [27].1236. Exhibit 53, Annex GMI12.1237. Exhibit 53, Annex GMI12 at [28].1238. Exhibit 53, Annexes GMI12 at [28], and GMI5 to that affidavit.1239. Exhibit 53, Annex GMI12 at [29].1240. Exhibit 53, Annex GMI12 at [34].1241. Exhibit 53, Annex GMI12 at [43].


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[1039] I find that Mr Irving incurred legal costs, on behalf of YAC, indefending the Adams proceedings, including the costs of engaging Cleary Hoareto act on YAC’s behalf in those proceedings, and that he did so on the basis ofhis belief that he was authorised to incur those expenses, on the bases set outabove.

[1040] In relation to the plaintiffs’ allegations that between 30 November 2015and 9 March 2016, YAC incurred expenses, including legal expenses, when it hadno validly appointed directors, I have already made a number of factual findingsin relation to the proceedings in this Court before Le Miere J in Sandy (No 2).The plaintiffs did not specify any particular expenses, or the total amount of theexpenses, they say were incurred without any authority, because YAC’s accountsfor the 2016 year had not been published by the date of the trial, and they werenot able to specify the level of expenses incurred between 30 November 2015and 9 March 2016, or the nature of those expenses.1242 There was very littleevidence in relation to this issue. It was not in dispute that YAC defended theproceedings in Sandy (No 2). In those proceedings, it was represented by externallawyers, from which I infer that YAC must have incurred expenses for its legalrepresentation during that period.

[1041] Ms Cheedy was unable to recall what expenses were incurred by YACduring the period when it had no validly appointed directors. However, sheaccepted that the directors received a sitting fee for attending directors’ meetingsduring that period.1243

[1042] The plaintiffs’ case, as I understand it, was simply that by virtue of thedeclarations made by Le Miere J, which made clear that between 30 November2015 and 9 March 2016, YAC did not have any validly appointed directors, anyexpenses paid on YAC’s behalf during that period (including its legal expenses indefending the proceedings in Sandy (No 2), and any directors’ sitting fees paidduring this period) must necessarily have been incurred or paid without authority.


[1043] In relation to the allegation that Mr Woodley and Mr Irving, on YAC’sbehalf, incurred expenses in defending the Adams proceedings, when they had noauthority to do so, counsel for the plaintiffs submitted that the authorisation ofYAC’s executive officers to incur expenditure was contrary to rule 8 of YAC’sRule Book.

[1044] I am unable to accept that submission. At the relevant time, rule 81244

provided that:

All money of the corporation must be deposited into the corporation’s bank account.The corporation must give receipts for all money it receives.All cheques, withdrawal forms and other banking documents must be signed by at

least two directors.All accounts must be approved for payment at a directors’ meeting.

[1045] The requirement to approve accounts necessarily carries with it a powerfor the directors to give that approval. Under rule 5.14 of the Rule Book, directorswere able to delegate any of their powers to another director, a committee ofdirectors or an employee of the corporation, by passing a resolution to that effect.

1242. PSIFC at [198].1243. Ts 1093.1244. YAC Rule Book: Ex 2, Annex VA-4.


[1046] The plaintiffs have not established that the delegation, by the directorsof YAC, of their power to approve expenditure, was contrary to rule 8 orotherwise invalid. The plaintiffs have not established that when Mr Irving andMr Woodley incurred expenditure that they did so in circumstances where theyexceeded their authority under the delegation from the directors made in 2014.

[1047] Furthermore, the plaintiffs did not adduce any evidence to establish thatthe directors failed to ratify that expenditure, as part of the quarterly ratificationof expenditure incurred by YAC’s employees, as contemplated in the delegation.Mr Irving’s evidence, that the directors did not raise any objection to ClearyHoare being engaged to represent YAC in the Adams proceedings, suggests thatpayment of those expenses was probably approved by the directors, but in anyevent, the plaintiffs have not established that the expenses were not subsequentlyapproved by the directors (consistent with rule 8 of the Rule Book) in any event.

[1048] The plaintiffs have not established that in incurring those expenses,YAC’s conduct was caught by s 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act.

[1049] As for the plaintiffs’ allegations that YAC incurred expenses when itsdirectors had not been validly appointed, the plaintiffs have not established thatany such expenses were not authorised. There was no evidence as to how anysuch expenses came to be incurred, or were paid, or when those expenses werepaid. It therefore cannot be said that any such expenses were not approved forpayment in accordance with rule 8 of the Rule Book, or by YAC’s executivespursuant to the delegation to them of that authority.

[1050] The plaintiffs have not established that in incurring any expenses duringthe relevant period that YAC’s conduct was conduct of the kind described ins 166-1(1)(d) or s 166-1(1)(e) of the CATSI Act.

[1051] I will, however, take YAC’s conduct into account in consideringwhether the totality of its conduct in relation to its conduct of meetings, and itsfinancial management, amounts to conduct within s 166-1(1) so as to warrant thegrant of relief.

7.3 Alleged continual non-compliance with the CATSI Act and rule book

[1052] The plaintiffs contend that in addition to the matters identified in thevarious categories of conduct considered above, there is evidence of general andconsistent non-compliance by YAC with the CATSI Act and YAC’s RuleBook.1245 The plaintiffs point to the first compliance notice and the secondcompliance notice issued by the Registrar, and also allege that YAC has failed toadequately maintain its Register of Members.

[1053] The plaintiffs say that this conduct, in conjunction with the otherconduct alleged, is such as to amount to conduct within s 166-1(1)(d) and (e) ofthe CATSI Act.1246

(a) First compliance notice

[1054] The plaintiffs say that on 8 March 2011, following an examination ofYAC’s books during October 2010, a delegate of the Registrar (delegate) issuedthe first compliance notice to the directors of YAC pursuant to s 439-20 of theCATSI Act. The first compliance notice indicated that the delegate suspected onreasonable grounds that YAC had not complied with the CATSI Act and/or YAC’s

1245. PSIFC at [203].1246. PSIFC at [213].


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Rule Book in numerous respects.1247 The plaintiffs say that 16 suspectednon-compliant activities were identified,1248 namely:

• Persons who applied for membership after notices had been given forthe AGMs for the financial years ending 30 June 2008 and 30 June 2009were allowed to participate in the AGMs (paragraph A of the firstcompliance notice).

• YAC did not hold its AGM for the financial years ending 30 June 2008and 30 June 2009 by 30 November of each year (paragraph B).

• The form and content of the notices for the AGMs for the financial yearsending 30 June 2008 and 30 June 2009, and other general meetings werenot correct as the notices did not provide information that memberscould appoint a proxy (paragraph C).

• The minutes of the AGMs for the financial years ending 30 June 2008and 30 June 2009 and other general meetings were not signed by theChairperson within a reasonable time (paragraph D).

• Decision-making did not take place in accordance with the applicablerules, as persons who were admitted as members after notices of theAGMs had been given were allowed to participate in decision making(paragraph E).

• At least 21 days’ notice was not given prior to the holding of generalmeetings (paragraph F).

• Non-members were appointed as directors at the AGM for the financialyear ending 30 June 2008 (paragraph G).

• Directors did not give the requisite written consent to act as directorsbefore being appointed (paragraph H).

• Directors’ meetings were not held every three months (paragraph I).

• Minutes of directors’ meetings were not signed by the Chairpersonwithin a reasonable time after the meetings (paragraph J).

• Cheques were not being signed by two directors of the corporation (butwere instead being signed by the Chairman and an officer fromJuluwarlu) (paragraph K).

• Accounts were not passed for payment at directors’ meetings (paragraphL).

• Payments were made to related parties without material informationbeing provided to members and without material being lodged with theRegistrar (paragraph M).

• YAC did not provide the required explanatory statement to members inrelation to payments to directors and related parties (paragraph N).

• Notice of the meeting to resolve to make payments to directors andrelated parties did not contain the required information (paragraph O).

• Voting on the resolution for payments to directors and related partieswas not carried out in the required manner, as related parties who wereto be recipients of the payments were involved in the voting (paragraphP).

1247. PSIFC at [204].1248. PSIFC at [205].


[1055] The plaintiffs say that the conduct of YAC referred to in the firstcompliance notice, where it contravened the CATSI Act and/or YAC’s RuleBook, was such as to amount to conduct which fell within s 166-1(1)(d) and (e)of the CATSI Act.1249

[1056] The plaintiffs say that the first compliance notice set out a number ofactions that YAC was required to take to rectify the alleged breaches identified bythe Registrar. They say that although the delegate sent a letter dated 25 October2011 to YAC stating that he was satisfied that the directors had met therequirements of the first compliance notice, the conduct which was the subject ofthe first compliance notice remains relevant to the present action, because theprejudice that may have occurred from the breaches identified by the delegatehad not been addressed. The plaintiffs allege that deficiencies in YAC’s practicesconcerning payments to directors and related parties (paragraphs K — P in thefirst compliance notice) have not been addressed.1250 (I note that the plaintiffs didnot specify any conduct in particular beyond that general description.)

[1057] The defendants do not dispute that the delegate issued the firstcompliance notice. However, they rely on the fact that on 25 October 2011, thedelegate wrote to YAC’s directors advising that he was satisfied that the directorshad met all the requirements of the first compliance notice, and that the periodduring which the Registrar had been monitoring YAC had concluded. Thedefendants say that neither the delegate nor the Registrar took any further actionin relation to the first compliance notice.1251

Factual findings in relation to the first compliance notice

[1058] I make the following findings in relation to the first compliance notice.

[1059] On 8 September 2010, ORIC caused authorised officers to examine thebooks of YAC and to report on the results of that examination.1252 Thatexamination was conducted pursuant to s 453–1 of the CATSI Act. Theobjectives of the examination were to:1253

• Assess the level of compliance, on or after 1 July 2008, with the CATSI Act,the regulations and YAC rule book;

• Assess the viability and solvency of YAC as at the date of examination;• Check whether any material personal interests exist and whether they have

been properly managed;• Check whether there is any corruption or misuse of corporation resources for

personal benefit;• Report any lack of control, direction and management of the affairs of the

corporation by the directors; and• Inquire into specific governance/operational concerns raised with the

Registrar.

[1060] The report prepared as a result of that examination identified a numberof breaches of the requirements of the CATSI Act. The report made the followingrecommendations:

Our examination identified a number of breaches to the CATSI Act and/or thecorporation’s rules. The breaches identified indicate that the corporation does not focus

1249. PSIFC [206].1250. PSIFC at [206]–[207].1251. DSIFC at [37], [174].1252. Exhibit 1.11.1253. Exhibit 1.31.


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on the specific requirements of the CATSI Act and its rule books. However, it is

apparent that the corporation, through its management agreement with [Juluwarlu], the

corporation does maintain a certain level of governance and recordkeeping.

The corporation is well-run and it appears that the corporation has the capacity to

rectify the breaches identified if given the necessary training and support. However,

some breaches are fundamental to the operation of the corporation including1254

• Applications for membership being received and accepted prior to the AGM

on the same day and these new members participating in that AGM.

• Payments made to elders in consideration for culture, history and knowledge

which, if deemed to be payments to members instead of a contract for

services, would be in breach of the current rules.

• No formal policies and procedures in relation to material personal interests

and related party benefits.

• Payments not being signed/authorised by at least two directors in breach of its

current rules.

• Payments not being authorised by directors at a directors’ meeting.

• …

• Based on our examination, our recommendation would be for the Registrar to

issue a compliance notice in accordance with s 439-20(1) of the CATSI Act

requiring relevant breaches to be identified, the financial position of the

corporation be monitored and that governance training be undertaken.

[1061] On 8 March 2011, the Registrar issued the first compliance to YAC,pursuant to s 439-20 of the CATSI Act.1255 Pursuant to that notice, the Registrarrequired that the directors of YAC take specified action by a specified date,including:1256

3 In the general business at the directors’ meeting … discuss and put in placea course of action to resolve the following matters and ensure that

3.1 All applications for membership are considered by the directors at adirectors’ meeting;

3.2 The names and details of persons who apply for membership after anotice has been issued for an AGM or a general meeting are not enteredon the register of members until after the AGM or general meeting hasbeen held;

3.3 The AGM is held by 30 November every year;

…

3.11 All payments are to be authorised by two directors;

3.12 All accounts have not been passed for payments by directors;

3.13 Any payments to directors or related parties which are over $5,000 invalue need member and ORIC approval and the required explanatorystatement to members ….

The first compliance notice also required that the directors of YAC forwardto the Registrar of ORIC copies of all minutes of directors’ meetings andgeneral meetings held by YAC after the date of the first compliance noticeuntil such time as the Registrar notify YAC that he was satisfied that it wasno longer necessary for him to monitor YAC.1257



[1062] On 25 October 2011, a delegate of the Registrar advised YAC that afterreviewing YAC’s responses to the first compliance notice, he was satisfied thatthe directors had met all the requirements of the first compliance notice and, assuch, the monitoring period had officially concluded.1258

[1063] For completeness, I note that it is clear, and there is no dispute, thatYAC did not hold its AGM for the financial year ending 30 June 2011 by30 November 2011. Instead, that AGM was held on 21 March 2012. Mr Mackaccepted that that was not what ORIC had asked YAC to do.1259 However, as Ihave already mentioned, YAC had been restrained by an order of this Court fromproceeding with the AGM it had proposed to hold on 30 November 2011.

(b) Second compliance notice

[1064] The plaintiffs also rely on the second compliance notice issued by theRegistrar, to which I have already referred, in the context of the dispute over themembership of YAC.

[1065] The plaintiffs say that on 16 May 2016 a delegate of the Registrar underthe CATSI Act issued the second compliance notice, which was to the effect thathe suspected on reasonable grounds that YAC had not complied with the CATSIAct and/or its Rules in two respects, namely by failing to hold and complete anannual general meeting within five months after the end of each financial year (inrespect of its 2013, 2014 and 2015 AGMs), and by failing to consider allapplications for membership of the corporation within a reasonable time aftereach application for membership was received by the corporation.

[1066] The plaintiffs say that the second compliance notice required YAC to,inter alia:

• hold its 2016 AGM by no later than 30 November 2016;

• by 1 June 2016, prepare draft policies and procedures that provided forall applications for membership to be considered and decided upon bythe directors in a directors’ meeting within a reasonable time after eachapplication for membership was received;

• before the close of business on 30 June 2016, convene a directors’meeting or meetings to consider and decide upon all known applicationsfor membership submitted before the close of business on 1 June 2016that had not been previously accepted or rejected; and

• comply with subsections 144–10(5) — (7) of the CATSI Act afterconsidering and deciding upon the abovementioned applications.

[1067] The plaintiffs allege that the conduct of YAC identified in the secondcompliance notice, where it contravened the CATSI Act and/or the Rule Book,was such as to amount to conduct within s 166-1(1)(d) and (e) of the CATSI Act.

[1068] The plaintiffs allege that YAC has not complied with the secondcompliance notice, because written notice of the directors’ decision not to acceptan application for membership was not given within a reasonable time, incontravention of s 144–10(6) and (7) of the CATSI Act, in that letters were sentto applicants for membership over three weeks after the decisions on thoseapplications were made by the directors.

1258. Exhibit 1.58.1259. Ts 1149.


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[1069] The defendants’ case is that YAC complied with the second compliancenotice. They rely on the case they advanced in relation to the plaintiffs’allegations concerning the membership applications considered on 29 June 2016,and they rely on the fact that on about 28 July 2016, Mr Armstrong, a delegateof the Registrar, wrote to YAC advising that he was satisfied that YAC hadsatisfied all of the action items in the second compliance notice (except for theitem requiring YAC to hold its next AGM by no later than 30 November2016).1260

[1070] The defendants say that in relation to the first and second compliancenotice, the satisfaction of the delegate in each case that YAC and the relevantdirectors of YAC had met or satisfied the requirements of each compliance notice(except for the requirement in the second compliance notice to hold an annualgeneral meeting for 2016 by no later than 30 November 2016) means that therehas been no oppression within the meaning of s 166-1(1) of the CATSI Act or,alternatively, to the extent there has been oppression, it is not ongoing.1261

[1071] In so far as the plaintiffs allege that YAC failed to give each applicantfor membership written notice of the directors’ decision in respect of theirapplication within a reasonable time, the defendants say that having regard to thehigh number of membership applications determined on 29 June 2016, YAC tooka reasonable period of time to notify unsuccessful applicants of the directors’decision to refuse their application.1262

Factual findings in relation to the second compliance notice

[1072] I have already made findings in relation to the issue and content of thesecond compliance notice. I have also made findings about YAC’s response tothat notice, and about the Registrar’s response thereto. It is unnecessary to repeatthose findings.

[1073] As for the plaintiffs’ allegation that the defendants breached s 144–10(6)and (7) of the CATSI Act by failing to advise applicants for membership, withina reasonable time, that their applications had been refused, I have already dealtwith that allegation (at [708]). It is unnecessary to repeat my conclusion on thatissue.

(c) Failure to adequately maintain the register of members

[1074] The plaintiffs allege that YAC failed to adequately maintain its Registerof Members, in that:

• Jannalee Mather appeared on the membership list published on theORIC website, but not on a list discovered by YAC on 29 July 2016; and

• In contravention of rule 3.1 of the Rule Book, Kaysha Hicks, RandallSambo and Kiniesh Thorne were added to the Register of Membersbefore they reached 18 years of age.1263

[1075] The defendants say that:1264

• YAC accepted Jannalee Mather’s application for membership on 5 May2014 and updated the ORIC list of members on 8 September 2014;

• YAC erroneously omitted to add Jannalee Mather to the spreadsheet ofmembers that it maintains;

1260. DSIFC at [175].1261. DSIFC at [176].1262. DSIFC at [177].1263. PSIFC at [212].1264. DSIFC at [177].


• YAC erroneously added Kaysha Hicks and Randall Sambo to itsspreadsheet of members and to the ORIC list of members before theyreached 18 years of age;

• according to YAC’s records Kiniesh Thorne was born on 29 November1995, and consequently she was 18 years of age when she was added toYAC’s spreadsheet of members and ORIC’s list of members on23 January 2014; and

• YAC’s spreadsheet of members records that Kiniesh Thorne was addedto the Register on 23 October 2010, which is a typographical error.

[1076] Counsel for the defendants submitted that the errors made by YAC inthe maintenance of its spreadsheet and the ORIC list of members are once-offerrors and are low in number, having regard to the number of members of YAC;and that in all the circumstances, the errors do not amount to oppression withins 166-1(1) of the CATSI Act, either in isolation or together with YAC’s conductin relation to the compliance notices.

Factual findings in relation to errors on the register

[1077] I rely on the defendants’ admissions set out at [1076] above that theerrors in the Register occurred, and in relation to the circumstances in whichthose errors were made, and find that errors in relation to the Register occurredin circumstances admitted by the defendants.

Did YAC’s conduct constitute oppressive conduct within s 166-1(1) of theCATSI Act?

[1078] Counsel for the defendants submitted that a compliance notice issued bythe Registrar or his delegate under the CATSI Act cannot be relied on in courtproceedings to establish the proof of the facts asserted in that notice, or proof ofnon-compliance with the CATSI Act, because the basis for the issue of acompliance notice is merely a suspicion on reasonable grounds that a corporationhas failed to comply with the CATSI Act or its rules. The Registrar need not besatisfied that there was in fact a failure to comply.1265 I accept that submission.

[1079] Save to the extent that the plaintiffs’ individual allegations of oppressiveconduct overlapped with the alleged acts or omissions by YAC which were thesubject of the first and second compliance notices, the plaintiffs did not adduceevidence to prove that the acts or omissions referred to in those noticesconstituted breaches of the CATSI Act or YAC’s Rule Book.

[1080] In my view, the plaintiffs have not established that any conduct referredto in the first compliance notice or second compliance notice occurred, or that itwas conduct by YAC of the kind referred to in s 166-1(1) of the CATSI Act.

[1081] In relation to the plaintiffs’ allegations that YAC failed to maintain theRegister in the manner particularised in the PSIFC, I am not persuaded thatYAC’s conduct (as admitted by the defendants) constituted conduct of the kindreferred to in s 166-1(1) of the CATSI Act, having regard to the very smallnumber of errors involved (relative to the overall number of members of YAC),and the circumstances in which the defendants admit that those errors occurred.Even if I am wrong in that conclusion, I am not persuaded that the errors in theRegister would warrant the grant of relief under s 166-5 of the CATSI Act, as theerrors or omissions appear to have been rectified or overcome. There is no basis

1265. Defendants’ closing submissions at [241].


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for concluding that those errors represent any ongoing issue of non-complianceby YAC with its obligation to maintain the Register.

8. The overall relief which should be granted in respect of the conduct ofYAC within s 166-1(1) which the plaintiffs have established

The relief sought by the plaintiffs

[1082] In their closing submissions,1266 the plaintiffs modified, somewhat, therelief which had been sought initially, and in their substituted Notice ofOriginating Motion. Subject to any determination by the Registrar to place YACunder special administration, the relief now sought by the plaintiff is, insummary, as follows:

(i) The appointment of a receiver of all of the property of YAC;(ii) An order that the Receiver, in addition to performing the usual functions

of a receiver and manager:(a) Consider and decide any membership applications to YAC that are

outstanding as at the date of the order;(b) Consider and decide on any membership applications that may be

lodged with YAC during the period of the receivership;(c) In considering any membership application, the Receiver shall be

at liberty to take advice from any person or body including anyYindjibarndi Elder, or Elders, or independent anthropologist;

(d) Take steps to prepare appropriate accounts for YAC and itssubsidiaries;

(e) Put in place appropriate systems to ensure approval of allpayments made by YAC, including payments to related parties sothat those payments are made in accordance with the CATSI Actand the Rule Book, and appropriate systems and controls tofacilitate internal ongoing compliance by YAC with the CATSIAct and the Rule Book;

(f) Convene and hold an AGM, at which the office of each currentdirector shall cease, and at which the election of 12 directors willtake place; and

(g) Thereafter, the Receiver shall have liberty to apply for thedischarge of his appointment or for any ancillary or consequentialdirections in relation to his conduct as Receiver.

(iii) Orders as to the power of the Receiver, including that the Receiver shallnot make any decision which constitutes a ‘native title decision’ underYAC’s Rule Book without the approval of the Court, and an order thatthe Receiver’s remuneration be drawn from YAC’s assets;

[1083] Before turning to consider the question whether a receiver should beappointed, it is appropriate to consider the extent of the Court’s power to grantrelief. The plaintiffs primarily rely on the power to grant relief under s 166-5 ofthe CATSI Act (which is set out above at [93]). Among the Court’s expresspowers under s 166-5 is the power to appoint a receiver, and the power to makeorders regulating the conduct of a corporation’s affairs into the future. Theplaintiffs also rely on the Court’s power, under s 29(5) of the Supreme Court Act1935 (WA), to appoint a receiver in all cases in which it shall appear to the Courtto be just or convenient to do so.

1266. Annexure to plaintiffs’ closing submissions — Proposed minute of judgment after trial.


[1084] The power in s 166-5 of the CATSI Act reflects the power to grant reliefunder s 233 of the Corporations Act 2001 (Cth). The principles established toguide the exercise of that discretionary power apply to the exercise of discretionunder s 166-5 of the CATSI Act.

[1085] It has been recognised that s 233 of the Corporations Act 2001 (Cth) —which is a power ‘to make any order under this section that [the Court] considersappropriate in relation to the company’ — is a power1267

conferred in extremely wide terms, which would be confined as a matter ofconstruction only to the extent that the scope and purpose of the statutory enactmentmay enable the court to see that some exercises of the power would be definitelyextraneous to any objects the legislature could have had in view ….

[1086] The Court should also fashion the appropriate remedy to respond to theparticular circumstances of the case.1268 Clearly, the Court’s discretion to make‘any order … it considers appropriate in relation to the corporation’ must beexercised having regard to the factual circumstances found by the Court toconstitute conduct falling within s 166-1(1)(d) or s 166-1(1)(e).

[1087] It has also been recognised that the remedy granted by the Court shouldbe proportionate to the conduct found to be contrary to the interests of thecorporation, or oppressive.1269 Consequently, the remedy that is the leastintrusive and which will eliminate the conduct which contravenes s 166-1(1)should be considered first.1270

[1088] The purpose of relief is to put an end to the conduct which constitutesoppression, or which is contrary to the interests of the members as a whole,1271

or to terminate the effects of such conduct.1272

[1089] The Court’s power to grant relief under s 232 of the Corporations Act2001 (Cth) is not conditioned on the continuation of the oppression or of conductnot in the best interests of the corporation. Sections 232 and s 233 of theCorporations Act were introduced in their current form ‘with a view to makingit clear that the Court may make orders even if the act, omission or conductcomplained of has yet to occur or has ceased’.1273 Accordingly, the fact that therelief claimed is founded on conduct which is no longer continuing will beregarded as relevant to the exercise of discretion, but will not necessarily bedeterminative against the grant of relief.1274

1267. Turnbull at [42] per Campbell J.1268. Noble Investments Pty Ltd v Southern Cross Exploration NL (2008) 174 FCR 301; 69 ACSR

304; [2008] FCA 1963 at [30].1269. Nilant at [108] per Hasluck J.1270. Nilant at [109] per Hasluck J.1271. Nassar at [125].1272. Campbell at [182] per Gummow, Hayne, Heydon and Kiefel JJ.1273. Campbell at [72] per French CJ, [182] per Gummow, Hayne, Heydon and Kiefel JJ.1274. Campbell v Backoffıce Investments Pty Ltd (2008) 66 ACSR 359; [2008] NSWCA 95 at

[130]–[132] per Giles JA, [203] per Basten JA but compare [382]–[383] per Young CJ in Eq;the same point was considered but not finally determined on appeal to the High Court: seeCampbell at [72] per French CJ and [182] per Gummow, Hayne, Heydon and Kiefel JJ; see alsoAllways Resources Holdings Pty Ltd v Samgris Resources Pty Ltd (2017) 121 ACSR 1; [2017]QSC 074 at [25] per Bond J; Exton v Extons Pty Ltd (2017) 118 ACSR 411; [2017] VSC 14 perSifris J; Szencorp Pty Ltd v Clean Energy Council Ltd (2009) 69 ACSR 365; [2009] FCA 40 at[73] per Goldberg J; Trafalgar West Investments Pty Ltd (as trustee for the Trafalgar West

Investments Trust) v Superior Lawns Australia Pty Ltd (No 6) (2014) 102 ACSR 130; [2014]WASC 278 at [59]–[63] per K Martin J; Ubertini v Saeco International Group Spa Societa A


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The court’s power to appoint a receiver

[1090] This Court has an express power to appoint a receiver under s 166-5 ofthe CATSI Act. A receiver of property of a body corporate is also a manager ifthe receiver manages, or has — under the terms of appointment — the power tomanage the affairs of the body corporate.1275 If a receiver is appointed to an ATSIcorporation, the provisions of the Corporations Act 2001 (Cth) in relation toreceivers1276 apply, with certain modifications.1277

[1091] In so far as the Court’s power to appoint a receiver under s 29(5) of theSupreme Court Act 1935 (WA) is concerned, the words ‘just or convenient’ ins 29(5) mean where the appointment is practicable, and the interests of justicerequire it. It is well established that that power is to be construed broadly, and itmust be exercised with a view to all the circumstances of the case.1278

[1092] The power to appoint a receiver should not be exercised unless theCourt is persuaded that there is no reasonable or satisfactory alternative,1279 andthe Court should refrain from exercising its powers to appoint a receiver whenanother method of dealing with the situation under the CATSI Act isavailable.1280 By way of example, in Sandy (No 2) Le Miere J declined to appointa receiver until after he had given the Registrar the opportunity to considerwhether he would take action (such as to appoint a special administrator) in lightof the Court’s findings.1281

The parties’ submissions on the appointment of a receiver

[1093] As I understood the thrust of the submissions of counsel for theplaintiffs in relation to the appropriate relief, they were to the effect that theappointment of a receiver was warranted, for five reasons.

[1094] First, he submitted that of the forms of relief commonly granted by thecourts to deal with oppressive conduct, the appointment of a receiver was themost apt in this case. Counsel for the plaintiffs submitted that the other forms ofrelief commonly granted in response to oppressive conduct by corporations —such as a winding up order, or a ‘buy out’ order — would not be appropriate.1282

He also submitted that an order for the appointment of new directors to YAC’sboard would divide the board, entrench factionalism, and was likely to beineffective, because directors representing minority interests were likely to beignored or out-voted.1283 In addition, counsel for the plaintiffs submitted that theCourt could not simply leave the board in place, because it could have noconfidence that the directors would comply with their statutory obligations in the

Socio Unico (No 4) (2014) 98 ACSR 138; [2014] VSC 47 at [510] per Elliott J; Tomanovic v

Argyle HQ Pty Ltd [2010] NSWSC 152 at [39] per Austin J.1275. Section 694-70 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).1276. Part 5.2 of the Corporations Act 2001 (Cth).1277. Section 516-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).1278. Sandy (No 2) at [65].1279. Sandy (No 2) at [65] per Le Miere J, citing Re Avonwood Homes Pty Ltd [2000] VSC 216 at

[8] per Mandie J.1280. Sandy (No 2) at [68] per Le Miere J.1281. Sandy (No 2) at [69] per Le Miere J.1282. Plaintiffs’ closing submissions at [179].1283. Plaintiffs’ closing submissions at [182].


future, in light of their previous non-compliance, and their apparent lack ofunderstanding of their duties concerning YAC’s financial management, includingits financial reporting requirements.1284

[1095] In short, counsel’s submission was that the appointment of a receiverwas the least imperfect relief of all the forms of relief available to the Court. Hesubmitted, rather colourfully, that in this case, identifying the appropriate reliefwas ‘rather like going to the cupboard to cook and finding only a few ingredientsleft, you may not make a perfect dish, but your Honour is left with very littleingredients’.1285

[1096] Secondly, counsel for the plaintiffs also submitted that the appointmentof an independent receiver was appropriate, having regard to YAC’s‘non-compliance over a lengthy period of time … with its statutory obligationsand the fact that non-compliance is continuing as well the deep historicfactionalism promoted by YAC and its executives’.1286 In so far as continuingnon-compliance was alleged, counsel for the plaintiffs submitted that the conductof the directors in dealing with the second compliance notice was revealing, inthat rather than comply, they requested that they be permitted to write to allapplicants, asking them to fill in a new membership form, and to return it, so thatthey could assess the applications by reference to the new policies.1287 He alsosubmitted that, despite Mr Armstrong’s advice that YAC would need to secureapproval for the proposed changes to its Rule Book by a vote of the members ofYAC, the directors did not attempt to do so at the AGM in November 2016.1288

[1097] Thirdly, counsel for the plaintiffs submitted that the appointment of areceiver was appropriate because it was necessary to deal with the conduct ofYAC’s financial management and reporting.1289 He submitted that the Courtcould be confident that a receiver would supervise the preparation of appropriateaccounts for YAC and its subsidiaries, put in place appropriate systems to managepayments by YAC, especially to related parties, in accordance with the CATSIAct and the Rule Book, and put in place appropriate systems and internal controlsto facilitate ongoing compliance with YAC’s obligations in future.1290

[1098] Fourthly, while counsel acknowledged that ‘dealing with themembership issue … is more difficult’,1291 he submitted that the receiver couldact on advice, such as from an advisory committee of Yindjibarndi Elders or anindependent expert such as an anthropologist, and could deal with membershipissues in a fair and unbiased manner.1292

[1099] Fifthly, counsel for the plaintiffs submitted that ‘[a]nything less thanplacing control of the corporation in the hands of an independent person risks thesame response as shown by the incumbent directors of YAC [in the past] …namely the corporation playing lip service to the promises it made to ORIC andignoring the clear findings of this Court’.1293 In the latter respect, counsel for the

1284. Plaintiffs’ closing submissions at [180]–[181].1285. Ts 1653.1286. Plaintiffs’ closing submissions at [178].1287. Plaintiffs’ closing submissions at [130]–[131].1288. Plaintiffs’ closing submissions at [132].1289. Plaintiffs’ closing submissions at [183].1290. Plaintiffs’ closing submissions at [185].1291. Ts 1630.1292. Plaintiffs’ closing submissions at [187].1293. Plaintiffs’ closing submissions at [190].


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plaintiffs relied upon the fact that at the date of the trial, the directors had still notdetermined the 10 applications contained in the envelope which had gonemissing.

[1100] The defendants accepted that the Court had power under s 166-5 of theCATSI Act to make an order for relief, because of the admissions of oppressiveconduct made by the defendants. However, counsel for the defendants submittedthat the Court should not make an order in relation to the admitted oppressiveconduct because the conduct was no longer continuing, or had beenremedied.1294

[1101] The defendants opposed the appointment of a receiver. They submittedthat there was.

no legal precedent for a Court either appointing a receiver for the purpose ofapproving membership applications or ordering that certain membership applications beapproved. To the contrary, the case law clearly indicates a reticence on behalf of Courtsto interfere with the management decisions of a corporation.1295

[1102] They also submitted that a receiver would be ill-equipped to determinemembership applications having regard to the criteria for membership underYAC’s Rule Book. They submitted that

the evidence establishes firstly, that decisions on membership applications in thecircumstances of this case, are of critical importance to YAC’s members and secondly,that the Directors have what the Receiver does not have, that is, the ‘special expertiseand experience’ necessary to make decisions of that kind.1296

[1103] They also submitted that those charged with the assessment ofmembership applications for YAC needed to have ‘a deep knowledge of andfamiliarity with the Yindjibarndi community and with Yindjibarndi law andcustom. The evidence demonstrates that there is room for differences of opinionin making those assessments’.1297

[1104] Counsel for the defendants also submitted that the appointment of areceiver was unnecessary.1298 They submitted that the appointment of a receiverwould not resolve the real issue underlying the membership issues in this case,namely ‘the dispute between WMYAC and YAC concerning FMG and what is inthe best interests of Yindjibarndi people’.1299 They also pointed to the fact thatLe Miere J appointed a receiver in Sandy (No 2), pending the holding of a generalmeeting called by the Registrar; that that general meeting took place and newdirectors were appointed; that amendments to the Rule Book had overcomeprevious difficulties in elections caused by the requirement for a special majorityof votes; and that YAC had appointed KPMG as its accountants, which wouldassist in ensuring compliance with its financial reporting requirements.

[1105] In the course of closing submissions at the trial, counsel for thedefendants advanced, for the first time, the submission that the proper forum forthe determination of membership disputes was in proceedings in the FederalCourt. That submission was not advanced to resist the jurisdiction of this Courtto deal with the present application, but rather was apparently advanced as a

1294. Defendants’ closing submissions at [153].1295. Defendants’ opening submissions at [64].1296. Defendants’ reply submissions at [54].1297. Defendants reply submissions at [55].1298. Defendants’ submissions at [180].1299. Defendants’ submissions at [180].


discretionary consideration in relation to whether the appointment of a receiverwas the appropriate relief in this case. I will deal with this submission furtherbelow.

[1106] In addition, counsel for the defendants submitted that if the Court foundthat the conduct of the directors in refusing those applications constitutedoppression, the preferable course would be to order the directors to reconsiderand determine those applications (or any relevant applications) lawfully and inaccordance with any relevant findings of the Court and of the Federal Court in theYindjibarndi #1 claim proceedings. Counsel for the defendants pointed out thatthe directors of YAC had the clear support of the majority of YAC’s members,having been elected by the members by a secret ballot at the meeting called andconducted by the Registrar in March 2016.

Why a receiver should not be appointed

[1107] I am unable to accept the plaintiffs’ submissions that the appointment ofa receiver is the appropriate relief under s 166-5 in response to my findings thatYAC has engaged in conduct of the kind described in s 166-1(1)(d) and (e) of theCATSI Act. In the words of s 29(5) of the Supreme Court Act 1935 (WA), theappointment of a receiver would not be ‘just and convenient’. I have reached thatview for the following reasons.

[1108] First, in so far as the oppressive conduct concerning membership isconcerned, a receiver could not, without advice, determine membershipapplications. In other words, the application of the criterion, in rule 3.1 of theRule Book, that the applicant be a ‘Yindjibarndi person who holds in common thebody of traditional law and culture governing the determination area and whoidentifies as Yindjibarndi’ could not be applied by a receiver, other than onadvice.

[1109] Secondly, the corollary of the first reason to which I have referred, isthat the appointment of a receiver will not, in reality, provide a solution to themembership dispute. Although a receiver could obtain advice (for example, fromYindjibarndi Elders), in the event of uncertainty about an applicant’s compliancewith the criteria for membership, it is difficult to see how the receiver would bein a position to make a final decision. Instead, the most likely course would bethat the receiver would need to apply to the Court for directions. It also seemslikely that directions from the Court could not be given in the absence of hearingevidence in respect of each and every applicant about whom there was a dispute.Counsel for the plaintiffs frankly acknowledged that that outcome was ‘notperfect, but it’s the best solution … I accept 100 per cent that it’s difficult tofashion the appropriate remedy because the wound is deep, the prejudices areingrained and the remedies ordinarily available [are not suitable in this case]’.1300

[1110] Thirdly, I am not persuaded that it is appropriate to appoint a receiver todeal with membership applications. The admission of a person to membership ofYAC is a decision of fundamental importance to the Yindjibarndi people (asthese, and the various related proceedings to which I have referred, amplydemonstrate). To entrust decisions about membership to a stranger, from outsidethe Yindjibarndi community, is in my view liable to perpetuate membershipdisputes in the long run, rather than to resolve them.

1300. Ts 1657.


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[1111] Fourthly, the appointment of a receiver to deal with membershipdisputes might, perhaps, be pursued as a last resort, but I am not persuaded thiscase has yet reached that point. YAC itself should be given a further opportunityto resolve membership disputes, but within the confines of declaratory reliefgiven by the Court as to the framework within which those membership decisionsmust be made. I will discuss that relief further below. The prospect that thatapproach may have utility is supported by the fact that under the SettlementDeed, YAC’s board agreed to admit to membership those persons whoseapplications were supported by the Elders’ Sub-committee, including thoseunderstood to be supporters of WMYAC.

[1112] In so far as the oppressive conduct of YAC in relation to its financialmanagement and reporting is concerned, I am also not persuaded that theappointment of a receiver is necessary. In reaching that conclusion, the followingthree factors appear to me to be of particular significance.

[1113] First, in so far as YAC has failed to prepare accounts that comply withsubdivision 333-A of the CATSI Regulations and the applicable AccountingStandards, I do not consider that it is necessary to appoint a receiver to rectify thisdeficiency in the future. In view of the Court’s decision, YAC’s directors, advisedby its accountants, can undertake the preparation of consolidated reports that isrequired.

[1114] Secondly, at the time when much of YAC’s oppressive conduct tookplace, it did not have the assistance of external accountants and auditors. I haveno reason to doubt that as YAC has now engaged accountants and auditors, itscompliance with its financial and reporting requirements should improve,especially if ORIC continues to monitor that compliance.

[1115] Finally, in so far as financial and management practices are concerned,what emerged very clearly from this case is that the directors of YAC who gaveevidence did not have a sophisticated understanding of their obligations asdirectors, and relied heavily on the CEO in ensuring compliance with YAC’sobligations. Clearly, those who act as YAC’s directors, and as its CEO and itsother office holders, need education and training in relation to their role andresponsibilities, in relation to financial decision-making and accountingstandards, and in relation to matters relevant to the running of a small to mediumsized business and sound investment decision making. It is only by ensuring thatYAC’s directors and officers obtain the education and training that they need, thatthe standard of the board’s decision making, and YAC’s compliance with itsobligations, will improve. To appoint a receiver, as a substitute decision maker,merely postpones the time at which that more fundamental problem must betackled. The real solution to the deficiencies in YAC’s financial management andadministration, which presents an ongoing challenge for YAC, and for ORIC, isto ensure that YAC’s directors and officers obtain the education and training thatthey need to properly meet the responsibilities of their role. Given the amount ofcompensation which is paid to the Trusts under the Participation Agreement, andthe significance of YAC’s income from the Trusts for improving the wellbeing ofthe Yindjibarndi people, it is essential that that issue be addressed as soon aspossible. At the same time, the existence of that income stream means that YAChas the means at its disposal to ensure its directors and officers can receive at leastsome of the training they need.


[1116] Before turning to consider what alternative relief should be granted, it isappropriate to deal, briefly, with the submission advanced by senior counsel forthe defendants in closing, namely that in the exercise of its discretion, the Courtshould decline to appoint a receiver to resolve membership disputes, and thatinstead, the preferable forum for the resolution of membership disputes withinATSI corporations was in native title proceedings in the Federal Court. Hepointed to s 84 of the NT Act, which permits a person, who has been excludedfrom an applicant in native title proceedings, to apply to become a respondent toa proceeding under s 61 of the NT Act for the determination of native title orcompensation. He submitted that that was the preferable course for any personwhose application for membership of YAC had been refused. Counsel submittedthat that was the course which had been taken by members of the Todd family inrelation to the Yindjibarndi #1 claim, who claimed that they had been wronglyexcluded from the Applicant in the Yindjibarndi #1 claim. He submitted that asimilar application had also been made by members of a family group in Yilka v

Western Australia.1301 Counsel submitted that such an application enabled thepersons claiming to be among the common law holders of native title to adduceexpert evidence as to their membership of that group, enabled that evidence to betested, enabled competing evidence to be adduced and tested, and thus permittedthe dispute about membership of the applicant group to be resolved withprocedural fairness to all interested parties. He submitted that the same could notbe said for decisions as to membership which might be made by a receiver.

[1117] With the greatest of respect to counsel, that submission was advancedvery late in these proceedings, and almost as an after-thought, was not fullydeveloped in submissions, and consequently was not presented as an approachwith real practical utility in the present circumstances. Perhaps recourse to theFederal Court might be viable if native title proceedings are ongoing, but thehearing of the Yindjibarndi #1 claim had concluded (although judgment wasreserved) by the time the trial of the present action commenced. Furthermore,recourse to the Federal Court (like recourse to this Court) is a costly andtime-consuming exercise. It is not a desirable means by which to resolvemembership disputes in relation to large numbers of applicants, such as in thiscase.

[1118] I turn, next, to consider what alternative relief should be granted.

What alternative relief should be granted?

[1119] It is appropriate to begin by summarising the findings I have made as tothe plaintiffs’ allegations of oppressive conduct by YAC.

[1120] In relation to the various allegations of conduct falling within s 166-1(1)of the CATSI Act, which were said to have arisen in relation to membership ofYAC, my findings are as follows:

• In relation to the wrongful exclusion of members from meetings ofYAC, in particular the AGM of 15 December 2010, I found that YACengaged in conduct which was oppressive to those persons in theircapacity as members of YAC, contrary to s 166-1(1)(e) of the CATSIAct. However, I concluded that this conduct, considered on its own,does not warrant the grant of relief.

1301. Murray on behalf of Yilka Native Title Claimants v Western Australia (No 5) [2016] FCA 752.


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• In relation to the wrongful purported cancellation of memberships on15 December 2010 with respect to 26 members of YAC, and continueddenial of that membership until at least 21 March 2012, I found that thepurported cancellation of the 26 memberships was oppressive conductfor the purpose of s 166-1(1)(e) of the CATSI Act. However, Iconcluded that, considered on its own, the finding of oppression inrespect of this conduct does not warrant the grant of relief.

• In relation to the threatened conduct of YAC to convene a meeting forthe purpose of amending rules 3.1 and 3.7 of YAC’s Rule Book, in orderto limit the persons who can be members of YAC and the grounds uponwhich membership may be cancelled, I found that YAC’s failure toprovide proper notice of the meeting to members was oppressiveconduct, and that YAC’s conduct in proposing the amendments to itsRule Book, at least in so far as those amendments sought to include theloyalty criterion and the disqualification ground in the membership rulesfor YAC, was also conduct which was oppressive for the purposes ofs 166-1(1) of the CATSI Act. However, I concluded that, considered onits own, the finding of oppression in respect of this conduct does notwarrant the grant of relief.

• In relation to YAC’s wrongful rejection of 52 membership applicationson 25 August 2011, I found that that conduct was conduct falling withinthe meaning of s 166-1(1)(d) of the CATSI Act, in that it was conductwhich was contrary to the interests of the members of YAC as a whole.However, I concluded that, considered on its own, the finding ofoppression in respect of this conduct does not warrant the grant of relief.

• In relation to YAC’s alleged wrongful denial of membership to 17persons approved by the board in 2014 to be eligible for membership, Ifound that that conduct was not oppressive conduct of the kinddescribed in s 166-1(1) of the CATSI Act, and consequently that nobasis for relief has been established.

• In relation to YAC’s approval (in November 2015) of membershipapplications by its purported board, and subsequent registration of themembership applicants as members of YAC, for an improper purpose, Ifound that that conduct was oppressive conduct for the purposes ofs 166-1(1) of the CATSI Act. However, I concluded that, considered onits own, the finding of oppression in respect of this conduct does notwarrant the grant of relief.

• In relation to YAC’s apparent bias in dealing with membershipapplications in June 2016, I found that the directors purported to applycriteria they had introduced in the Pending Applications Policy, whichcriteria reflected those the directors had agreed on in the new policies.Of those, the criteria for membership which the directors employed inorder to provide them with a basis for refusing membership in thesecircumstances were the identification criteria, the Birdarra Law criteria,and the loyalty criteria. The same criteria under the new policies, and inaddition, the requirement for a commitment under the Code of Conduct,including the requirement for support for YAC’s UNDRIP policy, werealso designed to achieve the same outcome: a basis for refusingmembership to WMYAC members and supporters. I concluded that thedirectors’ decision to refuse membership to WMYAC supporters on thebasis of the identification criteria, the Birdarra Law criterion, or the


loyalty criterion, constituted the exercise of the directors’ power for animproper purpose, and that the directors’ conduct fell within s 166-1(1)of the CATSI Act. I found that if the directors were permitted to applythe same policies in the future, further oppressive conduct may occur. Iconcluded that this conduct, of itself, warranted the grant of some reliefunder s 166-1(1) of the CATSI Act, but of itself did not warrant relief inthe form of appointment of a receiver.

[1121] In relation to the various allegations of conduct falling within s 166-1(1)of the CATSI Act, which were said to have arisen in relation to YAC’s conductof meetings, and the administration of its finances, my findings are as follows:

• In relation to YAC’s alleged improper conduct of the AGM on 21 March2012, and its improper administration of its finances in that it failed toprovide members with an opportunity to ask question or makecomments about YAC’s financial report at the AGM on 21 March 2012,I found that that conduct was not conduct falling within s 166-1(1) of theCATSI Act and consequently no basis for relief has been established.

• In relation to YAC’s alleged hindrance of discussion about financialissues at the AGM held on 10 September 2014; and the issues arising outof the Korda Mentha report which was tabled at that AGM, I found thatwhile the findings in the Korda Mentha Report could not be relied uponas evidence of improper administration of YAC’s finances, that YAC’shindrance of discussion at the meeting constituted oppressive conductunder s 166-1(1)(e) of the CATSI Act, but that that conduct, of itself,does not warrant the grant of relief;

• In relation to YAC’s failure to report to members in compliance withsubdivision 333-A of theCorporations (Aboriginal and Torres StraitIslander) Regulations 2007(Cth) due to its failure to prepareconsolidated accounts, I found that YAC had failed to comply with therequirement to prepare consolidated accounts, but that that conduct didnot constitute conduct falling within s 166-1(1) of the CATSI Act, andthat no relief is warranted in respect of that conduct.

• In relation to YAC’s signing off on the 2014 annual financial reportwhen it contained material errors, I found that that conduct did notconstitute conduct which fell within s 166-1(1) of the CATSI Act, andthat no basis for relief has been established in respect of that conduct;

• In relation to the fact that at the AGMs on 30 November 2015, theCEO’s report was not accepted on the basis that it did not relate to theaffairs of YAC in the 2014 and 2015 financial years, I doubted whetherthat conduct could constitute conduct of the kind referred to ins 166-1(1) of the CATSI Act, but in any event, concluded that no reliefis warranted in respect of that conduct.

• In relation to YAC’s operation without any validly appointed directors,I doubted whether that conduct could constitute conduct of the kindreferred to in s 166-1(1) of the CATSI Act but in any event, concludedthat no relief is warranted in respect of that conduct.

• In relation to the incurring of legal costs without authority from theboard, and YAC’s incurring and payment of expenses in the period whenYAC had no validly appointed directors, I found that that conduct wasnot conduct falling within s 166-1(1) of the CATSI Act, and that no basisfor relief has been established in respect of that conduct.


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• In relation to YAC’s alleged continual non-compliance with the CATSIAct and the Rule Book, arising from the first compliance notice and thesecond compliance notice, and by YAC’s failure to adequately maintainthe Register of Members, I found that the plaintiffs had not establishedthat any of the conduct in the first or second compliance notice occurred,or that it was conduct by YAC of the kind referred to in s 166-1(1) ofthe CATSI Act, and in so far as the Register of Members is concerned,I found that YAC’s failure to properly maintain the Register was notconduct of the kind referred to in s 166-1(1) and that no basis for reliefhad been established in respect of that conduct.

[1122] Accordingly, while I have found that some of the conduct about whichthe plaintiffs complained constituted conduct within s 166-1(1) of the CATSI Act,I am not persuaded that any of that conduct, with one exception, individuallywarrants the grant of relief. That exception arose from YAC’s refusal ofmembership applications in June 2016, on the basis of the identification criteria,the Birdarra Law criteria, and the loyalty criteria, and its adoption of similarcriteria under the new policies (including its adoption of the requirement for acommitment under the Code of Conduct, and the requirement for support forYAC’s UNDRIP policy).

[1123] It remains, then, to reconsider all of the conduct the subject of theplaintiffs’ allegations to determine if the conduct which constituted conduct of thekind within s 166-1(1), when considered together, warrants the appointment of areceiver. I am not persuaded that it does, for the reasons I have already outlinedin relation to the issue of the appointment of a receiver.

[1124] However, I am satisfied that all of the oppressive conduct I have foundto have occurred, especially when considered in the context of the long runningdispute concerning membership of YAC, which has involved repeated instancesof oppression over a number of years, warrants some relief being granted. Thepurpose of that relief must be to signal to the directors of YAC that their conducthas been contrary to the CATSI Act, and to endeavour to ensure that such conductis not repeated into the future.

[1125] At the same time, I bear in mind that the directors of YAC have astatutory discretion to refuse membership to an applicant, and must be entitled torefuse membership in appropriate cases, including to any person who they, ingood faith, consider would not act in the best interests of the corporation.

[1126] Consequently, taking no action at all is not an appropriate response inthis case. As the appointment of a receiver is not the appropriate relief, and asnone of the other more orthodox forms of relief for oppression in the corporatecontext are suitable here, what remains is injunctive or declaratory relief.

[1127] What is necessary, by way of relief, is to set aside the directors’decisions to refuse membership to applicants on the basis that they did not meetthe identification criteria, the Birdarra Law criteria or the loyalty criteria. Thoseapplications must then be reconsidered. It also needs to be made clear that thedirectors of YAC are not permitted to refuse membership of YAC to applicantswho are identified as members or supporters of WMYAC, including for thereason that those persons take a different view from the directors about the meritsof YAC entering into an agreement for compensation with FMG or have soughtto prosecute that view in the past, including by the s 66B Application. That couldbe done by appropriately fashioned orders for injunctive and declaratory relief.


I will hear from counsel in due course, but the necessary orders would appear tobe along the following lines:

(i) A declaration that the conduct of the directors on 29 June 2016, inrefusing applications for membership to applicants on the basis of theirfailure to meet the identification criteria, the Birdarra Law criterion andthe loyalty criterion, was oppressive conduct within s 166-1(1) of theCATSI Act.

(ii) A declaration that the adoption of the new policies, in so far as theycontained criteria for membership on the grounds of the identificationcriterion, the Birdarra Law criterion, the loyalty criterion, or requiredcommitment to the Code of Conduct (including support for theUNDRIP policy) was oppressive conduct within s 166-1(1) of theCATSI Act.

(iii) An injunction to prevent the directors applying those aspects of the newpolicies in respect of any membership application in the future.

[1128] I digress at this point to observe that I see no difficulty in the directorsapplying other aspects of the new policies in the future, such as the time framewithin which applications for membership will be considered, and by recourse tothe views of Yindjibarndi elders in the case of uncertainty about an applicant’ssatisfaction of membership criteria. Indeed, in my view, in order to ensure thatthere is some confidence within YAC’s membership, and within the Yindjibarndicommunity more generally, in relation to the consideration of membershipapplications by the directors, in any case in which the directors consider that anapplicant for membership may not meet the criteria for membership in rule 3.1of the Rule Book, it would be highly desirable for the directors to establish acommittee of Yindjibarndi elders to whom such applications could be referred. Inote that the new policies contemplated the establishment of an advisory BirdarraLaw Committee.

[1129] I will hear from counsel as to whether it is open to the Court to mandatea requirement for recourse to that committee in relation to applicants formembership who the committee considers may not meet the criteria formembership of YAC. Such a committee might, for example, comprise both maleand female Yindjibarndi elders, who are recognised and respected elders withinthe Yindjibarndi community, and who are regarded as the custodians of thetraditional law and culture of the Yindjibarndi people, and an equal number ofpersons who are members of YAC, on the one hand, and persons who aremembers of YAC and who are also members or supporters of WMYAC, on theother hand.

[1130] Continuing on with the orders which should be made, the orders shouldalso include:

(iv) A mandatory injunction to require the directors to reconsider themembership applications in (i), and any future membershipapplications, by applying the criteria for membership in rule 3.1 of theRule Book, namely that the applicant has reached the age of 18 years,and is a Yindjibarndi person who holds in common the body oftraditional law and culture of the Yindjibarndi people. (As I have said,I will hear from counsel as to whether it is open to the Court to mandatethat in the event that the directors consider that an applicant may notmeet those criteria, or are uncertain about satisfaction of those criteria,


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they must obtain the advice of an advisory committee of elders asdescribed in the previous paragraphs.)

(v) An injunction to prohibit the directors from rejecting any application formembership of YAC, in respect of an applicant who otherwise meets thecriteria for membership of YAC, solely on the basis that that applicantis a member of WMYAC, or supports entry into an agreement withFMG on the same, or similar, terms as those set out in the FMGAgreement;

(vi) In relation to the membership applications described in (i), compliancewith the re-consideration of those applications, the process adopted, andthe decisions reached, including the basis for those decisions, should beverified by an affidavit filed in the Court.

[1131] In the event that an application for membership is refused under thisprocess, an unsuccessful applicant will have to consider such legal rights as theymay have in respect of that decision.

[1132] In addition, a copy of this judgment should be forwarded to ORIC sothat it may continue to monitor YAC’s conduct in relation to its financial andmanagement practices, in light of the conclusions reached in these reasons.

[1133] YAC’s directors should also be left in no doubt that the Court’sexpectation is that they will take steps, with the assistance of YAC’s accountants,to ensure that the directions set out in the second compliance notice continue tobe observed, and to ensure that YAC’s accounts are prepared in accordance withthe relevant Accounting Standards concerning consolidated accounts for YACand its subsidiaries.

[1134] In my view, a long term improvement in YAC’s financial andmanagement practices requires ongoing monitoring by ORIC to ensure thatappropriate procedures and standards are maintained. ORIC has the means at itsdisposal, in the exercise of its powers under the CATSI Act, to take steps toensure that that occurs.

[1135] I will publish these reasons, and then give the parties some time toconfer about the terms of the orders which should be made, before calling thematter on for a hearing at which to make final orders.

Postscript: Determination of the Yindjibarndi #1 claim

[1136] On 20 July 2017, the Federal Court published its reasons for decision inthe Yindjibarndi #1 claim. On 13 November 2017, Rares J made orders givingeffect to those reasons for decision.

[1137] His Honour’s determination was that native title exists in theYindjibarndi #1 claim area to the extent set out in his Honour’s determination. Ofparticular significance was his Honour’s determination that in an area referred toas the ‘exclusive area, the native title rights and interests [of the Yindjibarndi]people confer[red] the right to possession, occupation, use and enjoyment of thatarea to the exclusion of all others’.1302 That area included unallocated Crownland on which FMG’s Solomon Hub mine is located.

[1138] In addition, Rares J ordered that an indigenous corporation called theYindjibarndi Ngurra Aboriginal Corporation (YNAC) was to hold those nativetitle rights on trust for the native title holders pursuant to the NT Act. YNAC was

1302. Warrie (No 2); Warrie.


registered as an indigenous corporation under the CATSI Act, on 11 October2017, and under the NT Act, the members of the Applicant in the Yindjibarndi #1claim had nominated YNAC to hold on trust, as the PBC, their native title rightsand interests over the claim area.1303 However, as his Honour observed:1304

All of the Yindjibarndi people, regardless of whether they support WMYAC or not,are now entitled to the benefit of the exclusive and non-exclusive rights and intereststhat YNAC will hold in trusts for them in large parts of the claimed area.

[1139] The final observation which should be made is that nothing in theevidence at the trial suggests that the dispute within the Yindjibarndi communityis intractable. On the contrary, the evidence demonstrated that members of theYindjibarndi community have, in the past, been willing to attempt to resolve theirdispute. The Deed of Settlement negotiated between the parties to this action isan example. A further example is a meeting held on 11 April 2014 in the 50 CentHall in Roebourne, which was attended by a large number of the members of theYindjibarndi community. At that meeting, there was a discussion of variousoptions for how the dispute between YAC and WMYAC might be resolved.1305

These included matters such as equal representation on YAC’s board of peopleidentified as YAC members and people who were also WMYAC members, equalrepresentation on the committees negotiating native title deals, the appointmentof a new YAC chief executive officer (Michael Woodley having resigned toenable that to occur) and a framework for resolving disputes about membershipof YAC.1306

[1140] Mr Woodley’s evidence was that YAC had:1307

no issue with getting back to the table with FMG and negotiating on a fair deal. We— we’ve always opened the door to our members who support the Wirlu-murra sidewith their concerns about issues. We just don’t share the same opinion [about the termsof such an agreement].

[1141] It is to be hoped that the clarification of the extent of the native titlerights of the Yindjibarndi people in the Yindjibarndi #1 claim area may providea turning point for the Yindjibarndi people to leave behind their past differencesand to work together to make decisions about whether, and if so how, they shouldenter into agreements with mining companies, and the terms of any suchagreements which would best serve the interests of all of the Yindjibarndi people.

OrderAlternative relief granted.

RHIANNON KERR

SOLICITOR

1303. Warrie (No 2) at [23].1304. Warrie (No 2) at [27].1305. Exhibit 1.635.1306. Ts 1359–60.1307. Ts 1357–8.


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[2018] WASC 256

Page 1

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : OORANYA PTY LTD -v- ISPT PTY LTD [2018]

WASC 256

CORAM : KENNETH MARTIN J

HEARD : 30 & 31 JULY, 10, 17 & 20 AUGUST 2018

DELIVERED : 22 AUGUST 2018

FILE NO/S : CIV 1600 of 2018

BETWEEN : OORANYA PTY LTD

First Plaintiff

BAYSWATER NOMINEES PTY LTD

Second Plaintiff

AND

ISPT PTY LTD

Defendant

CITY OF PERTH

Third Party


(Consolidated by orders of Justice Kenneth Martin on

31 July 2018)

BETWEEN : ISPT PTY LTD

Plaintiff

AND

OORANYA PTY LTD

First Defendant

[2018] WASC 256

Page 2

BAYSWATER NOMINEES PTY LTD

Second Defendant

Catchwords:

Torts - Private nuisance - Intentional interference with contractual relations -

Interlocutory injunction - Major Perth CBD construction and redevelopment site

- Works interrupted by human presence at cafe site at aberrant trading hours - No

unlawful conduct - Principles

Legislation:

Nil

Result:

Application granted

Category: B

Representation:

CIV 1600 of 2018

Counsel:

First Plaintiff : Mr M L Bennett & Mr M Nas

Second Plaintiff : Mr M L Bennett & Mr M Nas

Defendant : Mr M N Solomon SC & Dr R Collins

Third Party : No appearance

Solicitors:

First Plaintiff : Bennett + Co

Second Plaintiff : Bennett + Co

Defendant : Allens

Third Party : No appearance

[2018] WASC 256

Page 3

CIV 2276 of 2018

(Consolidated by orders of Justice Kenneth Martin on 31 July 2018)

Counsel:

Plaintiff : Mr M N Solomon SC

First Defendant : Mr M L Bennett

Second Defendant : Mr M L Bennett

Solicitors:

Plaintiff : Allens

First Defendant : Bennett + Co

Second Defendant : Bennett + Co

Case(s) referred to in decision(s):

Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd

(1995) 58 FCR 26

Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR

57

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618

Boase v Seven Network (Operations) Ltd [2005] WASC 269

Donaldson v Natural Springs Australia Ltd [2015] FCA 498

Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473

Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670

Hardie Finance Corporation Pty Ltd v Ahern [No 3] [2010] WASC 403

Jaddcal Pty Ltd v Minson [2011] WASC 28

JSC BTA Bank v Khrapunov [2018] UKSC 19

Merkur Island Shipping Corporation v Laughton [1983] 2 AC 570

Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105

OBG Ltd v Allan [2008] 1 AC 1

Orica Investments Pty Ltd v McCartney [2007] NSWSC 645

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No

3) [1998] HCA 30; (1998) 195 CLR 1

Quinn v Leathem [1901] AC 495

Samsung Electronics Co v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238

Schering Pty Ltd v Forrest Pharmaceutical Co Pty Ltd [1982] 1 NSWLR 286

[2018] WASC 256

Page 4

Shogunn v Investments Pty Ltd v Public Transport Authority of Western Australia

[2016] WASC 42

Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76

Spotwire Pty Ltd v Visa International Service Association Inc [2003] FCA 762

Terry Cross Financial Services v Misiti [2008] NSWSC 1365

Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106

Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110

Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530

[2018] WASC 256 KENNETH MARTIN J

Page 5

KENNETH MARTIN J:

1 In this now consolidated action, I am dealing with the urgent

application of the defendant (ISPT) seeking an interlocutory injunction

against the plaintiffs.

2 Under its chamber summons of 25 July 2018 filed in CIV 2276 of

2018 (but which has now been consolidated with CIV 1600 of 2018 by

my orders of 31 July 2018) ISPT seeks an injunction against the plaintiffs

in the following terms:

3. An injunction be granted to prevent the defendants, their

directors, officers, servants, agents or contractors, from remaining

within the café area or the alfresco area of the defendants' leased

premises in Forrest Place between the hours of 10.30 pm (other

than Friday and Saturday evenings) and 5.00 am the following

day on any day which ISPT has nominated, by providing the

defendants at least seven days' written notice, that it intends to

install the gantries above the café area and the alfresco area of the

defendants' leased premises in Forrest Place or to undertake

demolition or reconstruction works.

3 Reference to the defendants in the terms of the proposed order

which is now sought in the consolidated action (above) should be read as

a reference to the plaintiffs, ie, Ooranya and Bayswater.

4 According to the Cambridge English Dictionary, a 'gantry' is a tall

metal frame that supports heavy machines such as cranes, railway signals

or other equipment. As I will explain, the use of the term 'gantry' (or

'gantries') creates a misleading first impression. The context reveals that

what is envisaged is a canopy-like structure supported by horizontal,

diagonal and vertical steel beams to be erected around and above the

leased Bocelli Espresso Café premises (including the Alfresco Area)

situated in Forrest Place. Ooranya and Bayswater Nominees occupy both

the covered Café area and Alfresco Area of these premises under the

terms of their lease with the City of Perth. The land itself is part of the

public reserve area which is effectively administered in the public

interest by the City of Perth.

5 The application for relief in the terms above is strongly opposed by

Ooranya and Bayswater.

6 Unprecedented volumes of affidavit materials have been filed on

each side supporting, in the case of ISPT, the grant of this relief, and


Page 6

Ooranya and Bayswater actively opposing any such injunction by

Ooranya and Bayswater.

7 ISPT has provided an undertaking as to damages in the usual terms.

ISPT is a substantial entity and I accept that its undertaking is of financial

substance. As I will explain, the basis of ISPT's asserted cause of action

in order to support interlocutory relief is grounded upon its reliance on

an economic tort. This is explained in ISPT's counterclaim which is the

subject of its consolidated defence and counterclaim in the consolidated

action dated 27 July 2018, commencing at par 58 of that pleading. The

common law cause of action invoked by ISPT under its counterclaim is

the tort of alleged intentional interference by Ooranya and Bayswater

Nominees with ISPT's contractual relations with its contractor,

Lendlease, further or alternatively for intentional interference with

ISPT's contractual relations with the City of Perth (who is a third party

to the consolidated action at the behest of ISPT).

8 Under its counterclaim commencing at par 58, ISPT pleads the

existence of a construction contract which it says it entered with

Lendlease on 13 October 2017 for Lendlease to undertake the

construction of significant works abutting Forrest Place in Perth (on

property owned by ISPT) and also on an adjacent reserve administered

by the City of Perth at first floor or mezzanine level (known as the

Padbury Walkways). I generally refer to the matters pleaded under

par 58 to par 73 of the ISPT counterclaim (which includes amendments

made 27 July 2018). Essentially, however, the economic tort cause of

action identified by ISPT complains under par 67 and par 68 of conduct

by or on behalf of Ooranya and Bayswater in March and June 2018 which

has frustrated the preparatory works for the installation of gantries over

the Bocelli Espresso Café area. That frustrating conduct complained

about is the human presence of either Mr Francesco Agnello (a director

of Ooranya) and others on the premises after 10.30 pm and by Mr Leo

Agnello (a director of Ooranya) and others on 13 June 2018 (par 68e).

The consequence is pleaded to be that Lendlease has been prevented due

to safety concerns and safety requirements from proceeding with the

installation of the gantry proximate to the Bocelli Espresso Café area.

Under par 69 of the ISPT counterclaim it is contended that this conduct

was intentional by Ooranya and Bayswater and that it was undertaken

with notice and knowledge of ISPT's intentions to install the gantry at

those times.

9 The relevant ISPT counterclaim plea under par 70 is that Ooranya

and Bayswater have directly interfered with the Lendlease construction


Page 7

contract and also with ISPT's contractual arrangements with the City of

Perth under contracts referred to as the DMA or the Works Deed. There

are pleas of direct interference by Ooranya and Bayswater with

Lendlease's performance of the construction contract by preventing or

hindering Lendlease from being able to progress the work and to install

the gantry above the Café area. There are further pleas alleging direct

interference with the City of Perth's obligations under the works deed by

preventing or hindering the City of Perth from providing ISPT and

Lendlease with access to the Bocelli Espresso Café area as areas required

to install the gantry.

10 There are further and alternative counterclaim pleas (see par 70E)

concerning allegations that Ooranya and ISPT had induced or procured

Lendlease to breach obligations under its contract with ISPT, to cause

ISPT to breach its (provision of access) obligations to Lendlease under

various clauses of the construction agreement and that the City of Perth

has been induced or procured to breach (provision of access) covenants

promised to ISPT under the Works Deed. Hence, the common law tort

relied upon by ISPT is the tort of intentional interference with ISPT's

contractual relations with either Lendlease and/or the City of Perth.

11 By its present application seeking interlocutory injunctive relief

ISPT essentially calls in aid the ancillary jurisdiction of a court of equity

to provide assistance through the provision of discretionary equitable

interlocutory injunctive relief. This is asserted, in effect, on the basis that

common law damages (the usual remedy) would be an inadequate

remedy for ISPT, even if it succeeds at trial wholly upon its economic

tort cause of action under its counterclaim at any ensuing trial.

12 Correlatively, however, it may be observed that, if granted, the

terms of the injunctive restraint as sought by ISPT as interlocutory relief

would, pragmatically viewed, deliver it an outcome now that is closely

akin to final relief and enabling it, in effect, to proceed now to complete

all the redevelopment works as a part of what is essentially a $110

million redevelopment of the Forrest Chase complex and the adjacent

Padbury Walkways.

13 It is to be observed at the outset that:

(a) under the terms of the lease agreement between Ooranya and

Bayswater and the City of Perth, those parties are granted


Page 8

exclusive possession of the Bocelli Espresso Café area for the

purposes of conducting a café business;

(b) under the terms of the lease there is no constraint upon the trading

hours of the café business. Ooranya and Bayswater are

theoretically permitted under the terms of their lease to trade

24 hours a day, although historically under the preceding 19 or

so years of their lease occupancy at this site they have not traded

around the clock. Prior to 2018 their usual trading hours, which

could fluctuate, were roughly between 6.00 am and 5.00 pm with

late night trading on Friday nights until approximately 8.30 pm.

Beyond that, there would, of course, be the usual pre-opening and

post-opening preparatory and close of business clean-up duties

for staff before or after customers were served within those hours;

(c) under the terms of their lease the plaintiffs are granted exclusive

possession of an area comprising both a covered (café) area and

an alfresco area within Forrest Place. The area leased extends to

cover vertical space above the Café area to a height of four

metres; and

(d) ISPT raises no allegations at all of unlawful conduct by Ooranya

or Bayswater as a basis to support its common law economic tort

cause of action as seen from its counterclaim. Nevertheless, it

relies upon the tort of intentional interference with ISPT's

contracts arising out of the conduct of having or procuring

persons to be present upon the Bocelli Espresso Café premises in

March 2018 and then again in June 2018 - for the contended

explicit purpose of preventing Lendlease from progressing works

for ISPT under the construction contract, preventing ISPT from

progressing the works and preventing the City of Perth from

providing ISPT and Lendlease with access to the Bocelli

Espresso Café areas in order for them to use all the necessary

heavy equipment to install gantry structure(s).

14 One of the primary defensive responses put by the plaintiffs in

answering the counterclaim and in resisting the interlocutory injunction

sought is, to contend that, in the wake of a 2007 decision of the House of

Lords, see OBG Ltd v Allan [2008] 1 AC 1, particularly by the reasons

of Lord Hoffman - absent any establishment by ISPT of a different tort

of causing loss by unlawful means (which ISPT does not seek to raise

here) that ISPT holds no arguable cause of action against them. This was

the basis upon which the plaintiffs originally sought a summary


Page 9

judgment and the dismissal of the ISPT counterclaim; on the basis that

the economic tort as pleaded and contended for by ISPT was wholly

unarguable. Before turning to those and other arguments, it is necessary

to provide some further context.

Context

15 The plaintiffs (Ooranya and Bayswater) commenced an action CIV

1600 of 2018 against ISPT on 5 April 2018. By that action they seek

common law damages for the tort of private nuisance alleged against

ISPT. This is by reason of alleged noise, dust and vibration associated

with all the surrounding construction works now being effected over the

Forrest Chase premises and in their vicinity by ISPT and its servants,

contractors and agents since 18 February 2018. Under particulars

provided at par 7 of the statement of claim as endorsed upon the writ, the

plaintiffs complain of the erection of signage and hoardings around the

Myer store building and boundary of their leased premises and

demolition works through the use of machinery, including jackhammers,

excavators and heavy drills.

16 Under par 8 of the statement of claim it is said that construction

works are ongoing and occur between the hours of 7.00 am until times

past 9.30 am in the morning and then in the evenings commencing at

around 5.00 pm and thereafter. Under par 9 it is pleaded that this conduct

constitutes a wrongful, substantial and unreasonable interference with

the conduct of the plaintiffs' adjacent café business, Bocelli Espresso

Café (ie, a private nuisance ongoing tort). This is said to be by reason of

the excessive levels of noise, vibration and dust affecting the premises

and its clientele, resulting in multiple disruptions, a loss of custom and a

trespass by workers as agents of ISPT upon the Bocelli Espresso Café

premises.

17 Ooranya and Bayswater, however, have not sought to obtain an

interlocutory injunction restraining ISPT's works. In part of the

voluminous materials filed on an interlocutory basis in the application it

emerges that the plaintiffs would appear to have been sensibly advised

that any interlocutory injunction sought by them would require an

undertaking as to damages as a pre-requisite to such relief. Their

financial exposure arising out of a possible loss at trial upon their private

nuisance cause of action might then produce a financially devastating

outcome for them longer term. Hence, they only seek a permanent

injunction, common law damages and an expedited trial.


Page 10

18 It may be seen that irrespective of ISPT's economic tort cause of

action upon its counterclaim, the plaintiffs can still pursue their

subsisting cause of action for private nuisance in respect of which they

claim ongoing financial losses arising out of ongoing construction works

generally and arising from the ongoing redevelopment works at the

Forrest Chase site.

19 Any grant of interlocutory injunctive relief to ISPT upon its

counterclaim does not or should not affect the viability of the private

nuisance cause of action of the plaintiffs. What ISPT argues for on its

counterclaim is something related, but nevertheless a different cause of

action.

20 Shortly, I will proceed to list the voluminous affidavit materials

sought to be relied upon by the parties respectively on this strongly

resisted application for interlocutory injunctive relief as pursued by ISPT

on its counterclaim. I should observe, however, that:

(a) hearsay evidence is admissible upon interlocutory applications of

the present kind, unlike at a trial;

(b) in assessing the application for interlocutory relief I will

essentially proceed upon the basis of what is respectably arguable

at this stage. I do not render final determinations of fact or law

in the process. That is simply not feasible. Moreover, I point out

that by custom in Western Australia witnesses are usually not

cross-examined, generally speaking, upon their affidavits filed in

support of interlocutory applications such as that presently

pursued. Hence, any factual observations I render within these

reasons bearing upon the ultimate matters required for

determination at trial are to be viewed as necessarily provisional

only.

The record of affidavit evidence on each side

21 In this section of these reasons I identify the affidavit materials

relied upon by each of the parties upon the present interlocutory

application.

22 The applicant, ISPT, read and relied upon the following affidavits

in support of interlocutory relief:

(1) affidavit of Michael D Barr dated 21 June 2018 [court document

42 (358 pages)];


Page 11

(2) affidavit of Nicholas J De Vries dated 20 June 2018 [court

document 44 (639 pages)];

(3) affidavit of Gurukugan Kugananthan dated 20 June 2018 [court


(4) supplementary affidavit of Gurukugan Kugananthan dated

26 June 2018 [court document 53 (26 pages)];

(5) supplementary affidavit of Nicholas J De Vries dated 26 June

2018 [court document 54 (5 pages)];

(6) affidavit of Robert E Staniford dated 26 June 2018 [sworn in CIV

2056 of 2018 and read and relied upon on the present application

[court document 4 (8 pages)];

(7) affidavit of Nicholas J De Vries dated 9 July 2018 [court


(8) supplementary affidavit of Robert E Staniford dated 10 July 2018


(9) affidavit of Michael D Barr dated 20 July 2018 [court document

79 (17 pages)];

(10) affidavit of Francesco Agnello dated 6 June 2018 [court


(11) affidavit of Francesco Agnello dated 17 July 2018 [court


(12) affidavit of Gurukugan Kugananthan dated 30 July 2018 [court



94 (3 pages)];

(14) affidavit of Nicholas J De Vries dated 30 July 2018 [court



96 (3 pages)];

(16) affidavit of Gurukugan Kugananthan dated 31 July 2018 [court



Page 12

(17) affidavit of Michael D Barr dated 3 August 2018 [court document

101 (40 pages)];

(18) supplementary affidavit of Michael D Barr dated 6 August 2018


(19) affidavit of Michael D Barr dated 8 August 2018 [court document

103 (65 pages)];

(20) affidavit of Michael D Barr dated 10 August 2018 [court


(21) affidavit of Michael D Barr dated 13 August 2018 [court

document 106 (56 pages)]; and

(22) affidavit of Michael D Barr sworn on 17 August 2018 [court

document 113 (26 pages)].

23 As seen there is an unprecedented amount of material relied upon.

It emerged slowly over time on a drip feed basis. The last four or five

affidavits by Mr Barr were a product of my request for greater clarity

about how the Bocelli Espresso Café premises would look following the

gantry installation work. ISPT's evidence on this point emerged

painfully and slowly to its ultimate end positions: see Annexures A, B

and C, which show computer generated drawings produced by Mr Barr

for ISPT showing perspectives of how the Bocelli Espresso Café was to

present following the so called gantry installation work, and as it

progressed. As it emerged even later, these sketches do not show the

scaffolding or canvas to be used to cover the scaffolding proximate to

the café.

24 One of the affidavits relied upon by ISPT is a further affidavit of

Michael David Barr sworn 31 July 2018. That affidavit bears heavily

upon and explains the duration of the proposed works as foreshadowed

by ISPT and its contractors during and after installation of a gantry or

gantries above Bocelli Espresso Café. It is an important affidavit

clarifying the scope and potential intrusive effects of the requested

interlocutory orders, if made for ISPT.

25 The plaintiffs rely upon the following affidavits in resisting the

present application:

(1) affidavit of Francesco Agnello sworn 6 June 2018 [court



Page 13

(2) subsequent affidavit of Francesco Agnello 17 July 2018 [court


(3) affidavit of Giuseppe Agnello dated 6 June 2018 [court document

37 (7 pages)];

(4) affidavit of Giuseppe Agnello dated 17 July 2018 [court


(5) affidavit of Brandon Leigh Cross sworn 16 August 2018 [court


(6) second affidavit of Clara Elisabeth Hagan sworn 16 August 2018


(7) affidavit of Giuseppe Agnello sworn 17 August 2018 [court

document 111 (10 pages)]; and

(8) third affidavit of Clara Hagan sworn 17 August 2018 [court

document 112 (6 pages)].

26 As a part of the plaintiffs' overall materials they indicate their

reliance upon pars 11, 12, 22, 30 - 38 and 48 of Mr Francesco Agnello's

affidavit of 6 June 2018 and pars 11 and 12 of Mr Francesco Agnello's

affidavit of 17 July 2018.

27 I also observe that Ooranya and Bayswater through their lawyers

have filed objections against a great many paragraphs of the defendant's

affidavit (see court document 91). Many of those objections were of

form raising allegedly objectionable issues, such as material being

argumentative or conclusionary, or by way of comment upon documents

or, indeed, at some points allegedly scandalous. Whilst I do note those

objections of form, it is unnecessary to rule specifically upon any of

them, as most of the basic underlying facts (save for where I point to the

contrary position) are not essentially in dispute.

Issues to be resolved at a trial

28 The essential core disputed factual issues (which can only be finally

resolved at a trial) are twofold.

29 First, is the issue concerning the knowledge and intention of the

plaintiffs through their directors, officers, agents or servants concerning

the existence and broad content of the contractual relationships between

ISPT and Lendlease and the City of Perth.


Page 14

30 Secondly, and even more fundamental, is the disputed question of

whether the conduct of the plaintiffs in terms of their alleged procuring

of persons to be present upon the Bocelli Espresso Café premises in the

late evening or early hours of the morning on occasions during March

and June 2018 (as is complained of by ISPT's counterclaim) was conduct

that was executed by the plaintiffs with the objective of specifically

bringing about a breach of the contracts between ISPT and Lendlease

and/or the City of Perth, or at least bringing about a frustration in the

performance of those contractual arrangements by that presence conduct.

31 They are, essentially, the two key critical factual issue in primary

dispute.

32 The affidavit material filed on behalf of the plaintiffs through the

Agnellos contends that the presence of persons at the café at those

(unusual trading) times was for a purpose of the plaintiffs seeking to trade

in order to recoup, in effect, the alleged trading losses they had suffered

in 2018 by reason of the (private nuisance) works that ISPT had

commenced by way of its redevelopment and about which complaint was

originally made under the plaintiffs' private nuisance suit.

33 On the other hand, ISPT alleges as its key contention that the

plaintiffs have effectively adopted a deliberate tactic of causing persons

to be present at hours and times during March and June 2018 in what

were aberrant trading hours for the Bocelli Espresso Café premises

(viewed historically) but particularly during June 2018 in winter in Perth.

These are circumstances where it is said by ISPT the potential customers

who would seek to take advantage of the services of the Bocelli Espresso

Café at these aberrant trading times would be minimal, if not negligible.

Later in these reasons I refer to some tabulated customer recordings of

patrons at the Bocelli Espresso Café at these aberrant trading hours.

34 Those questions are the subject of an elaborate canvassing under the

parties' materials which I will collect in the next section of these reasons.

35 I must say at the outset, however, that I am prepared on this

application to accept that for the purposes of the present injunction

application there is sufficient material provided for me to proceed on the

basis, as I do, that ISPT has a very respectable prospect of showing at

trial that the plaintiffs have, in fact, intentionally acted in March and June

2018 so as to cause and procure persons to be present at the café at what

are aberrant trading hours - and with a purpose of frustrating the

execution of ISPT's contractors' gantry installation works.


Page 15

36 The next section of my reasons deals with the parties' submissions.

The parties respectively have filed very extensive written submissions.

A first wave exchange occurred in a context of ISPT resisting the as

foreshadowed defendant's summary judgment application made against

ISPT's counterclaim at a hearing convened on 27 June 2018. At that

time, however, I essentially dealt only with submissions made on behalf

of the plaintiffs to the effect that the counterclaim was defectively

pleaded by ISPT in CIV 1600 of 2018, as regards largely its then pleas

of contractual breaches and as to the alleged sustaining of damages.

(This is not to mention some of the problematic Eshelby issues

concerning the June 2018 conduct not properly being a subject of a

counterclaim cause of action that was issued by ISPT on 27 April 2018.)

In the end, I struck out the then pleaded counterclaim of ISPT but granted

leave to re-plead. This is now a subsequently re-pleaded defence and

counterclaim filed by ISPT.

37 At that time, the then foreshadowed interlocutory injunction

application of ISPT on its counterclaim was programmed for a hearing

at the earliest convenient time suitable for counsel and the court. That

turned out to be 30 July 2018. This resulted in a second wave of material

respectively exchanged.

Written Submissions as filed in CIV 1600 of 2018

38 I will now collect some of the extensive written submissions.

39 ISPT on 26 June 2018 (see court document 55), in the context of

resisting the summary judgment application brought against its then

counterclaim in CIV 1600 of 2018, filed extensive written submissions.

Paragraphs 2 through 8 provide a factual overview to that point of time.

I will incorporate them by reference below as I will accept them factually

for the purposes of the present application.

2. The defendant (ISPT) is currently conducting a very significant

redevelopment of one of Perth's most important public spaces and

indeed Perth's primary civic square - Forrest Place. Forrest Place

is Crown Land constituted by certificates of title on 3 levels -

basement, ground floor and upper level. The upper level of

Forrest Place is known as the 'Padbury Walkways' which wraps

around Forrest Chase (the 'Myers' shopping complex adjacent to

Forrest Place). Since 2013, ISPT has been planning this

redevelopment and obtaining the relevant approvals and permits.

The estimated cost of the redevelopment is approximately $110

million.


Page 16

3. The redevelopment includes the demolition and rebuilding of the

Padbury Walkways by ISPT for the City of Perth. The improved

walkways are expected to enhance the public realm in the area, in

particular to provide improved access to other City destinations

and infrastructure for residents, shoppers, retailers and visitors to

the City.

4. On the ground floor of Forrest Place, under a lease with the City

of Perth, there is a retail café business known as Bocelli Espresso

(Café) which is owned by the plaintiffs (Bocelli) and which until

7 June 2018 had publicised weekly trading hours of 6.30 am to

5.30 pm (other than Friday). The Café operates over 2 areas - a

café building and an adjacent Alfresco Area.

5. In respect of the redevelopment there are three relevant contracts.

(a) the design and construct contract executed on or around

13 October 2017 by ISPT and Lendlease (Construction

Contract). This is a complex building contract which

among many other things requires Lendlease to progress

and complete the redevelopment works efficiently and

requires ISPT to provide Lendlease with appropriate

access to allow Lendlease to do so.

(b) an agreement dated 7 February 2017 titled the

'Development Management Agreement -

Redevelopment of Walkways' (DMA) executed by the

City of Perth and ISPT. This records, among many other

things, the obligation of ISPT to carry out the

redevelopment works on the land controlled and

managed by the City of Perth including the Padbury

Walkways; and

(c) an agreement dated 7 February 2017 titled 'Works,

Access and Licence Deed - Walkways and Works Area'

which among other things requires the City of Perth to

grant access to ISPT to permit the redevelopment works

to be undertaken.

6. As part of the construction works, it is necessary for ISPT to

install gantries above the Café building and the Alfresco Area

(outside the Café's leased premises) to safely protect both sites

from demolition works. In turn, to safely install the gantries it is

necessary that nobody is underneath where the gantries are being

lifted and installed - that is, the Café building and Alfresco Area

need to be vacant while the installation takes place.

7. Despite notice being given to Bocelli on 2 March 2018 of ISPT's

intention to install the gantry over the Café on 6 March 2018, a

director of one of the plaintiffs, among others, remained in the


Page 17

Café on the evening of 6 March 2018 outside of the Café's

publicised normal trading hours and at least until 2.00 am on

7 March 2018. This conduct prevented the gantry from being

installed.

8. On 5 April 2018, Bocelli brought a claim against ISPT in nuisance

for allegedly wrongfully causing substantial and unreasonable

interference with the Café by reason of allegedly excessive noise

levels, vibration and dust. ISPT has denied these allegations and

brought a counterclaim. By its counterclaim, ISPT claims that

Bocelli has committed the tort of interference with contractual

relations based on the conduct referred to above occurring on

6 March 2018.

40 Next, under pars 10 through 36 of those submissions ISPT

explained its counterclaim cause of action as involving the tort of

interference with contractual relations.

41 Given the importance, novelty and urgency of issues raised on the

present application, I will incorporate by reference from those

submissions pars 10 through 39, explaining at some length the economic

tort that is relied upon by ISPT. ISPT says:

10. The plaintiffs' submissions proceed largely on the basis of the

English decision of OBG v Allan [2008] AC 1, that:

(a) historically (and leaving aside the category of cases

where the defendant 'indirectly' made the breach more

likely) the tort of inducement of breach of contract had

been expanded to apply to cases where the defendant had

merely prevented performance of the contract such that

the tort was made out even if there was no identified

actual breach of the contract. This expanded notion of

the tort was referred to as 'interference with contractual

relations': plaintiffs' submissions [18] - [19];

(b) following OBG v Allan the tort no longer includes the

more expansive tort of interference with contractual

relations which could be constituted by the mere

prevention of contractual performance - rather, in the

absence of inducing an actual breach a plaintiff must

establish the tort of unlawful interference with trade

which requires the conduct itself to be unlawful (and not

merely conduct which is accessorial to a civil wrong

such as a breach of contract): plaintiffs' submissions

[20] - [23];

(c) although the position Australia is less clear than in

England and other common law jurisdictions, a number


Page 18

of Australian cases have regarded OBG v Allan as

authoritative and accordingly OBG v Allan 'embodies

the law in Australia': plaintiffs' submissions [24] - [25],

[29] and cases suggesting otherwise were decided in

error: plaintiffs' submissions [36].

11. An assessment of the plaintiffs' contentions and whether they

justify the granting of the plaintiffs' application, requires a

consideration of the relevant legal principles.

12. In Northern Territory v Mengel, in a joint judgment, five

members of the High Court said at 342 that the first development

of significance in the emergence of 'economic torts' in the second

half of the last century:

… was the recognition, in Lumley v Gye … of the tort of

intentional interference with contractual rights.

Subsequent developments in the United Kingdom have,

to some extent, impinged upon the intentional element

of tort. Liability does not depend on whether there is a

predominant intention to injure … and it has been held

that constructive knowledge of the terms of a contract is

sufficient, so that a defendant may be liable if he or she

recklessly disregards the means of ascertaining those

terms … But it is still accurate to describe the tort as one

that depends on an intention to harm for that is

necessarily involved if a person knowingly interferes

with the enjoyment by another of a positive legal right,

whether such knowledge is actual or constructive.

(citations omitted)

13. The plaintiffs are correct that the tort encompasses what has been

described as a tort of inducing or procuring a breach of contract,

and that it was extended by the judgment of Lord Denning in

Torquay Hotel Co Ltd v Cousins who held that this tort may be

committed when the defendant, although not necessarily having

procured the breach of a contract between the plaintiff and the

third party, had prevented or hindered a party from performing all

of the obligations under it.

14. Lord Denning's views were subsequently accepted as correct in

Australia. Further, the tort of interference with contractual

relations has been recognised as forming part of the common law

of Australia. In Zhu v Treasurer of the State of New South

Wales the High court dealt with an appeal arising from an action

described as based on the tort of 'interference with contractual

relations'. Although Zhu principally turned upon the defence of

justification, it provides implicit support for a tort of interference

with contractual relations.


Page 19

15. Moreover, contrary to the plaintiffs' submissions, the tort of

interference with contractual relations, constituted by 'mere'

prevention of contractual performance, is supported by ample

Australian authority.

16. In Allstate Life Insurance Co v Australia & New Zealand

Banking Group Ltd the Full Federal Court (Lindgren J; Lockhart

and Tamberlin JJ agreeing) discussed the elements of the tort of

interference with contractual relations at 42 as follows:

From the modern progenitor of the tort, Lumley v Gye to

date, the alleged tortfeasor's state of mind with respect to

breach has been central to this particular form of tortious

liability. In early cases what was required was referred

to as 'malice'. This has yielded to references, in

numerous cases, to 'intention' or 'knowledge' that a

breach of contract or at least an interference with

another's contractual rights will result …

… The requirement that the alleged tortfeasor

have 'sufficient knowledge of the contract' is a

requirement he have sufficient knowledge to

ground an intention to interfere with

contractual rights. [Citations omitted,

emphasis added]

17. In Fightvision Pty Ltd v Onisoforou, the New South Wales Court

of Appeal said at [171]:

The position may be stated, we think as follows. The

plaintiff must prove that the defendant intentionally

procured the breach. The requirement that the defendant

have sufficient knowledge of the contract is a

requirement that he have sufficient knowledge to ground

an intention to interfere with contractual rights.

[Emphasis added]

18. In Donaldson v Natural Springs Australia Limited, Beach J

stated at [2013]:

… the classic case of direct interference [with

contractual relations] is the tort of inducing a breach of

contract. But direct interference with contractual

relations is not confined to the procurement of a breach,

if the defendant prevents or hinders a contractual party

from performing his contract, even though it is not a

breach, the tort may be established.

… The various elements of the tort of inducing a breach

of contract are not in doubt. First, there must be a


Page 20

contract. Second, the defendant must know that such a

contract exists. Third, the defendant must know that if

one of the contracting parties does or fails to do a

particular act, that conduct would be a breach of the

contract. Fourth, the defendant must intend to (and in

fact (induce or procure that contracting party to breach

the contract by doing or failing to do that particular act.

Fifth, the breach must cause loss or damage to the

plaintiff. Sixth, no defence of justification should be

applicable.

19. Beach J continued at [210]:

But direct interference with contractual relations is not

confined to the procurement of a breach. If the

defendant prevents or hinders a contractual party from

performing his contract, even though it is not a breach,

the tort may be established.

20. Relevantly, Beach J explained that Lord Hoffmann in OBG v

Allan expressed doubt as to the tort of indirect interference with

contractual relations, which he preferred to put into the broader

category of the tort causing loss by unlawful means. This appears

to be because in the case of indirect interference with contractual

relations it is necessary to establish a separate unlawful conduct

or means. His Honour proceeded to critique Lord Hoffmann's

distinction between primary and accessorial liability for these

torts as follows at [217]:

… [the] primary and accessorial liability distinction may

not be all that clear or clean. Accepting that indirect

interference involves a tort of primary liability, so too

may be the case with direct interference. Direct

interference may involve, in some cases, not inducing a

breach as such. It may involve preventing or hindering

a contracting party's performance which does not

involve or produce a breach. In such a case, such

conduct of the defendant would not amount to

accessorial liability, for there would be no 'primary

wrongful' act of the contracting party' … In such a

situation of direct interference the defendant would have

primary liability.

21. Beach J concluded at [223]:

Whatever be the position concerning the broader tort, for

present purposes it is sufficient to say that there is an

economic tort of interference with contractual relations,

where the interference can be either direct or indirect.


Page 21

22. Significantly, this case was decided after OBG v Allan. Further,

this view that the tort of intentional interference with contractual

relations continues to exist (despite OBG v Allan) and that

interference is not confined to the procurement of a breach but

extends to a case where a third person prevents or hinders another

from performing his contract has also been followed in Mad Dogs

Pty Ltd (in liq) v Gilligan's Backpackers Hotel & Resort Pty Ltd

& Anor (No 3).

23. In Western Australia, Newnes M in Boase v Seven Network

(Operations) Ltd observed at [32]:

The general principle is that in order to establish a cause

of action of unlawful interference with contract the

plaintiff must show that the defendant, with knowledge

of the contract and intent to prevent or hinder its

performance, persuades, induces or procures one of the

parties not to perform their obligations: Short v City

Bank of Sydney (1912) 15 CLR 148.

and at [34]:

Although the cases generally refer to a breach of

conduct, for the purposes of this application it was

common ground that in fact it is not necessary that the

defendant's conduct results in a breach, so long as it

interferes in the execution of the contract. It was

accepted that the law was as stated by Lord Denning in

Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106 at 138

as follows:

… there must be interference in the execution

of a contract. It extends to a case where a third

person prevents or hinders one party from

performing his contract, even though it be not a

breach.

24. The principles in Boase were cited and followed by Le Miere J in

Jaddcal Pty Ltd v Minson. Significantly, this decision was a

number of years after the OBG decision thereby highlighting that

the position in Western Australia had not been transformed by the

OBG decision.

25. Most recently, in Mastec Australia Pty Ltd v Trident Plastics

(SA) Pty Ltd (No 2) White J stated without any reference to the

OBG decision:

The principles concerning the tort of interference with

contractual relations were summarised by Bray J in


Page 22

Davies v Nyland (1975) 10 SASR 76 at 98 as including

(relevantly):

1. A knowing and intentional interference by the

defendant with the plaintiff's contractual rights

without justification is an actionable tort.

2. Such an interference may be, inter alia, the

procuring of a breach of a legally binding

contract not yet fully performed between the

plaintiff and the third party or preventing the

performance of such a contract.

3. The interference in question must be unlawful

but 'where it is direct, the persuasion,

procurement, inducement, or other form of

interference is regarded by the law as wrongful

in itself, where it is indirect, the means by

which the interference is effected must be, or

include, an unlawful act, that is, an act which

the defendant is not in law at liberty to commit.

4. The defendant must have knowledge of the

existence of the contractual relations interfered

with …

5. The interference must be intentional.

(Emphasis added)

26. Consistently with those authorities, Halsbury's Laws of Australia,

'5 Intentional Interference with Trade or Business' [415-1150]

states:

The tort of interference with 'contractual relations is

committed where a person knowingly and intentionally

interferes with contractual relations or the contractual

rights of the complainant, thereby causing damage to

that person, where there is no sufficient justification for

that interference. It must be shown that there was a

contract which had been interfered with by the

defendant, whether by inducing one of the parties to

break the contract or by interfering with performance

of the contract, and that the defendant had sufficient

knowledge of the contract to know he or she was

hindering or preventing the performance of the

contract. It is not sufficient that the defendant hoped,

wished or had an 'uncommunicated subjective desire'

that the contract would be breached.


Page 23

The interference must be unlawful and may be effected

directly or indirectly. Where it is direct, the persuasion,

inducement, procurement or other form of interference

is regarded by law as wrongful in itself. Where the

interference is indirect the acts must be or include an

unlawful act and the interference with the contract must

be a consequence of that act.

Direct interference may be constituted by direct

persuasion or procurement, for example, bribery or

threat or force, or hindering or preventing

performance of a contract, for example, by physically

restraining a contracting party. Actionable indirect

interference occurs where persons upon whom the

plaintiff relies for the performance of the contract with a

third party are induced to breach their contracts with the

plaintiff, thereby preventing or hindering performance of

the contract.

(Emphasis added)

27. That passage was adopted verbatim in Terry Cross Financial

Services v Misiti [2008] NSWSC 1365 at [17].

28. Accordingly, it is plainly arguable in Australia that:

(a) there remains a tort of interference with contractual

relations; and

(b) the tort is committed by a person who hinders or prevents

the performance of a contract.

29. It is then necessary to consider each of the elements of the tort set

out in Donaldson at paragraph 18 above.

Knowledge and intention

30. To establish knowledge, it is not necessary to prove that the

defendant knew the precise terms of the agreement. It is sufficient

if the defendant has a 'fairly good idea' that the contract benefits

another person in the relevant respect. Knowledge of the contract

in this sense may be sufficient to ground the necessary intention

to interfere with contractual rights, even though the defendant

does not know the precise terms that will be breached.

31. In Boase [33] and Jaddcal [32] it was put as follows:

The fact that the breach was a natural consequence of the

defendant's conduct is not sufficient; the defendant must

have intended the breach. It is not necessary that the

defendant knows the precise terms of the contract:


Page 24

Woolley v Dunford (1972) 3 SASR 243 at 266 - 268.

But the defendant must know of the contract and

sufficient of its terms to know that what the defendant

intended or procured the party to the contact to do would

be in breach of the contract. If the defendant knew of the

existence of the contract but believed reasonably that

what the defendant induced or procured the party to do

was not a breach, the defendant has not knowingly

induced or procured the breach: Fightvision Pty Ltd v

Onisofou at [160],

32. In Allstate Life Insurance Company v Australia and New

Zealand Banking Group Ltd (1995) 58 FCR 26 the Full Federal

Court reviewed the elements of tortious interference of

contractual relations. Lindgren J, with whose judgment Lockhart

and Tamberlin JJ agreed, made the following observations about

the elements of knowledge and intention at 37:

… a person's 'knowledge' that what he is inducing will

constitute a breach of contract and his 'intention' to

induce a breach of contract by what he is doing refer to

one and the same thing. After all, ex hypothesi, the

alleged tortfeasor's acts are intentional, a breach of

contract occurs, and the acts induce the breach. Against

that background, 'knowledge' and 'intention' that the

breach will result from the acts do not signify and

relevant distinction.

33. Lindgren J also proceeded to state at 43:

… the authorities establish conclusively that the

gravamen of the tort is intention. Although the

requirement of knowledge of the contract is sometimes

discussed as if was a separate ingredient of the tort, it is

in fact an aspect of intention. The requirement that the

alleged tortfeasor have 'sufficient knowledge' is a

requirement he have sufficient knowledge to ground an

intention to interfere with contractual rights.

Both this intention to interfere with contractual rights

and the necessary supporting knowledge of the contract

refer to the 'actual' or 'subjective' statement of mind of

the alleged tortfeasor.

Direct and Indirect Interference

34. A distinction has been drawn between direct and indirect

interference. Direct interference occurs where the defendant's act

or omission acts on the mind or position of one of the parties to

the contract. It is prima facie unlawful because it directly touches


Page 25

one of the contractual parties and their contractual rights. An

example of direct interference is where a defendant uses direct

persuasion or procurement or prevents or hinders a contractual

party from performing his contract, for example by physically

restraining a contracting party.

35. By contract, indirect interference occurs where the tortfeasor's act

or omission acts on the mind or position of a third party which

causes that third party to take or not take a step which then acts

on the mind or position of one of the contracting parties. Some

other element of unlawfulness needs to be added beyond the

ultimate intention of the defendant in seeking to interfere with the

contract. An example of indirect interference is found in the case

of Merkur Island Shipping Corp v Laughton in which tugmen

and lock-keepers were induced by the union to break their

employment contracts with the consequence that the vessel which

the plaintiffs had chartered to leave port was unable to do so.

Defence of justification

36. Justification is the only defence available for the tort of inducing

breach of contract. The onus of proving justification is on the

party who has interfered with contractual relations of another.

The essence of the defence is that the conduct of the alleged

tortfeasor involves the assertion of a greater right. The authorities

observe that the defence has rarely succeeded. As stated by the

High Court in Zhu v Treasurer of NSW:

The rarity of instances of success [of the defence of

justification] probably reflects the high store placed on

compliance with contractual obligations by English law

and the common law systems derived from it. The

assertion of justification by a stranger to interfere with

such compliance necessarily impinges on the general

approach to the law. It is for that reason that justification

requires either the authority of statute or some other

superior right if the interference is to be lawful.

However, in stating the law for Australia, it should now

be accepted that where the superiority of rights rest in

some characteristic of the general law then … temporal

priority of other purely contractual rights will not

suffice.

37. An actually superior legal right is required and such superiority is

not established by priority between merely contractual rights.

Superiority is conferred by the proprietary nature of the right or

must be found in statute.


Page 26

38. However, there is a limitation on the defence. As the High Court

stated at [16]:

Even if [the defendant's] conduct had fallen within some

existing judicial test, it would not constitute justification

for an additional reason. According to Jordan CJ in

Independent Oil Industries Ltd v Shell Co of Australia

Ltd an act of interference may be justified 'if shown to

be no more than reasonably necessary for the protection

of some actually existing superior legal right in the doer

of the act.

… [t]he 'reasonably necessary' test directs attention to

how a reasonable and prudent person or body in [the

defendant's] position would have behaved.

39. Thus, even if a defendant has a superior legal right, the defence

of justification will not be available unless the defendant has done

no more than is reasonably necessary for the protection of that

superior legal right.

42 By a second tranche of written submissions of 20 July 2017, ISPT

elaborated upon the tort of interference with contractual relations which

it invokes, and then towards its application to the contended facts

underlying this application. Again, for speed and present convenience, I

will incorporate pars 26 through 69 of the further submissions of ISPT

(court document 76).

26. [I]SPT set out at some length the general principles in relation to

the tort of interference with contractual relations from [10] to

[39]. It is thus not necessary to set out those principles in full

again. It is sufficient to observe that it is the present state of the

law in Australia, that:

(a) there remains a tort of interference of contractual

relations;

(b) that tort is committed by a person who hinders or

prevents the performance of a contract;

(c) preventing or hindering a contractual party from

performing a contract amounts to direct interference;

(d) actual knowledge of the contract is not necessary - a

fairly good idea is sufficient;

(e) knowledge is really an aspect of intention – a person's

intention to prevent the performance of a contract is

sufficient to constitute the tort; and


Page 27

(f) the onus of making out the defence of justification rests

upon the party alleged to have interfered. The essence of

the defence is that the conduct of the alleged tortfeasor

involve the assertion of a greater right. The defence

rarely succeeds and is in any event limited - an active

interference is only justified if shown to be no more than

reasonably necessary for the protection of some actually

existing superior legal right.

Serious question to be tried - application of the facts

27. Again, the ISPT summary judgment submissions descend in some

considerable detail to the application of the facts to the elements

of the tort. The summary below is directed to the principal

features that strongly suggest the plaintiffs' conduct was

motivated by a desire and intention to interfere with ISPT's

contractual relations by preventing installation of the gantries and

those parts of the redevelopment of the Walkways dependent

upon their installation.

28. First, it is plain that the plaintiffs were aware of the involvement

of the City of Perth and Lendlease in respect of the development

works. There is a good deal of documentary evidence to support

that but one need go no further than the following:

(a) the email from the plaintiffs' solicitors to ISPT referring

to the fact that 'ISPT has engaged contractors

(Lendlease)…';

(b) the affidavit evidence of Frank Agnello is that on or

around 21 July 2017 he received a copy of a document

titled Forrest Chase Redevelopment dated 17 May 2017.

That document set out on page 109 the construction

methodology for the gantry installation including that a

gantry was to be installed above the Café and that it was

installed for the protection of both construction workers

and the public;

(c) the email from Lendlease to the City of Perth dated

12 February 2018 confirming that Frank Agnello had

contacted Lendlease directly in relation to the impending

gantry works around the Café on 12 February 2018;

(d) the letter from the plaintiffs' solicitors to the City of Perth

dated 16 February 2018 which shows that the plaintiffs:

(i) were aware at least from 2013 of the

redevelopment;


Page 28

(ii) had engaged in discussions with ISPT about its

intention to redevelop the land; and

(iii) had engaged in discussions with the City of

Perth about its intention to carry out works on

the common areas;

(e) the letter from the plaintiffs' solicitors to each of ISPT,

the City of Perth and Lendlease dated 1 March 2018

demanding that ISPT and Lendlease comply with the

plaintiffs' requirements to limit certain works to after

10.30 pm and before 5.00 am and ensuring that the City

as the plaintiffs' landlord is aware of these matters;

(f) the letter from the City of Perth's solicitors to the

plaintiffs' solicitors dated 2 March 2018 shows that the

plaintiffs were informed of 'the nature of works intended

by ISPT and its contractor Lendlease, under

arrangements with the City' and that there had been fairly

extensive consultations about this work;

(g) the letter from the plaintiff's solicitors to ISPT dated

6 March 2018 shows that the plaintiffs were aware that

the City of Perth had given notice that ISPT's contractor

intended to commence work relating to the constructor

of the gantry over the Café [on] the evening of 6 March

2018; and

(h) the plaintiffs were aware (or must have turned a blind

eye to the fact) that the entity that controlled Forrest

Place, the City of Perth, was its landlord and that ISPT

could not be conducting significant invasive works in

Forrest Place without a contractual arrangement with the

City of Perth. The plaintiffs received a variety of

communications and notices regarding the construction

works directly from the City of Perth.

29. The plaintiffs thus had sufficient knowledge of the contractual

arrangements. Indeed, the above matters provide an evidentiary

foundation establishing that by 6 March 2018 the plaintiffs knew

that:

(a) ISPT's contractor for the construction works was

Lendlease and, accordingly, that there was a contract

between ISPT and Lendlease for the works associated

with the redevelopment which included the installation

of the gantries; and

(b) the works intended by ISPT and its contractor Lendlease

were of a nature that required arrangements with the City


Page 29

of Perth and, as such, the plaintiffs must have known that

there was an arrangement with the City to enable ISPT

and Lendlease to undertake the works.

30. There is a very strong inference that the plaintiffs' conduct was

undertaken with the intent of preventing the installation of the

gantries and thus frustrating the contractual arrangements of

which they must have been aware.

31. There is no suggestion or evidence that the plaintiffs historically

traded through to the early hours of the morning outside Friday or

Saturday nights. On the contrary, in his own affidavit of 27 April

2018 Frank Agnello attested to the opening hours of the Café

being 6.30 am to 7.30 pm except for Fridays. The published

trading hours of the Café on Facebook showed that the Café

closed around 5.00 pm other than on Fridays. As a matter of

common sense, it is not difficult to see why that is so. It is plain

that a café business trading into the early hours of the morning in

Forrest Place during the week, particularly in the winter nights,

will not be profitable. It defies common sense to assert otherwise.

32. The plaintiffs only began to trade into the early hours of the

morning during the week upon learning that ISPT intended to

install the gantries. The background to that happening strongly

suggests that the plaintiffs did so as a means of preventing the

installation of the gantries and those parts of the redevelopment

of the Padbury Walkways dependent upon their installation.

33. That background requires an appreciation of the genesis of the

dispute. The plaintiffs have a lease that expires on 1 March 2021.

There is no option for a further term. It is clear from the plaintiffs'

own evidence and the contemporaneous documentation that the

plaintiffs were only prepared to cooperate so as to allow the

redevelopment to proceed if they got a new lease deal on terms

they found acceptable. When they did not get the deal they

wanted they developed a significant hostility towards ISPT whom

they accused of as lying and deceiving.

34. In his affidavit Michael Barr refers to a meeting in 2017 following

the breakdown of the lease negotiation. His evidence is that Frank

became angry and said he would stay open all night. Frank made

no reference to recouping losses. In his responsive affidavit,

Frank contends that Mr Barr's summary 'is incomplete' but

provides no denial of the evidence. On the contrary he confirms

that he became angry and accused ISPT of 'screwing us' and of

lying. It stands to reason that in that context the plaintiffs would

have been motivated to frustrate ISPT's commercial objectives.

35. Michael Barr made contemporaneous notes of his meeting with

the plaintiffs on 18 February 2018. The contemporaneous notes


Page 30

make it plain that the plaintiffs' cooperation in relation to the

redevelopment had ceased due to the breakdown in negotiations

for a further lease. Point 4 of the note makes it plain that the

plaintiffs' conduct to frustrate installation of the gantries was

deliberate and as a result of the plaintiffs' hostility. Point 8 makes

it plain that Frank became abusive in response to the prospect of

the installation of the gantries and that he would take legal action

'and would trade 24 hours a day going forward'. There is no

reference in that contemporaneous note linking the intention to

trade 24 hours a day to making up the losses. On the contrary, the

threat to trade 24 hours a day is plainly in response to ISPT's

intention to install the gantries after the breakdown of lease

negotiations.

36. It is also instructive to consider the record of the closing times of

the Café taken from the time-lapse camera and annexed at page

603 of the affidavit of Nicholas De Vries dated 20 June 2018.

That record indicates that other than Friday night there was no

late trading until 11 February 2018. The email records annexed

to the affidavit of Michael Barr indicate that the plaintiffs were

advised of the imminent installation of the gantries sometime

shortly after Thursday, 8 February 2018. The email at page 225

indicates that the plaintiffs found out about the proposed

installation of the gantries shortly before 12 February 2018. The

plaintiffs' commencement of weekday late trading thus coincided

with the anticipated installation of the gantries.

37. A letter from the plaintiffs' solicitors to the City of Perth dated 16

February 2018 shows that the plaintiffs were aware that:

(a) it was intended that a gantry be erected over the Café;

and

(b) seeking to stop the works, including the erection of the

gantry, was likely to interfere with ISPT's timetable for

the redevelopment and likely to cause significant loss to

ISPT such that the plaintiffs were not prepared to seek

an interlocutory injunction which would require them to

provide an undertaking as to damages.

38. The plaintiffs knew that the gantries above the Café and Alfresco

Area were to be installed so that the works could proceed as

planned.

39. As to ISPT's attempt to install the gantry on 6 March 2018, notices

had been provided to the plaintiffs before 6 March 2018 to advise

them of the proposed gantry installation and the need to vacate

the Café outside of the work hours previously advised by the

plaintiffs themselves.


Page 31

40. Further, there were very few people in the Forrest Place area

generally after 8.00 pm on 6 March 2018. Accordingly, it was

not a time at which one could sensibly expect to trade for profit.

In fact, Nicholas De Vries' evidence is that there were no observed

customers purchasing anything from the Café after 9.30 pm on 6

March 2018. Instead, the people who remained in the Café or

Alfresco Area after 9.30 pm appeared to be a mix of Bocelli Café

staff members and acquaintances of the owners of the Café. The

absence of real customers and the presence of Bocelli affiliates

strongly suggests that the purpose in keeping the Café open was

to frustrate the installation of the gantry, not to trade for profit.

41. There is some conflict on the evidence as to what the plaintiffs

said on the night of 6 March 2018 when ISPT attempted to install

the gantry. Nicholas De Vries gives evidence that Frank told him

that he 'would not be vacating the premises as long as the gantry

installation crew remained on-site'. Frank denies having said

words to that effect. The contemporaneous record is a text

message from Michael Barr to Robert Staniford: 'Spoke to Nick.

Frank says he is not budging tonight. Will trade through the night.

According to [N]ick his ire is firmly directed at [ISPT]. Says he

has been trying to get people to come to the party but can't get

anyone to talk to him!…'. That contemporaneous record is

consistent with the plaintiff exacting its anger on ISPT by

frustrating its construction works.

42. The Café appears to have closed shortly after or during the

demobilisation by Lendlease (after it became clear that the works

could not go ahead). It appears that the plaintiffs changed their

mind about trading 'through the night' once it became clear that

the works could not go ahead. Further, the proximity in timing of

the Café closure and demobilisation undermines the plausibility

to the plaintiffs' claim that they remained in the Café for the

purpose of trading for profit. Rather, it is far more likely that the

plaintiffs remained in the Café solely for the purpose of

frustrating the installation of the gantry.

43. On 8 May 2018 ISPT invited the plaintiffs (through their

solicitors) to identify a time when they would not need to stay in

the Café after their usual trading hours so that the gantries could

be installed. Had the plaintiffs' true motivation been profitable

trade, then the records of closure times over May and June 2018

indicate that there would have been nights when the gantries

could have been installed without impacting on the Café. But the

plaintiffs never responded to this letter. Their lack of response is

again suggestive of their intention to frustrate any attempt to have

the gantries installed.

44. After not receiving any response, on 25 May 2018 ISPT's

solicitors provided notice to the plaintiffs' solicitors of ISPT's


Page 32

intention to commence installation of the gantry over the Café on

12 - 14 June 2018. ISPT informed the plaintiffs (through their

respective solicitors) that the Café needed to be vacant for the

gantry to be safely installed and further noted that it seemed

opportune to undertake the works in the middle of winter and on

nights other than Friday and Saturday nights to minimise the

impact on the plaintiffs' business.

45. The events surrounding ISPT's attempts to install the gantries in

June 2018 provide further strong support for the inference that the

plaintiffs' conduct was undertaken with the intention of

preventing the installation of the gantries. At page 639 of

Nicholas De Vries' affidavit dated 20 June 2018 is a table that

collates the number of people observed in the Café after 6.00 pm.

It is evident from that table that during the evenings preceding the

attempted gantry installations, there was no more than one person

in the Café late at night but suddenly there were up to 15 people

there on the night that ISPT resumed its efforts to install the

gantry on Tuesday night 12 June 2018. After those efforts ceased

on the Friday night 15 June 2018 there were no people in the Café

at the equivalent times (even though Friday night is ordinarily a

late-night trading period).

46. On the evening of 12 June 2018, the evidence of Nicholas De

Vries is that:

(a) there were no customers of the Café after 8.00 pm that

night other than people who appeared to be clearly

associated with the directors of the first plaintiff and two

Lendlease subcontractors who purchased coffee; and

(b) there were no other shops open in either Murray Street

Mall or Forrest Place after 8.00 pm.

In these circumstances, it is not credible to assert that the opening

of the Café beyond 2.00 am in the morning was for the purposes

of trading for a profit. It is far more likely in the circumstances

that it was to frustrate the attempts to install the gantry.

47. On 13 June 2018, the evidence of Nicholas De Vries is that:

(a) All other shops in the vicinity were closed by 8:00pm

that night;

(b) There appeared to be a total of 8 legitimate customers

(including one Lendlease subcontractor who purchased

coffee) between 8.00 pm and 10.30 pm that night with

no customers after that time;


Page 33

(c) Café staff were hosing down inside the Café and

generally cleaning up and sweeping up by 10.15 pm that

night; and

(d) Frank Agnello and his wife appeared to have arrived at

the Café at 10.40 pm.

Again, these observations, strongly suggest that the opening of

the Café beyond 2.00 am was not for the purposes of trading for

a profit but to frustrate the attempts to install the gantry.

48. On the afternoon of 14 June 2018, after further notice had been

provided to the plaintiffs of ISPT's intention to install the gantry

that evening, the plaintiffs' solicitors responded that the plaintiffs

'will trade every night until late for the balance of its lease'. In

light of the context in which this response was provided, the

inference ought to be drawn that the plaintiffs' intention in trading

late every night (regardless of the ability to profit from such trade)

was to frustrate the installation of the gantry.

49. On 14 June 2018, the evidence of Mr De Vries, based on

information received from his colleague Mr Farnworth, is that:

(a) all other shops in the vicinity of the Café were closed by

8.00 pm that night;

(b) there appeared to be a total of 6 customers (including 4

Lendlease subcontractors purchasing coffee) up to

9.50 pm after which time no customers at the Café were

observed; and

(c) it appeared that Frank Agnello arrived at the Café at

10.25 pm (being 5 minutes before the intended

commencement of the gantry installation).

Once again, the inference is irresistible that the plaintiffs

remained in the Café not for the purpose of trading for a profit but

to frustrate the installation of the gantry.

50. Against that background, there is a strong, if not inescapable

inference that the plaintiffs began and maintained their weekday

late-night trading in order to prevent the installation of the

gantries.

51. By reason of the matters set out above, it is fairly plain that:

(a) the plaintiffs had sufficient knowledge of the contractual

arrangements;


Page 34

(b) the plaintiffs appreciated that the consequences of their

conduct would be to interfere with those arrangements;

and

(c) indeed, the plaintiffs intended that outcome by their

conduct.

52. The plaintiffs maintain that they were not seeking to prevent the

installation of the gantries but rather to make up for lost trade.

The contemporaneous record does not support that contention but

in any event, as a matter of common sense it is fanciful to suggest

that it would be profitable to trade through the early hours of the

morning especially at the height of winter in order to make up

losses.

53. The plaintiffs also maintain that pursuant to their lease they have

a right to trade extended hours as they wish. Whether or not the

plaintiffs were entitled to stay in the Café by reason of the rights

provided by the lease is not to the point. Even if the lease provided

such rights, they may not be exercised for a collateral purpose.

But, in any event, the exercise of rights under a lease discloses

nothing about the reason for the exercise of those rights. If lawful

rights are exercised for the purpose of preventing the performance

of a contract then a tort may nevertheless be committed.

54. In any event, as explained above, the defence of justification will

not be available unless the plaintiffs have done no more than is

reasonably necessary for the protection of their rights. In light of

the matters set out above, it is most unlikely that a Court would

conclude that the plaintiffs limited their actions to that which was

reasonably necessary.

55. In all the circumstances, there is a strong inference available that

the plaintiffs consciously intended to disrupt ISPT's contractual

arrangements by preventing installation of the gantries and those

part of the redevelopment of the Padbury Walkways dependent

upon their installation.

56. There is therefore, a serious question to be tried as to whether the

plaintiffs committed the tort of interference with ISPT's

contractual relations.

Adequacy of damages

57. No injunction will usually issue where an adequate remedy at law

exists.

58. Common law relief may be inadequate where:

(a) doubt surrounds the respondent's ability to pay the

damages sought. As stated in Schering Pty Ltd v


Page 35

Forrest Pharmaceutical Co Pty Ltd & Ors [1982] 1

NSWLR 286 at 290:

Certainly if an injunction is not granted there is

no other remedy that is of any value at all to the

plaintiff; it will suffer irreparable harm; it will

probably suffer irreparable harm in any event,

but certainly it will suffer irreparable harm if an

injunction is not granted, because any right to

damages in the present circumstances is

completely illusory.

(b) damages are likely to prove difficult to quantify.

59. Here, damages are not an adequate remedy. If injunctive relief is

denied, unquantifiable or irreparable damage will be suffered by

ISPT, third parties and the general public more broadly for the

following reasons.

(a) Loss of future tenants - ISPT has entered into various

lease agreements with future tenants for the lease of

shops in the retail area behind the existing Padbury

Walkways. If the redevelopment of that area cannot be

finalised before a specified commencement date in the

lease agreements then these future tenants have the right

to walk away from the lease agreements. As a result

ISPT may lose important future tenants. It is not

possible to quantify the loss to ISPT if it loses these

future tenants.

(b) Further, tenants that lease shops in the redeveloped

Forrest Chase will be affected by the unfinished

redevelopment because:

(i) there will be fewer shops resulting in fewer

visitors to the mall and their shops and therefore

less trade; and

(ii) an unfinished shopping mall will be less

attractive than a finished shopping mall and will

not attract the same customer levels which will

also result in less trade for these tenants.

This may lead to a demand for lower

rental incomes for ISPT from these

tenants and/or demands for

compensation to be paid by ISPT to

these tenants. Much of this loss is not

possible to quantify.


Page 36

(c) Impact on new leases - As a result of the inability to

install the gantries and continue the works, there is

uncertainty regarding:

(i) the timing of completion of the redevelopment

and the opening of future shops in the

redeveloped Forrest Chase; and

(ii) the outlook of the redeveloped Forrest Chase.

As this is critical information for any

potential tenants, ISPT is unable to

provide any certainty on these matters

to potential tenants which is impacting

its ability to find new tenants and sign

up new leases for the redeveloped

Forrest Chase.

(d) Loss of Christmas period trade for tenants - If the

redeveloped works are further delayed, certain future

tenants will not be able to open their shops in the

redeveloped Forrest Chase before Christmas. This will

have a negative impact on:

(i) the trading levels for these shops as they will

miss out on the most important trading period

in the year when a significant portion of annual

sales is achieved; and

(ii) other retailers in Forrest Chase will have

reduced customer levels due to fewer shops in

the area and the shopping mall being

unfinished.

(e) Impact on the City of Perth and community events - If

the redevelopment works continue to be delayed, there

will be more works undertaken in the Christmas period

than currently envisaged. This will impact on the

ambiance and atmosphere of the City of Perth as a

whole. It may also impact on any events that are planned

to take place in or around Forrest Place in the Christmas

period such as the event to turn on the City of Perth's

Christmas lights which has taken place in Forrest Place

in recent years and attracts thousands of people every

year.

(f) Impact on surroundings and other parties - Further

delay of the redevelopment will also have the effect that

the construction works continue for a longer period of

time. This will negatively impact on:


Page 37

(i) Other retailers and shopping malls in the

vicinity of Forrest Chase including the Murray

Street Mall and Carillon City and their tenants;

(ii) Residents in nearby apartment blocks,

including on Murray Street and Barrack Street;

and

(iii) A large number of the general public including

commuters who use Forrest Place and the

Padbury Walkways on a regular basis.

(g) Effect of reprogramming in the works schedule - If the

gantries above the Café and Alfresco cannot be installed

such that the construction works cannot be completed

until the expiry of the plaintiffs' lease in 2021, then there

will be further impact on:

(i) tenants within Forrest Chase as certain shops

will need to be vacated during the period that

redevelopment is recommenced which will

result in loss of trade to these retailers and lower

or no rental income from those tenants to ISPT

during that period; and

(ii) other parties in the area, such as retailers,

pedestrians, commuters, shoppers and visitors

to the City of Perth as the construction works

will continue for a longer period. It is not

possible to quantify losses to these third parties.

(h) Reputational loss - Further delays to the redevelopment

are likely to result in consequential reputational damage

for ISPT, which loss is impossible to quantify. This is

likely to arise in the following ways:

(i) if ISPT is unable to comply with its obligations

under lease agreements or is not able to

negotiate new leases with potential future

tenants and those future tenants form part of a

larger retail company that has branches in other

parts of the country then this may affect ISPT's

ability to enter into leases with these companies

in other parts of Australia or negatively impact

the negotiation position of ISPT in future

dealings with these companies;

(ii) the additional costs associated with a delay in

the redevelopment may result in dissatisfaction

with the current investor base of ISPT and could


Page 38

impact ISPT's ability, or the terms on which it

is able, to attract future investors; and

(iii) if, as a result of the current delays in the

redevelopment, ISPT gets a reputation that it is

not able to complete large redevelopments, this

may lead to reluctance of other governmental

bodies to work with ISPT on any future

redevelopments.

(i) For the above reasons, damages will not be adequate

remedy in the event that injunctive relief is not granted.

Balance of convenience

60. Consideration of the balance of convenience begins with the

observations of the High Court in Castlemaine Tooheys Ltd v

The State of South Australia (1986) 161 CLR 148 at 153 that the

grant of an injunction involves balancing the injustice which

might be suffered if the injunction is granted and the plaintiff later

fails at trial, against the injustice which might be suffered if the

injunction is not granted and the plaintiff later succeeds at trial.

Ultimately the question is as to the balance of the risk of injustice.

61. In considering the balance of convenience in this matter, it is

important at the outset to observe that there can be no doubt that

the plaintiffs will continue to occupy the Café in a manner that

prevents the installation of the gantries. Thus, there is no 'neutral'

outcome. Either the plaintiffs will be required to allow the

gantries to be installed or ISPT will in effect be prevented from

installing the gantries.

62. In that regard, it is important to note that the plaintiffs have

consciously elected not to bring an application for an injunction

because they do not wish to provide an undertaking for damages.

Yet, if the injunction is not granted, the plaintiffs will in effect

have their injunction because ISPT will, practically speaking, be

restrained from installing the gantries. In effect, the plaintiffs will

have their injunction and ISPT will have no protection from any

undertaking. That alone is sufficient to suggest that a greater

injustice will arise if an injunction is not granted.

63. But in any event the various factors relevant to the balance of

convenience are in favour of the injunction being granted. These

are as follows.

(a) the redevelopment is a very significant redevelopment of

one of Perth's most important public spaces and indeed

Perth's primary civic square - Forrest Place.


Page 39

(b) ISPT will suffer significant prejudice if the injunction is

not granted. If the plaintiffs are not restrained from

preventing the installation of the gantries then the

construction works (in respect of the Padbury Walkways

and the bridge, lifts and escalators between the Padbury

Walkways and Carillon City) cannot proceed as planned.

As a result there will be significant loss to ISPT

including:

(i) costs associated with redesign of the

redevelopment and reprogramming of the

works schedule;

(ii) damages claims resulting from liability to

Lendlease and its subcontractors for delays to

the project and potentially from the City of

Perth;

(iii) losses flowing from lease agreements entered

into by ISPT relating to Forrest Chase;

(iv) losses arising from the difficulties in signing up

new tenants to leases within the redevelopment;

and

(v) reputational losses at a corporate, investor and

governmental level.

(c) as noted above, the plaintiffs have consciously elected

not to seek injunctive relief and accordingly there are no

means by which ISPT will be compensated for these

losses other than by prosecution of its counterclaim with

its attendant risks. The first plaintiff has a paid up capital

of two dollars. The second plaintiff has a paid up capital

of one thousand dollars. No balance sheets have been

provided;

(d) third parties (including current and future tenants of

Forrest Chase and the surrounding areas, residents,

commuters and the general public) will also be adversely

affected if the works cannot proceed as planned

including:

(i) the likely losses by retailers in Forrest Chase

and the surrounding areas (including Murray

Street Mall and Carillon City) as a result of the

delayed launch of the redeveloped Forrest

Chase and the loss of the opportunity to trade

during the lucrative Christmas period (as set out

in paragraph 59(d) above);


Page 40

(ii) the negative impact on the general public who

would attend events in Forrest Place in the

Christmas period (such as the event to turn on

the City of Perth's Christmas lights which

attracts thousands of people every year) as there

will be more works being undertaken in the

Christmas period if the delay continues (as set

out in paragraph 59(e) above);

(iii) the negative impact on residents in nearby

apartment blocks including on Murray Street

and Barrack Street as the construction works

will continue for a longer period of time (as set

out in paragraph 59(f) above);

(iv) the impact on a large number of the general

public including commuters who use Forrest

Place and the Padbury Walkways on a regular

basis (as set out in paragraph 59(f) above).

(e) if the injunction is granted, then the impact on the

plaintiffs is that they will be unable to trade between

10.30 pm and 5.00 am (notably these were hours which

until early June 2018 were publicised as hours during

which the Café was closed) for a limited number of

evenings during winter and possibly early Spring.

Moreover it is difficult to see how the plaintiffs could

suffer any great prejudice when their own solicitor wrote

to ISPT, Lendlease and the City of Perth demanding that

noisy works be undertaken between 10.30 pm and

5.00 am.

(f) it should also be noted that the terms of the injunction

have been carefully crafted in order to minimise any

impact on the plaintiffs. ISPT has agreed to provide at

least seven days' notice of any gantry installation and any

other demolition or reconstruction work requiring the

vacation of the Café and has agreed that those works will

not be done on a Friday night or Saturday night. It may

be noted that ISPT has suggested those arrangements to

minimise any detriment to the plaintiffs and only after

the plaintiffs [failed] to respond to the invitation to

nominate times.

(g) it is appreciated that the plaintiffs maintain that it is not

simply the installation of the gantries that causes them

concern but the further works that the gantries will

facilitate. However, the plaintiffs have both ISPT's

undertaking and their own nuisance claim by which any

prejudice can be cured. In contrast to the financial


Page 41

position of the plaintiffs, there is no suggestion that ISPT

is not in a position to adequately fulfil any undertaking.

Nor is there any suggestion that the plaintiffs' prejudice

cannot be cured by financial compensation.

64. As a general observation it should be noted that the plaintiffs

have, for 19 years taken the benefit of being located in Forrest

Place and adjacent to the Walkways which are a very significant

public thoroughfare. In the circumstances there is no overriding

prejudice in requiring the plaintiffs to vacate the Café on

nominated winter nights from 10.30 pm to 5.00 am to permit

improvements to the very infrastructure from which they have

profited.

65. The circumstances in relation to the balance of convenience in

some respects is similar to the case of Bradto. In that regard it is

useful to note the Court of Appeal's acceptance of the primary

judge's comments at [83].

66. In that context, it is noteworthy that the plaintiffs have previously

submitted that the application for injunctive relief is entirely

novel because nowhere has a court excluded a lessee from

conducting lawful activity in its own leased premises. The

Bradto decision suggests otherwise. Further, in City Cites

(Rainham) Ltd v Price Carter [2002] EWHC 1496, Neuberger J

(as his Lordship then was) considered whether an interlocutory

injunction should be granted to require tenants to vacate their

premises for 20 weeks. His Honour considered that justice would

be best served by granting the injunction reasons which relevantly

included:

(a) His Honour observed that sooner or later the work would

have to be carried out and cause detriment to the

defendants. There was a contract [to carry out the

works] in place ready to go and apart from the short term

interests of the defendants it was of benefit to the

landlord and tenants of the whole centre that the work

proceed at that time. Similarly, in the current

proceedings (ie concerning Forrest Chase) the work will

have to be carried out sooner or later and there is

currently a construction contract in place with

Lendlease. Apart from the apparent short term interests

of the plaintiffs (in trading the Café in the middle of the

night), it is of benefit to ISPT and the tenants of not only

the redeveloped Forrest Chase but tenants of

surrounding retail malls (eg Murray Street Mall and the

Carillon) that the work proceed as soon as possible;

(b) the position was to be assessed by reference to the

interest of the landlord and tenants but in the context of


Page 42

a case which concerns a shopping centre, also by

reference to the interests of other occupiers of the centre.

His Honour observed that 'the sooner this part of the

centre ceases to be a building site…the better'.

Similarly, in the current proceedings this is a relevant

factor. The relevant context is the redevelopment of

Forrest Chase and the Padbury Walkways. It is clearly

in the interests of all of the tenants in these areas and

surroundings areas (as well as commuters, residents and

shoppers) to expedite matters so that the area is no longer

a building site.

(c) Significantly His Honour also considered that it would

be better to grant the injunction sooner so that the tenants

did not suffer the disadvantage 'of being out of their units

in the Centre during the Christmas season'. Similarly, in

the current proceedings, it is important for the gantries

to be installed as soon as possible and the works on the

Padbury Walkways undertaken so as to minimise the risk

that tenants, shoppers and the general public intending to

attend Christmas events in Forrest Place are impacted

during the Christmas period due to ongoing and delayed

construction works.

67. Although this case concerned an injunction sought by a landlord

against certain tenants, the relevant factors considered by the

Court in granting the injunction apply. In that case it was the

landlord who was carrying out the relevant works. In the current

proceedings, it is ISPT who is carrying out the relevant works

(under an agreement with the City of Perth, the landlord of the

leased premises) which are adjacent to the plaintiffs' leased

premises. Further, ISPT is not seeking an injunction to have the

plaintiffs vacate their premises for 20 weeks. Instead they are

only seeking for the plaintiffs to vacate their premises between

10.30 pm and 5.00 am on a limited number of weeknights.

68. It must be acknowledged that in Bradto and City Cites the lessor

was seeking to exercise a contractual right to enter the premises

whereas no such contractual entitlement as between the plaintiffs

and ISPT exists here. That distinction be should be

acknowledged but not overstated. The court in those cases was

required to consider the possible injustice that might arise if the

lessees were ultimately correct and there was in truth no

entitlement to enter the premises or require them to be vacated.

That is the same predicament that confronts the Court in this

matter - here, there is a serious question as to whether the

plaintiffs' presence in the premises amounts to a tort.

69. Moreover, it is not correct to say (as the plaintiffs appear to

contend) that the existence of some form of property right (here,


Page 43

a lease) presents a barrier to the grant of relief. Esso Petroleum

Co Ltd v Kingswood Motors [1974] QB 142 considered an

application for a mandatory interlocutory injunction in the

context of an allegation of interference with contractual relations.

That alleged interference had ultimately resulted in property

being assigned to another party so as to defeat the contractual

arrangements. In opposition to the application for injunctive

relief it was suggested that the court was constrained from

interfering with vested property rights. At 156 Bridge J

concluded:

'In my judgment the answer to it is that those doctrines

really never meet at all because they are concerned with

two entirely different things. The Tulk v Moxhay line

of cases is not, as it seems to me, remotely concerned

with the tort of conspiracy to induce breaches of

contract, and I can see no reason whatever why the

powers of the court to act against tortfeasors who bring

about breaches of contract by other persons should be

limited in the way suggested simply because the breach

of contract which the conspirators have succeeded in

inducing is one which involves the transfer of title to

land … I am not asked to enforce an equitable doctrine

which makes some party not privy to a contract

nevertheless liable in certain circumstances to perform

that contract. I am asked to enforce the personal liability

incurred by a tortfeasor to undo the consequences of his

tort which could have been restrained before it was

committed. In a proper case, I ask myself: what reason

can there be in principle why the tortfeasor should not be

ordered to undo that which he has done?'

The opposing submissions of the plaintiffs against interlocutory relief

43 The plaintiffs' first tranche of filed written submissions was

likewise submitted in the context of contending ISPT's economic tort

cause of action (as then pleaded under its first pleaded counterclaim) was

untenable, such that that cause of action should be afforded summary

dismissal. As mentioned, I struck out that pleading but did not grant a

summary dismissal; rather, I gave leave to re-plead. There is now a

consolidated re-pleaded defence and counterclaim by ISPT standing in

the consolidated action.

44 I will set out pars 30 through 51 of the plaintiffs' written

submissions of 22 June 2018 (court document 48), which attack the

economic tort relied upon by ISPT in its counterclaim and also

challenges ISPT's alleged damages claim. Additionally, the plaintiffs

address a defence of justification to the economic tort. They say:


Page 44

30. The defendant's language of 'interference with contract' is

imprecise. Similarly, the pleading of a 'direct' interference (at

[64]) is imprecise, to the extent that it relies upon a (now)

fallacious distinction between 'direct' and 'indirect' interference

for the purposes of the tort; see OBG v Allan, 28 [34] et seq (Lord

Hoffman).

31. To the extent that the defendant pleads an action in tortious

inducement (or 'procurement') of breach of contract, that action

must fail, for the following reasons.

B.1 There is no accessory relationship

32. First, there was no accessory relationship which would bring the

facts within the scope of the Lumley principle. The alleged

liability is primary: the plaintiffs did not act in concert with

Lendlease (or anyone else).

33. The case that appears to be put in the counterclaim is akin to a

'prevention' case, like Torquay Hotel Co Ltd v Cousins [1960] 2

Ch 106. The law has developed since then. As explained in OBG

v Allan, [178] (Lord Nicholls):

'With hindsight it is evident that application of the

Lumley v Gye tort to a 'prevention' case was unfortunate.

There is a crucial difference between cases where the

defendant induces a contracting party not to perform his

contractual obligations and cases where the defendant

prevents a contracting party from carrying out his

contractual obligations. In inducement cases the very act

of joining with the contracting party and inducing him to

break his contract is sufficient to found liability as an

accessory. In prevention cases the defendant does not

join with the contracting party in a wrong (breach of

contract) committed by the latter. There is no question

of accessory liability. In prevention cases the defendant

acts independently of the contracting party. The

defendant's liability is a 'stand-alone' liability.

Consistently with this, tortious liability does not arise

in prevention cases unless, as was the position in

GWK, the preventative means used were

independently unlawful. (emphasis added.)'

34. As explained below, the plaintiffs' conduct was not independently

unlawful.

B.2 Deeds should be captured by the unlawful means tort; there were no

words by the plaintiff which induced a breach of contract


Page 45

35. Applying the above dictum of Lord Nicholls, the tort of

inducement of breach of contract should not be applied to cases

of interference 'by deeds', where a person is prevented from

performing their contractual obligations.

36. There were no other express words which induced any breach of

contract. Accordingly, the defendant's pleaded facts ought to be

properly characterised as a pleading of the unlawful means tort:

OBG v Allan, [178] (Lord Nicholls).

36.1 Contra: Fortron Automotive Treatments Pty Ltd v

Jones (No 3) [2011] FMCA 467, [135]: '[d]irect

interference may be brought about by words (persuasion

or procurement) or by deeds (disabling the person with

whom the applicant has contracted from continuing with

performance of the contract)'. The plaintiffs respectfully

submit that the Court erred in advancing this proposition.

37. Any words that mentioned why the defendant or Lendlease

should not do xyz were merely 'advice', directed to reasons which

were already in existence, and of which the defendant and

Lendlease were obviously aware.

37.1 Advice which leads to a breach of contract is not

necessarily actionable. See Siemens Ltd v CEPU (2005)

223 ALR 480, 485 [19] (Finkelstein J):

It is, however, necessary to show that the breach

of the contract has been 'procured' or 'induced'.

Sometimes the cases have noticed a distinction

between 'procuring' or 'inducing' which is said

to be unlawful, and 'advice' which is said not to

be unlawful. The prevailing view is that to

induce a breach of contract means to create a

reason for breaking it; to advise a breach of

contract is to point out the reasons that already

exist. The former is actionable while the latter

is not …

B.3 There was no intention to cause a breach of contract

38. In this context, intention requires that the breach of contract was

either the defendant's desired end, or the means to the defendant's

desired end: OBG v Allan, [8], quoted in Hardie Finance

Corporation Pty Ltd v Ahern (No 3) [2010] WASC 403, [677].

39. The plaintiffs' intent plainly was to exercise its rights to trade and

occupy the property in order to earn revenue. That intent, in turn,

should be understood against the backdrop of the damage suffered

by the plaintiffs as a result of the defendant's ongoing nuisance.


Page 46

40. The plaintiffs' desired end was thus mitigation of their losses. The

alleged breach of contract was not a means to that desired end;

any loss suffered by the defendant would not make a difference

to whether the plaintiffs were able to trade. There was certainly

no 'predominant purpose' to injure: cf Khrapunov.

41. If the defendant were to argue that the plaintiffs had the requisite

intent by way of lack of reasonable care, it should be noted that

'[n]egligence or a lack of reasonable care is not sufficient to

satisfy the requirement of intention': Polyaire Pty Ltd v K-Aire

Pty Ltd [2003] SASC 41, [209], cited in LED Technologies Pty

Ltd v Roadvision Pty Ltd (2012) 199 FCR 204, 213 [42] (Besanko

J, Mansfield and Flick JJ agreeing).

42. On balance, the plaintiffs' state of mind was not sufficient.

B.4 The defendant has not suffered any loss

43. It must be proved that the (alleged) breach of the contract has

caused damage, or at least that damage can be inferred from the

circumstances: Exchange Telegraph Co v Gregory & Co [1896]

1 QB 147; Bent's Brewery & Co Ltd v Hogan [1945] 2 All ER

570; Jones Brothers (Hunstanton) Ltd v Stevens [1955] 1 QB

275; Greig v Insole [1978] 3 All ER 449, 490 (Slade J).

44. The defendant's materials do not establish any breach or loss. In

that regard, the plaintiffs note in respect of the contracts put in

evidence:

44.1 Design and Construct Contract (NDV-1): There is no

evidence of any claim or notice by any party against the

defendant (or vice versa) in respect of loss or damage,

for instance pursuant to clause 24, 34.9, or 39.7 of the

Lendlease Contract. In any case, the contracts require

(for instance in the case of clause 39.7, a remedy period).

Subject to 39.7, there is no breach by reason of delay in

the Principal giving possession of the site.

44.2 Development Management Agreement (MB-2):

There is no evidence of any claim or notice by ISPT or

the City of Perth against the other for loss or damage. In

any event, the contract allows for 'flexibility' in the

achievement of milestones (clause 6.8, 7.2) and caters

for restrictions, closures and other changes that may

occur from time to time (clause 18).

44.3 Works, Access and Licence Deed – Walkways and

Works Area (MB-3): There is no evidence of any claim

or notice by ISPT or the City of Perth against the other

for loss or damage.


Page 47

45. Even on the assumption that the defendant has suffered loss, then

the plaintiffs' conduct was not the cause of that loss. Rather, that

loss would be caused by 'idiosyncratic contractual arrangements'

between the defendant and Lendlease: Marsh v Baxter (2014) 46

WAR 377, 433 [379] (Kenneth Martin J), cf Marsh v Baxter

(2014) 49 WAR 1, 45 [261] - [262] (McLure P, dissenting), 129

[785] (Newnes and Murphy JJA).

45.1 As Kenneth Martin J explained in Marsh v Baxter, 433

[379] - [380]:

'Idiosyncratic contractual arrangements,

consensually reached between accepting

parties, might nevertheless prescribe what

might more widely be assessed as a wholly

unreasonable status quo from the broader

community perspective.

For a contracting party to impose its adverse

contractual outcomes arising from a private

relationship upon outsiders to the contract as

being off limits to scrutiny and effectively non-

negotiable, is not an acceptable approach for the

law to follow, in my view. A court, in

unfettered fashion, needs to conduct an

objective and holistic analysis, when assessing

what are reasonable standards of conduct as

between neighbours.'

45.2 Those comments were made in the context of a private

nuisance claim, but are equally applicable to the context

of the tort of inducing breach of contract.

B.5 The plaintiffs have a justification defence

46. It is accepted that 'justification' is a defence to inducement of

breach of contract: Quinn v Leathem [1901] AC 495, 510. Per

OBG v Allan, 63 [193] (Lord Nicholls): 'For completeness I

mention, but without elaboration, that a defence of justification

may be available to a defendant in inducement tort cases. A

defendant may, for instance, interfere with another's contract in

order to protect an equal or superior right of his own, as in Edwin

Hill & Partners v First National Finance Corpn plc [1989] 1

WLR 225'.

47. Romer LJ provided an explanation of the justification defence in

Glamorgan Coal Co v South Wales Miners' Federation [1903]

2 KB 545, 574 - 5:


Page 48

'Regard might be had to the nature of the contract

broken; the position of the parties of the contract; the

grounds of the breach; the means employed to procure

the breach; the relation of the person procuring the

breach to the person who breaks the contract; and … to

the object of the person in procuring the breach.'

48. The leading authority on justification is Zhu, where the High

Court held as follows.

48.1 An act which would in itself be wrongful as infringing a

legal right of another person may be justified if shown to

be no more than was reasonably necessary for the

protection of some actually existing superior legal right

in the doer of the act. For the purposes of the tort of

interference with contractual relations, actually existing

superior legal right refers to a right in real or personal

property or a right or duty found in statute.

48.2 Whether or not there were circumstances in which an

equal right of the defendant may provide a justification

for inducing a breach of the plaintiff's contract, a merely

contractual right of the defendant equal to and

inconsistent with the plaintiff's right to contractual

performance does not provide justification, unless the

defendant's contract was a specifically enforceable

contract to sell property which passed an equitable

interest to the defendant. Temporal priority of other

purely contractual rights will not suffice.

49. A parallel may be drawn between the 'reasonably necessary' test

for justification in the context of inducement, and the test for

reasonableness of interference with use and enjoyment of land in

the context of private nuisance. In this case, they are two sides of

the same coin. In Southern Properties, McLure P held that, in

the context of nuisance, regard should be had to:

the nature and extent of the harm or interference, the

social or public interest value in the defendant's activity;

the hypersensitivity (if any) of the user or use of the

claimant's land; the nature of established uses in the

locality (eg residential, industrial, rural); whether all

reasonable precautions were taken to minimise any

interference ...

50. These principles may be applied as follows.

50.1 The plaintiffs possess actually existing superior legal

rights relative to the defendant.


Page 49

50.2 The plaintiffs' leasehold interest is a proprietary interest.

As occupier, the plaintiffs' interest 'in the use and

enjoyment of land is broad and comprehensive': Marsh

v Baxter (2015) 49 WAR 1, 44 [251] (McLure P). It is

not merely contractual. Moreover, the plaintiffs' rights

under its Lease are not restricted in terms of trading

hours.

50.3 The plaintiffs' interest in carrying on their business is

also statutory in nature: it is permitted within the

statutory framework of the Retail Trading Hours Act

1987 (WA): s 4 excludes restaurants, cafes, and

take-away food shops.

50.4 The contract allegedly broken is one to perform works -

though as noted it is not altogether clear (and not

established on the materials filed by the defendant) that

there has been breach, let alone that there has been any

loss.

50.5 In any event, the fact that the works constitute a nuisance

to the plaintiffs makes the plaintiffs' conduct all the more

reasonable - the plaintiffs are merely mitigating their

own loss by trading.

50.6 The unequal bargaining power between the plaintiffs

(the defendant is in a position of power) should also be

taken into account.

50.7 If the plaintiffs acceded to the defendant's requests to

vacate the premises, they would not only lose the

opportunity to mitigate their losses, but would lose their

cause of action in respect of a continuing or future

nuisance altogether.

51. Further, per Balkin and Davis (inter alia) it must be proved that a

breach of contract has caused damage, or at least that damage can

be inferred. In that regard, the only evidence proffered by the

defendant is as to 'wasted costs' of approximately $50,000 due to

the mobilisation/demobilisation of the crane on 20 February 2018

(for which the defendant does not claim and may not be liable),

and a suggestion that the gantry cost in the region of hundreds of

thousands of dollars to fabricate (but it is not suggested there is

any actual loss in that regard). There is no evidence of loss

flowing from events on 6 March. In any event, the defendant

appears to accept they were informed by Mr Frank Agnello of the

plaintiffs' intention to trade on that night (and each other night)

prior to the events.


Page 50

45 On 24 July 2018, the plaintiffs filed further resisting written

submissions now directly opposing the interlocutory injunction as sought

by ISPT. Again, for speed and convenience, I will set out pars 97 through

102 verbatim of those further written submissions.

97. As explained in the Plaintiff's Summary Judgment Submissions,

as a prevention case, the defendant's counterclaim ought to be

determined with reference to the tort of unlawful means, as

articulated in OBG v Allan.

98. If an inducement of breach of contract action is nonetheless

pursued, it must fail, for the following reasons.

99. First, as explained in Part 3.1 above, the defendant has not

suffered actionable damage.

100. Secondly, and fundamentally, there has been no breach of

contract: see Part 2 above. Breach of contract 'is of the essence'

of the tort of inducement of breach of contract under Lumley v

Gye: OBG Ltd v Allan, 20 [8] (Lord Hoffman). An injunction

for inducing breach of contract should only be ordered if the

breach is complete: Delphic Wholesalers Pty Ltd v Elco Food

Co Pty Ltd (1987) 8 IPR 545, 554 (McGarvie J).

101. Thirdly, as explained in the Plaintiff's Summary Judgment

Submissions Part B.3, there was no intention to cause a breach of

contract.

102. Fourthly, as explained in the Plaintiff's Summary Judgment

Submissions Part B.5, the plaintiffs have a justification defence.

46 From that edifice of collecting the exchanged written submissions

describing at great length the respective rival positions of the parties on

this application, I can now turn to canvas some general principles

concerning interlocutory injunctions, before indicating my views upon

the present application of ISPT.

47 Broadly speaking, however, I can say at this time that in the present

context I do prefer the submissions of ISPT upon the interlocutory

viability of its economic tort cause of action. I render that assessment, I

would reiterate, in the context of my assessment of its respectable

arguability to establish a prima facie case (on ISPT's counterclaim) upon

the present application.


Page 51

Some general interlocutory injunction principles

Urgency

48 I am satisfied that in the present circumstances the application for

interlocutory injunctive relief is urgent, as contended by ISPT.

49 I am also satisfied that on the Forrest Chase redevelopment works

programme, as explained in ISPT's affidavit materials, there will be

significant delays - if gantry installation work which ISPT, so far has

been thwarted to date from implementing proximate to the Bocelli

Espresso Café, is not begun at least towards an installation of the

proposed gantries during August 2018.

The threat to be restrained

50 Next, I am also satisfied on all the evidence that ISPT has

established (indeed, the point was hardly in dispute) that there is a real

and ongoing threat that unless disturbed by an order of this court the

human presences, being works interruptive events happening by or at the

behest of the plaintiffs at the Bocelli Espresso Café at aberrant trading

hours - will almost certainly continue to be deliberately implemented by

the plaintiffs into the foreseeable future. Correlatively, I am also

satisfied that this ongoing conduct is likely to deliver highly deleterious

financial consequences for ISPT - in terms of higher construction and

associated cost blow-outs - arising from ISPT's contractors being unable

to optimally complete by the autumn of 2019 the demolition,

reconstruction and redevelopment of the Padbury Walkways above the

leased Bocelli Espresso Café premises at Forrest Place and surrounding

works.

Legal tests: injunctions

51 I have already pointed out, but I will repeat, that the present

interlocutory exercise is not in the nature of a trial.

52 The nature of an application for an interlocutory injunction

proceeds upon a basis of established legal criteria. Essentially, it

involves a two limb assessment. The first limb assesses the present

strength of the cause of action of the applicant at a trial (in this case, the

strength of ISPT's counterclaim on its economic tort cause of action).

Second, and to be assessed as an interdependent limb, is the so-called

'balance of convenience', arising from a consideration of potential

consequences on each side from either the grant of, or the refusal of the

interlocutory injunction sought.


Page 52

53 The first limb of the test is sometimes approached by asking

whether a prima facie case (or a serious question for trial) has been

established as a matter of arguability by the applicant. Many prior cases

have canvassed this territory in Australia, but see, in particular, the High

Court of Australia's decisions in Beecham Group Ltd v Bristol

Laboratories Pty Ltd (1968) 118 CLR 618; Australian Broadcasting

Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57; and more

locally, Newnes JA's observations in Mineralogy Pty Ltd v Sino Iron

Pty Ltd [2016] WASCA 105, [87].

54 Also frequently cited as helpful in this context is the clear synthesis

of case authority used at first instance in this court in the reasons of

Beech J in Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008]

WASC 110 [7] - [12].

55 Those observations are, with respect, a convenient start. His

Honour explained:

In Castlemaine Tooheys Ltd v The State of South Australia (1986) 161

CLR 148, 153, Mason ACJ summarised the principles governing the

grant or refusal of an interlocutory injunction as follows:

In order to secure such an injunction the plaintiff must show (1)

that there is a serious question to be tried or that the plaintiff has

made out a prima facie case, in the sense that if the evidence

remains as it is there is a probability that at the trial of the action

the plaintiff will be held entitled to relief; (2) that he will suffer

irreparable injury for which damages will not be an adequate

compensation unless an injunction is granted; and (3) that the

balance of convenience favours the granting of an injunction.

That summary was adopted by Gleeson CJ in Australian Broadcasting

Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208

CLR 199, 217. These principles have been routinely applied in this and

other courts in Australia.

These principles were further explained by Gummow and Hayne JJ in

Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006)

227 CLR 57, [65] - [71] (Gleeson CJ and Crennan J agreeing). Their

Honours stated that the relevant principles are those stated in Beecham

Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, where

the two main inquiries were said to be whether the plaintiff had made out

a prima facie case and whether the balance of convenience favours the

grant of the injunction. The phrase 'prima facie case' does not mean that

the plaintiff must show that it is more probable than not that at trial the

plaintiff will succeed. It is sufficient that the plaintiff show a sufficient

likelihood of success to justify, in the circumstances, the preservation of

the status quo pending the trial. How strong the probability needs to be


Page 53

depends upon the nature of the rights the plaintiff asserts and the practical

consequences likely to flow from the orders the plaintiff seeks: [65],

[71].

The apparent statement by Lord Diplock in American Cyanamid Co v

Ethicon Ltd [1975] AC 396, 407 that, provided the court is satisfied that

the plaintiff's claim is not frivolous or vexatious, there will be a serious

question to be tried, is not to be followed. The governing consideration

is that the requisite strength of the probability of ultimate success

depends upon the nature of the rights asserted and the practical

consequences likely to flow from the interlocutory orders sought. These

principles make it clear that the various considerations identified by

Mason ACJ in Castlemaine Tooheys are to be considered together.

As the apparent strength of the applicant's case diminishes, the balance

of convenience moves against the making of an order: Glenwood

Management Group Pty Ltd v Mayo [1991] 2 VR 49, 54 - 55; Todd v

Novotny [2001] WASC 171. The grant of an injunction involves

balancing the injustice which might be suffered by the defendant if the

injunction is granted and the plaintiff later fails at trial, against the

injustice which might be suffered by the plaintiff if the injunction is not

granted and the plaintiff later succeeds at trial: Films Rover

International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670;

Madaffari v Labenai Nominees Pty Ltd [2002] WASC 67 [14].

In some senses, the plaintiffs' application seeks interlocutory mandatory

relief, in that it seeks an order compelling the defendant to undo its re-

entry and permit the plaintiffs back into possession of the premises. The

principles relating to interlocutory mandatory injunctions were explained

in Cash Converters Pty Ltd v Hila Pty Ltd (1993) 9 WAR 471, 483 -

484, and Films Rover International (679 - 682). In some cases, it is said

that an interlocutory mandatory injunction should be granted only if the

court has a high degree of assurance that the plaintiff will succeed at trial.

However, ultimately the question is as to the balance of the risk of

injustice. In considering that balance the court must take into account

the nature and consequences of the particular injunction sought.

56 In present circumstances, I am satisfied from all the material put

before me that ISPT, by its counterclaim, has made out a respectable

prima facie case - based upon its invocation of its economic tort cause of

action - contending against the plaintiffs that they have intentionally

interfered with ISPT's contractual relationships with both Lendlease and

the City of Perth, already causing financial loss thereby to ISPT and with

more financial losses on the horizon if an injunction is not soon granted

to ISPT.

57 In reaching that interlocutory assessment, I did pay particular

attention to the arguments of law put up by Mr Bennett's submissions for


Page 54

the plaintiffs in resistance. Those submissions were heavily grounded

upon a legal contention that absent any reliance by ISPT upon another

(distinct) tort as articulated by Lord Hoffman in OGB v Allan (namely,

the tort of intentional infliction of economic harm by unlawful means)

there is no presently arguable economic tort counterclaim open to ISPT.

With respect, I cannot accept that submission, as regards ISPT's prima

facie case, when it is assessed at the level of its present arguability in

Australia.

58 On the current state of the law of Australia (collected in ISPT's

written submissions seen earlier) both prior and subsequent to OGB v

Allen, it seems to me that there is a more than healthy body of Australian

cases supporting ISPT's cause of action as framed. As regards ISPT's

serious question or prima facie case, my only concern before a trial is in

evaluating the potential successful arguability of ISPT's economic tort

cause of action at a future trial. In deference, however, to Mr Bennett's

closely researched submissions on what is a novel legal argument, I

would add that I reach this interlocutory position on the prima facie case

arguments for two major considerations.

59 First, it seems clear from the terms of all the reasons in OGB v Allan

that even in rejecting the so-called 'unified theory' (said to have emerged

as a result of seeds of confusion begun by Quinn v Leathem [1901] AC

495 Lord Hoffman's speech at [15]), that the discrete tort of inducing a

breach of contract was still clearly recognised, albeit then separated.

Again see Lord Hoffman's speech at [39] - [44].

60 An essential component of the OGB reasons draws a distinction

between the tort of intentionally inducing a breach of contract and the

then separated tort of intentionally causing loss by unlawful means. That

second tort has not yet been accepted in this country at the highest level

by the High Court of Australia.

61 As I assess Lord Hoffman's reasons, they would, if accepted, cast a

level of doubt over the 'direct and indirect' interference distinction

aspects of the original Lumley v Gye breach procurement tort. Again see

Lord Hoffman's reasons at [38], where that distinction was described as

conceptually unsatisfactory. (But I would note that ISPT's counterclaim

alleges what are direct and a not indirect acts of interference by these

plaintiffs. So that aspect of OGB would not seem to present here as being

of material significance). But the first point is that OGB casts no doubt

at all upon the validity of the tort of intentionally inducing a breach of

contract. Only the potential reach of that well-established tort is


Page 55

questioned in some respects by OGB, in the context of the identification

of a separate and distinct further test of causing loss by unlawful means.

62 Second there is a key distinction as identified under [44] of Lord

Hoffman's reasons by reference to his observations going back to in those

made by Lord Denning MR in Torquay Hotel Co Ltd v Cousins [1969]

2 Ch 106 at 138. Lord Denning MR was of the view that there could be

liability under the interference tort for the preventing or hindering the

performance of a contract, albeit this conduct may not rise to the level

of proving a breach of the contract - upon the same principles as liability

was proven for the procuring a breach of contract. That dictum was

approved subsequently by Lord Diplock in Merkur Island Shipping

Corporation v Laughton [1983] 2 AC 570, 607 - 608.

63 As to that Torquay Hotel extension of the Lumley v Gye tort to

include the obstruction of the performance of a contract, Lord Hoffman

observed in OGB:

One could therefore have liability for interference with contractual

relations even though the contracting party committed no breach. But

these remarks were made in the context of the unified theory which

treated procuring a breach as part of the same tort as causing loss by

unlawful means. If the torts are to be separated, then I think that one

cannot be liable for inducing a breach unless there has been a breach. No

secondary liability without primary liability. Cases in which interference

with contractual relations has been treated as coming within the Lumley

v Gye tort … are really cases of causing loss by unlawful means.

64 Mr Bennett for the plaintiffs, in seeking here to confine the Lumley

v Gye procurement tort to pure breaches of contract only and for it not to

extend to cover scenarios of merely inhibiting the performance of a

contract under the Torquay Hotel approach of Lord Denning, attempted

to find some local support for a so-called supremacy of the OGB decision

as regards a tort of unlawful means from the post OGB decision of

Pritchard J in Hardie Finance Corporation Pty Ltd v Ahern [No 3]

[2010] WASC 403. Her Honour's reasons, with respect, contain at

between [675] - [702] a meticulous review of all the speeches of

members of the House of Lords from a perspective of her Honour's need

within that trial to decide if the unlawful means tort was of any

application (ie, in Australia).

65 Her Honour identified in her reasons multiple considerations both

for and against that proposition at [704] - [719].


Page 56

66 But the reasons in Hardie Finance [No 3] were rendered in a

context of a trial - where a final determination was needed concerning

the asserted unlawful means tort as the plaintiff's cause of action - with

that plaintiff only arguing for the unlawful means tort as its cause of

action - not the interference with contractual relations tort (and in the end

unsuccessfully).

67 Pritchard J at the outset of those reasons had very clearly identified

the distinction between the unlawful means tort and the distinct tort of an

interference with contractual relations, but which was not being

contended for in that trial: see at [672] and [674].

68 Her Honour's reasons explicitly recognise what is the extensive

body of case law in Australia applying the (distinct) tort of interference

with contractual relations. I mention the observations (see [111])

concerning the decision of the High Court in Zhu v Treasurer of the

State of New South Wales (2004) 218 CLR 530 (involving the

procurement of a breach of contract cause of action tort, and where the

appeal to the High Court was essentially concerned only with evaluating

an (unsuccessful) defence of justification against the conceded elements

of the procurement tort). Her Honour proceeded to refer to decisions in

intermediate courts, including by the Full Federal Court of Australia and

by the New South Wales Court of Appeal, both discussing and applying

the elements of the tort of interference with contractual relations: see

Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473 [159] - [157]

and Allstate Life Insurance Co v Australia and New Zealand Banking

Group Ltd (1995) 58 FCR 26 (Lindgren, Lockhart and Tamberlin JJ).

See also her further references to first instances authority, namely Orica

Investments Pty Ltd v McCartney [2007] NSWSC 645 [323] - [332]

(White J) and Spotwire Pty Ltd v Visa International Service Association

Inc [2003] FCA 762 [66] - [70].

69 I do not assess the reasons in Hardie Finance Corporation v Ahern

[No 3] as casting any doubt upon the substantial body of Australian case

law recognising and applying the procurement of breach economic tort.

In any event, the many Australian decisions about the inducement tort

coupled to the further cases, collected together in ISPT's written

submissions, both pre and post OGB, are simply too voluminous and too

well established. These and too many such cases decided in this country

for them to be regarded as having all been incidentally disposed of by

OGB v Allan. Absent a decision of the High Court of Australia reversing

them all, I would be inclined to follow them, contrary to Mr Bennett's

submission.


Page 57

70 I refer locally, in respect of the procurement of breach economic

tort, to the very clear exposition of the principles by Master Newnes (as

he then was) in Boase v Seven Network (Operations) Ltd [2005] WASC

269 [32] and [34] (a decision given prior to OGB, but which was

thereafter applied post OGB by Le Miere J in Jaddcal Pty Ltd v Minson

[2011] WASC 28). Le Miere J expressly applied the observations of then

Master Newnes in Jaddcal.

71 There is also, with respect, a most persuasive discussion of the

viability of the procurement tort after OGB in multiple respects,

including the Torquay Hotel's performance inhibition aspects extending

to interference with the performance of a contract, discussed by Beach J

in the Federal Court at first instance in Donaldson v Natural Springs

Australia Ltd [2015] FCA 498, 203, 210, 217 and 223, as cited in the

written submissions of ISPT. Those reasons dismiss and rationalise

many of the economic tort cases, including OGB.

72 To all that may be added the recent decision of White J at first

instance in the Federal Court in Mastec Australia Pty Ltd v Trident

Plastics (SA) Pty Ltd [No 2] [2017] FCA 1581 [197], rendering a similar

undiminished view of the Australian case law upon the breach

procurement tort notwithstanding OGB.

73 I also note some Australian textual commentary under a heading

'International Interference With Trade Or Business' found in Halsbury's

Laws of Australia at [415 - 1550] to like effect and which has been

judicially followed in Terry Cross Financial Services v Misiti [2008]

NSWSC 1365 [17].

ISPT'S prima facie case

74 For present interlocutory purposes then, as a matter of the assessed

arguability of ISPT's cause of action based on the alleged economic tort

of inducing a breach of contract (which would include inhibiting the

performance of that action), (until the High Court of Australia expresses

a contrary or revised view), I would as regards ISPT's invoked tort of

intentionally interfering with contractual relations (but not a more

problematic tort not yet recognised by the High Court of Australia

causing loss by unlawful means) apply what I assess to be the broadly

consistent formulation of that Lumley v Gye procurement tort explained

under decisions of Master Newnes, (as he then was), and by Le Miere J

in this court and by Beach J and White J in the Federal Court of Australia

to which I have referred.


Page 58

75 The upshot of all that, contrary to the submission of Mr Bennett for

the plaintiffs, is that assessed at a level of arguability, I conclude that

ISPT does not presently need to show any unlawful conduct by these

plaintiffs - where there is shown to exist (arguably) elements of direct

persuasion, procurement, inducement or other forms of interference by

or at the behest of the plaintiffs and which bears upon the causing and

procuring of a breach of a contract. In Australia, that procurement tort

would still extend to preventing or inhibiting the performance of a

contract by the knowing and intentional interference with contractual

rights.

76 As regards Mr Bennett's further submission concerning an

overwhelming likely existence of a defence of justification for the

plaintiffs, predicated upon the plaintiff's enhanced position as lessees of

the Bocelli Espresso Café holding superior proprietary rights as lessees,

I would also not accept that submission. Any such defence is not obvious

and is in any event, a matter for a trial.

77 Lords Sumption and Lloyd-Jones in JSC BTA Bank v Khrapunov

[2018] UKSC 19 [6] said this about the economic torts, generally:

Along with tortious misrepresentation (fraudulent or negligent), passing

off, slander of title and infringement of intellectual property rights, the

economic torts are a major exception to the general rule that there is no

duty in tort to avoid causing a purely economic loss unless it is parasitic

upon some injury to person or property. The reason for the general rule

is that, contract apart, common law duties to avoid causing pure

economic loss tend to cut across the ordinary incidents of competitive

business, one of which is that one man's gain may be another man's loss.

The successful pursuit of commercial self-interest necessarily entails the

risk of damaging the commercial interests of others. Identifying the point

at which it transgresses legitimate bounds is therefore a task of

exceptional delicacy. The elements of the four established economic

torts are carefully defined so as to avoid trespassing on legitimate

business activity or imposing any wider liability than can be justified in

principle.

In other words, the tort of interfering with contractual relations (the

Lumbley v Gye tort) as developed and explained under Australian law

would present as a qualification and exception to any more general

principle about the permissibility of inflicting financial harm upon a

business competitor.

78 So then, I will proceed from here upon a basis that ISPT has

established a serious question or prima facie case on its economic tort

cause of action the subject of its claim. Even so, I am further required,


Page 59

at interlocutory level, to assess its likely strength: see observations of

Newnes JA, with whom McLure P and Corboy J agreed in Mineralogy

Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 [102], applying the

approach of Samsung Electronics Co v Apple Inc [2011] FCAFC 156;

(2011) 217 FCR 238 [59], [87] - [88].

79 Here, I would assess the strength of ISPT's counterclaim economic

tort cause of action from the perspective of its ultimate success at trial,

as not overwhelming but, nevertheless, currently better than even. I say

'not overwhelming' because the establishment of the requisite anterior

contract knowledge and of a deliberate intent to inhibit the performance

of ISPT's contracts in the plaintiffs with either or both of Lendlease and

the City of Perth at a trial, will need to be proved by ISPT - against the

presently foreshadowed contrary intention evidence of Francesco and

Giuseppe Agnello.

80 Those directors and representatives of the plaintiffs presently

contend that the human presences all presenting conveniently late at the

Bocelli Espresso Café premises and which for safety and occupational

health considerations had generated an effect of thwarting the proposed

gantry installation work by ISPT's contractor during March and June

2018, was for a different purpose. They say, in effect, the Café was open

then to make good trading losses incurred due to the effect of the private

nuisances arising out of the Forrest Chase redevelopment works which

started in February 2018 and that presumably the persons present just

happened to be there at those extended trading hours.

81 Still, I am presently sceptical about what presents to me as a wholly

uncommercial position.

82 It is for ISPT at trial to prove a more malign intent in the plaintiffs,

for which it contends as part of its economic tort.

Interlocutory injunction: other factors

83 Showing a respectable prima facie case does not sit by itself to be

evaluated on a stand alone basis. There is an interdependency as between

that factor and the other major interlocutory injunction criteria required

to be evaluated - namely, the balance of convenience and the adequacy

of common law damages assuming success at a trial.

84 On a common law cause of action argued by a plaintiff who is an

applicant for an interlocutory injunction, a court needs to assess whether

an award of common law damages to the applicant after a trial, instead


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of an interlocutory injunction, would be an adequate and just outcome.

As to that, again see Newnes JA's observations in Mineralogy v Sino

Iron [2016] WASCA 105 at [87]. Then subsequently, see Sino Iron Pty

Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 [131] particularly

at footnote 160.

85 The Court of Appeal in Mineralogy v Sino Iron [2016] WASCA

105 concluded that notwithstanding some older case authorities, for

circumstances where a party is seeking, in effect, what is a mandatory

injunction, no more stringent and different legal test was to be applied

than that applicable in seeking the more usual negative restraint

interlocutory injunction: see again Newnes JA's observations to that

issue at between [76] to [85]. The old high degree of assurance test for

mandatory injunctions was not applicable - albeit even on the usual test

vigilance is called for if a respondent is to be compelled, in effect, to do

something positive, or if the effect of the relief delivers victory or a

quasi-victory to the applicant before any trial.

86 Those observations resonate for the present circumstances. The

plaintiffs, in resisting this injunction application, contend that, although

couched as a negative restraint, the terms of the injunctive relief as

sought under par 3 of ISPT's chamber summons would essentially seek

to compel them as to when and how they might otherwise choose to trade

and to conduct the hours of the Bocelli Espresso Café business operation

on their leased premises - and in a fashion which is in substance

mandatory and not solely negative or prohibitory.

87 As to any positive/negative legal distinction in the framing of

injunctive orders, see Films Rover International Ltd v Cannon Film

Sales Ltd [1987] 1 WLR 670, cited by Newnes JA in Mineralogy [2016]

WASCA 105 at [79] - [80] for the characterisation of the distinction as a

'semantic argument'. A more relevant question of substance is 'whether

the granting of the injunction would carry that higher risk of injustice

which is normally associated with the grant of a mandatory injunction',

noting also his following observations approving text in Meagher,

Gummow & Lehane (5th ed, 2015) 21-395:

In the application of the normal tests, often, though not always, the fact

that the relief sought is mandatory will tilt the balance of convenience in

the defendant's favour.

88 That led Newnes JA, in Mineralogy however, to observe at [96]:


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No doubt that is at least one of the reasons that mandatory injunctions are

rare.

and there is evident wisdom in that observation.

89 Another related point made by the plaintiffs in resisting

interlocutory relief is that what is sought is essentially final relief in

character. In other words, they say that if ISPT obtains the interlocutory

injunctive orders in the terms as sought, it will certainly then proceed to

implement, largely as planned, its Forrest Chase development works,

including the redevelopment of the Padbury Walkways and with that all

likely coming to pass before any trial on the substance of ISPT's

counterclaim.

90 Mr Bennett suggested essentially that in such events the ISPT

counterclaim would likely never go to a trial, even though ISPT says that

it has already suffered some financial damage to date arising out of the

March and June 2018 human presence, interruption events, frustrating

the then intended gantry installation works on those occasions at the

Bocelli Espresso Café. That (limited) financial loss and damage already

sustained, ISPT says it is entitled to pursue at a trial, and irrespective of

its success in obtaining the interlocutory relief. Even so, the force of

Mr Bennett's point must be acknowledged as regards ISPT achieving in

the short term on a summary outcome a result possibly better than what

it could achieve at a successful trial, where it was awarded only common

law damages.

91 ISPT says, of course, that if it does not obtain the interlocutory relief

enabling it to timeously install the gantries and thereby advance all the

Forrest Chase redevelopment works it contemplates, including at and

above the areas around the Bocelli Espresso Café, that even when it

succeeds at a trial upon its economic tort counterclaim - its loss and

damage will be of a large financial magnitude and may well be

irrecoverable from these plaintiffs.

92 ISPT's position is that it would, absent getting the injunction as now

sought, complete as much of the redevelopment works in the Forrest

Chase area as it can, then demobilise, with the works left unfinished.

That would be the position until the expiry of the Bocelli Espresso Café

lease at some time in 2021. Assuming the plaintiffs' lease is not renewed

by the City of Perth (only an assumption, of course) ISPT would then

remobilise again and then finally complete the balance of the works to

the Padbury Walkways some time in 2021.


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93 That delayed finish works result to 2021, of course, would see not

only the likely incurring of extra demobilisation and remobilisation costs

by ISPT, but also a much longer and drawn out process of leaving what

would be unfinished works and temporary structures in the overall

vicinity of Forrest Chase/Forrest Place, detracting from the aesthetic look

of the location, for adjacent business premises or would-be lessees from

ISPT. But also that delay to 2021 would detract from the overall amenity

of what is an important public space in Forrest Place for the general

public of Perth for a much longer period than would otherwise have been

the case if the whole redevelopment were to be implemented by ISPT's

contractors as planned finishing (largely) by the autumn of 2019.

94 As regards the wider public interest as a relevant consideration to

be weighed, I observe that the Court of Appeal in Sino Iron v

Mineralogy [No 2] [2017] WASCA 76 said this, as regards interlocutory

injunctions (see [13]) (and by way of endorsement of the observations of

the Full Federal Court in Samsung Electronics Co Ltd v Apple Inc

[2011] FCAFC 156; (2011) 217 FCR 238 [69]):

In assessing the balance of convenience in an interlocutory injunction

application, the interests of the public and third parties are relevant and

have more or less weight according to other material circumstances;

whether those interests tend to favour the grant or refusal of an injunction

in any given case depends upon the circumstances of the case; and

hardship visited upon third parties or the public generally by the grant of

an interlocutory injunction will rarely be decisive.

95 Here the position is somewhat unique. The contention by ISPT is

that the general public and traders generally in the vicinity of Forrest

Place will all likely be adversely affected - if it cannot complete its

overall redevelopment works for Forrest Chase and Forrest Place,

including the Padbury Walkways, on an uninterrupted basis and as soon

as is feasible.

96 There is more to say about other aspects of the balance of

convenience factors to be weighed on this injunction. Before that,

however, I need to address a late affidavit of Michael David Barr, which

was only received on 31 July 2018. Its receipt arose out of my request

to Mr Solomon, senior counsel for ISPT, during his reply submissions,

to clarify precisely the anticipated timing and duration of works

associated with the demolition and redevelopment of the Padbury

Walkways in the vicinity of the Bocelli Espresso Café.


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97 It is necessary to recite that further evidence in some detail in the

next section of these reasons.

Affidavit of Michael David Barr affirmed 31 July 2018 (court

document 96)

98 My dialogue with Mr Solomon during his reply submissions on 30

July 2018, led me to say that I required greater precision in terms of the

likely timing and duration of all the intended works to take place above

the Bocelli Espresso Café - since the arguments of counsel that day had

exposed what was being proposed by ISPT as extending well beyond a

mere installation of a ('singular') gantry (ie, a steel beam) above the

Bocelli Espresso Café and another over the Alfresco Area of the Café.

99 By reference to a lawyers' communication of 11 June 2018 found in

Mr Gurukugan's affidavit ISPT's lawyers, Allens Linklaters, had then

advised the plaintiffs' lawyers in terms then suggesting works of a

duration of approximately 40 nights duration.

100 However, that anticipated works duration position after argument,

was less than clear.

101 It was something of a revelation then to read the contents of

Mr Barr's further affidavit of 31 July 2018. It read:

5. From my involvement in this planning and implementation,

which requires me to work closely with ISPT's contractor

Lendlease, I am aware that the current best estimate of the timing

of works on the Padbury Walkways in the vicinity of the Bocelli

Café that require the Bocelli Café premises to be vacant and

which involve and/or will be facilitated by the installation of the

gantries is as follows (none of which will occur on Friday or

Saturday evenings):

(a) Installation of a gantry above the Bocelli Café:

approximately five nights of work, between 10.30 pm

and 5.00 am the next day;

(b) Demolition of the existing Padbury Walkways behind

the Bocelli Café: approximately 31 nights of work

between 10.30 pm and 5.00 am the next day;

(c) Installation of a gantry above the Bocelli Café Alfresco

Area: approximately five nights of work, between

10.30 pm and 5.00 am the next day;

(d) Demolition of the escalators, canopy and concrete

structure relating to the bridge over Murray Street:


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approximately 11 nights of work between 10.30 pm and

5.00 am; and

(e) A further 45 nights of work, between 10.30 pm and

5.00 am to install the new Padbury Walkways,

escalators, canopy and structure relating to the bridge

over Murray Street and remove both the gantries.

6. These estimated timeframes are best estimates and it is possible

that they could be impacted by unforeseen matters such as

inclement weather conditions or unresolved technical or sequence

in difficulties with the work. It is also possible that the time

required to carry out these works may be shorter than these

estimates if the work is able to proceed more expeditiously than

currently contemplated.

7. Assuming that it is possible to commence installation of the Café

gantry on 21 August 2018 (notice of which would need to be

given by ISPT to Lendlease by 7 August 2018) the last date upon

which the works would require the Bocelli Café to be vacant is

forecast to be 17 April 2019.

102 On 31 July 2018, at a further chambers appointment (at which I had

intended to deliver an extempore decision on the injunction application),

Mr Bennett, senior counsel for the plaintiffs, raised strong objections

following the late receipt of this late information from ISPT and Mr Barr.

More particularly, he (legitimately) complained that it contained no

explanation at all for why the newly received works duration information

now varied to such a significant extent beyond the prior (albeit loose)

estimate of around 40 nights work as the underlying assumption of

himself (and me) across the course of arguments the previous day. A

new anticipated position of 97 nights of anticipated works was

significantly greater than all counsel and the court had previously been

working upon.

103 The lack of any real explanation about this issue by ISPT was

unable to be explained by senior counsel for ISPT, beyond the urgency

of the present application. That was less than convincing.

104 I must accept Mr Bennett's submission that the unexplained and

significantly greater ISPT assessment about the proposed duration of

ISPT's works was unsatisfactory. However, it is what it is.

105 The duration of the intrusion sought under the interlocutory

injunction was greater than was previously revealed. I do not make a

finding that that situation was intentional from ISPT. But it was both


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unsatisfactory and unacceptable. Had the present application been for

ex parte relief by ISPT these emerging revelations would have provided

a basis for any ex parte order made to be immediately discharged as of

right.

106 The extra information of 31 July 2018 from Mr Barr then led me to

suspend a proposed delivery of reasons, in order to completely reconsider

again the position now as altered by the extra information in Mr Barr's

further affidavit.

107 Upon considering all materials again, that led me to have my

associate communicate with the solicitors for ISPT to seek greater and

more precise information about the structure(s) proposed to be erected

above area of the Bocelli Espresso Café premises - after the initial

installation of the gantries (see my associate's letter of 1 August 2018).

That resulted in four more affidavits from Mr Barr on that issue and to

further arguments on Friday 10 August 2018. Even then ISPT's

information still needed to be corrected to say once and for all what was

being proposed above and beyond the Bocelli Espresso Café and its

Alfresco Area.

108 The further forthcoming information then needed to be assimilated

on all sides. Since 10 August 2018 there emerged even further affidavits

from Mr Barr as seen collated in the 'Affidavit Evidence' record referred

to earlier on each side. Mr Barr's last affidavit explained that some

scaffolding to be covered by canvas would be needed in the vicinity of

the Bocelli Espresso Café. Late as that new information finally emerged,

it does not bear upon my end conclusions on this application.

Balance of commercial factors in the evaluations of the interlocutory

injunction application: viability of common law damages

109 Essentially, the present application seeks that the court grant ISPT

pre-trial assistance by a discretionary equitable remedy, namely an

interlocutory injunction. I have now identified and discussed ISPT's

underlying cause of action on its counterclaim for alleged interference

by the plaintiffs with contractual relationships as articulated by ISPT

under its amended counterclaim - a purely common law cause of action.

110 Hence, it is necessary to evaluate whether the usual remedy of the

common law, namely damages awarded after a successful trial would be

sufficient for ISPT upon its (assumed) success at a trial, or whether the

position is such that post trial common law damages would be

insufficient to do justice in all the circumstances.


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111 There remains some debate about whether the issue of (common

law) damages as being an adequate remedy, is a stand alone requirement,

or whether it is to be evaluated as a part of the overall balance of

convenience that is weighed considering the grant of an interlocutory

injunction. As to that, see observations of the Court of Appeal in Sino

Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 [131]

rendered as regards interlocutory injunctions (noting the Full Federal

Court authority cited in footnote 160) and contrasting further

observations that court rendered upon the equitable remedy of specific

performance and analogous equitable relief at [136] concerning Patrick

Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No

3) [1998] HCA 30; (1998) 195 CLR 1 [78] - [79] (Brennan CJ, McHugh,

Gummow, Kirby & Hayne JJ).

112 Given the observations under footnote 160 of Sino Iron Pty Ltd v

Mineralogy Pty Ltd [No 2] concerning mandatory interlocutory

injunctions tantamount to grants of final relief for specific performance,

in this instance I have assessed the potential adequacy of common law

damages as a stand alone factor - separate from other balance of

convenience factors, at least initially, before I weigh the residue of other

balance of convenience factors.

113 I recognise, of course, that the injunctive relief now sought by ISPT

would not be a grant of relief that is akin to specific performance.

Nevertheless, it would approach, on my view, if granted, relief akin to

final relief for ISPT obtained on a summary basis, ie, relief granted

without a trial. Hence, there is a need for particular caution and hesitancy

about granting such far reaching relief without a trial.

114 Were interlocutory injunctive relief to be granted in the terms that

ISPT seeks, it should then be able to proceed with its overall Forrest

Chase redevelopment works, as originally planned or close to that. ISPT

would not then need to 'work around' the Bocelli Espresso Café premises

area and then need to return later in 2021 to finish off works on the

Padbury Walkways above the location of the Bocelli Espresso Café at

the end of that lease (if that transpired).

115 It could be argued that ISPT's counterclaim can still see it, at a trial,

claim its common law damages already incurred and arising out of the

wasted expenditures incurred due to the frustration of its gantry

installation work in March and June 2018. But on any view, the scale of

any incurred damages by ISPT to date looks to be, comparatively, of a

smaller magnitude than the future likely costs or losses for ISPT


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potentially associated with needing to presently work around the Bocelli

Espresso Café area, only to return later to finish off the Padbury

Walkways work above and around the Café again in 2021.

116 There is force in Mr Bennett's argument therefore that were the

present relief to be granted against his clients, there is a good prospect

that there will never be a trial of ISPT's counterclaim - as ISPT would

have achieved on an interlocutory basis most, if not all of what it really

seeks. That is another reason for particular caution at this time. Whilst

the principles concerning granting of interlocutory injunctions do not on

the current law vary as between negative and mandatory injunctive

orders, nevertheless if the outcome of interlocutory orders would be

tantamount, in effect, to the giving of final relief, then that must be a

strong negative consideration for the court to weigh up in the overall

balance of convenience - albeit not a conclusive negative factor. It is

also necessary to comparatively weigh the damage or prejudice to the

interests of the plaintiffs before trial on the hypothesis of such

interlocutory relief being given now.

117 As regards the question of the adequacy of common law damages

for ISPT, assuming success for it on its counterclaim at a trial, I would

accept its argument that its post trial damages award would be difficult

to quantify, particularly as regards the effect of the likely damaged

commercial relationships with its tenants at Forrest Chase, arising out of

a delayed completion to all the redevelopment and affecting works

(negatively impacting against) ISPT's prospective Forrest Chase tenants.

That consideration bears upon the difficulty of a court quantifying at a

trial with any real precision all ISPT's lost opportunity financial losses

flowing out of suffering exposure to the economic tort complained of, if

established at a future trial. I am also of the view that albeit difficult to

quantify, the end damages of ISPT could be of some potentially high

financial magnitude. And further, I assess the position to be that the

economic prospect of ISPT's damages award actually being recovered

back from one or other of the plaintiff corporations, would be uncertain.

118 There is little, if any, financial information provided to me about the

financial wherewithal of the two plaintiff corporations. I do note that

within their ongoing private nuisance action that they have refrained

from seeking an interlocutory injunction predicated on their alleged

cause of action for private nuisance as against ISPT - on a basis of them

not wishing to expose themselves upon the usual required undertaking as

to damages which would 'bite' in the event of failure on their private

nuisance action at a trial.


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119 I do not criticise that stance of the plaintiffs. It seems on its face to

be taken with the benefit of sensible legal advice, from an end exposure

perspective. It is insightful however. I contrast the financial positions

of the plaintiffs against that of ISPT. ISPT presents on its face as a

corporation of far greater financial means. The 'David versus Goliath'

comparison of their relative economic strengths, is not out of place here.

120 So, in evaluating the potential future adequacy of a possible

substantial award of common law damages to ISPT upon a successful

counterclaim after a trial, I weigh in the overall balance, a substantial risk

that ISPT, even if successful, would not recover those damages in an end

result - due to the financial means of the plaintiffs. For circumstances

where a right to receive damages at the end was assessed (weighed

against a grant of injunctive relief) as being completely illusory: see

Halsham CJ in Equity's decision in Schering Pty Ltd v Forrest

Pharmaceutical Co Pty Ltd [1982] 1 NSWLR 286, 290 C-D.

121 On balance, I am satisfied that an award of common law end of trial

damages would not be an adequate remedy for ISPT, assuming success

for it at a trial upon its counterclaim against the plaintiffs.

122 That leads me to look at more general considerations concerning the

overall balance of convenience evaluated as further considerations to be

weighed.

123 I must weigh the balance of the overall comparative injustice which

might be suffered by these plaintiffs if the injunction is granted but ISPT

later fails at a trial on its counterclaim - in contrast against the injustice

which might be suffered by ISPT, if the interlocutory injunction it seeks

is not granted, but it later succeeds at a trial on its counterclaim.

Other factors in the balance of convenience evaluation

124 There will be a substantial injustice to ISPT, in my view, if absent

an injunction it ultimately succeeded at trial on its counterclaim and

obtained an award of substantial common law damages, but then was left

to execute that judgment against the plaintiffs for the recovery post 2021,

once the overall Forrest Chase redevelopment works were ultimately

completed.

125 In my view, there is also in the weighing overall of balance of

convenience considerations, some wider public interests at play here, for

the general public of Perth and of Western Australia - who use Forrest

Place and the Padbury Walkways - in terms of a general desirability in


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having this whole area restored to pristine condition as soon as possible,

rather than left as a part-finished building site until 2021.

126 There are also the considerations of the interests of existing and

prospective retail business tenants in the Forrest Place/Forrest Chase

areas, who would undoubtedly be benefitted by being able to trade within

a more normalised trading environment in the Forrest Place and Forrest

Chase at an earliest opportunity, rather than having to trade at or around

an unfinished site until 2021, including the unfinished parts of the

Padbury Walkways above the Bocelli Espresso Café.

127 Not granting the interlocutory relief sought by ISPT now, would

deliver a result of ISPT needing to presently work around Bocelli

Espresso Café areas for the balance of 2018 and into Autumn 2019, then

demobilising, only to return in 2021 with a remobilised work crew to

finish off the Padbury Walkway above Bocelli Espresso Café (at a point

after the expiry of the Bocelli Espresso Café lease (assuming the lease is

not renewed by the City of Perth)).

128 On the other hand, if I do grant injunctive relief in the terms as now

sought by ISPT, but then ISPT ultimately fails at a later trial upon its

counterclaim, that scenario would have achieved for ISPT an objective

of facilitating its implementing of all works above and around the Bocelli

Espresso Café - to its advantage financially. In achieving that outcome,

there may never be a trial upon the counterclaim. Even so, I ask what

would the plaintiffs have really lost in those hypothetical circumstances.

The answer, financially, I assess would be very little. They still retain of

course all their trading rights in daylight hours (5.00 am - 10.30 pm) and

their private nuisance action against ISPT based on alleged unreasonable

levels of noise, dust and vibration since February 2018. That private

nuisance action remains intact for them to pursue, as before.

129 On my assessment, even allowing for the late and greater ISPT

assessment of about 97 nights of work to April 2019, there will still likely

be little financial loss for these plaintiffs arising. My commercial

instincts lead me to think that for these plaintiffs to commence to adopt

in 2018 an aberrant late night/early morning pattern for their Bocelli

Espresso Café by keeping it open and trading on very late or through the

early hours of the morning, must likely be an unviable economic

proposition for them. I reach that view in cognisance of the assertion by

the Agnellos that they have adopted a new late night/early morning

trading pattern in 2018 to recoup the losses and not for a purpose of

frustrating or 'spoiling' the attempted gantry installation work of ISPT's


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contractors during March and June 2018. Even so, there is nothing

before me to suggest a viable level of customers in these hours for the

Café. In fact the tabulated tables of customers at these new trading times

as was put before me shows very low numbers, as I would expect. See

annexure D being page 639 of the affidavit of Nicholas John De Vries

sworn 20 June 2018, which is a table specifying the number of persons

visiting the Bocelli Espresso Café between 6.00 am - 2.00 am from 5 - 15

June 2018.

130 Cautious as I am about doubting the plaintiffs' intention evidence

before a trial (absent any cross-examination on affidavits) the stark

reality of the present bleak winter in Perth in June, July and August 2018,

and ISPT's recordings of very few customers in Forrest Chase after

8.00 pm on these evenings (when all the other surrounding retail outlets

Forrest Chase are closed), all strongly suggest to me that the plaintiffs'

true objective in staying open at these aberrant hours was to 'spoil' ISPT's

construction work plans and not to seek trading profits.

131 There is no evidence put to me by the plaintiffs as to the profitability

of the plaintiffs' aberrant extended trading hours' operations when they

were implemented in 2018 by the plaintiffs since March 2018 at times

that have, due to safety considerations, effectively thwarted the gantry

installation works.

132 On my commercial assessment, there is a significant prospect that

late night/early morning likely future patronage at the Bocelli Espresso

Café, if it does trade across the late hours of post-10.30 pm through to

5.00 am in the following early morning, would be minimal and ultimately

loss making for the plaintiffs. Any financial losses attributable to not

being able to trade between 10.30 pm - 5.00 am across approximately

97 nights to around April 2019 would be compensable (if proved) under

ISPT's undertaking as to damages - and which I do evaluate as being an

economically viable undertaking, if ISPT lost at a trial.

133 I further conclude that presently granting an interlocutory injunction

as sought by ISPT would carry, I assess, the correlative consequences of

alleviating the plaintiffs from future exposure to:

(a) a loss-making, aberrant and extended hours trading scenario;

(b) reducing their possible common law damages exposure to ISPT,

if ISPT eventually wins on its counterclaim at trial;


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(c) enhancing the overall amenability of the Forrest Chase/Forrest

Place area for proximate retailers and traders in those complexes

generally;

(d) improving the overall amenity of what is an important part of the

Perth CBD for the wider community, sooner rather than later, and

particularly for users of the Padbury Walkways in their

traversings from and to the Wellington Street train and bus

terminals to and from the inner Perth CBD; and

(e) avoiding (as has been argued for the plaintiffs) any issues over

the plaintiffs prejudicing their subsisting private nuisance action

against ISPT by being said to have consented to and/or

acquiesced, regarding ISPT's gantry installation(s) work and any

aftermath consequences.

Conclusions

134 Taking account then of a solid prima facie case of ISPT on its

counterclaim which I find established and which I assess at a level of

respectability (say between 5 and 6 out of 10 on a scale of likelihood of

success at trial), the potential non-recovery by ISPT of any long-term

award of common law trial damages upon the counterclaim (again

assuming success at the trial) and other balance of convenience factors

including the public interest which I have now discussed, those factors

weighed in aggregate, together persuade me presently that there should

be interlocutory relief for ISPT, allowing the proposed works to proceed

at the specified hours after 10.30 pm and up until 5.00 am. That

conclusion, however, is subject to some qualifications.

135 First, as regards the terms of the relief sought, I am troubled by how

it is currently framed. This is a question of form. But in light of the 97

nights of work currently foreshadowed until around April 2019, I am

concerned about the administration of notification arrangements to the

plaintiffs being reposed in some low level official of ISPT - rather than

in a professional person of authority who is identified to issue ISPT's

notices as anticipated to the plaintiffs from time to time under the terms

of any orders as framed.

136 A professional person acting for ISPT in issuing notices should be

a relatively senior identified lawyer or lawyers for ISPT and expressly

nominated to give the written notice(s).


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137 Second, there should be liberty to apply to the parties, particularly

for the plaintiffs to adjust the terms of these interlocutory injunction

orders to accommodate any relevant changed or emerging circumstances,

if and when they might arise as between now to possibly in April 2019.

138 Third, accordingly, the terms of the interlocutory injunction would

be along the following lines (the final terms of which I will canvass with

counsel after publication to the parties of the draft reasons):

Upon the usual undertaking as to damages from ISPT, an

injunction hereby issues until further order which restrains and

prohibits the plaintiff corporations (Ooranya Pty Ltd and

Bayswater Nominees Pty Ltd) as well as their directors, officers,

servants, agents and contractors - against trading, remaining open

or remaining within the area of the Bocelli Espresso Café or the

Alfresco Area of those leased premises of those plaintiff

corporations in Forrest Place - at between the hours of 10.30 pm

(other than Friday and Saturday evenings) and 5.00 am the

following day. Those restraints shall be in force and apply on

any day or days for which ISPT has by its nominated agents

(lawyers X or Y) has nominated in writing, by providing to the

plaintiff corporations not less than seven days written notice (at

the nominated address below), advising the plaintiffs that ISPT

intends to install gantries above the Café area or the Alfresco

Area of the plaintiffs' premises in Forrest Place, or otherwise

notifying them that ISPT intends by its servants, agents or

contractors to undertake in those hours demolition or

reconstruction works relating to or concerning the Padbury

Walkways, or otherwise notifying them that ISPT intends to

undertake any of the works as described under pars 5(a) through

5(e) of the affidavit of Michael David Barr affirmed 31 July 2018

in this action.

139 There is a further requirement I will mention at the end of these

reasons.

Substantially altered Café premises?

140 A residual question I have also weighed and evaluated is whether

the proposed works following the initial installation of gantries, across a

subsequent period of potentially 97 nights to April 2019, might deliver

the effect of facilitating the interim erection, in effect, a canopy-like

structure placed over the Bocelli Espresso Café, including over its

Alfresco Area, thereby dramatically changing from above the character


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of these leased premises in a negative fashion. I am now satisfied on the

most recent affidavits of Mr Barr for ISPT that the Alfresco Area will

not be affected by such a canopy although that looked to be a potentiality

on some earlier plans.

141 This altered character of the premises from above arose as a live

consideration, in light of the submission of Mr Bennett that although the

plaintiffs hold and will continue to enjoy rights to pursue a claim for

damages for private nuisance arising out of works in the general area at

Forrest Chase and Forrest Place commencing from February 2018, the

legal character of a private nuisance action requires an 'emanation' of

something from a defendant's land. There needs to be an emanation

which delivers an adverse effect to a plaintiff's leased space, such as by

way of noise, vibration, sound, smell, etc: see my discussion of the

private nuisance action generally in Shogunn v Investments Pty Ltd v

Public Transport Authority of Western Australia [2016] WASC 42.

142 Mr Bennett's submission, which I again assess as being of some

force, is that an erection of a canopy-like structure above the Café

premises, would change the character of the premises, albeit on a

temporary basis, until the ISPT Forrest Chase and Padbury Walkway

redevelopment works are complete, in a fashion that without more,

would not support any legal grievance in private nuisance for the

plaintiffs - ie, absent an emanation to those premises.

143 The concern may be further explained. Day-time patrons of the

Bocelli Espresso Café over a period of the 97 nights of ongoing work

extending into around Autumn 2019, might be dissuaded from

patronising the Café when it is open in the day-time, due to the overhead

presence and vision of gantry beams supporting a canopy structure as a

part of overall unsightly building works in this period.

144 The grievances of the plaintiffs under their private nuisance action

only extend to encompass all noise, vibration and dust associated with

the works. About that they have already complained and continue to

complain as their alleged private nuisance action causing them damage

on an ongoing basis. Even a temporary canopy overhead adds one more

dimension of overall negativity to the Bocelli Espresso Café premises. It

is likely to contribute to a further decline in patronage and so it is argued,

reduce even further the trade of the Café (beyond the presently

complained about, noise, dust and vibrations issues which are ongoing).


Page 74

145 According to Mr Bennett at any future trial of his clients' private

nuisance action, the extra 'canopy'/gantry feature may give rise to

insolvable problems for his clients of causal damage attribution - towards

whether the actual causes of any decline in patronage and profitability of

the Bocelli Espresso Café across a trading day (in contrast presumably

to prior trading patterns of profitability prior to these works), and expose

the plaintiffs at a trial to more prejudice. The extra prejudice is said to

arise from possibly being met by a defence from ISPT against private

nuisance damages on a basis that the plaintiffs had not sufficiently

proved causatively that any proven decline in patronage was due to the

noise, dust or vibration and rather, was instead due to simply an overall

unsightliness or a perceived lack of amenity or perceived (rightly or

wrongly) of customers undesirability of positioning themselves under

such a canopy/gantry structure as a patron.

146 By my assessment, there is again some substance in this from a

prejudice perspective to the plaintiffs as regards undermining longer term

their private nuisance action at a future trial. But that prejudice could be

met, on my assessment, by an undertaking from ISPT that no

differentiation of cause of trading loss arguments, by reference to the

canopy/gantry structure to be erected above Bocelli Espresso Café

following an issue of the ISPT proposed injunction, would be taken at

trial in the private nuisance action of the plaintiffs.

147 Subject also to receiving a suitable undertaking along those lines

from ISPT, I would then be persuaded that an interlocutory injunction

along the lines I have indicated, (subject to hearing the parties'

submissions about precise terms) should issue.

148 I am also of the view, in all the circumstances, that since ISPT will

be immediately substantially advantaged on a summary basis by these

orders by a result close to final relief, as well as circumstances where this

drawn out application has been, at least initially, advanced in far less than

perfect fashion, this interlocutory relief should come at the commercial

price as regards the costs of the plaintiffs in resisting the injunction to

this point.

149 Hence, ISTP should pay all of the plaintiffs' costs of the present

application on a solicitor/client basis, on my prima facie assessment.

150 These reasons were provided in draft to the parties at the conclusion

of further arguments on Friday, 17 August 2018 - for the purposes of the


Page 75

settling of final orders and conferral. Subsequently on 20 August 2018,

orders issued as follows:

1. An injunction hereby issues until further order to restrain and

prohibit the plaintiff corporations (Ooranya Pty Ltd and

Bayswater Nominees Pty Ltd) as well as their directors, officers,

servants, agents, contractors and invitees - against remaining

within the area of the Bocelli Espresso Cafe or the Alfresco Area

of those leased premises of those plaintiff corporations in Forrest

Place - at between the hours of 10.30pm (other than Friday and

Saturday evenings) and 5.00am the following day. Those

restraints shall be in force and apply on any day or days for which

ISPT has, by its nominated agent (lawyer Simon Robin Grant,

General Counsel of the defendant), nominated in writing, by

providing to the plaintiff corporations not less than seven days'

written notice (at the nominated address and in the form attached

to these orders (the Notice) (in accordance with Order3), advising

the plaintiffs that ISPT intends by its servants, agents or

contractors to undertake in those hours demolition or

reconstruction works relating to or concerning the Padbury

Walkways, or otherwise notifying them that ISPT intends to

undertake any one or more of the works as described in

paragraphs 5(a) through to 5(e) of the affidavit of Michael David

Barr affirmed 31 July 2018 in this action, being:

(a) installation of the gantry works above and around the

Bocelli Espresso Cafe;

(b) installation of the gantry works above and around the

alfresco area of the Bocelli Espresso Cafe;

(c) demolition of the existing Padbury Walkways adjacent

to the Bocelli Espresso Cafe;

(d) demolition of the escalators, canopy and concrete

structure relating to the bridge over Murray Street;

(e) installation of the new Padbury Walkways, escalators,

canopy and structure relating to the bridge over Murray

Street; and / or

(f) removal of the gantry above and around the Bocelli

Espresso Cafe and gantry above and around the alfresco

area of the Bocelli Espresso Cafe.

2. The entitlement of the defendant to give notice pursuant to Order

1 is subject to and conditional upon provision by the defendant to

the plaintiffs of the following:


Page 76

(a) payment of the following amounts into the trust account

of Bennett & Co (constituting a one off payment to be

made prior to the issuing of the first Notice to the

plaintiffs):

(i) $150,000 (being the sum referred to in the

defendant's open letter of 7 August 2018);

(ii) $110,000 (being the sum referred to in

paragraph 44 of the affidavit of Michael David

Barr affirmed 8 August 2018).

(b) a written undertaking by the defendant, to be provided

also to the Court that:

(i) as and from the date of this Order the defendant

shall not (and shall undertake to this Court in

writing to not) plead nor assert in respect of any

claim by the plaintiffs for damages as and from

the commencement of the Gantry Works the

subject of these Orders that the loss of custom

or damages claimed is separately caused by or

attributable to, in whole or in part, the Gantry

Works;

(ii) to indemnify and hold harmless the plaintiffs

from any:

(A) loss of, or damage to, the property of

the plaintiffs to the extent that loss or

damage is caused by, wholly or in part:

(I) the installation, construction,

emplacement, presence, use,

deconstruction and demobilisation of

the Gantries; or

(II) the works facilitated by the Gantries.

(The Gantry Works)

(B) liability to any 3rd party for any loss

of, or damage to, property, to the

extent that the liability is caused by,

wholly or in part, the Gantry Works;

and

(C) liability for any death or personal

injury to any person to the extent that

the liability is caused by, wholly or in

part, the Gantry Works.


Page 77

Notice

3. For the purposes of Order 1, Simon Robin Grant, General Counsel

of the Defendant and lawyer, must:

(a) specify on the Notice the date or dates (which, for the

avoidance of doubt, need not be consecutive) that ISPT

has nominated to undertake the works (referred to in

Order 1) between 10.30pm and 5am (Australian Western

Standard Time);

(b) insert his name and position, and sign the Notice;

(c) date the Notice;

(d) send the Notice via email on the same day prior to 5pm

(the relevant time being AWST, receipt by the plaintiffs

after 5pm being deemed as receipt on the next business

day in Western Australia) as the date of the Notice under

paragraph (c), with a subject line that reads 'ISPT Notice

to Bocelli (Orders of WA Supreme Court) - [insert date

of Notice]', to the following email addresses:

(i) [email protected]; and

(ii) [email protected]; and

(iii) [email protected]

(e) send the Notice in accordance with paragraph (d) at least

7 days (for the avoidance of doubt, being calendar days)

prior to the earliest date specified on the Notice under

paragraph (a).

4, Liberty to apply upon [5] hours written notice to the other party,

but otherwise without the need for prior conferral.

5. Nothing in these orders authorises the defendant (by its directors,

officers, servants, agents, contractors and invitees) to:

(a) enter into or onto the area of the Bocelli Espresso Cafe

or the Alfresco Area of those leased premises of those

plaintiff corporations in Forrest Place; or

(b) conduct works that do not (or conduct such works in a

manner that does not) comply with all laws, regulations

and permits applicable to the Gantry Works.

6. The defendant pay the plaintiffs' costs of the defendant's

application for an interlocutory injunction dated 26 June 2018 and

25 July 2018, such costs to be:


Page 78

(a) payable on a solicitor/client basis;

(b) assessed (if not agreed) without regard to any limits or

hourly rates imposed by the Legal Profession (Supreme

and District Courts) (Contentious Business)

Determination 2018;

(c) inclusive of transcript fees relating to the hearings on 30

and 31 July, 10, 17 and 20 August 2018 (in respect of

which there shall be a certificate);

(d) payable forthwith.

To: Ooranya Pty Ltd and Bayswater Nominees Pty Ltd (Bocelli)

By email to: [email protected] and

[email protected] and [email protected]

NOTICE TO BOCELLI'S ESPRESSO CAFÉ

This is a notice given on behalf of ISPT Pty Ltd (ISPT) pursuant to the

Orders of his Honour Justice Kenneth Martin of the Supreme Court of

Western Australia dated [X] (the Orders) in proceeding CIV 1600 of

2018 (consolidated with CIV 2276 of 2018) (the Proceeding).

For the purposes of the Orders, ISPT hereby gives this notice that for the

purpose of undertaking the works listed below it requires the plaintiffs to

the Proceeding, their directors, officers, servants, agents, contractors or

invitees to refrain from remaining within the café area or the alfresco area

of the plaintiffs’ leased premises in Forrest Place, Perth CBD between

the hours of 10:30pm (other than Friday and Saturday evenings) and

5:00am on the following specified days:

Times and dates:

[10.30pm on [insert date] to 5am on [insert date], etc.]

…………………………………………………………………………

……..…………………………………………………………………..

• Installation of the gantry works above and around the Bocelli Espresso Café;

• Installation of the gantry works above and around the alfresco area of the

Bocelli Espresso Café;

• Demolition of the existing Padbury Walkways adjacent to the Bocelli

Espresso Café;

• Demolition of the escalators, canopy and concrete structure relating to the

bridge over Murray Street;


Page 79

• Installation of the new Padbury Walkways, escalators, canopy and structure

relating to the bridge over Murray Street;

• Removal of the gantry above and around the Bocelli Espresso Café and

gantry above and around the alfresco area of the Bocelli Espresso Café.

This notice is given on behalf of ISPT by:

Name: ………………………………

Position: ………………………………

Signature: ………………………………

Date of Notice: ………………………………

BY THE COURT

THE HONOURABLE JUSTICE K MARTIN


Page 80

Annexure A


Page 81

Annexure B


Page 82

Annexure C

Annexure D


Page 83


Page 84

I certify that the preceding paragraph(s) comprise the reasons for decision of

the Supreme Court of Western Australia.

TG

RESEARCH ASSOCIATE TO THE HONOURABLE JUSTICES KENNETH

MARTIN AND CORBOY

22 AUGUST 2018

[2018] WASCA 198

Page 1


TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION : WILDEN PTY LTD -v- GREEN [No 6] [2018]

WASCA 198

CORAM : MURPHY JA

MITCHELL JA

BEECH JA

HEARD : 8 AUGUST 2018 & ON THE PAPERS

DELIVERED : 9 NOVEMBER 2018

FILE NO/S : CACV 101 of 2005

BETWEEN : WILDEN PTY LTD

First Appellant

MAGENTA NOMINEES PTY LTD

Second Appellant

TACE PTY LTD

Third Appellant

SYDNEY JAMES CHESSON

Fourth Appellant

BERT LEONARD DENBOER

Fifth Appellant

CALLAO PTY LTD

Sixth Appellant

BENRONE PTY LTD

Seventh Appellant

AND

[2018] WASCA 198

Page 2

GRAEME WILLIAM GREEN

First Respondent

W J GREEN & CO (1984) PTY LTD

Second Respondent

SHARYN LEE GREEN

GRAEME WILLIAM GREEN

JULIE ANNE GREEN

WILLIAM JOSEPH GREEN

NORMA GLENYCE GREEN

Third Respondents

Catchwords:

Account - Registrar's report - Taking of account in accordance with Court of

Appeal's orders - Proper construction and application of orders - Adoption of

Registrar's report - Principles to be applied

Legislation:

Rules of the Supreme Court 1971 (WA), O 35 r 9, O 35 r 11, O 36 r 9, O 45 r 8,

O 67 r 17

Result:

Respondents' application to adopt Registrar's report is granted

Appellants' applications to adduce additional evidence dismissed

Category: B

Representation:

Counsel:

First Appellant : Mr N D C Dillon

Second Appellant : Mr N D C Dillon

Third Appellant : Mr N D C Dillon

[2018] WASCA 198

Page 3

Fourth Appellant : In Person

Fifth Appellant : Mr N D C Dillon

Sixth Appellant : Mr N D C Dillon

Seventh Appellant : Mr N D C Dillon

First Respondent : Mr M L Bennett

Second Respondent : Mr M L Bennett

Third Respondents : Mr M L Bennett

Solicitors:

First Appellant : AustAsia Legal Pty Ltd

Second Appellant : AustAsia Legal Pty Ltd

Third Appellant : AustAsia Legal Pty Ltd

Fourth Appellant : In Person

Fifth Appellant : AustAsia Legal Pty Ltd

Sixth Appellant : AustAsia Legal Pty Ltd

Seventh Appellant : AustAsia Legal Pty Ltd

First Respondent : Bennett + Co

Second Respondent : Bennett + Co

Third Respondents : Bennett + Co


Armour v Mason [2002] NSWSC 464

Australian Securities and Investment Commission v GDK Financial Services

Pty Ltd [2006] FCA 1415; (2006) 236 ALR 699

Beneficial Insurance Co Ltd v Hamilton (1985) 73 FLR 347

Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5

Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005]

NSWSC 784

Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124

Green v Wilden Pty Ltd [2005] WASC 83

Green v Wilden Pty Ltd [2005] WASC 83 (S)

Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64;

(1984) 156 CLR 41

Juul v Northey [2010] NSWCA 211

Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146

Mid-City Skin Cancer Laser Centre v Zahedi-Anarak [2006] NSWSC 844;

(2006) 67 NSWLR 569

Netglory Pty Ltd v Caratti [2013] WASC 364

[2018] WASCA 198

Page 4

Owen v ComLaw (No 62) Pty Ltd [2006] VSCA 151; (2006) 201 FLR 275

Super Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549

Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544

Wenco Industrial Pty Ltd v WW Industries Pty Ltd [2009] VSCA 191; (2009)

25 VR 119

Wilden Pty Ltd v Green [2009] WASCA 38

Wilden Pty Ltd v Green [2009] WASCA 38 (S)

Wilden Pty Ltd v Green [No 4] [2016] WASCA 195

Wilden Pty Ltd v Green [No 5] [2017] WASCA 105

Young v National Australia Bank Ltd [2004] WASCA 298; (2004) 29 WAR 505

[2018] WASCA 198 JUDGMENT OF THE COURT

Page 5

JUDGMENT OF THE COURT:

1 This matter concerns an application by the respondents, filed

22 June 2017, for, in general terms (1) the adoption of the report of

Registrar Davies delivered 7 June 2017 in Wilden Pty Ltd v Green

[No 5]1 (Registrar's report), and for consequential orders in accordance

with the Registrar's report, and (2) costs orders. The matter came

before the court on 8 August 2018, and the hearing on that date

proceeded on the basis that the court would determine pars 1 and 2 of

the respondents' application (dealing with the adoption of the

Registrar's report and consequential orders) and leave for further

determination pars 3 - 6 of the application (dealing with costs orders).2

These reasons deal with pars 1 and 2 of the respondents' application.

2 The appellants challenge the adoption of the Registrar's report and,

in that regard, filed and served grounds of challenge and submissions in

support in the form of an 'appellants' case'. The first - third and fifth -

seventh appellants filed an amended appellants' case on 20 November

2017. They are legally represented. The fourth appellant, Mr Chesson,

filed an amended appellant's case on 27 November 2017. The

respondents filed an amended respondents' answer on 13 December

2017.

3 Before referring to the appellants' challenges to the Registrar's

report, it is convenient to outline, in summary, the relevant background

to the current iteration of the dispute between these parties. The dispute

goes back to events which occurred over 25 years ago, and has

produced a significant amount of litigation which has resulted in a

number of judgments over the years.

Background

4 The first appellant (Wilden) is the trustee of a trust sufficiently

described for present purposes as the Balga Trust. The second

appellant (Magenta) is the trustee of what may be referred to as the

Kelmscott Trust. The third appellant (Tace) is the trustee of what may

be referred to as the Summerfield Trust. The respondents may

collectively be described as the 'Green Parties'. The first respondent is

Graeme Green (Mr Green). The second respondent (W J Green & Co)

is a trustee company for a family trust for the Green family.3 The third

1 Wilden Pty Ltd v Green [No 5] [2017] WASCA 105. 2 Appeal ts 947 - 948. 3 Green v Wilden Pty Ltd [2005] WASC 83 [3], [73].


Page 6

respondents are members of Mr Green's extended family (the Greens).

At all material times, Mr Green was a registered holder of units in the

Balga Trust and the Summerfield Trust, W J Green & Co was a holder

of units in the Balga Trust and the Summerfield Trust, and the Greens

were holders of units in the Kelmscott Trust.4

5 There were disputes about the operation of the trusts, including,

relevantly for present purposes, in relation to:

(a) claims by the Green Parties requiring the trustees to repurchase

their units in the trusts; and

(b) the issue of additional units in the Balga Trust for an allegedly

fraudulent purpose.5

6 The dispute between the parties was originally determined by

Hasluck J in Green v Wilden Pty Ltd6 (the primary decision). By that

stage, the litigation had been on foot for 14 years. Orders were made

by Hasluck J on 9 August 2005, following the delivery of

supplementary reasons in Green v Wilden Pty Ltd.7 There was an

appeal to this court: Wilden Pty Ltd v Green8 (the 2009 appeal). This

court also delivered supplementary reasons in relation to the making of

orders by this court on 6 July 2009: Wilden Pty Ltd v Green.9 The

orders of the Court of Appeal of 6 July 2009 are referred to as the '2009

Court of Appeal orders'.

7 The 2009 Court of Appeal orders involved the setting aside of a

number of the orders made by Hasluck J on 9 August 2005, but

preserved the operation of a number of other orders made by Hasluck J.

The 2009 Court of Appeal orders are set out in sch 1 to these reasons.

The orders of Hasluck J which were preserved by the 2009 Court of

Appeal orders will be referred to as 'Hasluck J's preserved orders'.

These orders are set out in sch 2 of these reasons.

The effect of the 2009 Court of Appeal orders

8 The effect of the 2009 Court of Appeal orders, in conjunction with

the continued operation of Hasluck J's preserved orders, is set out

below.

4 Wilden Pty Ltd v Green [2009] WASCA 38 [5] - [6]. 5 Wilden Pty Ltd v Green [2009] WASCA 38 [1], [7] - [27]. 6 Green v Wilden Pty Ltd [2005] WASC 83. 7 Green v Wilden Pty Ltd [2005] WASC 83 (S). 8 Wilden Pty Ltd v Green [2009] WASCA 38. 9 Wilden Pty Ltd v Green [2009] WASCA 38 (S).


Page 7

A Units issued in the Balga Trust declared to be void (par 2(a) of 2009

Court of Appeal orders)10

9 Under pars 4.3 and 4.4 of Hasluck J's preserved orders:

4.3 200 units issued to the sixth appellant (Callao Pty Ltd) in the

Balga Trust in or about 1992 is void and of no effect.

4.4 200 units issued to the seventh appellant (Benrone Pty Ltd) in

the Balga Trust in or about 1992 is void and of no effect.

B Moneys received and paid pursuant to the void issue of units in the

Balga Trust (par 8 of 2009 Court of Appeal orders)

10 By par 8 of the 2009 Court of Appeal orders:

8. The trustee of the Balga Trust (Wilden) shall:

(a) ascertain the funds received by Wilden for the purported

issue of units referred to in orders 4.3 and 4.4 of

Hasluck J's judgment on 9 August 2005;

(b) ascertain the moneys paid or credited as having been

paid by way of capital distribution or income

distribution to the purported unit holders from the date

of the purported issue of the units until the date of these

orders; and

(c) thereafter set off against the sum found to have been

received by Wilden under 8(a), the funds found to have

been credited or paid by capital or income distribution to

the purported unit holders under 8(b).

C Amounts payable by Mr Green and W J Green & Co to the Balga

Trust (par 2(b) of the 2009 Court of Appeal orders)11

11 By pars 13.1, 13.2, 14 and 15 of Hasluck J's preserved orders, in

effect:

13.1 Mr Green is indebted to the Balga Trust as and from

25 October 1990 in the sum of $85,365.86.

10 Paragraph 2(a) of the 2009 Court of Appeal orders; pars 4.3 and 4.4 of Hasluck J's preserved orders. 11 Paragraph 2(b) of the 2009 Court of Appeal orders; pars 13.1, 13.2, 14 (as amended in the 2009 Court of

Appeal orders, par 3), 15 of Hasluck J's preserved orders.


Page 8

13.2 W J Green & Co is indebted to the Balga Trust as and

from 25 October 1990 in the sum of $234,097.56.

…

14. An account be taken between Mr Green, W J Green & Co, and

Wilden, before a registrar, as to the cost to the Balga Trust from

time to time as from 1 December 1990 of its borrowing of a bill

line facility with the ANZ Bank Ltd, together with recurring

charges.

15. The sums owing by Mr Green and W J Green & Co to the Balga

Trust referred to in par 14 [sic - presumably par 13]:

15.1 bear interest at the rate and for the periods found on the

account referred to in par 14 [sic - presumably par 13] to

be the cost to the Balga Trust; and

15.2 for the period during which the Balga Trust did not incur

costs on a bill line facility with ANZ, at the (interest)

rate prescribed from time to time pursuant to s 32 of the

Supreme Court Act 1935 (WA).

D Amounts payable by the third respondents to the Kelmscott Trust

(par 2(c) of the 2009 Court of Appeal orders)12

12 By pars 31.1 - 31.3, 32 and 33 of Hasluck J's preserved orders, in

effect:

31.1 the first-named third respondent (Sharyn Green) is

indebted to the Kelmscott Trust in the principal sum of

$30,000;

31.2 the second and third-named third respondents (Graeme

and Julie Green) are indebted to the Kelmscott Trust in

the principal sum of $30,000; and

31.3 the fourth and fifth-named third respondents (William

and Norma Green) are indebted to the Kelmscott Trust

in the principal sum of $500,000.

32. An account be taken between the third respondents and

Magenta, before a registrar, as to the cost to the Kelmscott Trust

12 Paragraph 2(c) of the 2009 Court of Appeal orders; pars 31.1 - 31.3 and 32 - 33 of Hasluck J's preserved

orders.


Page 9

from time to time as from 6 December 1988 of its borrowings

of a bill line facility with ANZ, together with recurring charges.

33. The sums owing by the third respondents to the Kelmscott Trust

referred to in par 30 [sic - presumably par 31]:

33.1 bear interest at the rate of the periods found on account

referred to in par 32; and

33.2 for the period during which the Kelmscott Trust did not

incur costs from any bill line facility with ANZ, at the

(interest) rate prescribed from time to time pursuant to

s 32 of the Supreme Court Act.

E Repurchase of units value (par 4 of the 2009 Court of Appeal

orders)

13 By par 4 of the 2009 Court of Appeal orders, the 'determination of

current repurchase value made by each valuer is valid'.

F Amounts payable to respondents in respect of repurchase of units

(pars 5 and 6 of the 2009 Court of Appeal orders)13

14 By pars 5 and 6 of the 2009 Court of Appeal orders, relevantly in

effect:

5. The respondents are entitled to be paid for their respective units

in the Balga Trust, the Kelmscott Trust and the Summerfield

Trust by reference to the current repurchase value (less any

deductions for stamp duty and other disbursements properly

incurred by the relevant trustee in respect of the repurchase).

6. The respondents are entitled to be paid:14

(a) their proportionate share of the amount (if any) paid or

credited as having been paid by way of income

distribution to holders of units in the trusts in which they

hold units, from the date of the repurchase request, until

the cancellation or transfer of the units to or at the

direction of the trustee; and

13 Paragraphs 5 and 6 of the 2009 Court of Appeal orders. 14 It was common ground in the appeal that par 6(a) of the 2009 Court of Appeal orders was directed to each

respondent's proportionate share of such amount: appeal ts 966, 970 - 971, 1008.


Page 10

(b) interest on the amounts referred to in (a), accruing at the

rate the funds would have earned if invested in an

interest-bearing deposit with the banker to the trust.

G Set-off (par 7 of the 2009 Court of Appeal orders)

15 Paragraph 7 of the 2009 Court of Appeal orders provides,

relevantly in effect:

7. Upon the determination of the amounts owing by Mr Green and

W J Green & Co to the Balga Trust,15 and by the third

respondents to the Kelmscott Trust,16 and the amounts owing to

the respondents under the repurchase of units orders,17 if:

(a) a net amount is payable to a respondent, then on

payment of the net amount the respondent shall transfer

their units to or at the direction of the relevant trustee;

and

(b) a net amount is payable by a respondent, then they shall

forthwith transfer their units to or at the direction of the

relevant trustee.

H The orders for an account

16 Paragraphs 14 and 32 of Hasluck J's preserved orders (see [11] and

[12] above) provided for 'an account be taken', as to the cost of

borrowings referred to in those orders.

17 Further, par 10(b) of the 2009 Court of Appeal orders provides,

relevantly and in effect, that in the event of a dispute as to the amounts

payable by the respondents to the appellants, or the appellants to the

respondents (as the case may be) pursuant to pars 5, 6 and 8 of the 2009

Court of Appeal orders, then:

An account be taken before a registrar of this court for the purpose of

determining those matters.

The orders of the registrar for the taking of an account

18 On 6 May 2015, the registrar made orders by consent requiring the

appellants to file and serve an account in respect of pars 5 - 8 of the

2009 Court of Appeal orders, to be verified by affidavit. The registrar

15 See C above. 16 See D above. 17 See F above.


Page 11

also required the appellants to file any affidavits containing documents

in support of the account.18

19 The registrar made the following further orders:19

2. By 10 July 2015, the respondents file and serve:

2.1 any surcharges of any items in the Account;

2.2 any falsifications of any items in the Account; and

2.3 any affidavits in support of the surcharges and

falsifications.

3. By 31 July 2015, the appellants file and serve any affidavits in

reply to the respondents' affidavits filed pursuant to order 2

herein.

4. By 10 June 2015, the appellants file and serve affidavits

containing the following documents:

4.1 ANZ Bank bill line facility documents in their

possession and control in respect of Wilden Pty Ltd as

trustee for the [Balga Trust];

4.2 all income (including capital gains) distribution

statements in their possession and control in respect of

the [Balga Trust], the [Summerfield Trust] and

[Kelmscott Trust] created at the time that distributions

were made or credited to unit holders of each of the

trusts;

4.3 tax returns in their possession and control from the

financial year ended 30 June 1992 to the financial year

ended 30 June 2014 in respect of the [Balga Trust], the

[Summerfield Trust] and [Kelmscott Trust]; and

4.4 documents in their possession and control recording or

evidencing advice provided by each of the trustees of

the [Balga Trust], the [Summerfield Trust] and

[Kelmscott Trust] to unit holders in respect of their

income or distributions from the trusts for each

financial year commencing from 30 June 1992.

18 Registrar's report [28]. 19 Registrar's report [29].


Page 12

The Registrar's report

Overview of findings

20 The registrar:

1. Found, in effect, that there was no issue as to the amounts in

relation to the issue of the void units the subject of pars 2(a) and

8 of the 2009 Court of Appeal orders.20

2. Found, in effect, that there was no issue as to the principal loan

amounts due by Mr Green and W J Green & Co to the Balga

Trust under par 2(b) of the 2009 Court of Appeal orders read

with par 13.1 and 13.2 of Hasluck J's preserved orders, and by

the third respondents to the Kelmscott Trust under par 2(c) of

the 2009 Court of Appeal orders read with pars 31.1, 31.2 and

31.3 of Hasluck J's preserved orders.21

3. Determined the amount of interest on the amounts due by

Mr Green and W J Green & Co to the Balga Trust pursuant to

par 2(b) of the 2009 Court of Appeal orders read with pars 14

and 15 of Hasluck J's preserved orders, and by the third

respondents to the Kelmscott Trust pursuant to par 2(c) of the

2009 Court of Appeal orders read with pars 32 and 33 of

Hasluck J's preserved orders.22

4. Found, in effect, that there was no issue as to the principal

amounts to be paid for the current repurchase value of the units.

The determination of current repurchase value made by each

valuer was found valid in the 2009 Court of Appeal decision.23

The adjustments required by the 2009 Court of Appeal orders

were largely not in contest. Accordingly, the registrar

determined the amounts required by par 5 of the 2009 Court of

Appeal orders.24

5. Said, in relation to par 6(a) of the 2009 Court of Appeal orders,

that there were effectively two issues: (1) were the trustees

20 Registrar's report [152] - [155]. 21 Registrar's report [137]. 22 Registrar's report [151]. 23 Paragraph 4 of the 2009 Court of Appeal orders. 24 Registrar's report [67] - [69].


Page 13

required to restate the accounts of the trusts pursuant to par 6(a);

and (2) what is meant by 'income distributions' in this order?25

6. The registrar found that, on a proper construction of par 6(a),

there was no requirement for a restatement of the historical

accounts of the trusts, and that, in any event, the restated

accounts produced by the appellants were not reliable because a

restatement was not required to bring to account deferred

liabilities or to correct errors. Also, the purported distribution

of losses was not in accordance with proper trust accounting.

Accordingly, the determination required by par 6(a) should not

be made on the basis of the restated accounts which the trustees

of the trust had prepared for the purposes of the account.26

21 In relation to the second question (referred to in [20.5] above) as

to what is meant by 'income distribution' in par 6(a), the registrar:

1. Noted that the appellants sought to exclude, from the

distribution calculation, the amounts that were paid to the other

unit holders on the sale of property assets of the trusts, and

contended that these amounts could not be described as 'income

distributions'. On the other hand, the respondents contended

that there was no basis upon which to exclude such

distributions.27

2. Found that the word 'income' in par 6(a) is used to refer to

distributions of any character made to the other unit holders,

and is merely a synonym for 'payment'.28

3. Said that if she were wrong as to the meaning of the word

'income' in this regard, then she accepted the evidence of the

respondents' accounting expert, Mr Van Homrigh, and found

that all the distributions to other units holders referred to in his

report were properly characterised as distributions by way of

income.29

4. Said that on the basis of either of the two previous findings, the

total amount payable to the respondents is $1,314,676, but if

25 Registrar's report [72]. 26 Registrar's report [73], [79], [81], [93]. 27 Registrar's report [101]. 28 Registrar's report [124]. 29 Registrar's report [125].


Page 14

those findings were wrong, then the total amount payable to the

respondents is $467,475.30

22 In relation to par 6(b) of the 2009 Court of Appeal orders, the

registrar determined the interest component on the amounts payable

under par 6(a) by reference to the Reserve Bank of Australia cash rates,

in amounts which were the subject of agreed expert evidence.31 The

registrar said:32

The respondents have relied on the Reserve Bank of Australia cash rate.

The respondents in their schedule of evidence have altered their

amounts claimed in respect of this order and adopted the figures from

the experts' joint memorandum at [5.1.1]. The experts agree that the

retail deposit and investment amount rates published by the Reserve

Bank of Australia are reasonable to use in the absence of information

about the rate 'funds would have earned if invested in an interest

bearing deposit with the banker to the trust'.

I rely on the experts' opinion and determine that is the appropriate rate

of interest to be applied to the amount of the distribution calculation.

Expert evidence

23 In relation to expert evidence:

1. On 23 September 2015, the respondents filed an affidavit of

Mr Van Homrigh sworn 18 September 2015 annexing an expert

report.33

2. On 22 December 2015, the appellants filed an affidavit of

Mr Ashby sworn 17 December 2015 attaching his expert report

by way of responsive opinion to Mr Van Homrigh.34

3. Although the appellants tendered the expert opinion of

Mr Ashby, it was tendered as responsive to the evidence of

Mr Van Homrigh only. The appellants did not contend that the

calculations made by Mr Ashby should be accepted. Instead,

the appellants put forward their own set of calculations on the

account.35

30 Registrar's report [125], [128] - [129]. 31 Registrar's report [133] - [135]. 32 Registrar's report [133] - [134]. 33 Registrar's report [31]. 34 Registrar's report [31]. 35 Registrar's report [56].


Page 15

The hearing and related programming orders

24 The account was heard over three days (24 - 26 May 2016).

Orders were then made for the filing and service of a notice of

concessions, schedules of evidence and submissions.

Notice of Concessions and Schedules of Evidence

25 On 10 June 2016, Mr Chesson filed a notice of matters conceded

or not pursued (Notice of Concessions). On 1 July 2016, the

respondents filed a schedule of evidence. The appellants filed an

outline of submissions on 4 August 2016. They purported to comply

with the orders for the filing of the schedule of evidence, however, the

document filed by the appellants was not accepted for filing.

Mr Chesson also sought to file submissions, which document was also

not accepted for filing. The appellants applied for a review of the

registrar's decision in respect of those two documents, and the

applications for review were dismissed by this court.36

26 Following the unsuccessful applications for review, on

29 November 2016 further programming orders were made by the

registrar, following which the following further documents were filed:37

(a) the appellants' schedule of evidence was filed on 16 December

2016;

(b) the respondents' response to the appellants' schedule of evidence

dated 16 December 2016 was filed on 16 January 2017;

(c) Mr Chesson's submissions in closing with respect to the account

was filed on 17 February 2017; and

(d) the appellants' amended outline of submissions on account was

filed on 20 February 2017 (pursuant to order 5 of the orders

dated 29 November 2016).

27 The appellants included in their schedule of evidence amendments

to the amounts claimed in respect of some of the items in the schedule

of account, by reference to the Notice of Concessions. The registrar

ruled that the Notice of Concessions was not evidence. Nor were the

schedules. The registrar said that this was conceded by the appellants

in their submissions. The registrar said that to the extent the schedule

36 Wilden Pty Ltd v Green [No 4] [2016] WASCA 195; Registrar's report [37] - [38]. 37 Registrar's report [38].


Page 16

of evidence referred to the Notice of Concessions, she considered that

material as submissions made by the appellants in respect of the

relevant item.38

28 The schedule of evidence filed by the appellants also included

references to transcripts from other hearings in the proceedings.

Objections were made by the respondents to the reception of those

transcripts, and the objection was upheld. Reference was made by the

registrar to Wilden Pty Ltd v Green [No 4]39 in upholding the

objections. Accordingly, the registrar concluded that she would not

take into consideration material referred to in the appellants' schedule,

which included transcript not tendered in the account.40

Mr Ashby's evidence and the Kelmscott Central Development Trust

29 Mr Ashby in his affidavit set out sources of information that he

had considered in preparing his report, including annual reports for the

Kelmscott Central Development Trust (KCD Trust) for 2005 - 2007,

which he stated had been provided to him on 10 December 2015. No

evidence was led by the appellants about that trust. An objection was

made by the respondents on the basis that the underlying KCD Trust

materials had not been tendered in the account.41

30 The registrar upheld that objection to Mr Ashby's evidence:42

Against that background, I observe that I upheld the objection taken to

this material on the grounds of basic fairness. The records of the [KCD

Trust] did not form part of the materials annexed to the 31 July 2015

Chesson affidavit and were never served on the respondents. I was told

that Mr Van Homrigh saw the documents in conferral with Mr Ashby,

but he was not asked about then [sic - them] in his evidence. By the

time this issue arose, Mr Van Homrigh was on a plane to Brisbane.

This was not a situation in which the appellants could be given leave to

reopen and provide the evidentiary basis for the conclusions expressed

by Mr Ashby on the basis of this material. The evidence for both

parties had by then closed. At the hearing, I resolved this difficult

forensic position by marking for identification the [KCD Trust]

statements of financial position for the years 2005, 2006 and 2007. I

also marked for identification the parts of Mr Ashby's affidavit that are

based on those documents and I indicated that I would deal with those

matters after submissions were filed.

38 Registrar's report [39]. 39 Wilden Pty Ltd v Green [No 4] [2016] WASCA 195 [26] - [32]. 40 Registrar's report [40] - [42]. 41 Registrar's report [55]. 42 Registrar's report [58] - [61].


Page 17

In the submissions filed by the parties after the hearing this issue was

not addressed in any detail. The respondents simply noted that there is

an evidentiary issue with Mr Ashby's report in that a portion of it has

not been admitted into evidence (at [39] respondents' closing

submissions). The appellants noted (at [61.2]) that the issue with the

[KCD Trust] accounts has been 'saved up for appeal' and that 'in any

event, the relevant entries in the Trusts' accounts relevant to or flowing

from the [KCD Trust] accounts have been admitted into evidence as

part of Mr Chesson's July 2015 affidavit in that they are recorded in the

historical accounts'.

To the extent that Mr Ashby expresses an opinion on matters relating to

the [KCD Trust] I cannot receive that evidence because the evidentiary

basis for that opinion is not before the court. The statements of

financial position for the [KCD Trust] for the years 2005, 2006 and

2007 that were marked for identification at the hearing have not been

made exhibits and I remain of the view that it would be unfair to rely on

them. This ruling affects the following parts of the Ashby report:

[6.4.1], [6.4.11], Figure 10, [6.4.15], Figure 11, footnotes 25, 29, 31 and

32. Accordingly, I have not relied on those portions of the Ashby

report in making the determinations set out in this report. (emphasis

added)

Grounds of challenge

31 The appellants advance a number of grounds in support of their

contention that the court should not adopt the Registrar's report. The

grounds are prolix and are summarised in sch 3 to these reasons. The

general effect of the grounds is to challenge the Registrar's report in

determining amounts payable under:

1. paragraphs 2(b) and 2(c) of the 2009 Court of Appeal orders, in

relation to the registrar's failure to account for loans made to

Mr Green and W J Green & Co to assist in the purchase of units

in the Summerfield Trust, and interest on those loans;

2. paragraph 6(a) of the 2009 Court of Appeal orders, concerning

the respondents' entitlement to payments of 'income distribution'

to holders of the unit trusts; and

3. paragraph 6(b) of the 2009 Court of Appeal orders, concerning

the respondents' entitlement to interest on income distribution

payments.


Page 18

The fundamental issues for determination in the respondents' application

32 At the hearing of the application, it was evident that there were

effectively four issues raised by the first - third and fifth - seventh

appellants' grounds:43

1. Whether any loans (principal and interest) made by Tace as

trustee of the Summerfield Trust to Mr Green and W J Green &

Co for the purpose of acquiring their units in the Summerfield

Trust are to be credited to the appellants in the taking of the

accounts referred to in pars 2(b) and 2(c) of the 2009 Court of

Appeal orders.44

2. The proper construction and application of par 6(a) of the 2009

Court of Appeal orders. This was identified by the appellants as

the 'principal' ground.45

3. The proper construction and application of par 6(b) of the

2009 Court of Appeal orders.46

4. The allegation that the whole of the Registrar's report is infected

by errors of law or principle and, or alternatively, is manifestly

unreasonable.47

33 As to the last matter, counsel for the first - third and fifth - seventh

appellants said that the success of this would depend upon, in effect, the

success of the complaint regarding the proper construction and

application of par 6(a).48

34 Counsel for the first - third and fifth - seventh appellants also

accepted that the error alleged in ground 11 in relation to the Notice of

Concessions and the use of correct or restated accounts was immaterial

if the appellants did not succeed in relation to the proper construction of

par 6(a).49

43 Appeal ts 949 - 950. 44 Certain loans are referred to by Hasluck J in Green v Wilden Pty Ltd [2005] WASC 83 [232] - [233]. 45 Appeal ts 965. 46 Appeal ts 949. 47 Appeal ts 949. 48 Appeal ts 989 - 990. 49 Appeal ts 986.


Page 19

35 In relation to par 6(a), the second and 'principal' ground, counsel

for the first - third and fifth - seventh appellants also accepted that the

issues were:50

1. Is the reference in par 6(a) - the amount (if any) paid or credited

as having been paid - a reference to anything other than

amounts which have, in fact, been paid or credited to unit

holders in the relevant period?

2. Does the reference to 'income distribution' in par 6(a)

comprehend distributions made out of the capital of the relevant

trust fund?

3. Are the capital gains, which have been distributed to unit

holders, to be characterised as income distributions or capital

distributions?

36 The fourth appellant did not demur from the above

characterisation of the issues for determination, and an examination of

his grounds and submissions indicates that the points that he seeks to

make are effectively the same as those raised by the first - third and

fifth - seventh appellants.

The appellants' applications to adduce additional evidence

37 The appellants filed an application on 7 February 2018, supported

by an affidavit of Mr Chesson of 2 February 2018, seeking to adduce

additional evidence on the application. The evidence was said to be

certain pages of the transcript of the original hearing before Hasluck J,

and of the appeal hearing on 20 May 2008.

38 Well after the oral hearing in this matter, the first - third and

fifth - seventh appellants filed a further application, on 16 October

2018, to adduce further additional evidence.51

Orders for schedules of evidence after the conclusion of the oral hearing

39 A key argument raised by the appellants at the hearing of the

application was that certain distributions made by the trustees were

distributions by way of capital rather than distributions by way of

income. The appellants, in oral argument, did not point to any evidence

to support their contention that the evidence before the registrar showed

50 Appeal ts 967 - 968. 51 The fourth appellant, however, signed the application filed by the first - third and fifth - seventh appellants

on 16 October 2018.


Page 20

that the distributions in question were treated as distributions of capital

rather than income.

40 Counsel for the first - third and fifth - seventh appellants

ultimately conceded that he was merely 'speculating' that there existed

such evidence.52 Nor was the fourth appellant able, in oral

submissions, to refer to the evidence which he contended would best

support his argument.53

41 This resulted in the appellants applying for leave at the conclusion

of the hearing to file and serve a schedule identifying:

(a) what the appellants contend to be references in the evidence to

the trustees having historically treated distributions to unit

holders as capital distributions; and

(b) transcript references which they contend show that historically

the trustees treated the distributions as capital distributions.

42 Although it was wholly inappropriate for the appellants to conduct

their arguments on the basis that they were not in a position to tell the

court at the hearing of any evidence which supported their assertions,

leave was given to the appellants to file a schedule of evidence in that

regard. An order was made that the appellants file and serve such a

schedule by 4.00 pm on 9 August 2018, and the respondents file a

schedule in response by 4.00 pm on 10 August 2018.

43 The first - third and fifth - seventh appellants filed a schedule of

evidence on 10 August 2018, and the respondents filed a responsive

schedule on 10 August 2018.

44 The fourth appellant did not file and serve a schedule of evidence

in accordance with the court's orders.54

Provisions of the trust deeds

45 The parties referred to cl 11 and cl 12.1(15) of the trust deeds in

the course of argument. Clause 11 and cl 12.1(15) of the Balga Trust

52 Appeal ts 1024 - 1029. 53 Appeal ts 994 - 997. 54 The fourth appellant, however, signed the schedule filed by the first - third and fifth - seventh appellants on

10 August 2018.


Page 21

deed are, relevantly, set out below.55 The other trust deeds have

identical provisions.

46 Clause 11 relevantly provides:

11.1 The Trustee shall collect all dividends interest rents and other

income from the Investments of the Trust Fund.

11.2 The Trustee shall pay out of the gross income of the Trust Fund

all costs and disbursements commissions fees taxes (including

land tax and income tax) management charges and other proper

outgoings in respect of the Investments and administration of the

Trust Fund.

11.3 Subject to any special rights or restrictions provided in the

Second Schedule in relation to Units of any class the Trustee in

each Accounting Period … shall pay or apply the net income of

the Trust Fund of that Accounting Period to or for the benefit of

the Unit Holders in proportion to the number of Units of which

they are respectively registered as Holders at the end of each

Accounting Period.

11.4 Notwithstanding anything contained in this Part the Trustee

subject to any law in force at the time in relation to this Deed so

permitting may accumulate all or any part of the income of such

period and such accumulation shall be dealt with as an accretion

to the Trust Fund but so that the Trustee may at any time …

resort to all such accumulations and pay or apply the whole or

any part or parts thereof as if they were income of the Trust

Fund …

11.5 The Trustee may make monthly interim distributions of income

during any Accounting Period …

11.6 A determination to pay … any Unit Holder and the

implementation of such determination may be made by -

(a) placing such amount to the credit of the Unit Holder in

the books of the Trust Fund; or

…

(c) by paying same in cash to or for the benefit of the Unit

Holder …

…

55 GB 3711 - 3712.


Page 22

11.7 If at the end of any Accounting Period the amounts in respect of

which determinations have been made pursuant to this Part

exceed the net income of the Trust Fund for the Accounting

Period the amount of the excess shall in the first place be

deducted from the amounts which the Trustee has determined to

accumulate and in the second place should any deficiency

remain the Trustee shall be deemed to have applied the capital

of the Trust Fund the value of which shall thereupon be adjusted

accordingly.

…

11.9 The Trustee with the sanction of a Special Resolution of the Unit

Holders at any time or times and from time to time before the

date of the termination of the Trust may pay out of the capital of

the Trust Fund any sum or sums to Unit Holders in proportion to

the Units registered … for their own use and benefit in addition

to any income to which the said Unit Holders may from time to

time be entitled. (emphasis added)

47 Clause 12.1(15) relevantly provides:56

12.1 The Trustee in addition to the powers otherwise conferred upon

the Trustee by law shall have the following powers -

…

(15) to determine whether any … property or any receipts or

payments from for or in connection with any …

property shall be treated as and credited or debited to

capital or to income and generally to determine all

matters as to which any doubt difficulty or question

may arise under or in relation to the execution of the

trusts and powers of this Deed (and every

determination of the Trustee … shall upon approval

thereof by a Special Resolution of the Unit Holders

bind all parties interested therein …)[.] (emphasis

added)

The issues for determination - a recapitulation

48 It is convenient to recapitulate here the issues for determination

(see [32] - [36] above):

1. Whether any loans (principal and interest) made by Tace as

trustee of the Summerfield Trust to Mr Green and W J Green &

Co for the purpose of acquiring their units in the Summerfield

56 GB 3712, 3715.


Page 23

Trust are to be credited to the appellants in the taking of the

accounts referred to in pars 2(b) and 2(c) of the 2009 Court of

Appeal orders.

2. The proper construction and application of par 6(a) of the 2009

Court of Appeal orders, and, in particular:

(a) Is the reference in par 6(a) - the amount (if any) paid or

credited as having been paid - a reference to anything

other than amounts which have, in fact, been paid or

credited to unit holders in the relevant period?

(b) Does the reference to 'income distribution' in par 6(a)

comprehend distributions made out of the capital of the

relevant trust fund?

(c) Are the capital gains, which have been distributed to

unit holders, to be characterised as income distributions

or capital distributions?

3. The proper construction and application of par 6(b) of the

2009 Court of Appeal orders.

4. The allegation that the whole of the Registrar's report is infected

by errors of law or principle and, or alternatively, is manifestly

unreasonable.

49 In the disposition part of these reasons, the issues described above

are referred to as issue 1, issue 2(a), issue 2(b), issue 2(c), issue 3 and

issue 4, respectively.

Principles

50 Section 50(2) of the Supreme Court Act provides relevantly, in

effect, that the report of a registrar to whom the court has referred for

inquiry or report any question arising in a cause or matter (other than a

criminal proceeding) may be adopted wholly or partially by the court

and, if so adopted, may be enforced as a judgment or order to the same

effect.

51 By O 35 r 9 of the Rules of the Supreme Court 1971 (WA) (RSC)

read with O 35 r 11, any party may apply to the court to adopt or carry


Page 24

into effect the report of (relevantly) a registrar to whom a question or

issue has been referred. As the registrar in this case observed:57

Order 35 provides for a report to be made at the conclusion of an

account. When a report is made at the end of an account notice is to be

provided to the parties and the report provided to the court that made

the orders for an account. The court then has a discretion whether or

not to adopt the report … The report after an account must include

sufficient reasons so that

'the parties, the court and the disinterested observer [know] that

the conclusion is not arbitrary, or influenced by improper

considerations; but that it is the result of a process of logic and

the application of a considered mind to the factual circumstances

proved. The reasoning process must be sufficiently disclosed so

that the court can be satisfied that the conclusions are based

upon such an intellectual exercise: Chocolate Factory

Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC

784 ... [7(11)]; Wenco Industrial Pty Ltd v WW Industries Pty

Ltd [[2009] VSCA 191] [47].'

52 The following observations may be made for present purposes,

without intending to be an exhaustive statement of the relevant

principles.

53 The court exercises a judicial discretion as to whether to adopt the

Registrar's report. The discretion is to be exercised in the interests of

justice consistently with the object and purpose of the rules permitting

the court to direct the necessary inquiries or accounts to be taken or

made. An application to adopt the report is neither an 'appeal' de novo

nor an appeal by way of rehearing. The nature of the complaints made

about the report, the type of litigation involved and the length and

complexity of the proceedings before the registrar may all be relevant

considerations.58

54 If a report reveals an error of principle, an absence or excess of

jurisdiction, a patent misapprehension of the evidence or perversity or

manifest unreasonableness in fact finding, that would ordinarily be a

reason for its rejection.59 In this context, patent misapprehension of the

evidence refers to a lack of understanding of the evidence as distinct

from according aspects of the evidence with particular weight.

Perversity or manifest unreasonableness means a conclusion that no

57 Registrar's report [26]. 58 Super Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549, 563 - 564; Wenco Industrial Pty Ltd v

WW Industries Pty Ltd [2009] VSCA 191; (2009) 25 VR 119 [17]. 59 Super (563 - 564); Wenco [17].


Page 25

reasonable tribunal of fact could have reached.60 Also, the court is

entitled to consider the futility and costs of relitigating an issue

determined by the registrar where the parties have had ample

opportunity to place before the registrar such evidence and submissions

as they desire.61

Disposition

Issue 1 - Summerfield Trust loans

55 Issue 1 concerns the proper construction of the 2009 Court of

Appeal orders, including, in particular, the operation of pars 2(b) and

2(c), and the appellants' claims that Tace, as trustee for the

Summerfield Trust, is entitled to be repaid certain vendor finance loans

made by Tace for the issue of units in that trust to Mr Green and

W J Green & Co (Summerfield loans).62

The Summerfield loans

56 It is common ground in this application that the Summerfield

loans were made by way of vendor finance by Tace as trustee of the

Summerfield Trust.63

57 As Hasluck J noted in the primary decision, the Summerfield loans

were not, however (as counsel for Tace accepted64), the subject of any

counterclaim by Tace in the primary proceedings.65 The absence of

such a claim is notable in a context where the book of pleadings in the

primary proceedings contained 338 pages, and the litigation had then

been on foot for 14 years.66

58 In this application, the appellants did not put a date on when they

say the Summerfield loans were made. The inference is open that they

were made in the late 1980s or at least by early 1990. In the primary

decision, Hasluck J narrated certain evidence in relation to events in

1987 in connection with the creation of the Summerfield loans,67 and

the respondents' subsequent conduct, in 1990, to have their units in the

Summerfield Trust repurchased.68 The requests for repurchase in

60 Wenco [17]. 61 Wenco [17]. 62 First - third and fifth - seventh appellants' amended submissions, par 2.1. 63 Respondents' amended submissions, par 21. 64 Appeal ts 958 - 960. 65 Green v Wilden Pty Ltd [2005] WASC 83 [1353] - [1354]. 66 Green v Wilden Pty Ltd [2005] WASC 83 [2]. 67 Green v Wilden Pty Ltd [2005] WASC 83 [233] - [235]. 68 Green v Wilden Pty Ltd [2005] WASC 83 [246] - [247].


Page 26

November 1990 were on the basis that the Summerfield loans should be

deducted from the repurchase price.69 His Honour also recounted

evidence to the effect that in 1992 'statements of repurchase' had been

prepared on the basis that the repurchase price for the units would be

reduced by the amount outstanding on the Summerfield loans.

However, 'these events did not lead to a resolution of the differences

between the parties'.70

59 There has been no judicial determination that Mr Green and W J

Green & Co are liable to repay the Summerfield loans, including no

determination as to whether they have any limitation or other defences.

Further, the Summerfield loans were not contemplated by Hasluck J as

forming part of any account or final relief.71 Also, there is nothing in

the reasons for judgment of this court72 to suggest that the Summerfield

loans were relevant to the orders made by this court in the 2009 Court

of Appeal orders.

60 Accordingly, in the primary proceedings Tace made no claim for

recovery of the Summerfield loans, Hasluck J proceeded on the basis

that such claims were not being made, and there were no orders of

Hasluck J, or of this court, which expressly or impliedly provided for

the repayment of such loans to Tace.

61 In this application, the first - third and fifth - seventh appellants

contended that the Summerfield loans were 'repayable on demand', and

that 'no demand [had] been made for repayment of the Summerfield

loans'.73 The first - third and fifth - seventh appellants did not seek in

their submissions to support those statements by reference to any

findings of Hasluck J in the primary decision, or by this court in the

appeal from the primary decision, or by any evidence. The fourth

appellant made no reference in his submissions to what he contended to

be the terms upon which the Summerfield loans were repayable. He

submitted, however, that if the Registrar's report is adopted 'there would

be further proceedings regarding the loans'.74

62 For their part, the respondents contend that if the Summerfield

loans were payable on demand, the loans created an immediate debt,

69 GB 3901 - 3902. 70 Green v Wilden Pty Ltd [2005] WASC 83 [271] - [272]. 71 Green v Wilden Pty Ltd [2005] WASC 83 [1353] - [1354]. 72 Wilden Pty Ltd v Green [2009] WASCA 38; Wilden v Green [2009] WASCA 38 (S). 73 First - third and fifth - seventh appellants' amended grounds, par 1.6; first - third and fifth - seventh

appellants' amended submissions, par 2.11. 74 See fourth appellant's amended submissions, par 14, and, in particular, par 14.9.


Page 27

not conditional upon the making of any demand, and that the

Summerfield loans are accordingly statute barred. Reference was made

to Netglory Pty Ltd v Caratti.75 They also contend that even if the

loans did not create an immediate debt, and, instead, their recoverability

was conditioned upon first making demand, Tace effectively made

demand in 1992 when it deducted the loan amount from the 'statement

of repurchase' (see [58] above). Either way, they contend that claims in

respect of the loans are statute barred.76

63 In response to the limitation point raised by the respondents,

counsel for the first - third and fifth - seventh appellants referred to

Young v National Australia Bank Ltd.77 In that case, the court said, in

effect, that in an action by a plaintiff (P) against a defendant (D), a

countervailing claim pleaded by D by way of equitable set-off is, for

limitation purposes, deemed to commence when the action by P

commenced, and not at the time that D pleads its claim against P as a

defence to P's action.78 Counsel for the first - third and fifth - seventh

appellants did not, however, contend that Tace had pleaded as a defence

in the primary proceedings a countervailing claim in respect of the

Summerfield loans.79 Moreover, given Hasluck J's express reference to

the absence of any counterclaim by Tace,80 the absence of any reference

to a set-off is a powerful indicator that there was no plea of set-off.

The vendor finance loans by Wilden and Magenta

64 Unlike in relation to the Summerfield loans, Wilden as trustee of

the Balga Trust and Magenta as trustee of the Kelmscott Trust

counterclaimed for amounts said to be owing on vendor finance loans

made to the respondents in connection with the purchase of the units in

those trusts.81 The respondents' defence to the demands by Wilden was

that the loans were made on terms that they would not be repayable

unless the shopping centre (an asset of the trust) was sold and the trust

wound up, or the trustee had effected a repurchase of the units.82

Hasluck J rejected that defence. His Honour appears to have found, in

75 Netglory Pty Ltd v Caratti [2013] WASC 364 [275]. In this regard, see also Central City Pty Ltd v

Montevento Holdings Pty Ltd [2011] WASCA 5 [36] - [38]. 76 See respondents' amended submissions, pars 22, 23. 77 Young v National Australia Bank Ltd [2004] WASCA 298; (2004) 29 WAR 505; see appeal ts 963. 78 Young [37] - [44]. 79 As to the difference between counterclaims and set-off, see, for example, Meagher, Gummow & Lehane's

Equity: Doctrines & Remedies (5th ed, 2015) [39-05]. 80 Green v Wilden Pty Ltd [2005] WASC 83 [1353]. 81 Green v Wilden Pty Ltd [2005] WASC 83 [433] - [434], [740] - [747], [1182], [1272], [1298], [1304],

[1333], [1339], [1353] - [1354]; Green v Wilden Pty Ltd [2005] WASC 83 (S) [143] - [153], [161] - [162]. 82 Green v Wilden Pty Ltd [2005] WASC 83 [1181].


Page 28

effect, that the vendor finance loans which were the subject of

counterclaims by Wilden and Magenta, were repayable on demand.83

Hasluck J also said that in respect of the counterclaims by Wilden and

Magenta, 'there appears to be no dispute that the amounts in question

[the vendor finance loans by Wilden and Magenta] are outstanding'.84

65 In the final orders made by Hasluck J, his Honour included

declarations in terms that the Wilden and Magenta debts were

'repayable on demand', subject to the adjustments provided for in the

orders.85 However, the orders containing those particular declarations

were part of the suite of orders set aside by the 2009 Court of Appeal

orders.

Paragraphs 2(b) and 2(c) of the 2009 Court of Appeal orders

66 Paragraphs 2(b) and 2(c) of the 2009 Court of Appeal orders have

been summarised in [11] and [12] above.

67 Those orders deal only with the amounts in respect of the vendor

finance loans which were the subject of counterclaims by Wilden as

trustee for the Balga Trust (par 2(b)) and Magenta as trustee for the

Kelmscott Trust (par 2(c)). The principal amounts payable to the

trustees of those trusts are specified by those orders. Those orders also

provide for interest to be payable on the principal amounts.

Paragraphs 2(b) and 2(c) of the 2009 Court of Appeal orders do not

provide for, or require, any payment by Mr Green and W J Green & Co

in relation to the Summerfield loans - loans made by a different trustee

(Tace) in connection with a different trust (the Summerfield Trust).

Appellants' claims in relation to set-off, just allowances and other matters

68 The appellants nevertheless contend that they may, in effect,

recover the Summerfield loans by exercising rights of set-off, or

through a claim for 'just allowances' pursuant to O 45 r 8 of the RSC.

Order 45 r 8 of the RSC provides that in taking any account directed by

any judgment or order, all 'just allowances shall be made without any

direction for that purpose'. By virtue of O 67 r 17 of the RSC, O 45

applies 'in so far as … relevant and with the necessary modifications to,

and in relation to such account'.

83 Green v Wilden Pty Ltd [2005] WASC 83 [1298], [1300] - [1301], [1333] - [1340], [1353] - [1354]. 84 Green v Wilden Pty Ltd [2005] WASC 83 [1333]. 85 Green v Wilden Pty Ltd [2005] WASC 83 (S), Appendix A, pars 13.3, 31.4.


Page 29

69 The appellants also say that it would be 'unconscionable' for a

set-off not to be effectuated. They referred to Hasluck J's observations

to the effect that 'equitable requirements' dictated that (in effect) the

liability of Wilden and Magenta to repurchase the units in those trusts

should be adjusted to take into account the loans the subject of the

successful counterclaims by Wilden and Magenta.86 They also contend

that the respondents have, through their 'entire approach' in the

proceedings, 'elected' to set-off the Summerfield loans against the

amounts recoverable by the respondents pursuant to the 2009 Court of

Appeal orders. They also rely on O 36 r 9 of the RSC, which provides

that 'all evidence taken at the hearing or trial of any cause or matter

may be used in any subsequent proceedings in the same cause or

matter'.87

70 On the topic of whether the repayment of the Summerfield loans

formed part of the 2009 Court of Appeal orders, counsel for the first -

third and fifth - seventh appellants said, at various points, that (1) the

Summerfield loans were not within the scope of the 2009 Court of

Appeal orders;88 (2) that the loans were within the scope of the orders;89

(3) that the orders 'didn't clearly deal with it'90 and (4) that the registrar

was obliged, in effect, to take an account which, in any event,

transcended the requirements of the 2009 Court of Appeal orders.91

Consideration

71 It is correct to say that Hasluck J found, in effect, that equity

required that the liability of Wilden and Magenta to repurchase the

units in those trusts should be subject to the overall adjustment of

liabilities between the parties. His Honour was evidently satisfied that

Wilden and Magenta had established the terms of the loans, their

recoverability, and that it was equitable in all the particular

circumstances to fashion the relief in that way. In broad terms, that is

the effect of pars 2(b), 2(c) and 7 of the 2009 Court of Appeal orders in

relation to the vendor finance loans that were the subject of successful

counterclaims by Wilden and Magenta.

86 Green v Wilden Pty Ltd [2005] WASC (S) 83 [147]. 87 First - third and fifth - seventh appellants' amended submissions, pars 3 - 8; fourth appellant's amended

submissions, pars 11.8 - 11.12. 88 Appeal ts 956. 89 Appeal ts 957, 961. 90 Appeal ts 958. 91 Appeal ts 959.


Page 30

72 However, absent a pleaded claim in respect of the Summerfield

loans,92 there was no occasion for Hasluck J in the primary decision (or,

for that matter, this court in the 2009 appeal against the primary

decision) to make equivalent findings in relation to the repurchase of

the units in the Summerfield Trust.

73 Turning to O 45 r 8, the effect of this order is that it is unnecessary

for the court expressly to provide for allowances in the taking of an

account directed by a judgment or order of the court. Where, however,

the court expressly provides for allowances, it is the court's orders,

properly construed, which govern the question of whether, and to what

extent, the accounting party is entitled to allowances. Where the court's

orders do not expressly deal with allowances, the nature and scope of

the 'just allowances' provided for in O 45 r 8 will, in any particular case,

depend upon the nature, scope and subject matter of the account

directed by the order in question. In an account of profits, just

allowances commonly include allowance for the time, energy, skill and

financial contribution that the errant fiduciary has expended or made.93

74 Tace's claim that it is entitled to 'just allowances' in respect of the

Summerfield loans has no merit for the following reasons. First, the

orders requiring a repurchase of the units in the Summerfield Trust

(pars 4 and 5 of the 2009 Court of Appeal orders) make express

provision (par 5) for specified allowances being 'deductions for stamp

duty and other disbursements properly incurred by the relevant trustee

… in respect of the repurchase'. On the proper construction of the

2009 Court of Appeal orders, it is only those allowances which are

available to Tace as trustee of the Summerfield Trust. No other

allowances are permitted.94

75 Secondly, that conclusion is confirmed by the further

consideration that it could not, objectively, have been the intention of

the 2009 Court of Appeal orders, particularly given the lengthy history

of the proceedings, that the registrar would effectively conduct a fresh

trial of unpleaded issues in giving effect to the 2009 Court of Appeal

orders. 92 Hasluck J said, in effect, that he was determining the primary proceedings only by reference to the

pleadings: Green v Wilden Pty Ltd [2005] WASC 83 [344] - [351]. 93 Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 110;

Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 558 - 562; Mid-City Skin

Cancer Laser Centre v Zahedi-Anarak [2006] NSWSC 844; (2006) 67 NSWLR 569 [273]; see also

generally Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2015) [5-280]. 94 It is unnecessary to consider whether the orders for repayment of the loans made by Wilden and Magenta

are properly characterised as 'just allowances'. Whatever their characterisation, the significant point is that

they are express orders arising from a determination of the pleaded issues.


Page 31

76 Thirdly, even if Tace was entitled more broadly to 'just

allowances' under the 2009 Court of Appeal orders on their proper

construction, Tace has not established that the registrar's decision not to

require payment or allow a set-off in respect of the Summerfield loans

was manifestly unreasonable, or that it revealed any other basis for not

accepting the Registrar's report. Tace did not refer to any binding

findings or orders of Hasluck J in the primary proceedings to the effect

that the loans were recoverable or that there was a liability to repay

them.

77 Also, the evidence that in seeking to repurchase the units in 1990,

Mr Green and W J Green & Co accepted, in correspondence, that the

loans should be off-set against the repurchase price, does not assist the

appellants. Tace evidently did not accept the respondents' proposals in

1990,95 and there developed disputes between the parties leading to the

commencement of the primary proceedings. The primary proceedings

involved an assertion by Mr Green and W J Green & Co that they were

entitled to have the units repurchased. Tace was unsuccessful in the

defence of that claim, and Tace did not make any countervailing claim

in respect of the Summerfield loans. Nor is it suggested by the

appellants that Tace ever sought orders corresponding to the orders

made in favour of Wilden and Magenta in pars 13 - 15 and 31 of

Hasluck J's preserved orders. The final orders, both by Hasluck J and

in this court, reflected the way that the parties fought the litigation.

78 In this context, it was not manifestly unreasonable or otherwise

inappropriate for the registrar to proceed on the basis that the

respondents' correspondence in 1990 did not represent an operative

admission for the purpose of the account under the 2009 Court of

Appeal orders that the loans are recoverable by Tace.96

79 For similar reasons, it cannot be said that Mr Green and W J Green

& Co have 'elected' to set-off the amounts which Tace now seeks to

recover under the Summerfield loans. Nor is there anything

'unconscientious' in giving effect to the 2009 Court of Appeal orders on

their proper construction.

80 Further, the fourth appellant effectively contended that if the

Summerfield loans do not form part of the account required by the 2009

Court of Appeal orders, then they will be the subject of separate

95 Green v Wilden Pty Ltd [2005] WASC 3 [248] - [252]. 96 Whether viewed as at the date of Hasluck J's decisions in 2005, or as at the date of this court's decisions in

2009, or as at the date of the taking of the account before the registrar.


Page 32

proceedings by Tace. In that event, any rights that Tace may have in

relation to the Summerfield loans, and any questions in relation to the

exercise of those rights,97 may be determined in the subsequent

proceedings foreshadowed by the fourth appellant. That result cannot

be characterised as involving unconscientious conduct by the

respondents.

81 In relation to Tace's reliance on O 36 r 9, the contention appears to

be bound up with the complaint about the registrar's treatment of the

fourth appellant's Notice of Concessions and the appellants' schedules

of evidence. The procedural history of this is set out in [25] - [28]

above. In substance, it appears that at the conclusion of the hearing

before the registrar, the fourth appellant was ordered to file and serve a

notice of matters in the account that he conceded or would not be

pursued. By his Notice of Concessions, he not only conceded errors in

the original account as filed, but also sought to 'rework' aspects of the

account.98 The appellants' schedule of evidence then included

amendments to the amounts claimed in respect of some of the items in

the schedule of account, by reference to the Notice of Concessions.

The appellants' schedule of evidence also drew upon transcripts from

other earlier hearings which had not been tendered in evidence on the

hearing of the account before the registrar. This went beyond the

evident purpose of the schedule, which was to refer, as an adjunct to

closing submissions, to 'the evidence adduced on the taking of the

account over the three hearing days'.99 It was not to enable parties to

introduce new evidence after the hearing.

82 The registrar was correct to rule, in effect, that the reworkings of

the account and related schedule of evidence were not part of the

evidence in the taking of the account. The appellants were not entitled

to introduce, either through the Notice of Concessions or their schedule

of evidence, additional evidence which had not been tendered at the

hearing of the taking of the account. Order 36 r 9 is permissive, and did

not require the registrar to allow additional evidence to be adduced after

the conclusion of the hearing. No error is demonstrated.

83 In relation to set-off, the respondents had vindicated their rights to

judgment, and the registrar was concerned, only, with the proper

construction and application of the 2009 Court of Appeal orders.

97 Including any limitation issues and any issues arising from the failure to make a claim in respect of the

Summerfield loans in the primary proceedings. 98 BB 170. 99 Wilden Pty Ltd v Green [No 4] [2016] WASCA 195 [28].


Page 33

Giving effect to the 2009 Court of Appeal orders did not permit, much

less require, the registrar to entertain claims for set-off which had not

been litigated.

84 The fourth appellant (not counsel for Tace) raised an additional

argument to the effect that the words 'deductions … in respect of the

repurchase' in order 5 of the 2009 Court of Appeal orders allowed Tace

to recover the Summerfield loans.100 That submission does not assist

Tace. Any deductions under par 5 of the 2009 Court of Appeal orders

must be for 'stamp duty and other disbursements properly incurred' by

Tace 'in respect of the repurchase'. The Summerfield loans cannot be

reasonably regarded as a 'disbursement' within the phrase 'stamp duty

and other disbursements'. Nor can they be regarded as having been

'incurred … in respect of the repurchase'.

Conclusion

85 The 2009 Court of Appeal orders, on their proper construction,

contain no provision for any allowance, deduction, payment to or

set-off by Tace in respect of the loans made by Tace to Mr Green and

W J Green & Co. Accordingly, the registrar was correct to conclude

that the loans made by Tace as trustee of the Summerfield Trust to

Mr Green and W J Green & Co for the purposes of acquiring their

interests in the Summerfield Trust were irrelevant to the taking of the

account.

Issue 2(a) - whether a 'reworking' of financial statements is required

86 The appellants contended, in effect, that, properly construed,

par 6(a) of the 2009 Court of Appeal orders did not direct attention to

the historical position with respect to trust distributions, but rather

required a 'reworking' of the financial statements over the past 22 years

in order to create a new set of financial statements.101 They contended

that this was 'necessary to … calculate the true income position of the

Trusts'.

87 The use of the past tense 'paid or credited as having been paid' in

par 6(a) of the 2009 Court of Appeal orders directs attention to the

historical position. Paragraph 6(a), in its ordinary meaning, refers only

to amounts which have in fact been paid or credited to unit holders in

the relevant period. Its evident purpose is to ensure that pending

100 Appeal ts 991. 101 First - third and fifth - seventh appellants' amended submissions, pars 13 - 16, 19 - 22; fourth appellant's

amended submissions, par 6; appeal ts 967 - 969, 975 - 977.


Page 34

completion of the repurchase of the respondents' units, the respondents,

as unit holders, are to recover from the trustees their proportionate

share (in accordance with their unit entitlements) of the distributions

paid by the trustees over the years to the other unit holders. The

appellants were unable to advance any plausible construction of

par 6(a) of the 2009 Court of Appeal orders contrary to its ordinary

meaning.

88 Moreover, that construction of par 6(a) is consistent with the

operation of the trust deeds. Clause 11.3 (see [46] above) is to the

effect that the trustees, generally, are to pay or apply the net income of

the trust fund in each accounting period for the benefit of the unit

holders in proportion to the number of their registered units at the end

of the accounting period. That is, if income was distributed, then the

respondents ought to have received their proportionate share of that

distribution. Paragraph 6(a) requires that they be paid that share and

interest from the date the distribution was made. The effect of this is to

treat the respondents equally with other unit holders, by giving them the

proportion of the distributed income to which they are entitled. If the

consequence is that other unit holders have received more than they

should have because they received distributions which failed to reflect a

proper distribution to the respondents, that may be a matter between

those unit holders and the trustee, but it cannot affect the proper

construction and application of the 2009 Court of Appeal orders.

89 The appellants' complaint ultimately came down to the

propositions that where the trustees had effectuated distributions in any

financial year, excluding the respondents, it was (1) impossible, (2)

contrary to the trustees' duties, and (3) inconsistent with s 94(2) of the

Trustees Act 1962 (WA), to require the trustees to make any further

distribution in accordance with par 6(a) of the 2009 Court of Appeal

orders. These submissions cannot be accepted. First, the court was not

taken to any evidence before the registrar to establish the impossibility

suggested. Secondly, there is no basis for the contention that

compliance by a trustee with a court order involves a breach of trust.

Thirdly, s 94 of the Trustees Act enables the review of a trustee's act by

a court. It has no application to any payments made by the trustee

pursuant to par 6(a) of the 2009 Court of Appeal orders. Also, even if

s 94 were somehow relevant, the appellants failed, and indeed made no

attempt to establish, by reference to the registrar's findings or the

evidence, the existence of the criteria necessary for the operation of

s 94(2)(a) and s 94(2)(b). Fourthly, and fundamentally, those matters

do not bear upon the proper construction of par 6(a) of the 2009 Court


Page 35

of Appeal orders, and even if they did, they could not operate to give it

a construction contrary to its ordinary meaning and evident purpose.

90 The registrar was correct to conclude that par 6(a) of the 2009

Court of Appeal orders referred only to distributions that in fact had

been made by the trustees of the trusts.

Issue 2(b) - meaning of 'income distribution'

91 Paragraph 6(a) in terms refers to distribution to unit holders 'by

way of income'. On its ordinary meaning, par 6(a) is referring only to

distributions by way of income, and not to distributions by way of

capital. That construction is confirmed by a reading of the 2009 Court

of Appeal orders as a whole, in that the word 'capital' is used expressly

where the court's orders operate with respect to both capital and income

distributions.102

92 Accordingly, the registrar was, with respect, in error in construing

the reference to 'distributions by way of income' in par 6(a) of the 2009

Court of Appeal orders to mean all distributions of any character.

However, the error is immaterial for present purposes because, as

discussed below, there was no error by the registrar in accepting

Mr Van Homrigh's evidence that the distributions referred to in his

report were distributions 'by way of income' to unit holders.

Issue 2(c) - characterisation of historical distributions

93 Issue 2(c) concerns, in substance, the question of whether the

registrar incorrectly characterised certain historical distributions by the

trustees of the trusts as distributions 'by way of income' within par 6(a)

of the 2009 Court of Appeal orders. The appellants contend that the

registrar's findings were not open on the evidence, and that the

distributions in question were by way of capital distributions, rather

than income distributions. The appellants also rely on cl 11 and

cl 12.1(15) of the trust deeds (see [46] - [47] above).103

94 The distributions in question are the following:104

1. Balga Trust distribution of $1,512,024 in 1995, arising from the

sale of the Balga Bazaar Shopping Centre.

102 See pars 8(b) and 8(c) of the 2009 Court of Appeal orders. 103 First - third and fifth - seventh appellants' amended submissions, pars 26 - 34; fourth appellant's amended

submissions, pars 12.1 - 12.22. 104 Registrar's report [111]; report of Mr Van Homrigh dated 18 September 2015, pars 5.3.13, 5.3.18;

GB 3928, 3930; report of Mr Ashby dated 17 December 2015, par 6.4.11; GB 4075 - 4076.


Page 36

2. Balga Trust distribution of $543,874 in 2002, arising from the

sale of 'Realtech units'.

3. Kelmscott Trust distribution of $278,684 in 2006, which

according to the instructions given by the appellants to

Mr Ashby, resulted from the distribution of capital by the KCD

Trust.

4. Summerfield Trust distribution of $1,522,649 in 2007, arising

from the sale of the Summerfield Shopping Centre.

95 There is no merit in the appellants' contentions. First, there is no

error (let alone perversity or manifest unreasonableness) in the

registrar's conclusion that the distributions in question were treated by

the trustees, at the time the distributions were made, as distributions of

income rather than capital. There was ample evidence to support that

conclusion:

1. The respondents' accounting expert, Mr Van Homrigh examined

the contemporaneous financial statements and tax documents of

the trusts, and concluded that the distributions were by way of

income. Although the documents were not always consistent,

Mr Van Homrigh gave reasons for why he regarded some

documents as more reliable than others.105 Mr Van Homrigh

gave evidence and was cross-examined. Amongst other things

he said:106

5.3.10 Because the tax returns record all taxable income as

distributed to unitholders, and the annual returns show

that no tax was paid, the amounts recorded as

distributed in tax returns should be taken as the

minimum income distribution amount pursuant to

Order 6a.

5.3.11 The profits (but not losses) declared in the profit and

loss statements within the annual reports are the

indicator of income distributions pursuant to Order 6a.

5.3.12 Therefore, based on the analysis set out in Appendix E,

and summarised above:

105 Report of Mr Van Homrigh dated 18 September 2015, par 5.3; GB 3925 - 3930; appendix E.1,

pars 17 - 24; GB 3965 - 3966; appendix E.2, pars 65 - 70; GB 3976 - 3977; appendix E.3, pars 61 - 63;

GB 3988 - 3989. 106 Report of Mr Van Homrigh dated 18 September 2015, pars 5.3.10 - 5.3.12; GB 3927; see also Registrar's

report [102] - [109].


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(a) The profits, which are also described as 'final

total distribution for year', in Balga Bazaar's

annual reports for those years that had profits,

should be taken as the income distributions;

(b) The profits, generally also described as 'payable

to unitholders', in Summerfield's profit and loss

statements should be taken as the income

distributions; and

(c) The profits, which are also recorded as a

provision for distribution, in Kelmscott's profit

and loss statements should be taken as the income

distributions.

2. The accounting expert called by the appellants, Mr Ashby,

stated that his instructions were that the amounts in question

were capital distributions. Mr Ashby did not state that he had

formed his own conclusion that the amounts in question were

capital distributions.107

3. The contemporaneous financial records of the trusts which

indicated that the distributions were income distributions

included annual reports of the trusts108 and certain tax returns.109

4. There was no evidence of any special resolutions in accordance

with cl 11.9 of the trust deeds, which would have been required

had the trustees made the distributions in question by way of

capital distributions. Also, any determinations by the trustee

under cl 12.1(15) required a special resolution to bind unit

holders. The admitted absence of any such special resolution110

tends to indicate that there were no relevant determinations by

any of the trustees under cl 12.1(15). It does not merely

suggest, as counsel for the first - third and fifth - seventh

appellants submitted to the registrar, that 'there may be a breach

of trust', or that special resolutions were merely a 'matter of

form' and 'irrelevant'.111

107 Report of Mr Ashby dated 17 December 2015, pars 1.4.1, 6.4.7(a); GB 4051, 4074; appellants' letter of

instructions to Mr Ashby dated 17 December 2015, par 6; GB 4107; joint memorandum of Mr Van Homrigh

and Mr Ashby dated 11 February 2011, pars 2.1.2(b), 4.3.2, GB 4008, 4014; trial ts 831. 108 Balga Trust - GB 245, 253, 258, 383 - 384; Summerfield Trust - GB 3251 - 3256; Kelmscott Trust -

GB 1923. 109 Balga Trust - GB 663 - 664; Summerfield Trust - GB 3469 - 3470. 110 Appeal ts 980 - 981, 1016. 111 Registrar's report [126].


Page 38

5. In relation to the Kelmscott Trust distribution of $278,684, the

suggestion that this was a capital distribution was attributable to

the appellants' instruction to Mr Ashby that this sum was

derived from a capital distribution from the KCD Trust.

Material relating to the KCD Trust was not in evidence on the

taking of the account, and the registrar was not in error, for the

reasons she gave, in deciding that it was not appropriate to

allow the appellants to reopen their case to tender evidence in

relation to the KCD Trust.112

6. The fourth appellant's submissions, insofar as they refer to tax

regimes and the differences between income and capital, do not

engage with the evidence, accepted by the registrar, that the

distributions were historically treated as distributions of income

rather than capital.113 Insofar as the fourth appellant's

submissions refer to other documents annexed to his affidavit

dated 31 July 2015,114 the submissions do not demonstrate any

error in the registrar's reliance on Mr Van Homrigh's expert

evidence and the financial documents on which he relied.

7. Insofar as the appellants also submitted that there was oral

evidence given by the fourth appellant that the trustees treated

the distributions in question as distributions of capital at the

relevant times, notwithstanding assertions by counsel that 'I can

give you the detail' and that 'it will just take me a few

minutes',115 they were unable to give the court, at the hearing in

this matter, any references to transcript or other evidence in

support of that contention.116

8. The documents referred to in the schedule of evidence filed by

the first - third and fifth - seventh appellants after the conclusion

of the hearing (see [43] above) provide no basis for this court to

conclude that there was any error in the registrar's acceptance of

Mr Van Homrigh's analysis of the contemporaneous documents.

9. The contention by the first - third and fifth - seventh appellants

that it was not open to the registrar to find on the evidence that

the trusts were in the business of buying and selling property

112 See [30] above. 113 Fourth appellant's amended submissions, pars 12.1 - 12.11. 114 Fourth appellant's amended submissions, pars 12.12 - 12.22. 115 Appeal ts 981. 116 Appeal ts 994 - 995, 1025 - 1026.


Page 39

cannot be accepted.117 In any event, the criticism does not

establish any error in the ultimate finding that the distributions

in question were historically treated by the trustees as

distributions by way of income.

96 For these reasons, the appellants' submissions with respect to

issue 2(c) have no merit.

Issue 3 - interest rates

97 The appellants refer to par 6(b) of the 2009 Court of Appeal

orders, which provides for interest by reference to the rate the funds

'would have earned if invested in a interest-bearing deposit with the

banker to the trust'. In substance, the appellants contend that there was

no evidence either from the trustees of the rates offered by their bankers

for such deposits, or directly from the trustees' bankers as to such rates.

98 The registrar's findings are set out in [22] above. In the absence of

evidence (including by the trustees as accounting parties118) as to the

actual interest rates offered by the particular banker to the trust, it is

reasonable to infer that the deposit and investment rates published by

the Reserve Bank reflected the rate the funds would have earned if

invested in an interest-bearing deposit with the banker to the trust.

Counsel for the first - third and fifth - seventh appellants accepted as

much in oral submissions.119

99 There is no merit in the appellants' contentions.

Issue 4 - other matters

100 As noted earlier, counsel for the first - third and fifth - seventh

appellants accepted that success on the matters raised in issue 4 would

depend upon, in effect, the success of the complaint regarding the

proper construction and application of par 6(a) of the 2009 Court of

Appeal orders.120 The challenges in that regard have no merit, for the

reasons given earlier.

101 For those reasons, the challenges advanced by the first - third and

fifth - seventh appellants to the Registrar's report must be dismissed.

117 See par 4.2.1(c) of the joint memorandum of Mr Van Homrigh and Mr Ashby dated 11 February 2011;

GB 4013. 118 An accounting party must ordinarily make all due inquiries for the purpose of an account, including of

their relevant agents, bankers or solicitors: Re GDK Financial Solutions Pty Ltd; Australian Securities and

Investment Commission v GDK Financial Services Pty Ltd [2006] FCA 1415; (2006) 236 ALR 699 [51]. 119 Appeal ts 987. 120 See [33] - [34] above.


Page 40

The fourth appellant's contentions

102 Although it is unnecessary to address separately the grounds raised

by the fourth appellant because, as noted earlier, they in substance

covered the points raised by the first - third and fifth - seventh

appellants, the following specific observations may be made about the

fourth appellant's grounds, in addition to the observations made in

[55] - [101] above.

Ground 1

103 The scope of the registrar's authority was to take an account in

accordance with the 2009 Court of Appeal orders. The appellants'

submissions fail to engage with this fundamental point. The registrar

correctly construed and applied the 2009 Court of Appeal orders, save

in one immaterial respect referred to in [92] above. The concept of

wilful default, where the accounting party must account not only for

amounts actually received, but also for what should have been

received,121 had no application, and there is nothing to suggest that the

registrar thought otherwise. The registrar did not expressly or

impliedly conduct an exercise involving the taking of accounts on the

basis of wilful default. Moreover, as noted earlier, the registrar

correctly concluded that par 6(a), on its proper construction, referred to

amounts actually distributed by the trustees. Accordingly, the

appellants' contentions with respect to points 1 - 3 of ground 1 (see

schedule 3) have no merit. Point 4 is correct but, ultimately,

immaterial, for the reasons in [93] - [95].

104 Point 5 fails for two reasons. First, it proceeds upon the incorrect

assumption that the 2009 Court of Appeal orders required the trustees

to restate the accounts. Secondly, the registrar was not bound to act on

the evidence of the fourth appellant in relation to the reliability of the

restated accounts. It was open to the registrar, for the reasons she gave,

to accept Mr Van Homrigh's evidence that the restated accounts were,

amongst other things, 'misleading'.122 Further, the fourth appellant

accepted in cross-examination that (1) the 'restated' accounts had not

been adopted by the trustees, (2) they had not been circulated to all unit

holders, and (3) no amended tax returns had been filed in relation to

them.123

121 See, eg, Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146 [13] - [14];

Juul v Northey [2010] NSWCA 211 [180] - [191]. 122 Registrar's report [92]. 123 Registrar's report [84].


Page 41

105 Point 6 has no merit. Although there were objections to the

cross-examination of the fourth appellant, they were overruled by the

registrar on the basis, in effect, that the cross-examination was within

the general scope of the issues of which the fourth appellant had

notice.124

Ground 2

106 This ground lacks merit:

(a) for the reasons given in relation to ground 1; and

(b) because it proceeds on the unstated and incorrect assumption

that the 2009 Court of Appeal orders required the trustees to

undertake a restatement of the accounts of the trusts.

Ground 3

107 This ground lacks merit:

(a) for the reasons given in relation to grounds 1 and 2;

(b) because the registrar was bound to apply the 2009 Court of

Appeal orders on their proper construction. The trustees had no

new or fresh discretion of their own to exercise under the 2009

Court of Appeal orders; and

(c) for the reasons given in [89] above.

Ground 4

108 This ground fails for the reasons given earlier.

Ground 5

109 This ground proceeds on the erroneous premise that the

distributions in question were not distributions by way of income. For

the reasons given earlier, no error has been demonstrated in the

registrar's finding that the distributions in question were properly

characterised as distributions by way of income.

124 Trial ts 705 - 706, 743 - 750.


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Ground 6

110 This ground lacks merit for all the reasons given earlier. The

registrar determined all the matters which were required of her pursuant

to the 2009 Court of Appeal orders.

Ground 7

111 This ground lacks merit in that:

(a) the fourth appellant's position before the registrar, and this

court, was that he could not give accounting evidence because

he was not an accountant;125

(b) the approach taken by Mr Van Homrigh was logical and

reasoned, and it was open to the registrar to prefer the evidence

of Mr Van Homrigh, whose evidence on the point was not

contradicted by the expert opinion of the appellants' own

accounting expert, Mr Ashby;

(c) the fourth appellant has not referred this court to any objective

evidence capable of sustaining the assertion that the trustees had

waived the requirement for a special resolution pursuant to

cl 11(9) of the trust deeds; and

(d) none of the arguments concerning the trusts being 'closely held'

and the existence of the trustees' powers in cl 12.1(15) points to

any error by the registrar.

Ground 8

112 As to ground 8, for the reasons given earlier, the registrar was

incorrect to construe 'income' as merely synonymous with 'payments',

but that error is immaterial for present purposes.

Ground 9

113 This ground has no merit for the reasons given in [81] above.

Ground 10

114 This ground proceeds on an incorrect assumption as to the proper

construction of the 2009 Court of Appeal orders. Insofar as it involves

the contention that the registrar failed to accept into evidence the

125 Trial ts 718; appeal ts 1030.


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accounts of the KCD Trust, the ground also lacks merit. The registrar

was correct to disregard those accounts for the reasons that she gave.

115 The fourth appellant also contends that the registrar erred in not

requiring the payment of the Summerfield loans because, unless the

loans were repaid on the taking of the account, there would be fresh

proceedings by Tace to recover the loans. There is no merit in this

point. The registrar was required to apply the 2009 Court of Appeal

orders on their proper construction. The suggested prospect of further

litigation by Tace is, and was, an irrelevant consideration in the

exercise of the functions conferred on the registrar by the 2009 Court of

Appeal orders.

Ground 11

116 This ground also lacks merit. Essentially, it proceeds on a

misunderstanding of par 6(a) of the 2009 Court of Appeal orders, and

fails to engage with the registrar's findings that the distributions in

question were distributions by way of income.

The appellants' applications to adduce additional evidence

The first application

117 The appellants made an application on 7 February 2018 to adduce

additional evidence. The application is to have certain extracts of the

transcripts of the hearing of the primary proceedings in 2003 and 2004

and of the appeal in 2008, admitted into evidence. There were no oral

submissions advanced in support of the application at the hearing.

Counsel for the first - third and fifth - seventh appellants said that he

was content that the matter be dealt with on the papers.126

118 As the Victorian Court of Appeal recognised in Wenco, the

reference to the registrar is not to be treated as 'some kind of warm-up

for the real contest'.127 Reflecting that approach, the court recognised

that:

(f) Sixthly, generally, the referee's findings of fact should not be

re-agitated in the court. The court will not reconsider disputed

questions of fact where there is factual material sufficient to

entitle the referee to reach the conclusions he or she did,

particularly where the disputed questions are in a technical area

126 Appeal ts 955. 127 Wenco [17(b)], citing Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005]

NSWSC 784 [7].


Page 44

in which the referee enjoys an appropriate expertise. Thus, the

court will not ordinarily interfere with findings of fact by a

referee where the referee has based his or her findings upon a

choice between conflicting evidence.

(g) Seventhly, the purpose of [the relevant Victorian rules of court]

would be frustrated if the court were required to reconsider

disputed questions of fact in circumstances where it is conceded

that there was material on which the conclusions could be based.

(citations omitted)

119 It would generally be inconsistent with that approach for the court

to receive additional evidence which was available to the parties in the

proceedings before the registrar, for the purpose of attempting to

contradict the findings which the registrar made on the evidence before

her, particularly where no adequate explanation is given for the failure

to adduce the additional evidence before the registrar.

120 The application should be refused for the following reasons. First,

the relevance of the evidence has not been demonstrated. Secondly, to

the extent that it may be inferred that the transcript is tendered on the

basis that it is relevant to the Summerfield loans, the material is

irrelevant because, for the reasons given earlier, the 2009 Court of

Appeal orders do not provide for payment of the Summerfield loans to

Tace. Thirdly, and more fundamentally, it is not conducive to the

proper administration of justice to allow the appellants to introduce the

evidence at this point. It is plainly not fresh evidence. The appellants

must have had this material for some considerable time. There is no

explanation as to why it has been raised now, rather than before the

registrar. Also, the evidence appears to be of the same or similar

character to the evidence which the appellants sought to introduce after

the hearing of the account before the registrar, and which the registrar

correctly ruled could not be admitted.128 Also, the finality principle is

of particular importance, given that the various actions the subject of

the primary proceedings were commenced in 1990 and 1991.

The second application

121 The first - third and fifth - seventh appellants filed a second

application to adduce additional evidence on 16 October 2018.129 It is

supported by the affidavit of Mr Chesson sworn 5 October 2018. The

appellants filed written submissions on 16 October 2018.

128 See [28] above. 129 The fourth appellant, however, signed the application filed by the first - third and fifth - seventh appellants

on 16 October 2018.


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122 The application should be dismissed for the following reasons.

First, the matters referred to in [118] - [120] above have even greater

force in a context where the application has been heard, and the

appellants have already sought and been given the considerable

indulgence referred to in [42] above. Secondly, with the exception of

the matter referred to in the following paragraph, none of the material is

relevant. It purports to set out the fourth appellant's subjective views

on various taxation and accounting matters, his state of mind in relation

to his conduct in connection with various financial records of the trusts

going back to 1992, and his 'expectation' about the position of the

Summerfield Trust.

123 The exception to our conclusion about relevance is par 53 of

Mr Chesson's affidavit. In that affidavit, Mr Chesson deposes that the

trustees of the relevant trusts determined, under the relevant clauses of

the trust deeds, that specified items were recepts of a capital nature.

This paragraph of Mr Chesson's affidavit is merely an assertion, made

without reference to any particular resolution of the trustees and with

no documentary support for the asserted fact. The asserted fact is

inconsistent with the registrar's finding of fact at [126] - [127] of the

Registrar's report. The evidence is clearly not fresh and its reception

would open up a new area of factual inquiry, in which the respondents

would need to be given an opportunity to cross-examine Mr Chesson

and adduce other evidence. It is plainly not in the interests of justice,

and inconsistent with the principles referred to earlier, for this court to

receive this additional evidence.

Other matters - the bankruptcy of Mr Green

124 During the hearing of the application on 8 August 2018, counsel

for the first - third and fifth - seventh appellants contended that

Mr Green, who is a bankrupt, was not entitled to be heard.130 The court

ordered the filing of affidavits and submissions on the topic.

125 In their submissions dated 16 August 2018, the first - third and

fifth - seventh appellants seek determinations to the effect that, pursuant

to s 60 of the Bankruptcy Act 1966 (Cth):131

1. the trustees of Mr Green's estate in bankruptcy have abandoned

Mr Green's 'action', or alternatively, the trustees have

130 Appeal ts 952. 131 First - third and fifth - seventh appellants' submissions dated 16 August 2018, par 30.


Page 46

abandoned Mr Green's interest in the respondents' application to

adopt the Registrar's report; and

2. no orders should be made in respect of Mr Green or his trustees.

126 The first - third and fifth- seventh appellants contend, in substance,

that:

1. Mr Green's trustees in bankruptcy made an invalid election to

prosecute the 'action' on 25 June 2018, and, because the election

was invalid, there is a deemed abandonment of the 'action'

pursuant to s 60(3) of the Bankruptcy Act.

2. Alternatively, there is a deemed abandonment of the 'action'

pursuant to s 60(3) because the election, if valid, was later

withdrawn by the trustees, on 30 July 2018.132

3. Alternatively, there is a deemed abandonment of the

respondents' application to adopt the Registrar's report by

reason of the allegedly invalid election or by reason of the

alleged withdrawal of the valid election.

Provisions of the Bankruptcy Act

Definitions - property and provable debt

127 Section 5(1) of the Bankruptcy Act includes the following

definitions:

property means real or personal property of every description, whether

situate in Australia or elsewhere, and includes any estate, interest or

profit, whether present or future, vested or contingent, arising out of or

incident to any such real or personal property.

provable debt means a debt or liability that is, under this Act, provable

in bankruptcy.

Section 58 of the Bankruptcy Act

128 Section 58 provides, relevantly for present purposes:

(1) Subject to this Act, where a debtor becomes a bankrupt:

(a) the property of the bankrupt, not being after-acquired

property, vests forthwith in the Official Trustee or, if, at

132 They refer to Owen v ComLaw (No 62) Pty Ltd [2006] VSCA 151; (2006) 201 FLR 275 [44] for the

proposition that an election may be withdrawn.


Page 47

the time when the debtor becomes a bankrupt, a

registered trustee becomes the trustee of the estate of

the bankrupt by virtue of section 156A, in that

registered trustee; and

(b) after-acquired property of the bankrupt vests, as soon as

it is acquired by, or devolves on, the bankrupt, in the

Official Trustee or, if a registered trustee is the trustee

of the estate of the bankrupt, in that registered trustee.

…

(3) Except as provided by this Act, after a debtor has become a

bankrupt, it is not competent for a creditor:

(a) to enforce any remedy against the person or the

property of the bankrupt in respect of a provable debt;

or

(b) except with the leave of the Court and on such terms as

the Court thinks fit, to commence any legal proceeding

in respect of a provable debt or take any fresh step in

such a proceeding.

…

(6) In this section, after-acquired property , in relation to a bankrupt,

means property that is acquired by, or devolves on, the bankrupt

on or after the date of the bankruptcy, being property that is

divisible amongst the creditors of the bankrupt.


129 Section 60 of the Bankruptcy Act, relevantly, provides as follows:

60 Stay of legal proceedings

(1) The Court may, at any time after the presentation of a petition,

upon such terms and conditions as it thinks fit:

(a) discharge an order made, whether before or after the

commencement of this subsection, against the person

or property of the debtor under any law relating to the

imprisonment of fraudulent debtors and, in a case

where the debtor is imprisoned or otherwise held in

custody under such a law, discharge the debtor out of

custody; or

(b) stay any legal process, whether civil or criminal and

whether instituted before or after the commencement of


Page 48

this subsection, against the person or property of the

debtor:

(i) in respect of the non-payment of a provable

debt or of a pecuniary penalty payable in

consequence of the non-payment of a provable

debt; or

(ii) in consequence of his or her refusal or failure

to comply with an order of a court, whether

made in civil or criminal proceedings, for the

payment of a provable debt;

and, in a case where the debtor is imprisoned or

otherwise held in custody in consequence of the non-

payment of a provable debt or of a pecuniary penalty

referred to in subparagraph (i) or in consequence of his

or her refusal or failure to comply with an order

referred to in subparagraph (ii), discharge the debtor

out of custody.

(2) An action commenced by a person who subsequently becomes a

bankrupt is, upon his or her becoming a bankrupt, stayed until

the trustee makes election, in writing, to prosecute or

discontinue the action.

(3) If the trustee does not make such an election within 28 days

after notice of the action is served upon him or her by a

defendant or other party to the action, he or she shall be deemed

to have abandoned the action.

(4) Notwithstanding anything contained in this section, a bankrupt

may continue, in his or her own name, an action commenced by

him or her before he or she became a bankrupt in respect of:

(a) any personal injury or wrong done to the bankrupt, his

or her spouse or de facto partner or a member of his or

her family; or

(b) the death of his or her spouse or de facto partner or of a

member of his or her family.

(5) In this section, action means any civil proceeding, whether at

law or in equity. (emphasis added)


130 Section 116 of the Bankruptcy Act, relevantly, provides:

(1) Subject to this Act:


Page 49

(a) all property that belonged to, or was vested in, a

bankrupt at the commencement of the bankruptcy, or

has been acquired or is acquired by him or her, or has

devolved or devolves on him or her, after the

commencement of the bankruptcy and before his or her

discharge; and

(b) the capacity to exercise, and to take proceedings for

exercising all such powers in, over or in respect of

property as might have been exercised by the bankrupt

for his or her own benefit at the commencement of the

bankruptcy or at any time after the commencement of

the bankruptcy and before his or her discharge; and

…

(2) Subsection (1) does not extend to the following property:

(a) property held by the bankrupt in trust for another

person;

…

(g) any right of the bankrupt to recover damages or

compensation:

(i) for personal injury or wrong done to the

bankrupt, the spouse or de facto partner of the

bankrupt or a member of the family of the

bankrupt; or

(ii) in respect of the death of the spouse or de facto

partner of the bankrupt or a member of the

family of the bankrupt;

and any damages or compensation recovered by the bankrupt

(whether before or after he or she became a bankrupt) in respect

of such an injury or wrong or the death of such a person[.]

The parties' contentions

131 The first - third and fifth - seventh appellants submit that the

relevant 'action' referred to in s 60(5) of the Bankruptcy Act is, in the

present context, all of the following:133

1. the proceedings commenced by Mr Green in CIV 3049 of 1991

and CIV 3050 of 1991, which formed part of the consolidated

primary proceedings, ie, the proceedings heard before Hasluck J

133 First - third and fifth - seventh appellants' submissions dated 16 August 2018, par 27.


Page 50

in 2003 - 2004, and which resulted in final orders of Hasluck J

in 2005;

2. this appeal (CACV 101 of 2005), in which this court made the

2009 Court of Appeal orders and pursuant to which the registrar

prepared the Registrar's report; and

3. the respondents' application in this appeal for the adoption of

the Registrar's report.

132 The appellants do not contend that s 58 of the Bankruptcy Act has

any application.

133 The respondents, for their part, contend (amongst other things)

that s 60(2) of the Bankruptcy Act has no application because Mr Green

did not commence the appeal and, in any event, the enforceability of

orders pursuant to a judgment is not precluded by s 60(2) of the

Bankruptcy Act. Reference was made to the decision of Holland J in

Beneficial Insurance Co Ltd v Hamilton.134 In that case, it was held,

in effect, that if, after judgment is delivered and before final orders are

made, a claimant in civil proceedings is made bankrupt, s 60(2) does

not prevent the making of final orders on the claimant's claim. That is

because the purpose of s 60 is to give the trustee in bankruptcy the

opportunity to make an election, and that point has passed after the

delivery of judgment and before the making of final orders. The

relevant claims in that case involved cross-claims, but there can be no

difference between cross-claims and claims brought by a claimant in

this context.

134 In Beneficial Insurance, Holland J said:135

The purpose of the section is to give the trustee in bankruptcy the

opportunity to make that election and no other and it would seem to me

that the section presupposes that the state of affairs with respect to the

particular piece of litigation is such that considering whether or not to

make such an election is still a relevant and practical matter. In my

opinion, in the circumstances of the present case in all events, there is

no materiality at all in embarking upon a consideration of election

between prosecuting and discontinuing the first cross-claim. The

litigation in respect of that cross-claim is spent and it would seem to me

to have become spent at the time the hearing concluded and the court

reserved its judgment. The making of orders today makes no relevant

134 Beneficial Insurance Co Ltd v Hamilton (1985) 73 FLR 347. 135 Beneficial Insurance (348).


Page 51

difference to the cross-claimant's situation than the making orders

immediately at the conclusion of the hearing would have done.

135 The decision in Beneficial Insurance was referred to in a

somewhat different context by Austin J in Armour v Mason.136 In that

case, the plaintiffs sued the defendants to compel the defendants to

consent to a transfer of their lease for the purposes of a sale of their

business. The plaintiffs were successful in their claim, and the trial

judge ordered the defendants to consent forthwith to the transfer. The

plaintiffs then went into bankruptcy. The defendants executed a

transfer of the lease but refused to deliver the executed copy to the

plaintiffs. The plaintiffs themselves (and not their trustee in

bankruptcy) sought to enforce the trial judge's order. They applied to

the court for an order that the registrar of the court execute a transfer of

the lease on behalf of the defendants. Austin J held that the chose in

action constituted by the right to enforce the orders of the trial judge

constituted property within the meaning of s 58 of the Bankruptcy Act.

Accordingly, his Honour held that the plaintiffs themselves did not

have standing to make the application.137 His Honour rejected,

however, the defendants' submission that s 60 of the Bankruptcy Act

precluded the making of the order. His Honour distinguished the right

of a successful litigant in this context from the position of an

unsuccessful litigant against whom a monetary judgment has been

given, who then becomes bankrupt and seeks to appeal that decision.

His Honour also considered that the order sought by the plaintiffs did

not confer a proprietary or monetary benefit on the plaintiffs.

Accordingly, his Honour considered that although the plaintiffs (as

bankrupts) were not competent to make the application, the court could

and should make a direction on its own motion to ensure that

compliance with its previous order is completed.138 His Honour

referred to the passage in Beneficial Insurance quoted above, and

said:139

Likewise, the making of a direction now to ensure compliance with the

… order made by [the trial judge] … does not involve any election to

prosecute or discontinue the proceeding, and it makes no relevant

difference to the plaintiffs' and the defendants' situations, because their

rights and obligations were set by [the trial judge's] order.

136 Armour v Mason [2002] NSWSC 464. 137 Armour [7] - [10]. 138 Armour [12] - [14], [18]. 139 Armour [17].


Page 52

Relevant events

136 The appeal in this matter was commenced by the appellants (not

the respondents, including Mr Green) in 2005. The 2009 Court of

Appeal orders were made on 6 July 2009.

137 The respondents' application for this court to adopt the Registrar's

report was filed by the respondents on 22 June 2017.

138 On 22 March 2018, Mr Green was declared a bankrupt.

139 On 5 April 2018, the respondents' solicitors, Bennett + Co, wrote

to the Court of Appeal office advising that Mr Green had been declared

a bankrupt effective from 22 March 2018.

140 On 28 April 2018, Mr Ian Francis and Mr Paul Allen (Trustees)

were appointed as joint and several trustees in bankruptcy of

Mr Green's estate.

141 On 25 May 2018, the first - third and fifth - seventh appellants'

solicitors (AustAsia Legal) wrote to the Trustees requesting, amongst

other things, the Trustees' written election to prosecute or discontinue

any 'claims' that Mr Green has 'on foot' against the appellants.

142 On 30 May 2018, the Trustees wrote to AustAsia Legal and

advised, in effect, that the Trustees 'reserved' their decision.

143 On 25 June 2018, Mr Francis on behalf of the Trustees wrote to

AustAsia Legal and said:

I refer to my appointment as Trustee of the Bankrupt Estate and to your

letter dated 25 May 2018 attaching a notice to elect under section 60(2)

of the Bankruptcy Act 1966 (Cth) (the Act) in respect of Court of

Appeal Action CACV 101 of 2005 (the Action).

I advise that I elect to prosecute the Bankrupt's interest in the Action.

144 A formal 'notice to elect' in those terms was attached to the

Trustees' letter of 25 June 2018.

145 On 26 June 2018, the Trustees instructed Bennett + Co to appear

at the hearing before this court on 8 August 2018 on behalf of

Mr Green to press the respondents' application.140

140 Affidavit of Dalitso Banda filed 22 August 2018, par 9; respondents' submissions filed 22 August 2018,

par 19.


Page 53

146 On 17 July 2018, AustAsia Legal wrote to the Trustees and sought

advice as to whether the Bank of Queensland (who AustAsia Legal

understood requested the appointment of the Trustees to the bankrupt's

estate) has indemnified the Trustees and, if so, the terms of that

indemnity, and to provide particulars of the estate's creditors that has

provided funding for the prosecution of the bankrupt's 'claimed

interest'.

147 On 23 July 2018, AustAsia Legal wrote again to the Trustees

seeking a response to its letter of 17 July 2018.

148 On 25 July 2018, AustAsia Legal wrote to the Trustees advising,

in effect, that the appellants intended to apply for a non-party costs

order against the Trustees 'in the event that the prosecution of

Mr Green's interest fails'.

149 On 30 July 2018, the Trustees' solicitors (Ebsworths) wrote to

AustAsia Legal advising, in effect, that:

1. by their letter dated 25 June 2018, the Trustees elected to pursue

the bankrupt's interest in the appeal (CACV 101 of 2005);

2. as the appeal was commenced by the appellants, not Mr Green,

that election was not effective for the purposes of s 60(2) and

has no legal effect;

3. alternatively, the election could only relate to the respondents'

application in the appeal for the adoption of the Registrar's

report;

4. any liability for costs arising from the Trustees' election could

only relate to costs arising in respect of that application.

150 On 2 August 2018, AustAsia Legal wrote to Ebsworths advising,

in effect, that as the Trustees had indicated that the election was

ineffective, the Trustees are deemed to have abandoned Mr Green's

interest in 'the proceedings before Hasluck J' and in the appeal

(CACV 101 of 2005).

151 On 3 August 2018, Ebsworths wrote to AustAsia Legal to the

effect that:

1. section 60 has no application to the appeal because:


Page 54

(a) the appeal was commenced by the appellants, not

Mr Green; and

(b) the primary proceedings have been litigated to

judgment, and are concluded;

2. accordingly, there is presently no action on foot that was

commenced by Mr Green;

3. thus, no action commenced by Mr Green could be abandoned

by operation of s 60(3); and

4. alternatively, if s 60 does apply, then the only matter the election

related to is the respondents' application in the appeal for the

adoption of the Registrar's report, and Mr Green did not abandon

that application.

152 On 7 August 2018, Ebsworths instructed Bennett + Co to appear at

the hearing before this court on 8 August 2018 on behalf of Mr Green

to press the respondents' application.141

Disposition

153 Section 60(2) of the Bankruptcy Act provides, in effect, that an

action commenced by a person who subsequently becomes a bankrupt

is, upon his or her becoming a bankrupt, stayed until the trustee makes

an election, in writing, to prosecute or discontinue the action.

Section 60(5) provides that an 'action' means 'any civil proceeding,

whether at law or in equity'. An appeal is an 'action' contemplated by s

60(5).142

154 Where an appeal relates to property vested in the trustee in

bankruptcy, or relates to a claim by the bankrupt for money or property

that would be vested in the trustee if recovered, the right to appeal is

vested in the trustee.143

155 The 'action', for present purposes, does not include the primary

proceedings. The claims in those proceedings have merged in the

judgment given by Hasluck J, save insofar as his orders were varied by

the 2009 Court of Appeal orders. Section 60(5) of the Bankruptcy Act

has no application to the primary proceedings.

141 Affidavit of Dalitso Banda filed 22 August 2018, par 10; respondents' submissions filed 22 August 2018,

par 20. 142 Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124, 130. 143 Cummings (134).


Page 55

156 In relation to the appeal (CACV 101 of 2005), this was

commenced by the appellants, not Mr Green. Accordingly, Mr Green

is not a person who commenced the appeal who subsequently became

bankrupt, and the Trustees were not required to make an election to

prosecute or discontinue the appeal.

157 It is not necessary to decide whether the application for the

adoption of the Registrar's report filed by the respondents on 22 June

2017 is an 'action' within the meaning of s 60(5). If it is, the Trustees'

letter of 25 June 2018, on its proper construction, constituted an

election to prosecute the respondents' application filed 22 June 2017.

Further, if the Trustees' letter of 25 June 2018 was an effective election,

it is a mischaracterisation of the Trustees' solicitors' subsequent

correspondence to assert, as the appellants do, that the election was

'withdrawn'. They were merely seeking, in effect, to make the points

referred to in the preceding four paragraphs. It is unnecessary to

consider whether, in the circumstances, the election, if valid, was

capable of being withdrawn.

158 If it is not, then s 60(2) has no application to Mr Green in the

present circumstances, and there was no need for the Trustees to make

an election for the purposes of that section. The Trustees' letter of

25 June 2018 was, in that event, not an election within the meaning of

s 60(2), and the absence of any requirement to elect in this context

meant that s 60(3) did not operate as an abandonment.

159 Accordingly, there is no basis for making the determinations

sought by the first - third and fifth - seventh appellants referred to in

[125] above.

160 That conclusion is reached without reference to the decisions of

Beneficial Insurance and Armour.

161 As indicated earlier, the appellants did not contend that s 58 had

any application, or contend that the Trustees should be substituted as a

party in place of Mr Green.144 However, given that Mr Green's rights to

payment have, prima facie, vested in the Trustees in bankruptcy, it may

be arguable that the orders which this court makes should provide for

payments to be made to the Trustees rather than Mr Green. It may also

be arguable that the Trustees should be substituted as a party to the

appeal, either because they had made an election (see [157] above) or

144 Cf Cummings (135 - 136).


Page 56

because they are a proper party in any event. We would hear further

from the parties in relation to these matters.

Conclusion

162 The appellants' objections to the adoption of the Registrar's report

have no merit. The respondents, insofar as they seek the adoption of

the Registrar's report, have been successful in their application. The

appellants' applications to adduce additional evidence should be

dismissed. The parties should be heard further on formal orders.145

163 The issues that remain outstanding are the adjustments required to

the amounts specified in par 1 of the respondents' application to

account for interest to the date of the final orders, issues relating to

costs raised by pars 3 - 6 of that application and the matters referred to

in [161] above. A further hearing for final orders is proposed to be

listed for 29 November 2018 at 2.45 pm.

164 The parties should (and will be directed to) file and serve the

following documents by 4.00 pm 20 November 2018:

1. an agreed minute, or (if agreement cannot be reached)

competing minutes, of the final orders which should be made on

the respondents' application which give effect to these reasons;

and

2. any further submissions on the matters referred to in [163]

above.

165 Also, any application by the Trustees to be joined or substituted as

a party to the appeal should be filed and served on the parties by

4.00 pm on 16 November 2018.

145 It appears that pars 1.1 and 1.2 of the respondents' application contained incorrect references to the

trustees of the Summerfield Trust and the Kelmscott Trust.

[2018] WASCA 198

Page 57

Schedule 1 - 2009 Court of Appeal orders

The court hereby orders and declares that:

1. The appeal be allowed.

2. The orders made by Hasluck J on 9 August 2005 be set aside,

except for orders:

(a) 4.3 and 4.4;

(b) 13.1, 13.2, 14 and 15;

(c) 31.1, 31.2, 31.3, 32 and 33; and

(d) 38, 39 and 40.

3. Order 14 made by Hasluck J on 9 August 2005 be amended to

delete the reference to Mr Carrello and insert in lieu thereof

'Wilden Pty Ltd'.

4. The determination of current repurchase value made by each

valuer is valid.

5. The respondents are entitled to be paid for their units the

amount determined by reference to the relevant applicable

current repurchase value (less any deductions for stamp duty

and other disbursements properly incurred by the relevant

trustee upon or in respect of the repurchase).

6. The respondents are entitled to be paid:

(a) the amount (if any) paid or credited as having been paid

by way of income distribution to holders of units in the

trust in which they hold units from the date of the

repurchase request until the cancellation or transfer of

the units to or at the direction of the trustee; and

(b) interest on the amounts referred to in (a) accruing at the

rate the funds would have earned if invested in an

interest-bearing deposit with the banker to the trust.

7. If upon the determination of the amounts owing under orders

2(b) and (c), 5 and 6:

[2018] WASCA 198

Page 58

(a) a net amount is payable to a respondent(s), then on

payment of the net amount the respondent(s) shall

transfer their units to or at the direction of the relevant

trustee;

(b) a net amount is payable by a respondent(s), they shall

forthwith transfer their units to or at the direction of the

relevant trustee.

8. The trustee of the Balga Bazaar Unit Trust (the Balga Trust)

shall:

(a) ascertain the funds received by Wilden Pty Ltd (Wilden)

as trustee of the Balga Trust for the purported issue of

units referred to in orders 4.3 and 4.4 of the judgment of

Hasluck J on 9 August 2005;

(b) ascertain the moneys paid or credited as having been

paid by way of capital distribution or income

distribution to the purported holders of the units referred

to from the date such units were purportedly issued until

the date of these orders; and

(c) thereafter set off against the sum found to have been

received by Wilden under order 8(a), the funds found to

have been credited or paid by way of capital distribution

or income distribution to the purported unit holders

under order 8(b) (the net sum).

9. The net sum is payable to the relevant person(s) with 10 days

from the date of its determination under order 8.

10. If the parties are unable to agree upon the amounts payable by

the respondents to the appellants or by the appellants to the

respondents or by the appellants to other appellants as the case

may be pursuant to orders 5, 6 and 8, then:

(a) leave be granted to the appellants and the respondents

(or any of them), to apply to a single judge of this court

for an order that there be mediation with respect to such

matters as the parties are unable to agree; and that

(b) in the absence of agreement (either before or consequent

upon mediation) an account be taken before a registrar

[2018] WASCA 198

Page 59

of this court for the purpose of determining those

matters.

11. Payment of any amount payable by any of the appellants

(defendants) to any of the respondents (plaintiffs) determined in

accordance with the foregoing orders be stayed until the

appellants' costs of the appeal and of the action have been taxed

or agreed, and the taxed or agreed costs set off (as the appellants

see fit) against any amount payable to any respondent, so that

only the balance (if any) after such set off will be payable.

12. Save for the declarations made by order 4.3 and 4.4 by

Hasluck J on 9 August 2005, the plaintiffs' (respondents') claims

in the action be dismissed.

13. The first and second plaintiffs do pay to the defendants the costs

of the action and the counterclaim to be taxed as a single bill.

The third plaintiffs shall be jointly and severally liable to the

defendants for 25% of the said taxed costs. The defendants are

entitled to:

(a) a certificate for second senior counsel;

(b) all reserved costs;

(c) transcript fees;

(d) expert witness fees; and

(e) the costs of preparing the defence and counterclaim,

discovery and inspection, and getting up the case for

trial without regard to any limit imposed by any

applicable scale.

14. The first and second respondents do pay to the appellants 80%

of the costs of the appeal to be taxed as a single bill. The third

respondent shall be jointly and severally liable to the appellants

for 25% of the said taxed costs. The appellants are entitled to a

certificate for second counsel.

15. The suspension order made by Hasluck J on 25 August 2005 be

discharged.

16. In the event the respondents apply within time for special leave

to appeal to the High Court from these orders, there be a stay of

[2018] WASCA 198

Page 60

the orders until the determination of the special leave

application.

17. There be liberty to apply generally.

[2018] WASCA 198

Page 61

Schedule 2 - Hasluck J's preserved orders

4. It is hereby declared that the issue of:

4.3. 200 units in the Balga Bazaar (1985) Unit Trust to the

Sixth Defendant, Callao Pty Ltd, in or about 1992; and

4.4. 200 units in the Balga Bazaar (1985) Unit Trust to the

Seventh Defendant, Benrone Pty Ltd, in or about 1992,

was and is void and of no effect at law or in equity and such

units are and have been void as and from the date of purported

issue.

13. It is declared that:

13.1. the First Plaintiff [Mr Green] is indebted to the Balga

Bazaar (1985) Unit Trust as and from 25 October 1990

in the sum of $85,365.86; and

13.2. the Second Plaintiff [W J Green & Co] is indebted to the

Ba1ga Bazaar (1985) Unit Trust as and from 25 October

1990 in the sum of $234,097.56.

14. There be an account to be taken before a Registrar of this

Honourable Court between the First [Mr Green] and Second

[W J Green & Co] Plaintiffs and [Wilden Pty Ltd] as to the cost

to the Balga Bazaar (1985) Unit Trust from time to time as and

from 1 December 1990 of its borrowing of a bill line facility

with the ANZ Bank Limited together with recurring charges.

15. The sums declared to be owing to the Balga Bazaar (1985) Unit

Trust referred to in paragraph 14 [sic - presumably par 13]

hereof:

15.1. bear interest at the rate and for the periods found on the

account referred to in paragraph 14 [sic - presumably

par 13] hereof to be the cost to the Balga Bazaar (1985)

Unit Trust; and

15.2. for the period during which the Ba1ga Bazaar (1985)

Unit Trust did not incur costs on any bill line facility

with the ANZ Bank Limited at the rate prescribed from

time to time pursuant to section 32 of the Supreme Court

Act.

[2018] WASCA 198

Page 62

31. It is declared that:

31.1. the Third Plaintiff, Sharyn Lee Green, is indebted to the

Kelmscott (1988) Unit Trust in the principal sum of

$30,000;

31.2 the Third Plaintiffs, Graham William Green and Julie

Anne Green, are indebted to the Kelmscott (1988) Unit

Trust in the principal sum of $30,000; and

31.3 the Third Plaintiffs, William Joseph Green and Norma

Glenys Green, are indebted to the Kelmscott (1988) Unit

Trust in the principal sum of $500,000.

32. There be an account to be taken before a Registrar of this

Honourable Court between the Third Plaintiffs and Magenta Pty

Ltd as to the cost to the Kelmscott (1988) Unit Trust from time

to time as and from 6 December 1988 of its borrowings of a bill

line facility with the ANZ Bank Limited together with recurring

charges.

33. The sums referred to in paragraph 30 [sic - presumably par 31]:

33.1. bear interest at the rate and for the periods found on

account referred to in paragraph 32 hereof; and

33.2. for the period during which the Kelmscott (1988) Unit

Trust did not incur costs on any bill line facility with the

ANZ Bank Limited at the rate prescribed from time to

time pursuant to section 32 of the Supreme Court Act.

38. The Plaintiffs' claims against the Eighth and Ninth Defendants

be dismissed.

39. The Plaintiffs' claims otherwise be dismissed.

40. The First and Second Defendants have judgment on their

counterclaims as provided in pars 13 - 15 and 31 - 33 but the

counterclaims otherwise be dismissed.

[2018] WASCA 198

Page 63

Schedule 3 - Grounds of challenge

First - third and fifth - seventh appellants' grounds of challenge

Grounds 1 - 3 - pars 2(b) and 2(c) of the 2009 Court of Appeal orders

(principal sums on loans from Summerfield Trust)

The first - third and fifth - seventh appellants allege, in effect, that the

registrar 'erred in law or in principle or such is manifestly unreasonable'

for not including amounts for loans made by Tace as trustee of the

Summerfield Trust to Mr Green and W J Green & Co on the bases that:

1. the Summerfield loans were not disputed and were outstanding;

2. repayment of the sums were a 'just allowance' under O 45 r 8

and, in any event, were necessary to do justice between the

parties; and

3. the registrar erred in not having regard to the transcript of the

primary proceedings, in not giving effect to O 36 r 9, and in

concluding that this court in Wilden Pty Ltd v Green [No 4]146

had found that the transcripts could not be included in evidence.

Ground 4 - pars 2(b) and 2(c) of the 2009 Court of Appeal orders

(interest on loans from Summerfield Trust)

It is alleged that as the principal sums said to be due to the Summerfield

Trust should have been allowed, so should interest have been allowed

under pars 2(b) and 2(c) of the 2009 Court of Appeal orders, and

pars 14, 15, 32 and 33 of Hasluck J's preserved orders.

Grounds 6 -11 - par 6(a) of the 2009 Court of Appeal orders

There is no ground 5.

By ground 6, it is alleged that the registrar erred in law or in principle,

or her decision was manifestly unreasonable, in finding that the

construction and/or operation of par 6(a) was to the effect that the

respondents were entitled to be paid, rather than their share of the

income available for distribution each year, the same amount as had

been distributed to each of the other unit holders, so as to notionally

increase, by force of court orders, the total amount to be distributed in

the relevant years by the trusts.

146 Wilden Pty Ltd v Green [No 4] [2016] WACA 195.

[2018] WASCA 198

Page 64


or was manifestly unreasonable:

1. in construing the words 'income distribution' in par 6(a) as not

requiring 'income' to include or be net of costs and expenses

(and losses) incurred in each year the relevant income was

earned arising from the operation and management of the trusts

attributable to each unit;

2. in finding (at [81]) that it was unnecessary to restate the

accounts of the trusts; and

3. in finding (at [124]) that the words 'income distribution' in

par 6(a) included distributions of any character, capital or

otherwise, when the repurchase mechanism 'revoked' [sic] by

the respondents fixed the capital value of their units as at the

date of the repurchase notice, being the repurchase values to be

paid in accordance with par 5.


or was manifestly unreasonable in finding, that the losses suffered by

the trusts over the relevant period should not be taken into account in

giving effect to par 6(a), when not to include those losses resulted in

unit holders being treated unequally 'as prescribed by the Trust Deeds',

and, further, when the respondents conceded that the purpose of

par 6(a) was to treat all unit holders equally.


and her decision was manifestly unreasonable, given there was no

evidence relevant to the unit holders in support of the finding (at [125])

that distributions referrable to the sale of property assets constituted

income on the basis that the trusts were in the business of buying and

selling property.

By ground 10, it is alleged that the registrar erred in law or in principle

in finding (at [126] and [127]) that:

1. the proper construction of cl 12.1(15) of the trust deeds required

the exercise of the trustees' discretion, in determining whether

income was to be allocated as capital or income, to be the

subject of a special resolution by the unit holders;

2. notwithstanding the uncontroverted evidence of Mr Chesson

that the trustees had exercised their discretion and the relevant

[2018] WASCA 198

Page 65

determination had been made, the registrar found that the

exercise of the trustees' discretion to make the determination

had not been exercised;

3. the absence of special resolution supported a (general)

conclusion that all distributions by the trusts can be

characterised as income distributions; and

4. the trusts had not classified the proceeds of the sale of the

relevant trusts' capital assets as receipts, when such a finding

was against the evidence.

By ground 11, it is alleged that the registrar erred in law and principle

in finding (at [39] and [54]) that the Notice of Concessions and annexed

schedules were merely submissions rather than the account to be

passed, and that the amended financial records should not be received

as the trustees' account.

Ground 12 - par 6(b) of the 2009 Court of Appeal orders

By ground 12, it is alleged that the registrar erred in law in failing to

give effect to par 6(b), and, on the respondents' failure to comply with

that order (in not establishing the interest rate the funds would have

accrued in an interest bearing deposit with the banker to the trust), in

not disallowing the respondents' claim for interest.

Ground 13 - general ground

By ground 13, it is alleged that the Registrar's report is infected with

error or principle, or errors of law, or is manifestly unreasonable in that

the registrar:

1. proceeded on the basis that she did not need to decide or

determine the correct interpretation of par 6(a), but that was a

matter that ultimately would be dealt with by the Court of

Appeal, when she should have found that she was required to

make that determination to permit her to undertake the account;

and

2. misapprehended the trustees' and the registrar's roles in giving

effect to par 10.

As to the second alleged error, it is said that the trustees were, on the

basis of the written true financial records of the trusts, to bring before

the court the trustees' account of the amounts payable or due pursuant

[2018] WASCA 198

Page 66

to pars 5, 6 and 8, and the registrar was then to rule on any objections

(surcharges or falsifications) and determine the amounts payable or

due, with the respondents having the burden of proof on any surcharges

and the trustees on any falsifications. The registrar, nevertheless,

allegedly erred in finding that the trustees had the burden of proof for

all objections, and undertook a roving review of the trustees' accounts.

Each of the grounds 1 - 12 are also repeated.

Fourth appellant's grounds of challenge

Ground 1 - failure to conduct account in an appropriate and proper

manner

The fourth appellant contends, in effect:

1. The registrar conducted a roving commission of the type that

would be afforded by an account on the footing of default,

rather than an account for the administration of the trust in

circumstances where the trustees had not breached their

obligations under the trust deeds. In that regard, it is contended

that the registrar misdirected herself and failed to adhere to her

limited jurisdiction to determine whether any surcharges were

proven by the respondents, and whether the appellants were

able to prove that any falsifications raised by the respondents

were, in fact, properly incurred expenses.147

2. The registrar failed to recognise (at [73] and [79] - [81]) that the

account was not 'a historical account but was a current account

to take into account the entire period between the date of the

determination of the repurchase price of the units and the date

of the account'.148

3. The registrar misunderstood (at [25] - [26]) that she was not

required to determine particular items, when particular items

were reserved for determination by the trustees, in the absence

of breach of trust, and failed to recognise that the account was

to be taken 'before a registrar', and not 'by a registrar'. She

thereby adopted an approach which rendered nugatory the

whole of the preceding litigation.149

147 Fourth appellant's grounds of appeal, pars 1 - 3, 5. 148 Fourth appellant's grounds of appeal, par 6. 149 Fourth appellant's grounds of appeal, pars 4, 7, 8.

[2018] WASCA 198

Page 67

4. The registrar failed (at [81]) to properly construe order 6(a) in

relation to the word 'income'.150

5. The registrar erred in finding (at [88]) that she was not satisfied

that the restated accounts showed a legitimate claim to the

liabilities that had been calculated and included in the accounts

retrospectively. That finding was contrary to the evidence of

Mr Chesson, and Mr Chesson's evidence was supported by: (1)

the trust auditor's certificates'; (2) the fact that there was no

obligation under the trust deeds to pass any specific resolutions

in relation to costs and expenses; and (3) the fact that the trusts

were 'closely held' and managed by companies which were

managed by the unit holders.151

6. The registrar erred in law (at [28] - [31]) and in fact in failing to

recognise that the respondents 'did not provide the Appellants

with notice of the matters of cross-examination, such matters

becoming the matters identified and amended in the Notice of

Concessions and attached Schedule'.152

Ground 2 - failure to recognise that the trust deeds are paramount

The fourth appellant:

1. effectively repeats the matters in point 3 of ground 1 above;153

and

2. contends that the registrar failed (at [66]) to recognise that the

trustees were bound to apply and act in accordance with the

trust deeds.154

Ground 3 - failure to recognise the trustees' duty to treat all beneficiaries

equally

The fourth appellant:

1. effectively repeats the matters in point 1 of ground 1 above;155

150 Fourth appellant's grounds of appeal, par 9. 151 Fourth appellant's grounds of appeal, par 10. 152 Fourth appellant's grounds of appeal, par 11. 153 Fourth appellant's grounds of appeal, par 12. 154 Fourth appellant's grounds of appeal, par 13. 155 Fourth appellant's grounds of appeal, par 14.

[2018] WASCA 198

Page 68

2. contends that the registrar (at [12] and [81]) failed to recognise

that the trustees were bound to consider the interests of and be

fair to all unit holders;156 and

3. contends that the registrar (at [12] and [81]) misconstrued

order 6(a) by failing to recognise that her interpretation was: 157

(a) contrary to the obligation of the trustees;

(b) impossible to achieve; and

(c) contrary to s 94(2)(a) and s 94(2)(b) of the Trustees Act

1962 (WA).

Ground 4 - failure to recognise that the accounts had to be restated to

comply with the orders

The fourth appellant alleges, in effect, that the registrar erred in law and

in fact:

1. in failing to recognise (at [73] - [93]) that the 2009 Court of

Appeal orders required a restatement of the accounts, because

until those orders, the trustees had provided for interest to be

payable to the respondents, but had not provided for income

distributions to be paid to the respondents;158 and

2. on the basis of the matters set out in grounds 1 and 3 above.159

Ground 5 - failure to give due regard to the trustees' discretion

The fourth appellant, in effect:

1. contends that the registrar erred in failing to recognise (at [130])

that the treatment of capital gains, as separate from trust

income, was at the discretion of the trustees, which discretion

the trustees had exercised;160 and

2. repeats the matters in ground 1 above.161

156 Fourth appellant's grounds of appeal, par 15. 157 Fourth appellant's grounds of appeal, par 15. 158 Fourth appellant's grounds of appeal, par 16. 159 Fourth appellant's grounds of appeal pars 16.1, 16.2, 16.3. 160 Fourth appellant's grounds of appeal, par 17. 161 Fourth appellant's grounds of appeal, par 18.

[2018] WASCA 198

Page 69

Ground 6 - failure to properly consider the principal matters in dispute


in fact in that she failed to determine the principal matters in dispute

prior to considering the account presented before her, and that this

failure infected the account and the manner in which it was

conducted.162

Ground 7 - failure to properly consider the evidence

The fourth appellant contends, in effect, that the registrar erred in law

and in fact:

1. in disregarding Mr Chesson's evidence in finding (at [84]) that

Mr Chesson conceded that accounting principles were not

followed when no such concession had been made;163

2. by relying upon the expert evidence of Mr Van Homrigh over

the evidence of Mr Chesson, and, in particular, erred in relying

on Mr Van Homrigh's evidence in respect of capital gains

when:164

(a) there was no evidence that Mr Van Homrigh's view as to

the approach of an investor was the approach that was

actually taken by the trustees (at [119]); and

(b) Mr Chesson's evidence, and the evidence of the

historical accounts and tax returns, identified the

difference between capital gains and income from rents

or other trading activities (at [92]);

3. by wrongly relying on the absence of special resolutions

regarding capital distributions (at [126] - [127]) in

circumstances where:165

(a) there was unchallenged evidence that the trusts were

closely held and the management was undertaken by

companies who were managed by the trusts' unit

holders;

162 Fourth appellant's grounds of appeal, par 19. 163 Fourth appellant's grounds of appeal, par 20. 164 Fourth appellant's grounds of appeal, par 21. 165 Fourth appellant's grounds of appeal, par 22.

[2018] WASCA 198

Page 70

(b) the trustees could and did waive any obligation under

cl 11.9 of the trust deeds; and

(c) on the proper construction of cl 12.1(15) of each of the

trust deeds, the trustees had a discretion to make

allocations, and a special resolution was only required

where the trustees sought approval so as to bind all unit

holders.

Ground 8 - failure to properly consider the difference between income

and capital


in fact (at [127]) by determining that the intention of the 2009 Court of

Appeal orders was to award both income and capital growth to the

respondents in circumstances where the Court of Appeal 'had restricted

the payments to income only being the converse as against the decision

of Hasluck J at first instance which was to award to the Respondents

distributions of Income and Capital'.166

Ground 9 - failure to properly consider the Notice of Concessions

The fourth appellant alleges that the registrar erred in law and in fact (at

[39] and [54]) in finding that the Notice of Concessions and annexed

schedules were merely submissions, in that she failed to:

1. recognise that errors in the account were not identified or raised

by the respondents prior to the hearing of the account; and

2. understand that in the event of an error, surcharge or

falsification identified by the respondents which was accepted

by the trustees, the appellants had the right to amend the

account accordingly.167

Ground 10 - failure to make just allowances

The fourth appellant alleges that the registrar erred in law and in fact in

failing to make just allowances in:

1. that she had no regard (at [40] - [42]) to the transcripts of earlier

hearings in the proceedings and thereby ignored O 36 r 8 and

r 9, and erroneously misunderstood that the court in Wilden

166 Fourth appellant's grounds of appeal, par 23. 167 Fourth appellant's grounds of appeal, par 24.

[2018] WASCA 198

Page 71

[No 4]168 had held that the transcripts could not be included in

submissions advanced by the trustees;169

2. not accepting into evidence (at [55] - [61]) the accounts of the

KCD Trust when they were referred to in the historical accounts

and in annexure C to Mr Ashby's report, and where the

respondents were on notice because Mr Van Homrigh was

shown those accounts at an expert conferral;170

3. not including (at [143]), in the making of just allowances under

O 45 r 8, or otherwise to do justice between the parties, the

repayment by the first and second respondents (Mr Green and

W J Green & Co) to the third appellant (Tace as trustee of the

Summerfield Trust); and

4. finding (at [143]) that in taking the account required by order 10

of the 2009 Court of Appeal orders, it is unnecessary to include

within that process accounting for the outstanding loans owed

by the first and second respondents (Mr Green and W J Green

& Co) to the third appellant (Tace as trustee of the Summerfield

Trust), when the first and second respondents had admitted in

1990 that the loans were repayable.171

Ground 11 - failure to properly consider what is an income distribution

The fourth appellant contends that the registrar erred in law and in fact,

in effect:

1. In finding (at [98]) that the losses 'suffered by the Trusts from

the date of repurchase to the date of the taking of the account

should not be taken into account in giving effect to order 6(a)',

given that the failure to do so would result in the unit holders

not being treated equally.172

2. In failing to recognise (at [88]) that the expenses might need to

be the subject of further litigation. In that regard, the fourth

appellant also relies, in effect, on ground 1 above.173

168 Wilden Pty Ltd v Green [No 4] [2016] WASCA 195. 169 Fourth appellant's grounds of appeal, par 25.1. 170 Fourth appellant's grounds of appeal, par 25.2. 171 Fourth appellant's grounds of appeal, par 27. 172 Fourth appellant's grounds of appeal, par 28. 173 Fourth appellant's grounds of appeal, par 29.

[2018] WASCA 198

Page 72

3. In finding (at [81]) that the words 'income distribution' in

order 6(a) did not require adjustments to costs, expenses and

losses attributable to each unit, including interest on

borrowings, legal fees, and expenses incurred for which

payment was deferred. In that regard, the fourth appellant also

repeats, in effect, ground 1 above.174

174 Fourth appellant's grounds of appeal, par 30.

[2018] WASCA 198

Page 73



CL

ASSOCIATE TO THE HONOURABLE JUSTICE MURPHY

9 NOVEMBER 2018

[2019] WASC 451

Page 1


IN CIVIL

CITATION : JENSEN -v- NATIONWIDE NEWS PTY LTD &

ANOR [No 13] [2019] WASC 451

CORAM : QUINLAN CJ

HEARD : 8, 9, 13, 14, 15, 16, 17, 20, 21, 24 MAY 2019 & 3

JULY 2019

DELIVERED : 20 DECEMBER 2019


BETWEEN : DENNIS GEOFFREY JENSEN

Plaintiff

AND

NATIONWIDE NEWS PTY LIMITED

First Defendant

ANDREW BURRELL

Second Defendant

Catchwords:

Defamation - Publications made by way of newspaper articles, online articles

and tweets - Claim by former Member of Parliament - Imputations in relation to

Plaintiff's living arrangements - Imputation in relation to use of parliamentary

letterhead

Defences - Justification - Whether imputations substantially true

Defences - Qualified privilege - Whether occasion of qualified privilege -

[2019] WASC 451

Page 2

Political communication - Reasonableness of conduct - Failure to make

reasonable enquiries - Failure to provide opportunity to respond

Damages - Extent of publication and republication - Effect on plaintiff -

Aggravating circumstances - Failure to apologise - Further and continued

publication - Conduct of litigation

Damages - Economic loss - Special damage - Causation - Loss of preselection

for Federal election - Loss at Federal election - Failure to obtain subsequent

alternative employment - Andrews damages

Jury finds some but not all imputations to be defamatory - Imputation not found

to be defamatory subject to appeal - Provisional findings made in relation to

imputation not found to be defamatory

Legislation:

Civil Liability Act 2002 (WA)

Defamation Act 2005 (WA)

Result:

Judgment for the plaintiff

Category: B

Representation:

Counsel:

Plaintiff : Mr M L Bennett & Mr A J Tharby

First Defendant : Mr T Blackburn SC & Mr J D MacLaurin

Second Defendant : Mr T Blackburn SC & Mr J D MacLaurin

Solicitors:

Plaintiff : Bennett + Co

First Defendant : MacPherson & Kelley Lawyers

Second Defendant : MacPherson & Kelley Lawyers

[2019] WASC 451

Page 3


Amaca Pty Ltd v Ellis [2010] HCA 5; (2010) 240 CLR 111

Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225

Bauer Media Pty Ltd v Wilson (No 2) [2018] VSCA 154; (2018) 56 VR 674

Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 366

Bristow v Adams [2012] NSWCA 166

Broome v Cassell & Co Ltd [1972] AC 1027

Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44

Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; (1998) 193 CLR 519

Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335

Chau v Fairfax Media Publications Pty Ltd [2019] FCA 185

Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd

(1991) 22 NSWLR 389

Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211

Crampton v Nugawela [1996] NSWSC 651; (1996) 41 NSWLR 176

Fairfax Publications Pty Ltd v Kermode (2011) 81 NSWLR 157

Gacic v John Fairfax Publications Pty Ltd (2015) 89 NSWLR 538

Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1

Hockey v Fairfax Media Publications Pty Ltd (2015) 237 FCR 33

Jensen v Nationwide New Pty Ltd [2019] WASCA 77

Jensen v Nationwide New Pty Ltd [No 12] [2019] WASC 250



John Fairfax Publications Pty Ltd v O'Shane (No 2) [2005] NSWCA 291

Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR

520

Levy v Victoria [1997] HCA 31; (1997) 189 CLR 579

March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506

Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182

CLR 1

Mirror Newspapers Ltd v Fitzpatrick (1984) 1 NSWLR 643

Polly Peck (Holdings) v Trelford [1986] QB 1000

R v Dawes [1992] 2 Qd R 435

Rayney v The State of Western Australia (No 9) [2017] WASC 367

Rejfek v McElroy [1965] HCA 46; (1965) 112 CLR 517

Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1

Rogers v Nationwide News Pty Ltd [2003] HCA 52; (2003) 216 CLR 327

Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496

Selecta Homes & Building Co Pty Ltd v Advertiser-News Weekend Publishing

Co Pty Ltd [2001] SASC 140; (2001) 79 SASR 451

[2019] WASC 451

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Stephens v West Australian Newspapers Ltd [1994] HCA 45; (1994) 182 CLR

211

Theophanous v Herald & Weekly Times Ltd [1994] HCA 46; (1994) 182 CLR

104

Todd v Swan Television & Radio Broadcasters Pty Ltd [2001] WASC 334;

(2001) 25 WAR 284

Toomey v Mirror Newspapers Ltd (1985) 1 NSWLR 173

Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497

Wilson v Bauer Media Pty Ltd [2017] VSC 521

[2019] WASC 451

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Table of Contents

Introduction ................................................................................................................................ 7

The alleged defamatory imputations .......................................................................................... 9

A jury determines the extent of defamatory meanings ............................................................. 10

The effect of the jury's verdict .................................................................................................. 11

Summary of the issues for determination ................................................................................. 12

Standard of proof and overview of witnesses ........................................................................... 16

Onus and Standard of Proof.................................................................................................. 16

Witnesses .............................................................................................................................. 17

Factual background................................................................................................................... 17

Dr Jensen's early work history and entry into Parliament .................................................... 17

The Skywarriors .................................................................................................................... 19

Dr Jensen's living arrangements ........................................................................................... 20

Mr Burrell's work history and the lead-up to 2016 preselection .......................................... 21

The events leading up the publications..................................................................................... 23

Mr Burrell's Evidence ........................................................................................................... 23

The anonymous package .................................................................................................. 23

Preparations for a story and contact with Source A ......................................................... 26

Mr Burrell speaks with Sean Conway .............................................................................. 29

Mr Burrell speaks with Dr Jensen .................................................................................... 31

Cross-examination arising from the Listing ..................................................................... 34

Dr Jensen's evidence as to the conversation with Mr Burrell ............................................... 37

Dr Hoad's evidence in relation to the 31 March article ........................................................ 40

Assessment of witnesses' evidence ....................................................................................... 40

Assessment of Dr Jensen as a witness .............................................................................. 41

Assessment of Mr Burrell as a witness ............................................................................. 44

Assessment of Dr Hoad as a witness ................................................................................ 51

The failure to call Mr Conway - a Jones v Dunkel inference? ............................................. 52

Findings as to the events leading up to the publications ...................................................... 53

Pleas of Justification - Truth ..................................................................................................... 57

The parliamentary letterhead imputation – Defence of truth ............................................... 59

Is the Curtis Brown letter genuine? .................................................................................. 62

Did Dr Jensen send the Curtis Brown letter? ................................................................... 65

The best interests imputation – Defence of truth .................................................................. 72

Qualified privilege .................................................................................................................... 79

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General principles ................................................................................................................. 79

Occasion of privilege – political communication ................................................................. 86

Was the defendants' conduct reasonable? ............................................................................. 89

Reasonableness of the conduct in publishing the 31 March publications ........................ 89

Reasonableness of the conduct in publishing the 1 April publications ............................ 93

Malice ................................................................................................................................... 98

Conclusions in relation to liability ......................................................................................... 102

Damages ................................................................................................................................. 102

Damages in respect of the 1 April publications .................................................................. 103

The extent of publication and republication ................................................................... 104

Damages for non-economic loss - general principles ..................................................... 106

The effect of the defamation on Dr Jensen ..................................................................... 110

Aggravating conduct? ..................................................................................................... 113

The amount of non-economic loss ................................................................................. 122

Damages for economic loss ............................................................................................ 123

Damages in respect of the parliamentary letterhead imputation ........................................ 137

Conclusion .............................................................................................................................. 139

Schedule A – The 31 March Article ....................................................................................... 140

Schedule B – The 1 April Article ........................................................................................... 143

Schedule C – Pleadings of Aggravated Conduct .................................................................... 144

[2019] WASC 451

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QUINLAN CJ:

Introduction

1 On 31 March 2016, readers of The Australian newspaper, when

turning to page four, were met with the following article at the top of

the page:1

2 An article in the same terms (under the headline 'MP Dennis

Jensen used official stationery to spruik his novel') also appeared on the

website of The Australian that day.2 In addition, Mr Andrew Burrell,

the author of the article, posted a link to the internet article on his

Twitter page along with the tweet, 'Revealed: Liberal MP Dennis

Jensen writes of steamy sex and war with Indonesia in his unpublished

novel'.3

1 Exhibit 31 (the 31 March Article). The full text of the 31 March Article is reproduced in Schedule A to

these reasons. 2 Exhibit 38 (the 31 March Internet Article). 3 Exhibit 39 (the 31 March Tweet). The 31 March Article, the 31 March Internet Article and the 31 March

Tweet are referred to in these reasons, collectively, as the 31 March publications.

[2019] WASC 451

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3 The following day, 1 April 2016, a follow-up article appeared on

page six of The Australian:4

4 Again, the article appeared (under the headline: 'New chapter as

Dennis Jensen leaves family home and electorate') on The Australian's

website5 and was the subject of a tweet by Mr Burrell headed: 'Liberal

MP Dennis Jensen leaves family home and electorate, hasn't given up

on racy novel'.6

5 As reflected in each of the articles, the plaintiff, Dr Dennis Jensen,

was at the time the Liberal member for the federal seat of Tangney in

Western Australia. Dr Jensen was facing a challenge to his preselection

for that seat by Mr Ben Morton, a former State Director of the Liberal

Party.

6 The preselection meeting was scheduled for 3 April 2016.

7 Dr Jensen lost the preselection to Mr Morton by a vote of 57 votes

to 7.

4 Exhibit 1 (the 1 April Article). The full text of the 1 April Article is reproduced in Schedule B to these

reasons. 5 Exhibit 2 (the 1 April Internet Article). 6 Exhibit 3 (the 1 April Tweet). The 1 April Article, the 1 April Internet Article and the 1 April Tweet are

referred to in these reasons, collectively, as the 1 April publications. The 31 March publications and the

1 April publications are referred to, collectively, as the publications.

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8 Dr Jensen claims that the 31 March publications and the 1 April

publications were defamatory of him. He claims compensation in the

form of both general damages and loss of earnings against the publisher

of The Australian, Nationwide News Pty Ltd (the first defendant) and

Mr Burrell (the second defendant).

9 The defendants deny any liability in respect of the publications.

The alleged defamatory imputations

10 Dr Jensen variously alleged that five defamatory imputations were

conveyed by the publications.

11 In relation to the 31 March publications, Dr Jensen contended that

each of them conveyed the meaning that he:

(a) is a hypocritical purveyor of smut;7 and

(b) improperly exploited his position as a federal Member of

Parliament by using his parliamentary letterhead to seek to

obtain a personal financial benefit, namely, a publishing deal for

his book, 'The Skywarriors'.8

12 Dr Jensen alleged that the 1 April publications carried four

meanings defamatory of him, namely that Dr Jensen:

(a) by leaving the family home to live with his new girlfriend, is a

person devoid of the family values expected of a Member of

Parliament;9

(b) by leaving the family home to live with his new girlfriend, is a

person devoid of the high moral standard expected of a Member

of Parliament;10

(c) by abandoning his electorate to live in Halls Head, failed to act

in the best interests of persons residing in the division of

Tangney for whom he was elected to represent; 11 and

7 Fifth Amended Statement of Claim dated 16 May 2019 (Statement of Claim) [6.1], [10.1], [14.1]. This

imputation is referred to in these reasons as 'the purveyor of smut imputation'. 8 Statement of Claim [6.2], [10.2], [14.2]. This imputation is referred to in these reasons as 'the parliamentary

letterhead imputation'. 9 Statement of Claim [21.1], [29.1], [37.1]. This imputation is referred to in these reasons as 'the family

values imputation'. 10 Statement of Claim [21.2], [29.2], [37.2]. This imputation is referred to in these reasons as 'the moral

standards imputation'.

[2019] WASC 451

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(d) improperly exploited his position as a federal Member of

Parliament by using his parliamentary letterhead to seek to

obtain a personal financial benefit, namely, a publishing deal for

his book, 'The Skywarriors'.12

13 As is apparent, Dr Jensen alleged that the parliamentary letterhead

imputation was conveyed by both the 31 March publications and the

1 April publications.13

A jury determines the extent of defamatory meanings

14 On 6 and 7 May 2019 a trial of separate issues was conducted

before me and a jury to determine whether the various publications

carried the meanings contended for by Dr Jensen and whether those

meanings were defamatory.14

15 The jury found that the 31 March publications did not convey the

purveyor of smut imputation.

16 The jury found that both the 31 March publications and the 1 April

publications conveyed the parliamentary letterhead imputation. The

jury was not, however, satisfied that the parliamentary letterhead

imputation was defamatory of Dr Jensen.

17 The jury was satisfied, in relation to the 1 April publications, that

each of the following meanings were conveyed by those publications

and that they were defamatory of Dr Jensen:

(a) that, by leaving the family home to live with his new girlfriend,

he is a person devoid of the family values expected of a

Member of Parliament (i.e. the family values imputation);

(b) that, by leaving the family home to live with his new girlfriend,

he is a person devoid of the high moral standard expected of a

Member of Parliament (i.e. the moral standards imputation);

and

11 Statement of Claim [21.3], [29.3], [37.3]. This imputation is referred to in these reasons as 'the best

interests imputation'. 12 Statement of Claim [21.4], [29.4], [38.2]. 13 Dr Jensen had also pleaded that the 1 April publications conveyed the purveyor of smut imputation, on the

basis that it they were composite publications with the 31 March publications: Statement of Claim [22], [30],

[38.1]. That case was not pursued at trial (see Ts (3 May) 555, 570-575). 14 The reasons for the order for a trial of separate issues (and the issues to be tried) can be found in Jensen v

Nationwide New Pty Ltd [No 8] [2019] WASC 170 (Jensen [No 8]) and Jensen v Nationwide New Pty Ltd

[No 9] [2019] WASC 171 (Jensen [No 9]).

[2019] WASC 451

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(c) that, by abandoning his electorate to live in Halls Head, he

failed to act in the best interests of persons residing in the

division of Tangney for whom he was elected to represent (i.e.

the best interests imputation).

The effect of the jury's verdict

18 The effect of the jury's verdict is that Dr Jensen does not have a

claim for defamation in relation to the 31 March publications, for the

reasons that, first, the purveyor of smut imputation was not established

and, secondly, and the parliamentary letterhead imputation was not

defamatory.

19 For this reason, there can be no judgment or award of damages in

relation to those publications or those imputations.

20 Following the jury's verdict, on 8 May 2018, I commenced hearing

a separate trial in relation to the remaining issues in Dr Jensen's action,

in accordance with my decisions in Jensen [No 8] and Jensen [No 9].

21 On that day, Dr Jensen also lodged an appeal in relation to the

jury's verdict, and in particular, in relation to the jury's verdict that

Dr Jensen had not established that the parliamentary letterhead

imputation was defamatory. Dr Jensen sought an urgent hearing of that

appeal to enable the trial before me to proceed on the basis of the

'corrected' answers to the questions posed to jury (in the event that the

appeal were successful).15

22 On 9 May 2019 the Court of Appeal refused Dr Jensen's

application for expedition. In the reasons later published by the Court,

Buss P and Beech JA observed that:16

Thirdly, considerations of efficient case management did not support

the making of the expedition order sought by the appellant. In addition

to the points already made, it would, as the appellant accepted before

us, be open to seek orders from Quinlan CJ, or otherwise request his

Honour, to provisionally determine issues of defences and damages

arising from the disputed imputations. Such a course would be entirely

conventional. Of course, whether it is appropriate is a question for the

trial judge, and one on which we express no opinion.

23 The trial before me resumed on 9 May 2019.

15 Jensen v Nationwide New Pty Ltd [2019] WASCA 77 [15] (Buss P & Beech JA). 16 Jensen v Nationwide New Pty Ltd [2019] WASCA 77 [20] (Buss P & Beech JA).

[2019] WASC 451

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24 At the commencement of the hearing on that day, counsel for

Dr Jensen confirmed that the jury's verdict in relation to the purveyor of

smut imputation did not, and would not, form part of Dr Jensen's

appeal.17 That is, in his appeal, Dr Jensen seeks only to challenge the

finding that the parliamentary letterhead imputation was not

defamatory.

25 After hearing further submissions from the parties, I concluded

that (in light of the jury's verdict) it was appropriate for me to conduct

the balance of the trial on the basis that I would make provisional

findings as to the remaining pleaded issues concerning the

parliamentary letterhead imputation. Those issues include the defence

of justification by way of truth and the defence of qualified privilege,

together with the quantum of damages, if any, that would be payable in

respect of that imputation.

26 As a consequence, this trial was conducted on the basis that I

would determine all of the pleaded issues as they related to the

parliamentary letterhead imputation.

27 There being no challenge to the jury's verdict in relation to the

purveyor of smut imputation, it is not appropriate that I determine the

issues relating to that imputation (including the defendants' plea that it

was true). I, therefore, make no findings in that regard.

Summary of the issues for determination

28 The issues to be determined by me are as follows.

29 First, in relation to the parliamentary letterhead imputation and the

best interests imputation, the defendants plead the defence of

justification, namely, that those defamatory imputations are

substantially true. The defendants rely upon the defence of truth both at

common law and pursuant to s 25 of the Defamation Act 2005 (WA).18

30 The defendants do not plead the defence of truth in relation to the

remaining imputations, namely, the family values imputation and the

moral standards imputation. 17 Ts (9 May 2019) 845-846. 18 Amended Substituted Defence and Counterclaim dated 1 February 2019 (Defence) [7B], [11B], [15B],

[23A], [23B], [31A], [31B], [39A], [39B]. The Defence also pleaded a Polly Peck defence (see Polly Peck

(Holdings) v Trelford [1986] QB 1000) of truth in relation to a variant of the parliamentary letterhead

imputation (Defence [7C], [11C], [15C], [23C], [31C], [39C]) (see West Australian Newspapers Ltd v Elliott

[2008] WASCA 172). The defendants did not pursue the Polly Peck defences at trial (Ts (3 May 2019) 553.

The counterclaim pleaded in the Defence was also discontinued, by consent, on 6 May 2019 (Ts (6 May)

639-640.

[2019] WASC 451

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31 The defence of qualified privilege, however, is pleaded in relation

to the entirety of the 31 March publications and the 1 April

publications. That defence is relied upon pursuant to both s 30 of the

Defamation Act and the common law defence recognised in Lange v

Australian Broadcasting Corporation.19

32 In this context, I note that the Defence pleads the occasion of

qualified privilege compendiously in relation to each of the 31 March

publications and the 1 April publications,20 rather than by reference to

the particular defamatory imputations said to be contained in them.

Whether the test for qualified privilege is to be applied to the

publications as a whole, or to the individual defamatory imputations

conveyed by them, is a matter of controversy between the parties and

one which I have addressed below.

33 All aspects of the defence of qualified privilege remain in issue

between the parties, including, in each instance, whether there was the

requisite interest or apparent interest giving rise to an occasion of

privilege.21 Nevertheless, the most significant issue between the parties

in relation to the defence of qualified privilege is whether the

defendants have proved that their conduct in publishing the material

about Dr Jensen was reasonable in the circumstances.22

34 In addition, Dr Jensen, pleads that the 31 March publications23 and

the 1 April publications24 were actuated by malice, thus defeating any

defence of qualified privilege. While the pleadings as to malice are

extensive and detailed, essentially Dr Jensen alleges that the 31 March

publications and the 1 April publications were actuated by the improper

motive of 'tarnishing the reputation of Dr Jensen' and thereby (i.e. for

the purpose of) influencing the outcome of the preselection on 3 April

2016. It does not overstate Dr Jensen's case in this regard to say that he

alleges that Mr Burrell was a conscious and deliberate party to a

scheme, with an unidentified person, calculated to damage Dr Jensen's

prospects in the preselection.25

19 Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520 (Lange). 20 Defence [45]. 21 Fourth Amended Reply and Defence to Counterclaim dated 8 February 2019 (Reply) [2], [5]. 22 See s 30(3) of the Defamation Act and, in relation to the Lange defence, Hockey v Fairfax Media

Publications Pty Ltd (2015) 237 FCR 33 (Hockey) [373] (White J). 23 Reply [4]. 24 Reply [7]. 25 See Plaintiff's Closing Submissions dated 23 May 2019 [28].

[2019] WASC 451

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35 Finally, depending upon whether and, if so which, defamatory

imputations are not defensible, it is necessary to assess the quantum of

damages payable to Dr Jensen.

36 In this respect, a number of issues arise in relation to damages.

37 First, Dr Jensen pleads that the circumstances of the publication of

the defamatory material are such as to warrant an award of aggravated

damages. A finding in that regard would affect both the quantum of

general damages and whether the statutory cap imposed by s 35 of the

Defamation Act may be exceeded.

38 Secondly, Dr Jensen brings a claim for special damage in respect

of economic loss said to arise from his loss of preselection for the seat

of Tangney and his inability to obtain alternative employment. That

issue requires a determination as to whether Dr Jensen has proven a

causal connection between any defamatory statements made of him and

the loss of his seat in Parliament and the fact that he has been unable to

obtain alternative employment.

39 If the pleaded claim for special damage is not established, an issue

arises as to whether Dr Jensen should be awarded damages to reflect an

allowance for the general effect on his 'employability' (in what might

best be described as a form of 'Andrews damages').26

40 In relation to the issues to be decided, I should note that, despite

some ambiguity in the pleadings, the defendants admitted that each of

the publications was relevantly 'published' for the purposes of the cause

of action in defamation.27 In that regard, however, I observe that the

publisher or publishers, and so the relevant defendant for each

publication, was not identical.

41 In particular:

(a) the 31 March Article, the 31 March Internet Article, 1 April

Article and the 1 April Internet Article were each published by

both defendants, Nationwide News Pty Ltd and Mr Burrell;

(b) the 31 March Tweet and the 1 April Tweet were published only

by the second defendant, Mr Burrell. In relation to the tweets,

the defendants also accepted that, as each tweet included a link to

26 See Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 (Andrews); Todd v Swan Television &

Radio Broadcasters Pty Ltd [2001] WASC 334; (2001) 25 WAR 284 [58] (Steytler J). 27 Ts (30 April 2019) 440-443.

[2019] WASC 451

Page 15

the internet article corresponding to the tweet, the tweets

conveyed the same information as the respective internet article.

That is, the 31 March Tweet included the 31 March Internet

Article and the 1 April Tweet included the 1 April Internet

Article.28

42 Notwithstanding that there was, technically, some divergence in

relation to publications published by each defendant, the parties

essentially conducted the case without regard to the distinction between

the defendants. That is, in terms of the issues to be determined by me,

such as reasonableness, malice or the quantum of damages, the

resolution of the issues was common to both defendants.

43 The conduct relied upon by the defendants, for example, to

establish the reasonableness of the defendants' conduct, was the

conduct of Mr Burrell. The evidence could not yield different answers

to those issues as between the defendants. This is particularly so in

relation to the tweets which, while published only by Mr Burrell, will

yield the same answers in relation to those issues as are reached in

relation to the articles and internet articles.

44 Similarly, Dr Jensen conducted the case on the basis that there

should be a single award of damages against the defendants and I was

not asked to apportion any damages award between the defendants. In

relation to each individual publication, of course, there is a single cause

of action.29

45 Accordingly, in the course of resolving the issues before me I

have, where appropriate and convenient adopted language and made

findings that refer to the publications and defendants collectively

(notwithstanding that they apply, strictly, to both defendants in relation

to the articles and internet articles, and to Mr Burrell only, in relation to

the tweets). The reasons which follow should be so understood.

46 Before turning to the evidence, it is appropriate to make some

preliminary observations in relation to the standard of proof and the

witnesses.

28 Ts (3 May 2019) 555. 29 Defamation Act s 8.

[2019] WASC 451

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Standard of proof and overview of witnesses

Onus and Standard of Proof

47 As will be apparent from this brief summary of the issues, a

number of the pleaded issues involve quite serious allegations. The

defendants' plea of truth in relation to the parliamentary letterhead

imputation and the best interests imputation (particularly the former)

seek findings of impropriety or unprofessionalism in relation to

Dr Jensen. Similarly, Dr Jensen's plea of malice alleges significant

wrongdoing on the part of Mr Burrell, not only as to his motivation in

writing the various articles, but also in the conduct of the litigation.30

48 These, and other allegations, are serious ones, in relation to which

the onus of proof variously rests with Dr Jensen or the defendants. The

standard of proof, of course, remains at all times the balance of

probabilities. There is no intermediate standard of proof between

satisfaction beyond reasonable doubt and satisfaction on the balance of

probabilities.31

49 Nevertheless, satisfaction on the balance of probabilities must take

into account the nature and consequence of the fact or facts to be

proved, the seriousness of any allegation made, the inherent

unlikelihood of an occurrence of a given description and the gravity of

the consequences flowing from a particular finding.32

50 I take all of these matters into account when assessing the

evidence, and arriving at findings and conclusions in the present case.

In the end I am guided by Sir Owen Dixon's observation that:33

The truth is that, when the law requires the proof of any fact, the

Tribunal must feel an actual persuasion of its occurrence or existence

before it can be found. It cannot be found as a result of a mere

mechanical comparison of probabilities independently of any belief in

its reality.

30 Dr Jensen's submissions characterised Mr Burrell's evidence as involving a 'monstrous' and 'fundamental

lie' (Plaintiff's Closing Submissions dated 23 May 2019 [20], [28]) and alleged that his account of receiving

anonymous material in relation to Dr Jensen was a 'fabrication' [5] and included the fabrication of evidence in

the form of the envelope in which it was delivered [28]. 31 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 366, 362-363 (Dixon J); Rejfek v McElroy

[1965] HCA 46; (1965) 112 CLR 517, 521-522 (Barwick CJ, Kitto, Taylor, Menzies & Windeyer JJ). 32 Briginshaw v Briginshaw, 362 (Dixon J). 33 Briginshaw v Briginshaw, 361 (Dixon J).

[2019] WASC 451

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Witnesses

51 In addition to a substantial volume of documentary evidence,

Dr Jensen called three witnesses to give evidence: himself, Dr Trudy

Hoad (his wife),34 and Ms Victoria Gutierrez. Ms Gutierrez' evidence

was confined to issues concerning the parliamentary letterhead

imputation.

52 The defendants called Mr Burrell and evidence from five of the

preselectors at the 3 April 2016 Tangney preselection: Mr Cameron

Schuster, Mr Godfrey Lowe, Mr Jonathan Youngs, Mr Daniel Earl and

Mr Bruce McGregor. Mr Lowe also gave evidence in relation to

certain matters arising from his previous employment in Dr Jensen's

office from 2006 to 2008. That evidence was, principally, relevant to

the parliamentary letterhead imputation.

53 Before turning to the factual issues in detail, I begin by setting out

the factual background leading up to the publications, in so far as that

background may be regarded as uncontroversial.

Factual background

Dr Jensen's early work history and entry into Parliament

54 Dr Jensen was, at the time of trial, 57 years of age and was born in

South Africa.

55 He migrated to Australia in 1982, initially living in South

Australia and then later in Victoria.

56 Dr Jensen studied in Victoria, being awarded a Bachelor of

Applied Science from the Royal Melbourne Institute of Technology and

later a Master of Science and PhD (again in science) from Melbourne

and Monash Universities, respectively.

57 Following his doctoral studies, Dr Jensen worked as a research

scientist at CSIRO in Victoria from 1995 to 1999. He married his first

wife, Susan, in 1991 and they had two daughters in 1994 and 1996

respectively.

58 In 1999, Dr Jensen took a position as a defence analyst with the

Defence Science and Technology Organisation within the Department

34 Following her marriage to Dr Jensen in January 2017, Dr Hoad has adopted the name Dr Trudy Jensen.

Nevertheless, in order to distinguish between her and the plaintiff and to avoid any confusion, I have referred

to Dr Trudy Jensen in these reasons as Dr Hoad. No disrespect is intended by that nomenclature.

[2019] WASC 451

Page 18

of Defence. The placement was at the HMAS Stirling Naval Base at

Garden Island and, as a consequence, Dr Jensen and his family moved

to Western Australia and settled in the Mandurah area where he

acquired a property at Halls Head (the Halls Head property). Their

third child was born in 2001.

59 Dr Jensen joined the Liberal party in Western Australia in 2003

(having previously been a member in Victoria) and developed an

interest in running for a seat in Parliament.

60 In 2004, when the Hon Daryl Williams AM QC announced his

retirement as the member for the seat of Tangney, Dr Jensen was

preselected and endorsed as the new Liberal candidate for Tangney.

61 He contested the federal election that year and was elected as the

Member for Tangney. The two party preferred vote was 61.75% (up

from 57.97% in 2001).35 Tangney is, and was at the time, a safe Liberal

seat.

62 Dr Jensen thereafter served as the Member for Tangney until the

2016 federal election. During that time, he served as Deputy Chair of

the Education and Employment Standing Committee, a member of the

Joint Standing Committee on Foreign Affairs, Defence and Trade

(including as Deputy Chair of the Defence subcommittee), and as

Deputy Chair, and later Chair, of the Petitions Committee. Dr Jensen

was never appointed to the Ministry or Shadow Ministry during his

service in Parliament.

63 Prior to his loss of preselection on 3 April 2016, Dr Jensen had

previously had difficulties with his preselection as the Liberal member

for Tangney.

64 In 2006, for example, Dr Jensen was challenged by two candidates

for preselection and lost the local preselection (and an appeal to the

appeals and disciplinary committee of the Liberal party).36 While

Dr Jensen lost the preselection, he was ultimately endorsed as the

candidate by the State Council of the Liberal party. In this regard, it is

the State Council that actually endorses candidates.37 The State

Council consists of approximately 130 persons, including the State and

35 Exhibit 107. 36 Ts (13 May 2019) 959-960 (Jensen). 37 Ts (9 May 2019) 873 (Schuster).

[2019] WASC 451

Page 19

National President, the State Executive, Divisional delegates and

others.38

65 Again, in 2009, there was another preselection contest for the

Division of Tangney, in which Dr Jensen was challenged by two

candidates. He again lost the local preselection. Notwithstanding the

loss of preselection, Dr Jensen was again endorsed by the State Council

(which, on this occasion, Dr Jensen gave evidence, conducted its own

preselection process).39

The Skywarriors

66 Meanwhile, in approximately 1998 or 1999, Dr Jensen who had an

interest in 'techno-thrillers' by authors such as Tom Clancy, decided to

write a novel.

67 He worked on the novel, which he ultimately called The

Skywarriors, from that time until approximately 2003. The novel

concerns a war between Australian and Indonesia, following a coup

d'etat in Indonesia led by the protagonist of the novel, General Rajiv

Rono. During the course of the war, the Indonesian forces are, for a

time, backed by Chinese naval forces. The Chinese forces withdraw

from the war prior to the final hostilities. The novel concludes with the

surrender by the Indonesian commander (although an epilogue hints at

a possible sequel and the return of General Rono).

68 Dr Jensen gave evidence that he endeavoured to have The

Skywarriors published at the time of its completion but was not

successful.

69 Following his election to Parliament, in mid-2007, Dr Jensen

again considered seeking to have The Skywarriors published.40

70 At that time he sought advice from his staff, including Mr Lowe

and Ms Trish Phelan, as to the wisdom of having it published. Both

Dr Jensen and Mr Lowe gave evidence that Dr Jensen was advised

against seeking to have the book published.

71 As the events of 2007, and in particular whether Dr Jensen in fact

sought a publishing deal, are in dispute I have dealt with them in more

detail later in these reasons.

38 Exhibit 34 (see especially cl 64). 39 Ts (13 May 2019) 961 (Jensen). 40 Ts (13 May 2019) 980 (Jensen).

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Dr Jensen's living arrangements

72 At the time of his initial election as the member for Tangney in

2004, Dr Jensen was living at the Halls Head property with his family.

Halls Head is not within the electorate of Tangney.

73 Following the preselection contest in 2006, Dr Jensen and his then

wife acquired a property in Leeming, within the electorate of Tangney.

Dr Jensen gave evidence that there were two reasons for the move. The

first was due to the fact that his not residing in the electorate had been

put against him in the 2006 preselection battle. Secondly, with a young

family, Leeming provided ready access to the public schools in the

area. The property in Halls Head was maintained as a weekender and

holiday retreat.41

74 In July 2014, Dr Jensen's wife, Susan, decided to leave the

marriage. She expressed to Dr Jensen the wish to remain in the

Leeming property, as their son had just commenced schooling at Perth

Modern School. Dr Jensen, therefore, moved to the Halls Head

property.42

75 In December 2014, Dr Jensen's former wife moved to Melbourne.

The Leeming property was sold in February 2015.43 By that time

Dr Jensen had already changed his residential address to Halls Head

and in February 2015 updated his parliamentary Register of Member's

Interests upon the disposal of the Leeming property.44

76 In November 2014, Dr Jensen met Dr Trudy Hoad. They met

online and started living together, more or less permanently, from

December 2014. From that time, they divided their time between

Dr Hoad's unit in Nedlands (and later Crawley) during the week and at

Halls Head on weekends. Dr Hoad was registered as Dr Jensen's

partner on the parliamentary Register of Partners from December 2014.

77 Dr Jensen and Dr Hoad have since married, marrying on

25 January 2017. After they married, Dr Hoad moved permanently into

the Halls Head property, where she and Dr Jensen have lived ever

since.

41 Ts (13 May 2019) 953. 42 Ts (13 May 2019) 953-954. 43 Ts (13 May 2019) 945. 44 Exhibit 60.

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Mr Burrell's work history and the lead-up to 2016 preselection

78 At the time of trial Mr Burrell was 47 years of age. He was, at all

material times, the chief reporter for Western Australia at The

Australian newspaper. Prior to that, Mr Burrell was a senior business

reporter for The Australian.45

79 Mr Burrell has been a journalist for 25 years and has previously

worked for the Albany Advertiser, the Kalgoorlie Miner, and The

Australian Financial Review in various capacities. While employed

with The Australian Financial Review, Mr Burrell spent time working

in Sydney, Jakarta and, for a brief period, China.46

80 He commenced working at The Australian in early 2010, formally

becoming the chief reporter for Western Australia in 2014.

81 Mr Burrell held that position up to trial, including throughout

2016.

82 In around October 2015, speculation began to be publicly aired

that Mr Morton, the outgoing State Director of the Liberal Party, might

challenge Dr Jensen for the preselection for the seat of Tangney.47

Dr Jensen gave evidence that he became aware of such speculation

earlier in 2015.48

83 As a consequence of those rumours, on 17 October 2015

Dr Jensen asked Mr Morton, by text message whether he intended to

challenge Dr Jensen for the preselection. Mr Morton gave a

non-committal reply.49

84 The speculation evidently continued into early 2016.

85 Towards the end of January 2016, Mr Burrell decided to write a

story in relation to the 'looming preselection battle' for the seat of

Tangney. As preparation for the story, Mr Burrell called Dr Jensen's

office on 28 January 2016 and asked to speak with Dr Jensen or

somebody on his behalf. Mr Burrell was directed to Dr Jensen's senior

advisor, Sean Conway. He had never spoken with Mr Conway before.

45 Ts (17 May 2019) 1467 (Burrell). 46 Ts (17 May 2019) 1471 (Burrell). 47 Ts (9 May 2019) 907 (Schuster). 48 Ts (13 May 2019) 969 (Jensen). 49 Exhibit 41.

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86 Mr Burrell raised with Mr Conway the issue of the preselection, in

light of the rumours that Mr Morton may seek preselection for the seat

of Tangney. Mr Conway advised Mr Burrell that Dr Jensen would not

be commenting on any matters to do with preselection.50 The

conversation then continued as a 'background' or 'off the record'

conversation as to Dr Jensen's prospects in a preselection contest.

Dr Jensen gave evidence, which I accept, that he was not aware that

Mr Conway had spoken with Mr Burrell on this occasion until after the

commencement of these proceedings.51

87 Mr Burrell wrote an article for The Australian in relation to the

issue of the potential preselection challenge which was published on

30 January 2016, both online,52 and in the print edition of the Weekend

Australian newspaper.53

88 On 26 February 2016, Mr Morton contacted Dr Jensen and

advised that he, Mr Morton, intended to challenge Dr Jensen for the

preselection for the electorate of Tangney. That same day, by email,

Mr Morton advised senior office holders within the Liberal party of that

intention.54

89 After that point, Dr Jensen worked towards securing the

preselection in the upcoming contest (which was ultimately scheduled

for 3 April 2016). He was provided with the list of preselection

delegates and arranged meetings to discuss his candidacy.55 Dr Jensen

maintained a running sheet of his discussions with preselectors, which

was tendered in evidence as to Dr Jensen's state of mind in relation to

his prospects in the preselection.56 His view, in the days prior to the

preselection, was that the preselection was on a 'knife edge'.57

90 During that period, Dr Hoad also sent a copy of a letter addressed

to each of the preselectors providing her perspective on Dr Jensen's

personal and professional qualities.58

91 Dr Hoad's letter was undated, although she gave evidence that it

was sent approximately one month before the preselection meeting.59

50 Ts (17 May 2019) 1478 (Burrell). 51 Ts (14 May 2019) 1108 (Jensen). 52 Exhibit 27 (under the headline 'Abbott critic faces preselection challenge from Lib director'). 53 Exhibit 128 (under the headline 'Abbott turncoat faces likely challenge from former chief'). 54 Exhibit 42. 55 Ts (13 May 2019) 971 (Jensen). 56 Exhibit 50; see Ts (13 May 2019) 1001 (Jensen). 57 Ts (13 May 2019) 984 (Jensen). 58 Exhibit 44.

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This recollection is generally consistent with evidence given by

Mr Lowe, who received a copy of the letter from Dr Hoad (Mr Lowe

being a pre-selector). Mr Lowe's copy of the letter60 was recorded by

him as having been received on 11 March 2016. I accept Mr Lowe's

evidence in that regard, and I find that the letter from Dr Hoad was sent

to preselectors on or about that date.

92 The events that occurred next are a matter of controversy. They

include:

(a) the circumstances in which Mr Burrell came to write the

31 March publications;

(b) the steps taken by Mr Burrell prior to the 31 March publications

and 1 April publications; and

(c) in particular, the conversation between Dr Jensen and

Mr Burrell on 30 March 2016.

93 In relation to those issues, I propose, first, to address each

witnesses' evidence separately, commencing with Mr Burrell's (as he

appears first in the relevant narrative).

The events leading up the publications

Mr Burrell's Evidence

The anonymous package

94 Mr Burrell gave evidence in examination-in-chief, that, at some

point in the days preceding the 31 March publications, he received a

yellow envelope addressed to him.61 He gave evidence that he found it

at his desk in the week of 23 March to 30 March 2016.62 Later, in

cross-examination, he was taken to an electronic copy of a Word

document prepared by him, entitled 'Jensen-novel', the metadata of

which states that it was created on 22 March 2016.63

59 Ts (16 May 2019) 1277. 60 Exhibit 123. 61 Exhibit 124 is the original envelope and the contents identified by Mr Burrell. Copies of the individual

documents included in those contents are also Exhibit 35 (the parliamentary letter) and Exhibit 45 (the

Extract from The Skywarriors), 62 Ts (20 May 2019) 1574 (Burrell). 63 Exhibit 137; Ts (20 May 2019) 1580-1581 (Burrell).

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95 Mr Burrell gave evidence that he did not know, and still does not

know, who prepared the envelope64 or who left it at his desk.65 While

the envelope has a postage stamp on it, it is not postmarked, and so is

unlikely to have arrived in the mail.66

96 Mr Burrell initially gave evidence that the envelope contained

three separate documents.

97 First, an anonymous typed letter (the anonymous letter) which

read as follows:67

Dennis Jensen Hi - Thought you might like these papers related to Dennis Jensen. People are amazed that he spent his first term in Parliament writing a novel - see parts of it attached and then spent time (and using his parliamentary letterhead) trying to get it published. It is truly awful - I can only suggest you keep a bucket handy when you read it. Also interesting that his local divisional council has organized the Annual General Meeting for Tangney on the night of Thursday 25 February – a sitting day. This is to make it as difficult as possible for him to attend – in the hope that they won't have to listen to another dreadful speech. Mind you, his anniversary of a decade in Parliament, at another council meeting passed without him attending. Unfortunately he did send a video.

98 Secondly, Mr Burrell identified a letter, purportedly signed by

Dr Jensen, and addressed to Ms Gutierrez at Curtis Brown (the Curtis

Brown letter):68

64 Ts (17 May 2019) 1486 (Burrell). 65 Ts (20 May 2019) 1574 (Burrell). 66 Ts (20 May 2019) 1565 (Burrell). 67 Exhibit 124. 68 Exhibit 35.

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99 Curtis Brown (Australia) Pty Ltd (Curtis Brown) was, and is, a

large literary agency that has an office in Paddington, New South

Wales.69

100 Finally, Mr Burrell gave evidence that the envelope contained a

50-page extract from The Skywarriors (the Extract).70 There can be no

doubt that the Extract is in fact a true copy of an extract from

69 Ts (9 May 2019) 854, 859 (Gutierrez). 70 Exhibit 45.

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Dr Jensen's book. Save for slight differences in formatting (which

affect the page numbering) the Extract is identical to the opening three

chapters of the full manuscript.71

101 The anonymous letter, the Curtis Brown letter and the Extract

were the only documents identified by Mr Burrell as being contained in

the envelope. At the beginning of cross-examination, Mr Burrell

confirmed that the three documents were the full contents of the

envelope, which he recalled receiving and had never forgotten.72 That

evidence came under sustained challenge later in the cross-examination,

including as to whether the provision of the documents was indeed

anonymous. I will return to that evidence later.

Preparations for a story and contact with Source A

102 Mr Burrell gave evidence that, having read the documents, he

thought it might make a story, although he said he did not communicate

with anyone about it immediately. At some later point, he said, he

communicated with Mr James Madden, the Deputy National Chief of

Staff and Ms Paige Taylor, the Western Australian editor for The

Australian.73

103 On the morning of 30 March 2016, Mr Burrell had contact with a

number of persons.

104 First, he had a series of exchanges by text message with a person

Mr Burrell identified as a confidential source (Source A).74 The first

text message was a photograph from Mr Burrell to Source A at 9.48

am. The photograph was of part of a 'sex scene' on page 28 of the

Extract. Mr Burrell later confirmed in cross-examination that he had

previously spoken to Source A about the extract from the book, to ask

Source A if he had ever heard whether Dr Jensen had published a book.

105 It is clear from the text messages themselves that Mr Burrell did

speak to Source A prior to the exchanges. First, the photograph of the

extract is not preceded by any explanation in the text message thread:

this suggests it was preceded by some form of conversation. More

tellingly, Source A stated in a text at 10.05am: 'I hope his letter to the

publisher was not on his MP letterhead'. There was nothing in the text

71 Exhibit 46. Indeed both the Extract and the full novel contain the same typographical error in the header,

which reads 'The Skywarriorss'. 72 Ts (20 May 2019) 1565-1566 (Burrell). 73 Ts (17 May 2019) 1488-1489 (Burrell). 74 Exhibit 97.

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messages from Mr Burrell suggesting that there was such a letter. The

fact that Source A was aware of the existence of a 'letter to the

publisher' supports the inference that he obtained that information in an

earlier conversation with Mr Burrell. That inference is most likely, and

I so find. 75

106 Secondly, Mr Burrell also had contact, on the morning of

30 March 2016 with other employees of The Australian. In this regard,

Mr Burrell identified, in cross-examination, a series of emails that he

sent to Mr Madden and Ms Patricia Rees, the National Chief of Staff:

(a) At 10.33am he emailed a scanned copy of the Curtis Brown

letter;76

(b) At 10.34am he emailed pages 27 and 28 of the Extract

(containing the 'sex scene');77

(c) At 10.55am he emailed (to Mr Madden only) what he described

as a 'listing', being a summary of the proposed story for the

editors (the Listing).78

107 In examination-in-chief, Mr Burrell gave evidence that he also

spoke to Mr Madden that morning and that Mr Madden requested that

he get a photograph of Dr Jensen.79 In cross-examination, Mr Burrell

stated that that request had probably come from Ms Taylor, who had

spoken to Mr Madden. He later said that it was very difficult to recall

whether he spoke to Mr Madden directly or through Ms Taylor.80

108 In any event, at 12.24pm Mr Burrell sent a further text to Source A

stating: 'Don't suppose you know his home address? We have been

told to photograph him today?'.

109 In response, at 12.31pm, Source A sent Mr Burrell a PDF copy of the

applications for the Tangney preselection. That document consisted of

eight pages; four pages of Mr Morton's application and four pages of

Dr Jensen's application.81 The copy of Dr Jensen's application included

75 Mr Burrell initially said in cross-examination that he had not had a conversation with Source A and told

him about a letter, although he later accepted that he did speak with Source A prior to the text messages (Ts

1721, 21 May). 76 Exhibit 138. 77 Exhibit 139. 78 Exhibit 140. 79 Ts (17 May 2019) 1489 (Burrell). 80 Ts (20 May 2019) 1604-1605 (Burrell). 81 Exhibit 129; Ts (17 May 2019) 1508-1509.

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his residential address at Halls Head and described his marital status as

'partnered'.

110 Mr Burrell and Source A continued their text exchange in relation

to Dr Jensen's address, the fact that it was not in the electorate of

Tangney and the fact that his marital status was listed as 'partnered'.82

111 Before leaving that exchange, it is convenient at this point that I

make certain findings about Source A. Mr Burrell gave evidence in

relation to his previous dealings with Source A, including in relation to

his promises of confidentiality (a matter which was the subject of

challenge in cross examination).

112 Mr Burrell was not asked, or required, to identify the identity of

Source A in the course of his evidence (although he did identify that

Source A was male).83 Nevertheless, as it may be relevant to other

issues, it is appropriate that I make the following findings in relation to

Source A.

113 Clearly Mr Burrell regarded Source A as being a person who

would be likely to have information in relation to Dr Jensen.84 Source

A was also clearly a person who had access to the preselection

applications of both Dr Jensen and Mr Morton (and indeed was able to

forward them to Mr Burrell within seven minutes of Mr Burrell's

request for Dr Jensen's address). As a number of witnesses,85 and

indeed contemporaneous documentation,86 confirmed, the preselection

applications were confidential. They would not be in wide circulation.

They would, however, have been available to delegates for the

preselection and other persons within the administration of the Liberal

party.

114 On the basis of all of this evidence, in my view, the strong

inference is available that Source A was a member of the Liberal party

or a person closely associated with the Liberal party. I so find. This is

perhaps not surprising. Mr Burrell gave evidence that he had contacts

within all political parties.87 For completeness, I also record that, for

82 Exhibit 97. 83 Ts (20 May 2019) 1588 (Burrell). 84 See the reference to his 'strong understanding' at Ts (20 May 2019) 1584. 85 Ts (9 May 2019) 901-902 (Schuster), (13 May 2019) 971, (Jensen), (16 May 2019) 1353 (Lowe). 86 Exhibit 33. 87 Ts (17 May 2019) 1473 (Burrell).

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the reasons I gave in the course of the trial, I am satisfied that neither

Mr Conway nor Mr Morton is Source A.88

115 Moreover, I find that Source A was a person who was not a

supporter of Dr Jensen within the Liberal party. This is, in my view the

proper conclusion to be drawn from the apparent mirth with which

Source A responded to the 'sex scene', his preparedness to assist in,89

and keep confidential90 the fact of, a proposed article in relation to

Dr Jensen that (at the very least) would not cast him in a favourable

light. Source A was also prepared to breach the confidentiality that

attached to the preselection applications. Mr Burrell confirmed in

cross-examination that Source A was opposed to the re-election of

Dr Jensen.91

Mr Burrell speaks with Sean Conway

116 Following the text exchanges with Source A that day (the last of

which was at 12.41pm92) Mr Burrell took steps to contact Dr Jensen.

117 Mr Burrell called Dr Jensen's electoral office and had a

conversation with Mr Conway.93 In cross-examination, Mr Burrell said

that he thought he called Mr Conway in the morning. His telephone

records, however, record the call between Mr Burrell's telephone and

Dr Jensen's office as commencing at 1.14pm (WST), which I find to be

the time of the call.94

118 Mr Burrell gave evidence that he raised with Mr Conway his

understanding that Dr Jensen had written a book. Mr Conway

responded that he didn't know anything about a book and that he would

have Dr Jensen call Mr Burrell.95

119 Mr Burrell gave evidence that he then raised Dr Jensen's living

arrangements with Mr Conway. His evidence-in-chief was as

follows:96

88 Ts (20 May 2019) 1587-1588. 89 By providing the preselection application forms for Dr Jensen and Mr Morton. 90 Exhibit 97: 'I know nothing' (11.53am). 91 Ts (21 May 2019) 1720 (Burrell). 92 Exhibit 97: 'I don't know' (12.41pm). 93 Ts (17 May 2019) 1492 (Burrell). 94 Exhibit 147 (the telephone records are expressed in Coordinated Universal Time: the call is recorded at

5:14:50 UTC). 95 Ts (17 May 2019) 1493-1494 (Burrell). 96 Ts (17 May 2019) 1496 (Burrell).

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Right. Now, doing the best you can, what did you say to Mr Conway?--

-From - to the best of my recollection, I said, "I - I've heard that Dennis

- or I understand that - that - that Dennis is living in Halls Head, which

is outside the electorate. Is that because, you know, he had a marriage

breakdown or what's - what are the reasons behind that?" and Mr

Conway said words to the effect, "Yes. He's living in Halls Head. He

has been living - it's - it's - he has got - he has got a family holiday

retreat down there. He has been living in Halls Head since his marriage

broke down. He's now living there with his new girlfriend."

Right. Did he say anything to you to the effect of when that move took

place?---He didn't specify.

What did he say to you?---He said words to the effect that it had been

relatively recent.

Right. And do you recall saying anything back to Mr Conway in

response to that or was that the end of the conversation or what? Was

more said in that conversation?---I - I don't think anything more

substantial was - was said.

So that was the end of the conversation, was it?---Yes. I think the

conversation would have ended with Sean Conway saying something

like, "Well, I will - you know, I will get Dennis to call you."

120 Shortly after, Mr Burrell was asked about this reference to the

move being 'relatively recent':97

[W]hat did you understand, what was in your mind, by the use of the

words, Mr Conway's words, "relatively recently". What did you

think?---I didn't have a specific time in mind. I assumed it wasn't in the

preceding days or weeks, but I had the strong impression that it was - it

had happened relatively recently, and certainly in that current

Parliamentary term.

121 This evidence was the subject of substantial cross-examination.

122 In that regard, it was put to Mr Burrell, and he accepted, that the

witness statements that he had originally filed prior to trial said that he

had had two conversations with Mr Conway (on 30 March and

31 March respectively), but that he had changed his position after

reviewing his telephone records.98

123 Mr Burrell confirmed that, in his original statement, dated 18

October 2018, he had recounted that Mr Conway had said that

Dr Jensen was living in Halls Head 'with his girlfriend'. It was put to

97 Ts (17 May 2019) 1497 (Burrell). 98 Ts (21 May 2019) 1635 (Burrell).

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Mr Burrell that when he had recounted the conversation earlier in his

evidence, he had added the word 'new' (as in 'new girlfriend').

Mr Burrell responded that to the best of his recollection, Mr Conway

said 'new girlfriend'.99

124 When pressed as to the first statement, Mr Burrell said: 100

I was not trying to reproduce the exact words he spoke. I couldn't recall

them. I was saying what he has - the - as best - to the best of my

recollection at the time, he said words to the effect, "girlfriend".

125 Mr Burrell at first denied that he knew that there was some

significance to him having used the word 'new' in the 1 April Article.

When taken to an email exchange between himself, Ms Rees,

Mr Madden and Ms Taylor on 4 April 2016 referring to Dr Jensen's

complaints about the 1 April Article, Mr Burrell accepted that he knew,

at that date, that there was a significance in the use of the word 'new'. 101

126 Mr Burrell was also cross-examined in relation to his use of the

word 'recently' and confirmed that he did not ask Mr Conway the name

of the 'new girlfriend' or when any of the things had occurred (i.e. what

date Dr Jensen moved, when (or how) his marriage had broken down or

when he had got a new girlfriend).102

Mr Burrell speaks with Dr Jensen

127 Mr Burrell gave evidence that, following his conversation with

Mr Conway on 30 March 2016, he received a telephone call from

Dr Jensen. The telephone records of both Dr Jensen103 and

Mr Burrell104 reveal that there were in fact four telephone calls from

Dr Jensen's mobile telephone to Mr Burrell's landline: the first

commencing at 2.20pm and totalling approximately 15 minutes.

128 Both Dr Jensen105 and Mr Burrell,106 however, recall a single

conversation. I am satisfied that there was, in effect, one conversation,

albeit that it took place over four calls, commencing at approximately

2.20pm.

99 Ts (21 May 2019) 1638 (Burrell). 100 Ts (21 May 2019) 1637 (Burrell). 101 Ts (21 May 2019) 1637-1638 (Burrell). See Exhibit 146. 102 Ts (21 May 2019) 1639, 1674 (Burrell). 103 Exhibit 47, commencing at sequence no. 429. 104 Exhibit 147, commencing at sequence no. 500. 105 Ts (13 May 2019) 979 (Jensen). 106 Ts (17 May 2019) 1497-1498 (Burrell).

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129 In his evidence-in-chief, Mr Burrell recounted the conversation as

follows:107

Right. And, doing the best you can, what was said? When you took the

call, did Dr Jensen say something?---He would've said who it was, and I

think I said words to the effect, "I'm calling about the book that you

wrote some time ago."

All right. And what did Dr Jensen say?---I can't recall specifically what

he said next, but I think I said words to the effect that, "I've got –" no, I

think I said – I'm just trying to remember what I said. I think I said,

"I've got a copy of your book that – you know, with a letter to Curtis

Brown. You were seeking to have it published back in 2007."

Did you say anything about – at that point in the conversation, did you

say anything about the nature of the letter that you had, what it was,

what kind of letter it was?---I said it was a letter, "Signed by you on

your Parliamentary letterhead."

…And did Dr Jensen say something to you?---Well, when I originally

asked about the book and whether he had marketed to a literary agency,

he denied that.

130 Mr Burrell repeated again that he had said 'I have got a copy of

your book' and continued:

And that I believed, "It's something you tried to have published back in

2007."

Yes?---He - - -

And what did you say about the letterhead?---Well, he initially denied

seeking to have the book published.

Yes?---And then I said words to the effect to him, "Well, I've got a copy

of a letter signed by you on your Parliamentary letterhead to Curtis

Brown, a literary agent, that was sent back in 2007." He said words to

the effect, "Well, okay. I accept that, I sent the letter."

131 Mr Burrell went on to recount the balance of the conversation,

including that he had asked Dr Jensen whether it was appropriate for a

Member of Parliament to be writing such a book, to which Dr Jensen

responded 'No', or 'These aren't my current thoughts', or something

along those lines.108

107 Ts (17 May 2019) 1498 (Burrell). 108 Ts (17 May 2019) 1499 (Burrell).

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132 The conclusion of the conversation was described by Mr Burrell as

follows:109

… He said that he would prefer that people didn't know about the fact

that he had written this book and that he would prefer I didn't write a

story about it. I said words to the effect, "Well, it's - you know, I'm

going to write something, but it's not up to me whether it's published in

tomorrow's paper. That's up to the - the editors of the newspaper."

133 Mr Burrell gave evidence that he did not ask Dr Jensen about his

living arrangements as he 'had already received the information from

Mr Conway' and, also, that he had assumed that Mr Conway would

have told Dr Jensen that he had discussed Dr Jensen's living

arrangements with Mr Conway.110

134 Mr Burrell was taken back to the conversation with Dr Jensen in

cross-examination. It was put to Mr Burrell, as was the case, that

Mr Burrell had given evidence in examination-in-chief (twice) that he

had told Dr Jensen that he had a 'copy' of the book. Mr Burrell

accepted that if he had said to Dr Jensen that he had a copy of the book,

rather than an extract, that he would have been lying. He said:111

If I had said copy to him, yes, I guess I was lying. You're asking me to

remember a conversation from three years ago, but I'm doing my best.

135 In relation to the Curtis Brown letter, Mr Burrell denied that he

said to Dr Jensen 'I've got the proof' that Dr Jensen had sent the letter.

He repeated his evidence that he said: 'Well, I've got a copy of a letter

on your parliamentary letterhead, signed by you, sent to Curtis Brown,

the literary agent, asking for the book to be published.'112

136 A little later in cross-examination, however, Mr Burrell said that

he did not believe he said to Dr Jensen 'you sent it'. Indeed, he said 'to

the best of my recollection, I didn't use the word sent … It was

Dr Jensen who said that'.113

137 Returning later to the issue of the letter, the following exchange

took place in cross-examination: 114

109 Ts (17 May 2019) 1500 (Burrell). 110 Ts (20 May 2019) 1533 (Burrell). 111 Ts (21 May 2019) 1646 (Burrell). 112 Ts (21 May 2019) 1647 (Burrell). 113 Ts (21 May 2019) 1649 (Burrell). 114 Ts (21 May 2019) 1656 (Burrell).

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And you accept, don't you, that you don't have a perfect memory?---

Yes.

You accept, don't you, the difference between saying, "I've got a letter

you sent to Curtis Brown," and, "I've got a letter on parliamentary

letterhead." There's a nuance, one or the other?---It's a nuance?

Yes. Dr - you heard Dr Jensen say you never mentioned parliamentary

letterhead to him? Now, you had a clear recollection of this

conversation?---Well, I can recall saying that to him.

You heard him say it would have been a red flag to him if you had said

that?---Well, I can recall saying that to him.

Are you sure that wishes aren't a bit farther than memory? You - in

retrospect, you hoped you had said to him but you don't have a clear

recollection?---No. I can - I can recollect saying that, and I know that as

a journalist that was the key point of - one of the key points of the story,

so I would have put it to him.

138 In the course of cross-examination in relation to his conversation

with Dr Jensen, Mr Burrell identified handwritten notes made by him at

the time of the conversation.115 The handwritten notes refer to the

novel and the period over which it was written, but do not refer Curtis

Brown or the Curtis Brown letter. That said, however, the notes are

clearly not a complete record of the conversation and, in my view, are

of little assistance in determining what was said in the conversation.

139 Mr Burrell also accepted, in cross-examination, that he did not

make contact with Curtis Brown prior to writing the 31 March Article.

He said that was because he planned to ask Dr Jensen.116

140 It is also uncontroversial that, following the 31 March

publications, Mr Burrell did not attempt to make any contact with

Dr Jensen or Dr Hoad prior to the publication of the 1 April

publications.117

Cross-examination arising from the Listing

141 As noted above, Mr Burrell's evidence that he received the

anonymous letter, the Curtis Brown letter and the Extract in an

envelope from an anonymous source came under sustained attacked in

cross-examination.

115 Exhibit 148 (a typed transcription of the notes is contained in Answers to Interrogatories sworn by

Mr Burrell on 15 May 2017 was Exhibit 148A). 116 Ts (20 May 2019) 1584 (Burrell). 117 Ts (21 May 2019) 1687 (Burrell).

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142 It is convenient to refer to that cross-examination now.

143 It arose from the Listing that Mr Burrell emailed to Mr Madden at

10.55am on 30 March 2016.118 The Listing contained a summary of the

proposed story (in effect, a first draft of the 31 March Article).119 It

was prepared prior to Mr Burrell having had any contact with Dr Jensen

on that day.

144 The Listing incudes the plot summary of The Skywarriors that was

later to appear in the 31 March article, including reference to the war

being between a 'coalition of Indonesia and China' and that the

'Indonesians enlist the aid of China, which sends personnel and

equipment'. That description of the plot of The Skywarriors is an

accurate one: China does indeed appear as part of the narrative of the

book.

145 Mr Burrell was taken to the Extract, and, following a brief

adjournment to enable him to review it, accepted in cross-examination

that there is no reference, at all, to China in the Extract. That is, the

Extract, and the other documents identified by Mr Burrell as being

contained in the envelope that he received anonymously, could not have

supplied the information necessary to write the plot summary referred

to in the Listing and in the 31 March Article.

146 That plot information (particularly that involving China) relied

upon by Mr Burrell therefore must have come from elsewhere.

147 When Mr Burrell confirmed this, following the brief adjournment,

he proffered the following explanation:120

Can you explain to his Honour how at 10.55 am on 30 March 2016 you

were able to write to Mr Madden the document that we have got as

exhibit 140?---All I can think of is that there was some sort of synopsis

that was attached to this extract of the manuscript that came in this

envelope, that I saw that on the day, and it's - and - and then misplaced

it soon after because I don't recall seeing a synopsis, but it's - it's the

only logical explanation for me being able to say that - you know, for

me to be able to give a - a succinct summary here of what the book - the

entire book was about. I also recall that Ms Gutierrez from Curtis

Brown mentioned in her evidence that they required that each person

submitting a book or an extract of a book or - or a manuscript was

required to submit a - you know, a cover letter, a synopsis and a few

sample chapters - - -

118 Exhibit 140. 119 Ts (20 May 2019) 1594 (Burrell). 120 Ts (20 May 2019) 1598-1599 (Burrell).

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Well, we've got - keep going.

…

THE WITNESS: So all I can think of is that I did have a synopsis on

the day.

BENNETT, MR: Well, we've gone through six lists of documents, five

affidavits. I've got two more affidavits of discovery to show you, none

of which mention this. I've got your affidavit of 8 October, which

doesn't mention a synopsis. I've got your witness statement that doesn't

mention a synopsis. Your evidence-in-chief and your evidence this

afternoon cross-examination - none of which mentioned a synopsis.

There's another alternative, isn't there, Mr Burrell? You know who sent

the material and you spoke to the person and they told you

something?---No. No.

You find that amusing, do you?---I have - I find it very amusing

because I have no idea who sent it to me.

Well, the only way you could know the plot to be able to summarise it

at 10.55 am is if you had read something or you had been told

something. Do you accept that?---Yes.

And if you had read something, the eight affidavits - the eight list of

documents - seven affidavits of discovery and your affidavit of 8

October 2018 - would have referred to a document, wouldn't it?---I - I

don't recall seeing a synopsis, but it's the only logical explanation for

the fact that I seemed to know at 10.55, even before speaking to

Dr Jensen about what the book is about, that it was actually about - that

- that China was involved.

Well, let me go back. You've made every search possible for

documents, haven't you?---Yes.

You have put all the documents that came in the orange envelope inside

it for storage?---No.

Exhibit 124. Except for two documents, the Gutierrez letter and the

extract?---That's correct.

All right. So if there were any other documents, they would be inside

the yellow envelope?---Not necessarily. No.

Where else would they be?---I don't know.

Well – so what you want his Honour to believe is that an undiscovered

document that you don't remember ever seeing it – seeing must be the

source of your special knowledge?---I say that because I know that I

didn't speak to anyone about it one – with 100 per cent certainty. I've

summarised the plot here. …

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148 It is this evidence (and further cross-examination in relation to the

issue) that Dr Jensen submitted revealed a 'conscious and deliberate lie'

on the part of Mr Burrell: a 'monstrous lie' to conceal that Mr Burrell

knew the identity of the person who sent the material and that he was

'consciously and deliberately' involved in the publication of material

damaging to Dr Jensen's reputation and fatal to his prospects of

achieving preselection. In this regard, Dr Jensen submitted, Mr Burrell

(or the source of the information) came up with the idea of an

anonymous package to protect the source's identity.121

149 Needless to say, this is a submission of the utmost gravity,

alleging, in effect, an elaborate fraud upon the Court. If accepted, it

would, as Dr Jensen submitted, provide overwhelming evidence of

malice on the part of the defendants.

150 Whether that has been established I shall address later. It suffices

to note, however, that whatever be the conclusion in that regard, this

aspect of Mr Burrell's cross-examination will be relevant to the

assessment of the reliability of his account of the events leading to the

publication of the 31 March publications.

151 Turning then to Dr Jensen's evidence as to his conversation with

Mr Burrell.

Dr Jensen's evidence as to the conversation with Mr Burrell

152 Dr Jensen gave evidence that he first became aware of

Mr Burrell's interest in The Skywarriors when he received a phone call

from Mr Conway on 30 March 2016 advising that Mr Burrell had

called. Dr Jensen said it was in the middle of the afternoon.

153 Dr Jensen called Mr Burrell and (in what he also recalled as one

conversation) recounted it as follows:122

Can you tell his Honour the - your recollection of the conversation as

best you can?---Yes. Mr Burrell said to me, "I believe that you wrote a

book about a war between Australia, Indonesia and China," and I said,

"Yes, I did." And then he said, "I hear that you wrote that during the

parliamentary term," and I said, "No, I didn't. I wrote it prior to

Parliament." And he said, "And you sent it seeking publication," and I

said, "No, I did not." And he said, "Yes, you did. I've got proof that you

did." I asked him about the proof and he said - he didn't say what the

proof was, but he said that, "Don't assume that" - I can't remember if he

121 See Plaintiff's Submissions dated 23 May 2019 [1], [5], [20], [28]. 122 Ts (13 May 2019) 979-980 (Jensen).

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said literary agent or publisher, "Don't assume that they are the ones

that leaked to me." He also said, "Do you think that it is proper that a

Member of Parliament be writing and seeking to publish a book with a

fictitious war against two large and important nations in our region?"

And I said, "No, I don't. I don't think it was appropriate." He asked me

if my views on that had changed and I said "yes". I - what was the other

thing that was - yes. So I also - I was somewhat nonplussed, your - your

Honour. I couldn't see where this was going and I said, "Well, this must

have something to do with preselection," and I got no response on that

from Mr Burrell. And I said, "Well, what's this about? What - what it's

going to be?" And he said, "I don't know if it's going to get published,

but it will just be something light-hearted." So there were certainly no

red flags in my mind. It - I thought that it would be something that

would be maybe a somewhat embarrassing laugh in something like the

Strewth section of the paper, but beyond that, I really - I couldn't see

where it was going.

154 Two aspects of this account were developed further in Dr Jensen's

evidence-in-chief.

155 In relation to his initial denial of having sent the book seeking

publication, Dr Jensen said that his recollection was that, while he had

considered seeking to have the book published in 2007, following the

strong advice from his staff not to do so, it had not been sent.123 His

explanation for having agreed with Mr Burrell that he had sent it was as

follows:124

Well, when he had first confronted - when he first said, "You sent the

book for publication." I said, "No, I didn't," because that was my firm

recollection. But he said that he had proof that he did and I accepted

that, you know, being the experienced journalist with The Australian

that he was, that he would have done the due diligence and made sure

that, yes, I had sent it. I also - I also know that with a lot of these types

of things, that it is the denial that gets you more than the actual thing

itself. And I was very much aware that I was in a preselection. So

although my recollection firmly was that I hadn't sent it. I couldn't be

100 per cent sure nine years later. So I accepted his assertion. I wasn't

obviously happy to accept the assertion, but I accepted it.

156 Secondly, in relation Dr Jensen's reference to there being no 'red

flags' arising from the conversation with Mr Burrell, Dr Jensen gave

evidence that when he ultimately saw the 31 March Article, his reaction

123 Ts (13 May 2019) 980 (Jensen). 124 Ts (13 May 2019) 981 (Jensen).

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was, in part, due to matters that were not discussed with him. He

said:125

… The sex wasn't discussed. The letterhead wasn't discussed. I mean,

either of those would have been red flags to me because I would have

known straightaway where the article was going. After - after 11 years

of political experience, you certainly develop a bit of a - an instinct for

something like that and certainly letterhead and sex are two things that,

obviously, are going to have great impact now. As I said the previous

day, there had been no red flags. I had even forgotten about the sexing.

I mean, it was nine years prior and I hadn't revisited the book.

157 Dr Jensen was challenged in cross-examination in relation to his

recollection as to whether he in fact sent the Curtis Brown letter. I will

return to that evidence later in relation to the defence of truth to the

parliamentary letterhead imputation.

158 As to whether Mr Burrell had referred to a parliamentary

letterhead in their telephone conversation, Dr Jensen remained adamant

that it had not been referred to:126

When Andrew Burrell, rang you, he said this to you, didn't he, or to this

effect, "I have a letter in front of me signed by you on your

Parliamentary letterhead to literary agent Curtis Brown asking for your

book to be published in 2007". He said that to you, didn't he?---No, he

did not. He said that he had proof of sending – proof that I had sent the

book to a literary agent – for a start, letterhead. I was – as I've said in

my evidence, I was really nonplussed and confused about what the

angle with this story was going to be. I mean, if the word "letterhead"

had been mentioned, do you think I would be asking Mr Burrell at the

end of it what is the story about, only to be told, "Well, it's a light-

hearted – it will be a light-hearted piece. Don't know if it will be

published".

And you said, I suggest to you, words to Mr Burrell to this effect, "Yes.

I did send that letter"?---No. I didn't say I sent a letter. I accepted that I

had sent a copy of the manuscript. There was no discussion of a letter

and there was no discussion of letterhead.

159 In relation to this dispute as to whether Mr Burrell referred to the

parliamentary letterhead, there is an aspect of Dr Hoad's evidence that

may be relevant to that issue.

125 Ts (13 May 2019) 985 (Jensen). 126 Ts (14 May 2019) 1120 (Jensen).

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Dr Hoad's evidence in relation to the 31 March article

160 Dr Hoad gave evidence in relation to her observations of

Dr Jensen when they first became aware of the 31 March Article.

161 In her evidence-in-chief, Dr Hoad was asked:127

And did you observe any reaction on the part of Dr Jensen?---Dennis

was furious. He said, "Now, I can see where the journalist was going.

Yesterday when he called me he neglected to tell me anything about

publishing a sex scene or the fact that he suggested I had sent this to be

published to a literary agent on Parliamentary letterhead." He said,

"When he rang me yesterday, he simply asked whether I had written a

book about a fictitious war between Australia and Indonesia and

China." He said none of the other stuff was asked or mentioned. He

said, "Now, I have some understanding of where Mr Burrell was going

with this."

162 This, of course, amounts to a contemporaneous account of

Dr Jensen's reaction to the 31 March Article. Dr Hoad's evidence that

Dr Jensen said, on 31 March 2016, that Mr Burrell had not said

anything about the parliamentary letterhead is consistent with

Dr Jensen's evidence at trial.

163 This evidence was received without objection and was not the

subject of cross-examination. I note the lack of objection because it

might have been argued that the statement was strictly inadmissible as a

prior consistent statement, although it might also be sufficiently

contemporaneous to be admissible as part of the res gestae.128

164 At any rate, the unchallenged evidence would be admissible to

rebut any suggestion of recent invention on Dr Jensen's part.

Assessment of witnesses' evidence

165 In making findings as to the events leading up to the publications,

and in particular in relation to Mr Burrell's conversations with

Mr Conway and Dr Jensen on 30 March 2019, it is necessary that I set

out some general observations in relation to the evidence of Dr Jensen,

Dr Hoad and Mr Burrell.

127 Ts (15 May 2019) 1261 (Hoad). 128 R v Dawes [1992] 2 Qd R 435, 436-437 (McPherson SPJ).

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Assessment of Dr Jensen as a witness

166 Dr Jensen initially gave evidence over approximately 2.5 days

from 13 May 2019 to 15 May 2019. On 3 July 2019, the defendants

applied for leave to reopen the trial for the purposes of further cross-

examination. I allowed that application129 and Dr Jensen was further

cross-examined on that day.

167 Dr Jensen was reasonable and measured in his evidence in chief,

albeit that he could be garrulous in some of his answers. In cross-

examination, there were occasions upon which Dr Jensen was defensive

or indignant. That defensiveness meant that, on occasion, his answers

were expressed with a greater certainty and force than was appropriate

in the circumstances. An example of this was Dr Jensen's response to

cross-examination in relation to this attack, on Twitter, of a high school

principal in relation to whom he had a sense of grievance.130

168 This and other instances131 suggest that Dr Jensen can, at times, be

given over to a sense of righteous indignation, a personality trait that

appeared to be on display to a number of the preselectors on 3 April

2016, who variously gave evidence that he was hectoring, arrogant and

aggressive.132 While I accept this to be the case, it did not adversely

affect my view of Dr Jensen's credibility generally.133 In particular, I

find that Dr Jensen was, generally, an honest witness and, save for the

two matters referred to below, was generally reliable in his account of

the events in relation to which he gave evidence.

169 The defendants submitted that Dr Jensen demonstrated a

willingness to try to conceal relevant material from the Court. In that

regard, three matters, in particular, bear scrutiny.

170 First, Dr Jensen was cross-examined at length in relation to a

confidential deed that was attached to his preselection application, but

which had not been discovered.134 He initially gave evidence that,

while a deed was referred to in the preselection application, he did not

recall signing a deed. When shown the deed,135 Dr Jensen agreed that

he had executed it on a number of previous occasions and, indeed,

129 Jensen v Nationwide New Pty Ltd [No 12] [2019] WASC 250. 130 Ts (15 May 2019) 1189-1193 (Jensen). 131 See e.g. Ts (14 May 2019) 1084-1085; Ts (14 May 2019) 1099; Ts (15 May 2019) 1187-1188 (Jensen). 132 Ts (16 May 2019) 1319-1320 (Lowe); Ts (16 May 2019) 1372 (Youngs). 133 Indeed, as I have found at [504] below, Dr Jensen's indignation was, in part, a product of the sense of

grievance that he feels as a consequence of having been defamed. 134 Ts (14 May 2019) 1056-1076 (Jensen). 135 Exhibit 102.

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recalled being of the opinion that it was an unreasonable requirement

by the Liberal party.

171 The defendants submitted that Dr Jensen's initial evidence that he

did not recall the deed was not credible and could not be reconciled

with his evidence, when shown the deed, that he was conscious at the

time of signing the deed that he considered it unreasonable. I do not

agree. It is not, in my view, incredible that Dr Jensen might fail to

recall the deed until he was shown a copy. The deed was, in some

respects, a pro-forma document that a witness might fail to immediately

call to mind years later. Having observed Dr Jensen giving evidence in

relation to the matter, I accept that his initial evidence that he did not

recall the deed (in the context of questions in relation to the

preselection application) was truthful.

172 Secondly, the defendants submitted that Dr Jensen's evidence that

there were no text messages between him and Dr Hoad from 3 to

30 March 2016 concerning preselection issues (and, therefore, none to

discover) was unconvincing.136 In this regard, Dr Jensen's evidence

was inconsistent with that of Dr Hoad, who estimated that, during

March 2016, she and Dr Jensen would have exchanged text messages

every 'second or third day'.137 I accept Dr Hoad's evidence that, in all

likelihood, she and Dr Jensen were in regular text communication over

that time and that some of those texts would have concerned

preselection issues.

173 In this respect, Dr Jensen's categorical answer that there were no

such texts in relation to the preselection was unreliable. It does not

follow from this that I consider that Dr Jensen deliberately concealed

material from the Court or the defendants. His answer was, in my

assessment, an example of the defensiveness with which he

occasionally responded when pressed in cross-examination.

174 The final matter relied upon by the defendants was the failure of

Dr Jensen to discover documents relating to an employment

opportunity that arose in 2019. This was the matter the subject of the

further cross-examination when the trial was re-opened on 3 July 2019.

I have addressed the substance of that evidence in the context of

Dr Jensen's claim for economic loss. For present purposes it is

136 Ts (14 May 2019) 1144-1147 (Jensen). 137 Ts (16 May 2019) 1274 (Hoad). Dr Hoad was later somewhat more equivocal in her answers ('possibly

every second or third day': Ts (16 May 2019) 1275). Nevertheless, the general tenor of her evidence (which

I accept) was of regular text communication.

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sufficient to note that it emerged from that evidence that there were

documents in relation to that employment opportunity that ought to

have been discovered.

175 In that context, Dr Jensen gave evidence that he stopped

discovering his applications for employment around October or

November 2018, when he had completed his final witness statement in

preparation for trial.138 Dr Jensen said that this was due to a mistaken

belief on his part that his ongoing discovery obligation had come to an

end once he had submitted his final witness statement for trial. While I

accept that explanation was a truthful one, it does reflect a lack of

diligence on Dr Jensen's part in relation to his discovery obligations. I

take that account in my assessment of Dr Jensen's reliability.

176 In addition, as I indicated at [168] above, there were two respects

in which I have real reservations as to the reliability (although not the

truthfulness) of Dr Jensen's evidence.

177 First, Dr Jensen was, understandably, keen to emphasise his own

talents and achievements and, in my view, presented a somewhat

inflated sense of those achievements and his electoral popularity.139 I

do not make that observation by way of criticism of Dr Jensen (most of

us are given to vanity from time to time). In this case, however,

Dr Jensen's self-assessment is relevant to my assessment of the

reliability of his own perception as to his prospects of success in the

preselection. Dr Jensen's own assessment of those prospects prior to

the preselection, for example, I do not consider to be reliable. At the

same time, Dr Jensen's subjective belief as to his prospects of

preselection will be relevant to the effect of the publications upon him,

when it comes to the assessment of general damages.

178 I will deal with this in more detail later in the context of the

assessment of damages. For present purposes, it is sufficient that I

record that I do not consider that Dr Jensen's self-regard, or his

proclivity to attack others (as the defendants put it), adversely affects

his credibility or reliability in relation to the events of 30 March 2016.

179 The second matter in relation to which I have concerns as to

Dr Jensen's reliability concerns Dr Jensen's recollection as to whether

he sent the Curtis Brown letter in 2007. For reasons I will give in more

detail in the context of the defendants' plea of truth, in my view the

138 Ts (3 July 2019) 581-585 (Jensen). 139 Ts (13 May 2019) 966; Ts (15 May 2019) 1205-1206; Ts (15 May 2019) 1215 (Jensen).

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certainty with which Dr Jensen recalls not sending the Curtis Brown

letter has been affected by what he has since learned as a result of

enquiries made by his solicitors to Curtis Brown in the course of these

proceedings. That is, there is, in my view, a degree of reconstruction in

Dr Jensen's memory in this regard, brought about by the knowledge that

Curtis Brown have no record of receiving the letter.

180 This in not to say that Dr Jensen has intentionally altered his

evidence in this respect. I do not consider that he has. Moreover, I

accept that, at all times since 2016, Dr Jensen's recollection has been

(and is) that, as a consequence of the advice of his staff, he decided not

to send the book to Curtis Brown in 2007. It is the degree of certainty

of that recollection that, in my view, is unreliable.

181 It is also important to emphasise, in this context, that the reliability

of Dr Jensen's recollection as to the events of 2007 (as to whether he

sent the Curtis Brown letter) and of his recollection of the events of

2016 must be the subject of separate and distinct consideration.

182 Not only were those events separated by almost a decade,

Dr Jensen had no particular reason (until 2016) to recall the events

surrounding possible publication of The Skywarriors in 2007. By

contrast, Dr Jensen had every reason to recall the events surrounding

the 31 March publications and the 1 April publications. These

proceedings were commenced within days of those publications, when

those events will have been fresh in Dr Jensen's mind.

183 Focussing, in particular, on Dr Jensen's evidence as to his

conversation with Mr Burrell on 30 March 2016, I find that Dr Jensen

gave his evidence honestly and that his account of the conversation was

consistent and clear over both evidence-in-chief and cross-examination.

The clarity with which Dr Jensen expressed his recollection of that

conversation was in my view genuine. I find that Dr Jensen's account

of that conversation to be generally reliable.

Assessment of Mr Burrell as a witness

184 I regret to say that I have not reached a similar conclusion in

relation to the reliability of Mr Burrell's evidence as to the events

leading up to the publications. In saying that, I do not find that Mr

Burrell was deliberately untruthful in his evidence, although, for the

reasons set out below, he did in my view exhibit a certain carelessness

with regard to the need to be accurate in his evidence.

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185 I do not accept Dr Jensen's submission that Mr Burrell's evidence

to the effect that the Curtis Brown letter and the Extract were provided

to him anonymously was a 'conscious and deliberate lie'. I accept, on

balance, that Mr Burrell was truthful in his evidence that he does not

know who sent that material to him. In particular, I do not accept Dr

Jensen's submission that, when confronted with the absence of the word

'China' in the Extract, Mr Burrell's demeanour reflected somebody

caught out in a 'monstrous lie'. 140

186 On the contrary, in my observation Mr Burrell remained calm,

even nonchalant, at this point in his evidence. Indeed, this nonchalance

was, in my assessment, one of the problems with Mr Burrell's evidence

generally. Particularly in his evidence-in-chief and in the early stages

of his cross-examination, Mr Burrell displayed an aloof, almost

disinterested, demeanour in his efforts to recall the events in question.

187 Given that Mr Burrell had been personally sued within days of the

publications, one might have expected Mr Burrell to have had a keen

interest in recollecting the events, and expressing that recollection, with

confidence and clarity. And yet, his evidence, including as to critical

issues, was replete with expressions of equivocation such as 'I would

have …'141 and 'I believe …'142, as though Mr Burrell was calling to

mind the events for the first time.

188 These expressions of equivocation were not, in my view, merely

verbal habits. Rather, having regard to Mr Burrell's demeanour, in my

view they reflected a significant degree of inattention on Mr Burrell's

part to the need to be accurate in his account of the events.

189 For example, as set out in [129] above, in Mr Burrell's first,

unassisted, account of the conversation with Dr Jensen he said 'I think I

said "I've got a copy of your book – you know, with a letter to Curtis

Brown"'.

190 Of course, Mr Burrell did not have a copy of the book (he only

had an extract).

191 When cross-examined in relation to that evidence, Mr Burrell

stated that either he said he had a copy or an extract. When pressed he

140 See Plaintiff's Closing Submissions dated 23 May 2019 [20]. 141 See e.g. Ts (17 May 2019) 1477, 1482, 1489, 1492, 1496; Ts (21 May 2019) 1610-1611, 1617, 1629,

1643, 1654, 1656, 1672. 142 See e.g. Ts (17 May 2019) 1488, 1491; Ts (20 May 2019) 1519, 1565, 1571, 1574, 1592, 1595; Ts (21

May 2019) 1610-1614, 1623, 1628, 1643-1644, 1648, 1650, 1654, 1671, 1679, 1710.

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said 'I can't recall, if I said copy, I said copy'. He accepted that to have

said 'copy' would have been a lie.143

192 The same issue arose concerning the use of the word 'sent' in

relation to whether Mr Burrell put to Dr Jensen that he had 'sent' the

letter to Curtis Brown. On a number of occasions, when unassisted

(and unprompted as to its significance), Mr Burrell gave evidence that

he said to Dr Jensen that he had a letter that was 'sent' by Dr Jensen to

Curtis Brown.144 When cross-examination brought into focus the

significance of the word 'sent', given the issues in the trial, Mr Burrell

said that he did not use the word 'sent' to Dr Jensen.145

193 These examples, while of apparently minor detail, in my

assessment reflect a significant degree of reconstruction on Mr Burrell's

part to meet the exigencies of the defendants' case. This was evident in

relation to other matters of importance.

194 Again, in relation to the 'letter', in his first account of the

conversation with Dr Jensen, Mr Burrell had to be prompted by a

question in relation to 'the nature of the letter that he had', before he

incorporated the words 'signed by you on your Parliamentary

letterhead'.146

195 That Mr Burrell's evidence in that regard was, in my assessment,

affected by a degree reconstruction is evident in the exchange set out in

[137] above, where Mr Burrell added to his recollection that 'I know

that as a journalist that was … one of the key points to the story, so I

would have put it to him'.147

196 It may be noted in this context that, while Mr Burrell gave

evidence that he intended to convey the parliamentary letterhead

imputation,148 he did not give evidence that he specifically put that

imputation to Dr Jensen for his response (i.e. that he had improperly

exploited his position as a Member of Parliament by using the

letterhead). At most, Mr Burrell gave evidence that he referred to the

letterhead in the context of identifying the letter addressed to Curtis

143 Ts (21 May 2019) 1646 (Burrell). 144 Ts (17 May 2019) 1498; Ts (21 May 2019) 1647 (Burrell). 145 Ts (21 May 2019) 1648-1649. Tellingly, in one of the answers in which Mr Burrell gave evidence that he

didn't believe he said 'you sent it' he repeated that that he said 'It's sent to Curtis Brown' (see Ts (21 May

2019) 1648. 146 Ts (17 May 2019) 1498 (Burrell). 147 Ts (21 May 2019) 1656 (Burrell) (emphasis added). 148 Ts (20 May 2019) 1524 (Burrell).

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Brown; the suggestion of impropriety was not raised by him in his

conversation with Dr Jensen.

197 A further example illustrating the generally unreliable nature of

Mr Burrell's recollection concerns his evidence in relation to the

conversation with Mr Conway on 30 March 2016.

198 First, in witness statements filed prior to trial, Mr Burrell

originally stated that he had had two separate conversations with

Mr Conway in which he obtained information relevant to the

publications, on 30 March 2016 and 31 March 2016 respectively.149 He

accepted, based on his telephone records, that that was incorrect and

that there had been only one conversation, on 30 March 2016.

199 This error was not insignificant. The conversation with

Mr Conway provided a significant plank to the defendants' claim of

reasonableness in relation to the 1 April publications. That plea

included that:150

prior to the publication, the Second Defendant contacted the Plaintiff

and also a Mr Conway, being the Plaintiff's senior advisor who had on

previous occasions been contacted to and who did deal with media

enquiries for and on behalf of the Plaintiff, and obtained comment from

the Plaintiff in relation to the 1 April Subjects.

200 In relation to Dr Jensen's living arrangements Mr Burrell had no

contact with Dr Jensen: his only contact was with Mr Conway. If, as

proved to be the case, there was no conversation on 31 March 2016, the

plea to the effect that Mr Burrell had 'on previous occasions' contacted

Mr Conway was also incorrect. Mr Burrell had only spoken to

Mr Conway on one previous occasion prior to 30 March 2016 (on

28 January 2016).

201 As it was, Mr Burrell ultimately gave evidence that no attempt was

made to contact Dr Jensen between the 31 March publications and the 1

April publications. A telephone conversation on 31 March 2016 (as

Mr Burrell initially said had occurred), would have been significant,

inasmuch as it would have been closer in time (and specifically

referable) to the 1 April publications.

202 In relation to the content of that conversation with Mr Conway, as

noted above, Mr Burrell at varying times gave differing accounts as to

149 Ts (21 May 2019) 1635 (Burrell). 150 Defence [46(f)v].

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whether Mr Conway referred to Dr Jensen living with his 'girlfriend' or

his 'new girlfriend' (see [119] to [126] above). Those accounts, too,

were in my assessment affected by reconstruction on Mr Burrell's part

in light of the issues that had arisen in the proceedings.

203 There were other aspects of Mr Burrell's evidence that were the

subject of criticism in cross-examination. I will specifically refer to

only two more.

204 First, Mr Burrell was cross-examined in relation to affidavits he

swore in October 2018 in support of an application to permit redactions

to discovered documents, so as to protect the identity of his sources.151

Those affidavits included accounts of a conversation with Source A

concerning the provision by Source A of the PDF copy of the

applications for the Tangney preselection.152 Both affidavits recount a

conversation prior to Mr Burrell receiving the applications (e.g. 'I will

give you this information').

205 This was contradicted in Mr Burrell's evidence, in the course of

which he said that 'may have spoken' to Source A after receiving the

PDF. Mr Burrell later said that he did speak to Source A afterwards

and concluded this questioning by saying he thought there were two

conversations with Source A, but noted that he was being asked about

'April 2016'.153 I found all of this evidence to be quite unconvincing,

and had all of the hallmarks of being tailored to suit the circumstances.

206 Secondly, Mr Burrell was cross-examined extensively in relation

to the affidavits of discovery he swore or affirmed in the course of these

proceedings. In addition to an initial informal list of documents,154

Mr Burrell provided six affidavits of discovery.155 He was the only

representative of the defendants to provide an affidavit of discovery.

207 It must be said, and I find, that the defendants approach to

discovery (through Mr Burrell) in this case was woefully inadequate.

The deficiencies in Dr Jensen's discovery (referred to in [172] and

[175] above) pale by comparison. The two most glaring examples of

this inadequacy were:

151 Exhibit 134 (8 October 2018); Exhibit 141 (12 October 2018). 152 Exhibit 129. 153 Ts (20 May 2019) 1589-1590 (Burrell). 154 Exhibit 130 (3 October 2017). 155 Exhibit 131 (9 November 2017), Exhibit 132 (15 May 2018), Exhibit 133 (11 September 2018), Exhibit

135 (11 October 2018); Exhibit 143 (29 November 2018); Exhibit 145 (6 February 2019).

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(a) the defendants did not discover the envelope or the anonymous

letter until Mr Burrell's third affidavit of discovery (sworn on

11 October 2018);156 and

(b) the defendants did not discover the entire Extract, save for three

pages, until Mr Burrell's fourth affidavit of discovery (sworn on

29 November 2018).157

208 These documents were critically relevant to the circumstances

surrounding the 31 March publications.158 That they were not

discovered until two and a half years after the commencement of the

proceedings were significant failures on the part of the defendants. The

explanations for those failures were quite inadequate. By 'inadequate', I

do not necessarily mean dishonest. Indeed, I accept that, by and large,

Mr Burrell's evidence as to why important documents were not

discovered in a timely manner was honest. That, however, is part of the

problem.

209 For example, in relation to the envelope and the anonymous letter,

Mr Burrell gave evidence that he had filed them away and forgot about

them until he found the anonymous letter and envelope 'hidden in a file

or below other documents'159 and 'at the bottom of a drawer'.160 That

they had been so treated, in circumstances in which these proceedings

were commenced within days of the events in question, can only be

explained by a half-hearted and careless approach to discovery

obligations or, as Dr Jensen submitted, a more sinister explanation.

210 That sinister explanation is that proposed by Dr Jensen's

submission that the anonymous letter was fabricated, by Mr Burrell or

the person who provided the Extract and the Curtis Brown letter, to

conceal the fact that Mr Burrell knew (and knows) the identity of that

person and that he (and the source) consciously and deliberately set out

to injure Dr Jensen.161 In contending that I should so find, Dr Jensen

relied upon the lack of a satisfactory explanation from Mr Burrell as to

156 Exhibit 135. The envelope and the anonymous letter were in fact referred to three days earlier, in

Mr Burrell's affidavit in relation to confidentiality of sources sworn on 8 October 2018 (Exhibit 134). 157 Exhibit 143. 158 I do not accept the defendants' submission, in this regard (at [96]) that, when the proceedings were

commenced they included only the purveyor of smut imputation (and so, by implication were not

discoverable). These documents were at all times relevant to the reasonableness and truth of that imputation

and to the circumstances of the 31 March publications generally. 159 Ts (20 May 2019) 1569-1570 (Burrell). 160 Ts (20 May 2019) 1574-1575 (Burrell). 161 See Plaintiff's Closing Submissions dated 23 May 2019 [28].

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where he obtained the information relating to China enabling him to

write the Listing at 10.40am on 30 March 2016.

211 The only explanation that Mr Burrell did proffer as to that matter

was that he must have had a synopsis of The Skywarriors, albeit that he

said that he could not remember receiving a synopsis and that a

synopsis was never discovered.162

212 There is some evidence that might support the existence of a

synopsis of the book having existed. The guidance document headed

Submissions to Curtis Brown,163 identified by Ms Gutierrez,164 requests

a short synopsis and three chapters for submissions and the Curtis

Brown letter itself refers to an 'enclosed synopsis'.165

213 Conversely, if, as Dr Jensen posits, the additional information

concerning the plot of the novel did come from the source telling

Mr Burrell, it begs the question how that person had access to the

additional information. That is, if Mr Burrell had been 'told the plot by

somebody',166 how did they know what the plot was? In that regard, the

Extract does appear, prima facie, to be a complete document. That is, it

has the appearance of being a deliberately prepared extract (of three

chapters of the book) rather than an arbitrary portion of a larger

manuscript. The final page of the Extract (page 50), for example, is

indeed the conclusion of Chapter 3.

214 For reasons I have set out later, I find that the Curtis Brown letter

and the Extract were indeed prepared for submission to a publisher in

2007. I also find that those documents were taken, at some point, from

Dr Jensen's records. It is those documents that were ultimately

provided to Mr Burrell. If that be the case, there would be no good

reason to infer that that person had access to the entire novel. This

rather tells against the source having knowledge of the information

relating to China referred to in the Listing, independently of the

material taken from Dr Jensen's records. The greater likelihood is that

that person would have had access to a synopsis (a synopsis also being

referred to in the Curtis Brown letter).

162 Ts (20 May 2019) 1598-1599 (Burrell). 163 Exhibit 29. 164 Ts (9 May 2019) 855 (Gutierrez). 165 Exhibit 35. 166 See Plaintiff's Closing Submissions dated 23 May 2019 [27].

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215 For these reasons, in my view, there is a reasonable possibility that

Mr Burrell did have access to a synopsis of The Skywarriors at some

point in time.

216 In light of all of the evidence, however, I am unable to reach a

positive finding as to how Mr Burrell had the information relating to

China that enabled him to write the Listing and, in particular, whether

he did have a synopsis. For me to attempt to do so would be to

speculate.

217 In the end, however, I am able to positively conclude that I am not

satisfied on the balance of probabilities, and do not feel an actual

persuasion, that Mr Burrell knows the identity of the source of the

Extract and the Curtis Brown letter or that he has lied as to the

circumstances in which he received those documents. The evidence

relating to the Listing certainly gave rise to a legitimate suspicion on

the part of Dr Jensen and there was a proper foundation for the cross-

examination suggesting the sinister explanation (described at [210]

above). Suspicion, however, does not amount to proof and, based upon

all of the evidence (including Mr Burrell's evidence and his

demeanour), I am not satisfied that it has been proven. I, therefore,

reject the sinister explanation proffered by Dr Jensen.

218 Nevertheless, the fact remains that Mr Burrell could not, relying

upon his memory, provide any adequate explanation as to how he came

by the information contained in the Listing. In that regard, his memory

provides him no assistance at all (including as to whether he received a

synopsis). This is a significant omission. It reflects very poorly upon

the reliability Mr Burrell's account of the events surrounding the

publications generally.

219 For all of these reasons, I am not satisfied that Mr Burrell's

evidence as to the events leading to the publications is reliable. Indeed,

in my assessment, that evidence is quite unreliable. To the extent that

Dr Jensen's evidence in relation to their conversation on 30 March 2016

differs, I prefer Dr Jensen's evidence.

Assessment of Dr Hoad as a witness

220 Dr Hoad gave her evidence in a somewhat mannered way, but was

in my assessment a genuine and honest witness. She was, naturally,

supportive of Dr Jensen's position but did not in my view exaggerate

her evidence.

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221 Indeed, while they took issue with the relevance of some of her

evidence, the defendants accepted, in their submissions, that Dr Hoad

was an honest and truthful witness.

The failure to call Mr Conway - a Jones v Dunkel inference?

222 Finally, before turning to my findings in relation to the events in

the days leading up to the publications, it is necessary that I deal with

the defendants' submission that I should draw an inference, in

accordance with the rule in Jones v Dunkel,167 in relation to the failure

of Dr Jensen to call Mr Conway to give evidence. That is, the

defendants submit that I should infer that evidence from Mr Conway

would not have assisted Dr Jensen's case.

223 Neither party called Mr Conway to give evidence.

224 In that regard, the defendants submitted that I should find that

Mr Conway was relevantly in Dr Jensen's camp. They relied upon

statements made by counsel for Dr Jensen at directions hearings that a

draft witness statement had been taken from Mr Conway and that a

forensic decision had been made not to call him (on 17 October 2018,

28 March 2019 and 12 April 2019, respectively).168

225 In those circumstances, the defendants submitted that I ought to

infer that that forensic decision was driven by the fear that

Mr Conway's evidence would have exposed facts unfavourable to

Dr Jensen.169

226 It must be recognised that, in the particular circumstances of this

case, an inference that Mr Conway's evidence would not have assisted

Dr Jensen's case would be of very limited use or significance.

227 The only matter in relation to which Mr Conway's evidence could

have been relevant concerns the telephone conversation between

Mr Burrell and Mr Conway on 30 March 2016, and whether

Mr Burrell's account of that conversation was reliable.

228 In that context, counsel for Dr Jensen could well have had good

reason to suppose, prior to trial, that Mr Burrell's evidence in that

regard would be unreliable, without the need to call Mr Conway. Prior

to the trial Mr Burrell had filed witness statements incorrectly

167 Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298, 320-321. 168 Exhibit 152. 169 Referring to Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22

NSWLR 389, 418.

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identifying the number of conversations he had had with Mr Conway

(and indeed identified an important conversation on a date that did not

occur). Moreover, in relation to that conversation, Mr Burrell's witness

statement filed prior to trial (referring only to Dr Jensen's 'girlfriend')

did not go as far as his initial evidence at trial (which added the epithet

'new').

229 In addition, I was able to observe Mr Burrell's evidence as to the

conversation that did occur with Mr Conway on 30 March 2016, which

was the subject of challenge in cross-examination as to its reliability,

and make my own assessment of that evidence.

230 Accordingly, while I am prepared to infer that Mr Conway's

evidence would not have added to Dr Jensen's case, in the end, it

remains necessary for me to make findings as to the reliability of

Mr Burrell's account based on my assessment of Mr Burrell's evidence

as a whole (while recognising that that it was not the subject of

evidence from Mr Conway).

Findings as to the events leading up to the publications

231 On the basis of the evidence and findings set out above, I make the

following findings, on the balance of probabilities, as to the

circumstances leading up to the publications:

1. I find that Mr Burrell received the package containing, at least,

the anonymous envelope, the Curtis Brown letter and the

Extract (the anonymous package) on or about 22 March 2016. I

find that date to be most probable based upon the metadata as to

the creation of the document 'Jensen-novel'170 (together with

Mr Burrell's own evidence that it was in the week of 23 March

to 30 March 2016).

2. I find that Mr Burrell did not know, and does not know, the

identity of the person who was the source of the anonymous

package.

3. I find that, other than reading the contents of the anonymous

package, and commencing to write the Word document 'Jensen-

novel' Mr Burrell took no active steps in relation to the

anonymous package, or the potential publications, until

30 March 2016. In particular, I find that Mr Burrell took no

steps to verify the authenticity of the Curtis Brown letter or the 170 Exhibit 137.

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Extract (or whether they had been sent to Curtis Brown) prior to

30 March 2016, including making any inquiry with Curtis

Brown. Mr Burrell did not suggest otherwise in his evidence.

4. I find that on 30 March 2016 (or possibly a day or two earlier)

Mr Burrell first made contact with other employees at The

Australian in relation to a potential story.

5. I find that on the morning of 30 March 2016 Mr Burrell

provided, by email, Mr Madden and Ms Rees with copies of the

Curtis Brown letter and pages 27 and 28 of the Extract. I also

find that, at 10.55am on that day, he provided Mr Madden with

his first summary of the 31 March Article (the Listing). I find

that at the time he did so, Mr Burrell had not contacted, nor had

he attempted to contact, Dr Jensen in relation to the story.

6. I find that on the morning of 30 March 2016, Mr Burrell had

telephone and text message contact with Source A, a person

who was a member of the Liberal party or a person closely

associated with the Liberal party who was not a supporter of

Dr Jensen. I make that finding for the reasons set out at [111] to

[115] above. In the course of those exchanges, Source A

provided Mr Burrell with a PDF copy of the applications for the

Tangney preselection.171

7. I find that Mr Burrell contacted Dr Jensen's office and spoke

with Mr Conway at approximately 1.14pm (WST).

8. I find that Mr Conway advised Mr Burrell that he did not know

anything in relation to a book written by Dr Jensen.

9. I find that the conversation between Mr Burrell and Mr Conway

turned to Dr Jensen's living arrangements. In relation to that

conversation I find that Mr Conway told Mr Burrell that

Dr Jensen was living in Halls Head, that his residence was

previously a holiday house, and that Dr Jensen was living there

with his girlfriend. I find that Mr Burrell did not ask, and was

not told, when any of those things had occurred (i.e. what date

Dr Jensen moved, when (or how) his marriage broke down or

when he commenced a relationship with the girlfriend).172 All

of these findings are based on Mr Burrell's own evidence.

171 Exhibit 129; Ts (17 May 2019) 1508-1509. 172 Ts (21 May 2019) 1639, 1674 (Burrell).

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10. While I find that Mr Conway used the word 'girlfriend' in the

conversation with Mr Burrell, I am not satisfied that

Mr Conway used the expression 'new girlfriend'. I find that he

did not. In my assessment, Mr Burrell's evidence that

Mr Conway used the word 'new' was a reconstruction on

Mr Burrell's part in light of the issues that had arisen in the

proceedings. In my assessment Mr Burrell's original statement

dated 18 October 2018, (which omitted the word 'new') is more

likely to have been accurate, as was his answer in cross-

examination, 'he said words to the effect, "girlfriend"'.173

11. In relation to this finding, I reject the defendants' submission

that I should find that Mr Conway used the word 'new' because

it was used in the 1 April Article.174 Mr Burrell was not quoting

Mr Conway in the 1 April Article, which was written as a

'follow up' without making further enquiry of any persons

involved. Contrary to his original witness statement (which

suggested a conversation with Mr Conway on 31 March),

Mr Burrell wrote the 1 April Article based, in part, on the

earlier conversation that he had 'stored it away',175 and in

relation to which there were no notes.

12. Similarly, I am not satisfied that Mr Conway expressly said that

Dr Jensen had moved recently. Rather, I find that, as with the

word 'new', Dr Jensen having moved 'recently' was an

'impression' Mr Burrell gained from the conversation.176 At any

rate, as I have found, Mr Burrell made no enquiry as to when

Dr Jensen had moved.

13. I find that, at approximately 2.20pm (WST), Mr Burrell and

Dr Jensen had a telephone conversation. I am satisfied, based

on the evidence of both Mr Burrell and Dr Jensen, and based on

the telephone records, that there was one conversation that took

place over four calls.

14. I find that Mr Burrell put to Dr Jensen that he had written a

book about a war between Australia, Indonesia and China,

which Dr Jensen confirmed. I find that Mr Burrell put to

Dr Jensen the suggestion (which appeared in the anonymous

173 Ts (21 May 2019) 1638 (Burrell). 174 Defendants' submissions dated 29 May 2019 [104]. 175 Ts (21 May 2019) 1676 (Burrell). 176 See the evidence at [120] above.

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letter) that Dr Jensen had written the book while a Member of

Parliament, and that Dr Jensen denied that suggestion.

Dr Jensen gave evidence to that effect and it is supported both

by Mr Burrell's notes and the 31 March Article itself.

15. I find that Mr Burrell put to Dr Jensen that Dr Jensen had

sought to have the novel published, which Dr Jensen initially

denied.

16. I find that Mr Burrell put to Dr Jensen words to the effect that

he had proof that Dr Jensen had sent the book to a publisher and

that, in doing to, Mr Burrell made specific reference to a literary

agent or publisher. That was Dr Jensen's evidence and I accept

it in preference to Mr Burrell's evidence. I also find that

Dr Jensen accepted that he had submitted the book to a

publisher (notwithstanding his own recollection), for the

reasons that he gave.177

17. At this point in the conversation, Mr Burrell may have referred

to his being in possession of a 'letter'. I find that to be a real

possibility, which would be consistent with his reference to a

literary agent or publisher (which Dr Jensen could recall) and to

the reference in the 31 March Article to Dr Jensen being told of

a letter.

18. I am not satisfied, however, that Mr Burrell referred to a

'parliamentary letterhead' in the conversation. I find that he did

not do so. On this issue I accept Dr Jensen's evidence that there

was no mention of the parliamentary letterhead. While I am

comfortable making that finding based on Dr Jensen's evidence

alone, I find that evidence to be consistent with Dr Hoad's

unchallenged evidence as to of Dr Jensen's contemporaneous

reaction to the 31 March Article. Mr Burrell's evidence to the

contrary I find to be unreliable and the product of

reconstruction.

19. More particularly, I also find that Mr Burrell did not specifically

put to Dr Jensen that he had improperly exploited his position as

a Member of Parliament by using his parliamentary letterhead

to seek a publishing deal. Mr Burrell did not suggest in his

evidence that he did put that imputation to Dr Jensen.

177 As to those reasons, see Ts (13 May 2019) 981 (Jensen).

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20. I find that Mr Burrell and Dr Jensen discussed the plot of The

Skywarriors but that Mr Burrell made no reference to the sex

scene that was later referred to in the 31 March publications.

While not relevant to any of the defamatory imputations found

by the jury, this omission does reflect, in my view, Mr Burrell's

inclination not to 'give away' too much of the information that

he proposed to include in the story (as was already reflected in

the Listing).

21. I find that Mr Burrell and Dr Jensen discussed whether it was

appropriate for a Member of Parliament to be writing about a

war between Australia, Indonesia and China, and that Dr Jensen

said words to the effect that 'these are not my current thoughts'.

22. I find that Dr Jensen asked Mr Burrell what the enquiries he

was making were all about and whether they had something to

do with preselection. I accept Dr Jensen's evidence in relation

to this, which was corroborated by Mr Burrell's

contemporaneous notes which included the words 'preselection

nonsense'.178

23. I find that Mr Burrell made no reference to, and did not ask

Dr Jensen any questions in relation to, his living arrangements

in the course of the conversation on 30 March 2016.

24. I also find that Mr Burrell made no attempt to make any contact

with Dr Jensen or Dr Hoad on 31 March 2016 prior to the

publication of the 1 April publications.179 Nor did Mr Burrell

take any steps to verify any of the impressions or assumptions

he had drawn from the conversation the day before with

Mr Conway.

232 In light of these findings, I turn now to the pleaded issues for

determination.

Pleas of Justification - Truth

233 The defendants plead the defence of justification, in relation to the

parliamentary letterhead imputation and the best interests imputation.

That is, they plead that those defamatory imputations are substantially

178 Exhibits 148 and 148A. 179 Ts (21 May 2019) 1687 (Burrell).

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true. The defendants rely upon the defence of truth both at common

law and pursuant to s 25 of the Defamation Act.180

234 Insofar as the issues in this case are concerned, in my view, the

tests for the defence of truth at common law and under s 25 of the

Defamation Act are not relevantly different. At both common law and

under the Act it is necessary to prove that the imputation is

substantially true (or true 'in substance').181

235 In that regard, the law on this topic was conveniently summarised

by McColl JA in Fairfax Publications Pty Ltd v Kermode:182

In summary, a defendant seeking to justify the defamatory matter under

the 2005 Act may take the following courses of action, some statutory,

some based on the common law:

(a) prove that the defamatory imputations carried by the defamatory

matter of which the plaintiff complains are substantially true: s

25;

(b) prove that rather than the defamatory imputations pleaded by the

plaintiff, the defamatory matter carries nuance imputations

which are substantially true;

(c) to the extent that the defendant fails to establish all the

defamatory imputations carried by the defamatory matter of

which the plaintiff complains are substantially true, rely on

those proved to be true in mitigation of the plaintiff's damages:

partial justification; and

(d) to the extent the defendant cannot prove that the defamatory

imputations carried by the defamatory matter of which the

plaintiff complains are substantially true, prove that it carries

contextual imputations that are substantially true, by reason of

which the defamatory imputations do not further harm the

reputation of the plaintiff: s 26.

236 Points (b) and (d) of this summary are not relevant to the present

case, as the defendants do not rely upon a Polly Peck defence; nor is

there a plea of contextual truth under s 26 of the Defamation Act.

237 The distinction between truth as a complete defence and partial

justification, however, is relevant in the present case.

180 Defence [7B], [11B], [15B], [23A], [23B], [31A], [31B], [39A], [39B]. 181 See Defamation Act s 4 (substantially true means true in substance or not materially different from the

truth). 182 Fairfax Publications Pty Ltd v Kermode (2011) 81 NSWLR 157 (Kermode) [86] (McColl JA; Beazley &

Giles JJA agreeing). See also the specific summary in relation to the position at common law at [59].

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238 The plea of justification in relation to the parliamentary letterhead

imputation would be a complete defence to the 31 March publications.

That is because the parliamentary letterhead imputation is, for the

purposes of the issues to be determined by me, the only defamatory

imputation said to arise from the 31 March publications.183 In relation

to the 1 April publications, however, the truth of the parliamentary

letterhead imputation could only be a partial justification, given that no

plea of justification is made in relation to the family values imputation

and the moral standard imputation. In accordance with point (c) of

McColl JA's summary in Kermode, the truth of the parliamentary

letterhead imputation would only go to mitigation of damages in

relation to the 1 April publications.

239 Similarly, the truth of the best interests imputation, appearing as it

does in the 1 April publications, could only amount to a partial

justification of those publications.

240 Of course, it is necessary, in the case of each of the imputations

that the defendants contend are substantially true, that they prove, on

the balance of probabilities, both the substantial truth of the words

complained of and the defamatory sting.184

The parliamentary letterhead imputation – Defence of truth

241 To establish its defence of truth in relation to the parliamentary

letterhead imputation the defendants must prove that it is substantially

true (that is, true in substance and not materially different from the

truth) that Dr Jensen 'improperly exploited his position as a federal

Member of Parliament by using his parliamentary letterhead to seek to

obtain a personal financial benefit, namely, a publishing deal for his

book, 'The Skywarriors''.

242 The particulars of the defendants' defence of truth in relation to the

parliamentary letterhead imputation are as follows:185

(a) The Plaintiff knew, as was the case, that his prospects of having

his book published, given its content, would be enhanced by the

183 Recognising, of course, (in light of the jury's verdict) that my findings in relation to the parliamentary

letterhead imputation are all provisional. Nevertheless, given that Dr Jensen does not seek to challenge the

jury's verdict in relation to the purveyor of smut imputation, the parliamentary letterhead imputation is the

only one said to arise from the 31 March publications that Dr Jensen seeks to pursue. 184 Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335 [138] (Spigelman CJ, Beazley JA,

McColl JA, McClellan CJ at CL, Bergin CJ in Eq); Herald & Weekly Times Ltd v Popovic [2003] VSCA

161; (2003) 9 VR 1 [274] (Gillard AJA). 185 Defence [7B], [11B], [15B], [23B], [31B], [39B].

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fact that the author a Federal Member of Parliament, as opposed

to a general member of the public;

(b) The Plaintiff drafted up and sent to prospective publishers, a

letter upon his Parliamentary Letterhead promoting his book,

seeking to gain further attention for his book than that which

would otherwise be gained, were the author not a Federal

Member of Parliament;

(c) The publication of the promotion of the Plaintiff’s book was to

literary agent Curtis Brown and/or Victoria Gutierrez, among

others.

(d) Further, the Plaintiff had conversations and discussions with

publishers or prospective publishers, including with Victoria

Gutierrez, promoting his book, during which he referred to and

emphasised his position as a Federal Member of Parliament,

(e) the successful publication of the Plaintiff’s book would have

yielded a financial benefit to the Plaintiff.

243 The principal issues that arise in relation to this plea, in my view,

are first, whether Dr Jensen sent the Curtis Brown letter to Curtis

Brown, and secondly, whether it was improper for him to have done so.

244 In the course of cross-examination, Dr Jensen accepted that if he

had written and sent the Curtis Brown letter to Curtis Brown, it would

have been quite improper: 'Not the letter itself … the use of the

letterhead'.186

245 I agree with that concession by Dr Jensen and I find that, if

Dr Jensen did send the letter to Curtis Brown, using the parliamentary

letterhead, it would have been improper. In making that finding,

however, it is necessary to emphasise certain matters.

246 First, in my view, there is nothing improper, per se, in a Member

of Parliament approaching a publisher for the purposes of seeking to

have a book published. Sir Winston Churchill wrote and published a

two-volume biography of his father during his early years in

Parliament. Sir Robert Menzies wrote and published The Forgotten

People while the Member for Kooyong. Neither of those publications

could be described as involving anything improper.

186 Ts (14 May 2019) 1115 (Jensen).

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247 Politicians publishing novels is also not unheard of. Benjamin

Disraeli was a prolific author of novels while in office. More recent

examples could also, no doubt, be given.

248 Nor, in my view, would it necessarily be improper for a Member

of Parliament to seek such publication pseudonymously. Without

Alexander Hamilton, James Madison and John Jay having adopted the

pseudonym 'Publius', the world may have been deprived of the

Federalist Papers. In this respect, much will depend upon the

circumstances of each case and the particular mores of the times.

249 The fact that Dr Jensen, for example, may have enquired of

prospective publishers and made it known that he was a Member of

Parliament (as alleged in paragraph (d) of the defendants' particulars)

would not, of itself, justify a finding of impropriety.

250 It is therefore the particular use of the letterhead (as alleged in

paragraph (b) of the defendants' particulars) that is the gravamen of this

issue. Consistent with the defendants' pleaded case, it is the improper

use of the letterhead that the defendants must prove; namely that

Dr Jensen sent the Curtis Brown letter to Curtis Brown in an effort to

promote the publication of The Skywarriors.

251 In the context of the evidence at trial, the resolution of that issue

turns on two questions:

(a) Is the Curtis Brown letter genuine? and

(b) Did Dr Jensen send it to Curtis Brown?

252 Both of these questions would need to be answered in the

affirmative in order for the defendants to establish that the

parliamentary letterhead imputation was substantially true. It would

not be enough to establish the substantial truth of the imputation, for

example, if the letter was prepared by Dr Jensen, but, upon reflection,

not sent. The defendants, in closing submissions, did not suggest

otherwise.187

253 I turn, then, to each of those questions.

187 Defendants' submissions dated 29 May 2019 [177]-[204].

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Is the Curtis Brown letter genuine?

254 For the reasons which follow, while the matter is not without

doubt, I am satisfied that the Curtis Brown letter is genuine, at least in

the sense that it was prepared within Dr Jensen's office in 2007.

255 Of course, that is a finding I have had to make based on the

inferences available from all of the circumstances. Given the

anonymous source of the Curtis Brown letter, there is no direct

evidence as to its provenance, nor how the anonymous source came to

be in possession of it.

256 There are, however, two findings that can be made in relation to

the anonymous source. As in the case of Source A, it is clear from the

anonymous letter that the source of the Curtis Brown letter was a

member of the Liberal party or a person closely associated with the

Liberal party and that that person was antagonistic towards Dr Jensen.

257 In that regard, I find that whoever provided the Extract and the

Curtis Brown letter to Mr Burrell obtained the Extract (at least) from

records kept by, or for, Dr Jensen. As I have found, the Extract is

clearly a genuine copy of the first three chapters of The Skywarriors.

Given that Curtis Brown had no record of it, the Extract must have been

obtained from its point of origin (i.e. it is not from Curtis Brown). That

conclusion is supported by the fact that the source of the Extract was

connected to the Liberal party.

258 It is not possible to make any finding as to when the anonymous

source came into possession of the Extract: that is, whether he or she

obtained it back in 2007 when the issue of publication was raised in

Dr Jensen's office or, alternatively, whether the Extract was obtained

from amongst archived records closer to the time that it was provided to

Mr Burrell.

259 The fact that the Extract came from Dr Jensen's records, however,

supports the inference that the Curtis Brown letter also came from those

records.

260 In that context, whether it was newly discovered by the source or

held for nine years (as Dr Jensen submitted), there are a number of

other features of the Curtis Brown letter that support the inference that

it is genuine, and came from Dr Jensen's records.

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261 First, the letter is dated 8 June 2007. Dr Jensen confirmed that the

date of the letter accorded, approximately, with the time at which he

had considered seeking to have the book published.

262 Secondly, the letter is addressed to Ms Gutierrez at Curtis Brown

and refers to a telephone conversation with Ms Gutierrez. Ms Gutierrez

was indeed working at Curtis Brown in 2007 and was the person who

answered telephone enquiries in relation to submissions.188 She

confirmed in her evidence that she announced her name when

answering the telephone and would provide her full name to persons

wishing to address their cover letter to 'an actual person'.189

263 Thirdly, the contents of the letter contain an accurate reflection of

the very material that a person enquiring of Curtis Brown would have

been advised to submit: a synopsis and sample chapters. As I noted

above, the guidance document headed 'Submissions to Curtis Brown',190

identified by Ms Gutierrez,191 requests that a short synopsis and three

chapters be provided for submissions.

264 I should observe, at this point, that I found Ms Gutierrez to be an

honest, independent and reliable witness. I have no hesitation in

accepting her evidence in this regard.

265 Given these three matters, it would be remarkable, and indeed

uncanny, that a person fabricating the Curtis Brown letter would have

known the approximate time period during which Dr Jensen had

considered submitting the book for publication, to have known Curtis

Browns' preferences in relation to submissions and also to have known

the identity of the person responsible for answering the telephone at

Curtis Brown in 2007.

266 Such a sophisticated fabrication (particularly if it was suggested to

have taken place in 2016) is, in my assessment, highly improbable.

267 Rather, in my view, given that it accords with the relevant

timeframe, and the fact that the author of the letter had sufficient

knowledge to address the letter to Ms Gutierrez and to comply with

Curtis Brown's submissions guidelines, it is, far more likely that the

Curtis Brown letter was produced following an actual enquiry with

188 Ts (9 May 2019) 854 (Gutierrez). 189 Ts (9 May 2019) 862 (Gutierrez). 190 Exhibit 29. 191 Ts (9 May 2019) 855 (Gutierrez).

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Curtis Brown in 2007. Such an inquiry, more than likely than not, was

made by Dr Jensen, and I so find.

268 In this context, there is no doubt, based on Dr Jensen's own

evidence that he considered seeking to have the novel published in

2007 and that he sought advice from his staff in that regard. Mr Lowe,

whose evidence I found honest and reliable, recalled that, at that time in

2007, when speaking to Dr Jensen, Dr Jensen had given Mr Lowe the

impression that he had already been in communication with a

publisher.192 That recollection fits well with the reference, in the Curtis

Brown letter, to a telephone discussion and with the author's knowledge

of Curtis Brown's submission guidelines and Ms Gutierrez' name. All

of this points to the author of the letter being Dr Jensen.

269 There are a number of other matters relating to the Curtis Brown

letter that support a finding that it is authentic.

270 The letter itself appears on the parliamentary letterhead used by

Dr Jensen at the time. Mr Lowe gave evidence that there were two

letterheads in use at the time. He identified the Curtis Brown letter

(Exhibit 35) as 'the better quality one … the swish version, if you

like'.193 Dr Jensen submitted that Mr Lowe was unable to identify the

letterhead.194 I reject that submission. Mr Lowe's reference to the

'swish' letterhead was clearly a reference to the document that was in

front of him at the time he was giving evidence.195

271 Mr Lowe's evidence also confirmed that the date stamp, including

its placement on the Curtis Brown letter, was consistent with that used

in Dr Jensen's office in 2007196 and that, at that time, an electronic copy

of Dr Jensen's signature was not used for correspondence (although a

photocopy might be used for large mail-outs).197 In his own evidence

Dr Jensen confirmed that the signature on the Curtis Brown letter

certainly looked like his198, although he also said, and I accept, that he

had no recollection of signing the letter.199

192 Ts (16 May 2019) 1300, 1303 (Lowe). 193 Ts (16 May 2019) 1307 (Lowe). 194 Plaintiff's Submissions as to Provisional Matters dated 23 May 2019, [5]. 195 I do not regard the cross-examination of Mr Lowe (at Ts (16 May 2019) 1338) to the effect that Exhibit 35

was the facsimile letterhead and Mr Lowe not recognising it as the facsimile letterhead as being inconsistent

with his evidence-in-chief that Exhibit 35 was the 'swish' letterhead. In my assessment Mr Lowe was simply

recognising, at that point, that he did not recognise that that particular letterhead was used for facsimiles. 196 Ts (16 May 2019) 1305-1306 (Lowe). 197 Ts (16 May 2019) 1304-1305 (Lowe). 198 Ts (14 May 2019) 1054 (Jensen). 199 Ts (14 May 2019) 1119 (Jensen).

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272 Finally, there is the Extract itself. Whoever provided the Curtis

Brown letter to Mr Burrell clearly had access to the Extract. As I have

earlier observed, the Extract does have the appearance of being a

deliberately prepared extract (of the first three chapters of the book)

rather than an arbitrary portion of a larger manuscript. That, in my

view, supports the Extract having been prepared for submission to

Curtis Brown. Again, it would be uncanny (and the work of a

preternatural forger) to produce an extract of The Skywarriors that just

happened to accord with Curtis Brown's submission guidelines in 2007.

273 All of these matters lead me to find, on balance, that the Curtis

Brown letter is genuine, that it was prepared by Dr Jensen and that it

came from his records.

274 Whether it was in fact sent to Curtis Brown is a separate question.

Did Dr Jensen send the Curtis Brown letter?

275 There is no direct evidence that the Curtis Brown letter was in fact

sent by, or on behalf of, Dr Jensen to Curtis Brown.

276 First, as I have found, the copy of the Curtis Brown letter tendered

in evidence, and which was sent to Mr Burrell, did not come from

Curtis Brown, but came from Dr Jensen's records.

277 Nor is there any evidence that Curtis Brown received the Curtis

Brown letter. In this regard, on 18 October 2017, a subpoena was

issued to Curtis Brown at the request of Dr Jensen to produce, inter

alia:200

1 log/record of works identifying works submitted to Curtis

Brown (Australia) Pty Ltd (Curtis Brown):

1.1 in the year 2007;

1.2 by Dennis Jensen

1.3 entitled 'The Sky Warriors'

2 from Dennis Jensen to Curtis Brown dated 8 June 2007 and any

enclosures to that letter;

3 letter(s), including any letter(s) or rejection (signed or in draft):

3.1 to Dennis Jensen/Dr Jensen; or

200 Exhibit 40.

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3.2 in relation to The Sky Warriors.

4 Any correspondence or notes of oral conversations between

Curtis Brown:

4.1 in 2007, Dr Jensen;

…

278 Curtis Brown responded to the subpoena under cover of a letter

dated 20 October 2007, which was tendered without objection.201

279 In response to the subpoena, Curtis Brown provided the log of the

works submitted to it in 2007. It is a substantial list, recording many

submissions. In the two weeks following the date of the Curtis Brown

letter (8 June 2007) there were multiple submissions logged on every

day (other than the weekends and a public holiday).202

280 The Skywarriors does not appear in the log of works submitted to

Curtis Brown in 2007.

281 The letter from Curtis Brown in response to the subpoena states,

and I find, that:

(a) Curtis Brown does not have any record or documents from

Dr Jensen to Curtis Brown dated 8 June 2007, including any

letters, manuscripts or rejections;

(b) Curtis Brown does not have any correspondence or notes of oral

conversations between Curtis Brown and Dr Jensen in 2007.

282 On the basis of this evidence I therefore find that Curtis Brown has

no record of receiving the Curtis Brown letter or any extract from The

Skywarriors and that, in 2007, Curtis Brown maintained a reliable

record of the submissions that it had received.

283 Of course, no such record keeping system would be perfect or

foolproof. Ms Gutierrez, whose evidence I accept, accepted that it was

possible that there may have been manuscripts that were missed and not

logged (due to her absence or illness or error). Nevertheless,

Ms Gutierrez confirmed that the intention was to log everything that

they had received.203

201 Exhibit 40A. 202 Exhibit 36. 203 Ts (9 May 2019) 857 (Gutierrez).

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284 As I have observed, the log of works included multiple

submissions on most business days, including all such days in the

fortnight after the date of the Curtis Brown letter. While I accept the

possibility that the Curtis Brown letter and the Extract might have been

received but not logged, on the basis of Ms Gutierrez' evidence and

Curtis Brown's response to the subpoena I find that it is more likely that

it was not received.204 Given that the failure to log a particular work

would be unusual (and the exception), it would be a remarkable

coincidence if one of those unusual exceptions just happened to be The

Skywarriors.

285 This is not, however, the only evidence bearing on this question.

286 Godfrey Lowe gave evidence of his time working in Dr Jensen's

office, including throughout 2007. Mr Lowe gave evidence relevant to

the parliamentary letterhead imputation in two respects.

287 First, Mr Lowe gave evidence in relation to the practice

concerning outgoing correspondence in Dr Jensen's office. In that

regard, Mr Lowe said that the practice was that letters would be

prepared undated and that, after the letters had been signed by

Dr Jensen, they would be dated with a date stamp.205 Mr Lowe gave

evidence that the date stamp, including its placement on the Curtis

Brown letter, was consistent with the stamp that was used in

Dr Jensen's office in 2007.206

288 Mr Lowe's evidence of the practice was, in effect, that the

placement of the date stamp was the last thing that occurred before a

letter would be posted. I accept Mr Lowe's evidence that that was the

practice.207 It certainly supports the proposition that the Curtis Brown

letter was prepared for the purpose of being sent to Curtis Brown and,

indeed, that those preparations were quite advanced.

289 It does not, however, necessarily follow that the letter was in fact

sent. It remains for me to be satisfied that having been prepared, the

Curtis Brown letter was in fact sent (or alternatively, whether it simply

remained within Dr Jensen's office). That question invites

204 I should add, in this context, in making that finding I have not relied upon the fact that Ms Gutierrez had

no memory of receiving The Skywarriors or the Curtis Brown letter. As the defendants submitted (at [178])

it is wholly understandable and unsurprising that Ms Gutierrez would have no memory of any particular

submission (Ts (9 May 2019) 861). 205 Ts (16 May 2019) 1304 (Lowe). 206 Ts (16 May 2019) 1305-1306 (Lowe). 207 Dr Jensen, while not professing a recollection of the details, generally accepted the sense of the practice

described by Mr Lowe (Ts (14 May 2019) 1118).

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consideration as to whether there might be an explanation for why a

letter to the literary agent might be prepared but, ultimately, not sent.

290 This raises the second aspect of Mr Lowe's evidence in relation to

this issue. Mr Lowe gave evidence that, in 2007, Dr Jensen asked him

to read The Skywarriors, and said that he (Mr Lowe) was given the

impression that Dr Jensen had already been in communication with a

publisher.208 Up to this point, Mr Lowe's evidence is consistent with

Dr Jensen having made initial contact with Curtis Brown by telephone

and spoken with Ms Gutierrez (as suggested by the content of the

Curtis Brown letter itself).

291 Mr Lowe went on to give evidence that, having read The

Skywarriors, he formed the view that it would be very dangerous for

Dr Jensen to publish the book and that he gave advice to Dr Jensen to

that effect. Mr Lowe said he could not recall having the conversation

within the hearing of other people, but said that he did speak with

another advisor, Trish Phelan, about the matter. Mr Lowe described

Ms Phelan as 'scathing' about the prospect of publishing the book.209

292 Mr Lowe's evidence in this regard, in its essential details, accords

with that of Dr Jensen. Dr Jensen gave evidence that, in 2007, when he

was thinking of sending the book for publication, 'something was sort

of worrying [him] a bit' and he asked his staff for their input. Dr Jensen

identified Mr Lowe and, he thought, Ms Phelan as the relevant staff.210

293 Dr Jensen gave evidence that his staff advised him strongly against

sending The Skywarriors for publication. He said, from his

recollection, that he concurred with that view and the book was never

sent.211 This evidence, to which Dr Jensen adhered in cross-

examination, is consistent with Mr Lowe's evidence that Dr Jensen had

actively considered having the book published, including having made

initial telephone contact with a publisher prior to seeking his staff's

advice before finally sending the book to the publisher.

294 Given the apparently strong terms in which the advice was given,

it would be logical to conclude that Dr Jensen ultimately decided not to

send the Curtis Brown letter and the Extract, even though they had been

prepared for submission. The alternative conclusion would be that,

208 Ts (16 May 2019) 1300, 1303 (Lowe). 209 Ts (16 May 2019) 1301 (Lowe): 'She said, "This is crazy. I've told Dennis this would be absolutely stupid

to - and dangerous - to publish this."'. 210 Ts (13 May 2019) 980 (Jensen). 211 Ts (13 May 2019) 980; Ts (14 May 2019) 1119 (Jensen).

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having sought and received that strong advice, Dr Jensen secretly sent

the Curtis Brown letter and Extract anyway (a matter he specifically

denied).212 I find that possibility quite unlikely.

295 Finally, in relation to this issue, the defendants relied upon

apparent out-of-court admissions by Dr Jensen that he had sent the

Curtis Brown letter and Extract to Curtis Brown.

296 The defendants rely upon two admissions in particular.

297 First, the defendants point to Dr Jensen having accepted that he

sent the letter in his conversation with Mr Burrell on 30 March 2016.

298 In this regard I have already found that Dr Jensen initially denied

(to Mr Burrell) that he had sought to have the novel published but that

he accepted that he had done so when Mr Burrell put to him words to

the effect that he had proof that Dr Jensen had sent the book to a

publisher, making specific reference to a literary agent or publisher.

299 In that regard, I accept Dr Jensen's evidence that he had initially

denied sending the book (that being his recollection at the time) but

that, not being certain, he accepted Mr Burrell's assertion that he had

some form of proof, wishing to avoid a situation where 'it is the denial

that gets you more than the actual thing itself'.213

300 The second admission relied upon by the defendants was in an

interview with Geoff Hutchison on ABC Radio the following day, after

the 31 March Article had been published.214

301 In the course of that interview, Dr Jensen did make statements in

which he accepted, without demurrer, that he had sent an extract of The

Skywarriors book and the letter referred to in the 31 March

publications. The principal passage relied upon by the defendants was

Dr Jensen's answer that:215

So I sent the book out, or sample chapters in the form that under the

letter, under the letter that you’ve got but the reality is, in thinking

about it further and discussing it with some people, I decided not to

pursue it any further.

212 Ts (14 May 2019) 1119 (Jensen). 213 Ts (13 May 2019) 981 (Jensen). 214 Ts (14 May 2019) 1137-1141 (Jensen). The ABC Radio interview on 31 March 2016 was not ultimately

tendered in evidence, although it was played to the Court during cross-examination of Dr Jensen, who

identified it. 215 Ts (14 May 2019) 1138 (Jensen).

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302 Dr Jensen was cross-examined in relation to this statement, which

he accepted that he had made. Dr Jensen described the statement as

him trying to 'mitigate damage' and said that, had he 'gone about

denials' and the book had in fact been sent, it would have suggested he

was dishonest (consistent with his earlier evidence that 'it is the denial

that gets you more than the actual thing itself').216

303 Dr Jensen said, in response to the suggestion in cross-examination

that he had made that story up, that he had misspoke as to the

chronology (i.e. the chronology as to whether the discussion with

Mr Lowe and Ms Phelan came after his having sent the novel or

whether it had happened before he made a decision whether to send

it).217

304 It was not, in my view, entirely clear what Dr Jensen meant by

'misspoke' in this context: that is, whether Dr Jensen's evidence was

that he meant to convey something else in the interview (and

'misspoke') or, alternatively, that he meant that, at the time of the

interview, he was mistaken in his recollection as to whether he had sent

the book and, with the benefit of hindsight, considers that he 'misspoke'.

305 In my assessment, Dr Jensen, in his evidence, was conveying the

latter meaning. In that regard, at the time of the interview, I find that,

in light of his conversation with Mr Burrell (and his reference to 'proof')

and the context of the 31 March Article itself, Dr Jensen accepted that

he had in fact sent the letter. That is, he had at the time of the interview

accepted that his initial recollection of not sending the book

(demonstrated by his initial denial to Mr Burrell) was inaccurate.

306 It is worth noting, however, that even at this point in time (on

31 March 2016), Dr Jensen had (and expressed) a recollection of

having sought advice about publishing the book in 2007 and that he had

been advised against it. There is therefore nothing new about

Dr Jensen's recollection in that regard, which, as I have found, accords

with Mr Lowe's evidence.

307 In his evidence before me, Dr Jensen has now clearly reverted to

his initial recollection to the effect that he decided not to send an extract

of the book to a publisher.

216 Ts (14 May 2019) 1139 (Jensen). 217 Ts (14 May 2019) 1139-1140 (Jensen).

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308 In this regard, as I stated at [179] above, the certainty with which

Dr Jensen gave evidence that he recalls not sending the Curtis Brown

letter has been affected by what he has since learned as a result of

enquiries having been made by his solicitors to Curtis Brown.

309 This was apparent from the way in which Dr Jensen gave evidence

as to his recollection. On more than one occasion, Dr Jensen referred

(in the context of describing his own recollection) that 'Ms Gutierrez

and the Curtis Brown have no record of it'.218 For example, when asked

whether he still accepted the possibility that he had sent it, Dr Jensen

concluded his answer:219

So, I mean, in terms of possibilities, I'm not saying it’s impossible. But

I'm saying when you consider, your Honour, the entire sequence of

strong advice against - including the niggle that I had in my mind, the

decision not to send and then Curtis Brown not having any record of

receipt or discussion of it, I would say that it’s highly unlikely.

310 Dr Jensen's recollection that he had not sent the book has, in my

assessment, 'firmed up' since becoming aware that there is no record of

Curtis Brown having received it. Prior to becoming aware of that fact,

in my assessment Dr Jensen was more prepared to accept that his

recollection was wrong and to conduct himself on that basis.220 This, in

my view, explains Dr Jensen's preparedness to accept that he had sent

the letter when interviewed in the period immediately following the

31 March publications.

311 In accordance with my assessment of Dr Jensen generally,

however, I accept that his evidence in relation to his recollection that he

had decided not to send the book to a publisher in 2007 is truthful,

albeit that the certainty with which he holds that recollection has a

degree of reconstruction. In particular, the out-of-court admissions

relied upon by the defendants do not cause me to reject Dr Jensen's

evidence in this regard.

312 In all of the circumstances, having regard to:

(a) the absence of any record of Curtis Brown receiving the Curtis

Brown letter or any extract from The Skywarriors;

(b) Curtis Brown's generally reliable record of the submissions that

it had received;

218 Ts (14 May 2019) 1119 (Jensen). 219 Ts (14 May 2019) 1122 (Jensen). 220 Ts (15 May 2019) 1247 (Jensen).

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(c) Mr Lowe's evidence as to the advice to Dr Jensen not to send

the book for publication; and

(d) Dr Jensen's evidence as to his recollection that he had decided

not to send the book to a publisher in 2007 (subject to the caveat

I have identified),

I am not satisfied that the Curtis Brown letter was in fact sent by, or on

behalf of, Dr Jensen to Curtis Brown.

313 Accordingly, I am not satisfied that the parliamentary letterhead

imputation was substantially true.

The best interests imputation – Defence of truth

314 The defence of truth in relation to the best interests imputation

requires the defendants to prove that it is substantially true that by

abandoning his electorate to live in Halls Head, Dr Jensen failed to act

in the best interests of persons residing in the division of Tangney for

whom he was elected to represent.

315 The particulars of justification pleaded by the defendants in

relation to the best interests imputation were extensive. The defendants

provided the following particulars:221

(a) The Plaintiff was elected as the Federal Member for Tangney in

2004, at which time he was living in Halls Head, which is

outside the electorate of Tangney.

(b) The Plaintiff continued to live at Halls Head whilst sitting as the

Federal Member for Tangney between 2004 and 2006.

(c) After losing Liberal preselection for the seat of Tangney in

2006, the Plaintiff was advised by the then Prime Minister, John

Howard, to move into the electorate of Tangney.

(d) [T]he Plaintiff did in fact subsequently move into the electorate

of Tangney, living in a house in Leeming.

(e) In or around December 2012, and whilst sitting as the Federal

Member for Tangney, the Plaintiff moved out of Leeming, in the

seat of Tangney, to Halls Head.

(f) In or around January 2014, and whilst sitting as the Federal

Member of Tangney, the Plaintiff held himself out as residing in

the seat of Tangney in a Booragoon property, which was a

221 Defence [23A], [31A], [39A].

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leasehold property with the Plaintiff’s name upon the lease as

tenant and was at the address 7/36 Shadbolt Street, Booragoon.

(g) [T]he Plaintiff did not live in Booragoon, did not pay rent for the

house in Booragoon, and continued to live in Halls Head.

(h) A key role of a Parliamentarian is to represent his or her

electorate and to make representations to the government in

respect to matters of special interest to that electorate.

(i) A parliamentarian who lives within the electorate is best placed

to understand, appreciate and be able to best represent the

interests of the electorate in relation to matters of special interest

to the electorate and is better placed to do so than a

parliamentarian who lives outside the electorate.

(j) Further:

i. Halls Head is a significant distance from the electorate

of Tangney, being approximately 70 plus kilometers

South from the Swan River in the Perth area;

ii. the area of Halls Head is of a very different

demographic and industrial character than the electorate

of Tangney, Tangney being classified as inner

metropolitan, and its northern border being the Swan

River;

iii. there are intervening electorates between Tangney and

where Halls Head are located, being Fremantle and

Brand.

iv. the special concerns that affect the interests of those

residing in the electorate of Tangney are different than

those in the area of Halls Head.

(k) It is in the best interests of the electorate to be represented by a

parliamentarian who resides within the electorate;

(l) A parliamentarian will fail to act in the best interests of the

electorate he or she has been elected to represent by moving out

of the electorate to reside elsewhere, particularly in

circumstances where:

i. The residence is a significant distance from the

electorate;

ii. the demographic and industrial character of the area of

that residence is very difference from that of the

electorate;

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iii. the special concerns that affect the interests of those in

the electorate are different than those in the area of the

residence.

316 It must, at once, be observed that the defendants did not lead

evidence in relation to many of these particulars.

317 In relation to the allegation in particular (f) for example, that

Dr Jensen had held himself out as living in Booragoon (within the seat

of Tangney), the defendant expressly advised at the commencement of

the trial that it did not seek to prove that allegation (nor, by implication

particular (g)).222

318 There was no basis for the allegation that Dr Jensen held himself

out in this way. Dr Jensen gave evidence, which was not challenged,

that he had co-signed a lease for a property in Booragoon to assist his

daughter and a friend to obtain the accommodation.223

319 Similarly, there was very little evidence in relation to what might

be described as the demographic factors pleaded in particular (j). Save

for the proposition being put to Dr Jensen in cross-examination that

there was a very different demographic between Tangney and Halls

Head,224 the defendants did not lead any evidence in that regard.

320 Rather, evidence was led, principally from the preselectors called

by the defendants, as to their subjective views as to whether a member

of Parliament is better able to serve their electorate if they are a resident

of that electorate. That evidence was to varying effect.

321 Mr Schuster, for example, was philosophical about the matter:225

I view Parliamentarians on the substance of their performance and there

are many members of Parliament who live outside their electorate, and

the most obvious way that happens, of course, is with a redistribution

which suddenly puts your house outside the electorate you represent.

I'm much more interested in the calibre of the person and the

contribution they make to either Western Australia, in this case, or

Australia.

322 Mr Lowe, who I found to be an impressive and thoughtful witness,

addressed the issue generally and, with specific reference to Dr Jensen's

performance as a member of Parliament:226

222 Ts (8 May 2019) 820. 223 Ts (14 May 2019) 1047 (Jensen). 224 Ts (15 May 2019) 1167 (Jensen). 225 Ts (9 May 2019) 888 (Schuster).

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Do you have any more evidence to give on what I’ve just asked you

about?---About the significance of where a member lives, yes, I do.

And in terms of where a member lives, in terms of the significance of

the strength of their support in the - amongst preselectors and amongst -

that's - primarily, that’s where it matters. It is not that significant. There

are many members of Parliament that do not live in their electorate.

…

Are there factors in your electorate of Tangney – what do you say about

the accessibility of a member who lives in the electorate as opposed to a

member who doesn't?---If - the accessibility of a member to their

electorate and the knowledge that the member is working in the

electorate is important. I mean, if the electorate think that they’ve got an

absentee member, then that’s not good. But Dennis was not an absentee

member. He was accessible and available. When he was in town he was

available to constituents. The times that he wasn’t living actually in the

electorate, which was basically weekends and maybe holidays, was not

an issue. If you're going to the point that is it better if a member lives in

the electorate compared with someone who doesn’t live in the

electorate, yes, if you have equal merit of members or candidates, then

the one that lives in the electorate is going to be favoured over the one

that doesn't live in the electorate. That’s pretty plain. But - - -

And why is that?---They - a member is - they shop in the electorate.

They're more connected with it. They – people generally like the fact

that their members lives in the electorate. They identify with it. I mean,

it goes to grassroots democracy. We want one of our people, who know

us and who have lived in our electorate, or lives in our electorate, being

one of us and being our representative. I mean, it just goes to reason.

People like that.

But in that regard, you - it goes, as you’ve expressed that, to a matter of

perception, rather than whether or not the member is able to carry out

their functions?---Yes. That’s correct.

323 When taken back to the specific demographic features of Tangney,

Mr Lowe said: 'It's always desirable for the member to live in the

electorate. I don't think there's any special feature about Tangney that

makes it more or less desirable. It's a general thing'.

324 Mr Youngs proffered the belief that he did not think that a member

of Parliament who did not live in his or her electorate 'was fulfilling

their role properly'.227 What exactly Mr Youngs meant by this is not

clear, although he did express the view that not living in their electorate

226 Ts (16 May 2019) 1325-1326 (Lowe). 227 Ts (16 May2019) 1369 (Youngs).

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made it a lot harder with the 'meeting and greeting aspect' of the role.228

Mr Youngs did acknowledge that there were a lot of members who did

not live in their electorates and identified examples of effective

members who fell into that category.229

325 In any event, as discussed below at [585], I found Mr Youngs

somewhat argumentative in cross-examination and unwilling to accept

matters that ought to have been accepted. I do not find his evidence to

be reliable or persuasive.

326 Finally, Mr McGregor, when asked about the issue, gave the

following evidence:230

Now, you’ve said that – a few moments ago – that the – where

Dr Jensen lived and you thought he lived in Mandurah was not a factor

that influenced your - - -?---No.

No?---No.

No. No. Do you have a view, though, about the significance of a person

– a candidate living in the electorate or out of the electorate?---I think if

you’re weighing up two candidates that, for all other purposes, are

equal, then I would lean to the one that lived in the electorate, but that

wouldn’t be a deciding factor. That would only be a deciding factor if I

thought that the two candidates were level. But other than that, no, it

wouldn’t.

Why would you lean that way?---Because I think if the candidate lives

in electorate he has got a better feel for what’s happening. He – he

leaves the office and drives to his house in the electorate. He meets

people. He’s aware of what’s going on rather than driving from outside

the electorate to the office and then locking the office up and driving

again to his house outside the electorate. Very difficult for him to get a

– a feel of the place, where – where his constituents live.

327 In his own evidence Dr Jensen rejected the proposition that living

in his electorate had any effect on his capacity to represent his

constituents, although he accepted that not doing so was a matter that

was often raised in the context of preselection contests 'where people

are looking for arguments to get rid of you'.231

228 Ts (16 May 2019) 1368 (Youngs). 229 Ts (16 May 2019) 1368, 1394 (Youngs). 230 Ts (17 May 2019) 1455 (McGregor). 231 Ts (15 May 2019) 1164 (Jensen).

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328 Dr Jensen agreed that 'all else being equal' it would have been

preferable to live in the electorate.232 Ultimately, however, his

evidence was:

What I am saying in terms of my representation where I both lived

outside the electorate and I lived inside the electorate, I can honestly

say that it made no difference to how well I represented my

constituents.

329 All of the above evidence is, in my view, to similar effect, albeit

with differing degrees of emphasis.

330 Each of the witnesses, to a greater or lesser extent, agreed that it is

desirable that a local member live in their electorate and that, all things

being equal, a candidate who lived in the electorate is likely to be

preferred to a candidate who did not. This latter aspect, however, very

much went to matters of perception, rather than whether the member

could properly carry out their functions. This was the way in which

Mr Lowe put the position on the passage reproduced at [322] above. I

agree with that assessment.

331 Accepting that proposition, however, is in my view a far cry from

the general conclusion that a Member of Parliament, who does not live

in their electorate, fails to act in the best interests of their electors. Less

still does it support a finding that Dr Jensen, by moving to Halls Head

in July 2014, 'failed to act in the best interests' of the electors of

Tangney.

332 And it is that imputation that the defendants must establish is

substantially true.

333 In submissions, the defendants emphasised that the best interests

imputation was to be construed in a common sense way, and not to be

overlaid with what a lawyer might understand by the expression 'failed

to act in the best interests' (for example, a breach of fiduciary duty).233

That is no doubt correct. Nevertheless, it remains incumbent upon the

defendants to prove the substantial truth of the words complained of

and the defamatory sting.234

334 In seeking to justify that imputation as being substantially true, the

defendants cannot, in effect, 'water down' the meaning of the

232 Ts (15 May 2019) 1164 (Jensen). 233 Ts (18 May 2019) 1291. 234 See [240] above.

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imputation to the point that it is no longer defamatory. There was an

element of this in the defendants' submission that the best interests

imputation goes no further than 'it would have been in the better

interests of the constituents that Dr Jensen lived in the electorate',235 or

that it only means 'that living outside the electorate is not the absolute

'best' option'.236

335 In my view, these submissions do tend to water down the

defamatory sting of the best interests imputation. In seeking to

establish the substantial truth of that imputation, it is not enough to

prove that living in the electorate is generally 'desirable' or, all things

being equal, 'preferable'.

336 Rather the defendants must prove that, by moving to Halls Head,

Dr Jensen did something ('abandoning' is the word used in the

imputation itself, although 'leaving' would be sufficient) that was,

objectively, not in the best interests of his constituents (persons residing

in the division of Tangney for whom he was elected to represent). This

would require some objective basis for concluding that the interests of

the persons residing in Tangney were less well served by Dr Jensen

following, and as a consequence of, his change in residence.

337 The evidence relied upon by the defendants does not establish that

to be the case. On the evidence there is nothing to suggest that,

following his move in July 2014, Dr Jensen's work on behalf of the

electorate was adversely affected by his residence. Certainly, a number

of the preselectors gave evidence that they were less than satisfied with

Dr Jensen's performance as the member for Tangney. None of them,

however, suggested that that had anything to do with his residential

status.

338 At most, the evidence suggested that, generally, there were

advantages to living in one's electorate and that, as a matter of

perception, it affects a member's standing. Clearly these advantages,

and perceptions, will vary according to the circumstances of each case

and each particular member. They provide no basis for establishing

that Dr Jensen had failed to act in the best interests of his constituents

by moving to Halls Head in July 2014.

339 Accordingly, I am not satisfied that the parliamentary letterhead

imputation was substantially true.

235 Ts (16 May 2019) 1292-1293. 236 Defendants' submissions dated 29 May 2019 [162].

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340 The defences of justification must fail.

Qualified privilege

341 The defendants rely upon the defence of qualified privilege in

relation to the entirety of the 31 March publications and the 1 April

publications. That defence is relied upon pursuant to both s 30 of the

Defamation Act and the common law defence recognised in Lange.

General principles

342 Neither party submitted that the approaches to be taken under s 30

of the Defamation Act and the Lange defence, respectively, were

appreciably different. Under both defences, two issues will generally

arise for consideration:237

(a) whether the publication involved an occasion of qualified

privilege (i.e. whether the recipients of the publication have an

interest or apparent interest in receiving information on the

subject matter of the publication); and

(b) whether the conduct of the defendant in publishing the matter

was reasonable in the circumstances.

343 Each of these matters is reflected in s 30(1) of the Defamation Act,

which provides:

(1) There is a defence of qualified privilege for the publication of

defamatory matter to a person (the recipient) if the defendant

proves that -

(a) the recipient has an interest or apparent interest in

having information on some subject;

(b) the matter is published to the recipient in the course of

giving to the recipient information on that subject; and

(c) the conduct of the defendant in publishing that matter is

reasonable in the circumstances.

344 Section 30(1)(a) and (b) in particular, encapsulate the elements of

establishing an occasion of qualified privilege at common law. In the

237 The issue of malice as a disqualifying matter is considered separately below.

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context of identifying a relevant interest, the following statement from

the High Court in Lange applies equally to s 30(1)(a):238

[T]his Court should now declare that each member of the Australian

community has an interest in disseminating and receiving information,

opinions and arguments concerning government and political matters

that affect the people of Australia. The duty to disseminate such

information is simply the correlative of the interest in receiving it. The

common convenience and welfare of Australian society are advanced

by discussion - the giving and receiving of information - about

government and political matters.

345 I will return to the application of this passage to the present case

later.

346 Section 30(1)(c), in turn, requires a defendant to prove that the

conduct of the defendant in publishing the defamatory matter was

reasonable in all of the circumstances. Whether the conduct of the

defendant was reasonable is a question of fact to be determined in light

of all the circumstances of the case. In this regard there is, in my view,

no difference between the criteria of reasonableness under s 30 of the

Defamation Act and under the Lange defence.

347 Section 30(3) provides a list of factors that may be relevant to

determining whether the conduct of the publisher was reasonable. That

subsection provides:

(3) In determining for the purposes of subsection (1) whether the

conduct of the defendant in publishing matter about a person is

reasonable in the circumstances, a court may take into account -

(a) the extent to which the matter published is of public

interest;

(b) the extent to which the matter published relates to the

performance of the public functions or activities of the

person;

(c) the seriousness of any defamatory imputation carried

by the matter published;

(d) the extent to which the matter published distinguishes

between suspicions, allegations and proven facts;

238 Lange, 571 (Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow & Kirby JJ). See also Hockey

[222] (White J).

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(e) whether it was in the public interest in the

circumstances for the matter published to be published

expeditiously;

(f) the nature of the business environment in which the

defendant operates;

(g) the sources of the information in the matter published

and the integrity of those sources;

(h) whether the matter published contained the substance

of the person’s side of the story and, if not, whether a

reasonable attempt was made by the defendant to obtain

and publish a response from the person;

(i) any other steps taken to verify the information in the

matter published; and

(j) any other circumstances that the court considers

relevant.

348 Clearly this list of factors is neither exhaustive, nor mandatory.239

The considerations relevant to the reasonableness of the conduct of the

publisher will vary with the circumstances of each individual case.

Reasonableness 'is not a concept that can be subject to inflexible

categorisation'.240

349 As general guiding principles in this context, I would respectfully

adopt the following observations of Wigney J in Chau:241

First, in most cases, the more serious the imputation that is conveyed,

the greater the obligation upon the respondent to ensure that its conduct

in relation to the publication was reasonable: Morgan v John Fairfax &

Sons Ltd (No 2) (1991) 23 NSWLR 374 at 387C (per Hunt A-JA, with

whom Samuels JA agreed); see s 30(3)(c) of the Defamation Act.

Second, a respondent who intended to convey an imputation that was in

fact conveyed must generally establish that they believed in the truth of

that imputation and that the imputation conveyed was relevant to the

subject: Morgan at 387F and 388C.

Third, the fact that the respondent may not have intended to convey the

imputation that was in fact conveyed does not necessarily mean that

their conduct in publishing was unreasonable: Austin at 362; Roberts v

Bass [2002] HCA 57; (2002) 212 CLR 1 at [81]-[82]. In such a case,

239 Chau v Fairfax Media Publications Pty Ltd [2019] FCA 185 (Chau) [107] (Wigney J). 240 Rogers v Nationwide News Pty Ltd [2003] HCA 52; (2003) 216 CLR 327 [30] (Gleeson CJ &

Gummow J). 241 Chau [109]-[116] (Wigney J).

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the respondent must generally establish that they believed in the truth of

the imputation that they intended to convey, and that their conduct was

nevertheless reasonable in relation to the imputation which they did not

intend to convey, but which was in fact conveyed. In that regard, it may

be relevant to consider whether it was reasonably foreseeable that the

publication might convey the unintended imputation and, if so, whether

the respondent considered that possibility and took appropriate steps to

prevent that imputation being conveyed: Morgan at 387G-388A; Obeid

v John Fairfax Publications Pty Ltd [2006] NSWSC 1059; (2006) 68

NSWLR 150 at [70]-[75]; Evatt v Nationwide News Pty Ltd [1999]

NSWCA 99 at [40]-[43].

Fourth, the respondent must generally establish that reasonable steps

were taken before publishing to ensure that the facts and conclusions

stated in the publication were accurate. That would generally involve

making proper or reasonable inquiries, checking the accuracy and

reliability of sources of information and ensuring that the conclusions

followed logically, fairly and reasonably from the information that had

been obtained; Morgan at 388B; see generally ss 30(3)(g) and (i) of the

Defamation Act. In that context, the respondent must ordinarily disclose

both the nature and source of the information which was possessed:

Sims v Wran [1984] 1 NSWLR 317 at 327F.

Fifth, in relation to sources, the respondent's belief or perception of the

position, standing, character and opportunities of knowledge of the

source must be such as to make the respondent's belief in the truth and

accuracy of the information reasonable in the circumstances: Morgan at

388D; s 30(3)(g) of the Defamation Act.

Sixth, a respondent must show that the manner and extent of the

publication did not exceed what was reasonably required in the

circumstances: Morgan at 388C.

Seventh, the respondent must also establish that the respondent gave the

person defamed an opportunity to make a reasonable response to the

defamatory imputation: Stephens v West Australian Newspapers Ltd

[1994] HCA 45; (1994) 182 CLR 211 at 252; referred to by the High

Court in Lange v Australian Broadcasting Corporation [1997] HCA

25; (1997) 189 CLR 520 at 574.

In Lange, the High Court said the following about reasonableness in

publishing, albeit in the context of the implied Constitutional defence to

the publication of defamatory imputations relating to government and

political matters at 574:

Whether the making of a publication was reasonable must

depend upon all the circumstances of the case. But, as a general

rule, a defendant's conduct in publishing material giving rise to a

defamatory imputation will not be reasonable unless the

defendant had reasonable grounds for believing that the

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imputation was true, took proper steps, so far as they were

reasonably open, to verify the accuracy of the material and did

not believe the imputation to be untrue. Furthermore, the

defendant's conduct will not be reasonable unless the defendant

has sought a response from the person defamed and published

the response made (if any) except in cases where the seeking or

publication of a response was not practicable or it was

unnecessary to give the plaintiff an opportunity to respond.

(Footnotes omitted.)

350 In applying these principles in the present case, and indeed in

relation to the criterion of reasonableness generally, I recognise that

reasonableness should not be interpreted as requiring a counsel of

perfection.242

351 There is one final issue of principle that arises in the present case

that I should address. It is whether the criterion of reasonableness is to

be applied to the conduct in publishing the publications containing the

defamatory imputations as a whole, or to the individual defamatory

imputations conveyed by each publication.

352 The relevance of that issue in the present case arises because,

particularly in relation to the 1 April publications, there are a number of

defamatory imputations conveyed by each publication. In accordance

with the jury's verdict, for example, there were three defamatory

imputations carried by each of the 1 April publications: the family

values imputation, the moral standards imputation and the best interests

imputation. If the parliamentary letterhead imputation is included,

there were four.

353 The term 'matter' in s 4 of the Defamation Act relevantly includes

'an article, report, advertisement or other thing communicated by means

of a newspaper' and 'a program, report, advertisement or other thing

communicated by means of … the Internet'. Each of the 1 April

publications (i.e. the 1 April Article, the 1 April Internet Article and the

1 April Tweet) is, therefore, relevantly a separate 'matter' for the

purposes of the Defamation Act.

354 It is clear, however, from s 8 of the Defamation Act, that Dr Jensen

has a single cause of action in relation to the publication of each

'defamatory matter' notwithstanding that each matter carries more than

one defamatory imputation.

242 Hockey [228] (White J).

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355 Section 30(1) and the chapeau to s 30(3) refer to the conduct of the

defendant in publishing 'the matter'. This suggests that in applying s 30

it is necessary for the defendants to prove the reasonableness of their

conduct in publishing each 'matter' as a whole, rather than in relation to

the defamatory imputations per se.

356 I accept this to be the case, in the sense that the ultimate

conclusion to be reached is whether the defendants have proven that

their conduct in publishing the particular article, internet article or tweet

was reasonable. The Court's ultimate satisfaction must be as to the

reasonableness of the conduct in publishing the 'matter' as a whole, that

is, each particular article, internet article or tweet.

357 Nevertheless, I also accept that, in assessing the reasonableness of

the publication of each 'matter', it is appropriate to have regard to each

matter to the extent that it gives rise to a defamatory imputation or

defamatory imputations. The 'reasonableness' of the defendants'

conduct is not to be divorced from the prima facie wrong committed by

the defamatory imputations.

358 In this regard, I agree with the observations of White J in Hockey,

who concluded:243

[I]t is appropriate to understand the term "the publication of defamatory

matter" in the opening line of s 30(1) as referring to a "matter", as

defined in s 4, to the extent that it gives rise to a defamatory imputation

or defamatory imputations or, to use the phrase of Hodgson JA "in its

character as making the imputation complained of".

… If s 30(1)(c) is understood as referring to the matter containing the

defamation in all its aspects, the focus of the evidence appropriate to

discharge the defence would change significantly. So also would the

focus of the evidence necessary to establish malice under s 30(4) as it

too uses the term "the publication of the defamatory matter". It is not

readily to be supposed that s 30 is intended to allow a defendant to

avoid liability for a defamation by establishing that its conduct in

publishing an article was, considered generally, reasonable even though

its conduct in including a defamatory imputation in the article was

unreasonable.

… It would be simplistic however, to construe the term "defamatory

matter" as being a matter in the defined sense which is also defamatory.

Rather, the term "defamatory matter" appears to be used as a composite

expression that is, as a term for the defamatory content of a matter

whether it be a single imputation or multiple imputations. Accordingly,

243 Hockey [318]-[320] (White J).

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it is the respondents' conduct in publishing those matters which

s 30(1)(c) requires to have been reasonable. (original emphasis)

359 In Hockey, White J was referring to circumstances in which the

conduct in publishing an article, considered generally, might be

considered reasonable, whereas the inclusion of the defamatory

imputation would not. As his Honour reasoned, it is not appropriate in

those circumstances to ask if the particular article was generally

reasonable having regard to non-defamatory matters, in circumstances

in which the inclusion of defamatory imputations as part of the article

was unreasonable.

360 That reasoning has particular resonance in the present case in

relation to the 31 March publications, which in significant respects

convey information that has been found not to carry defamatory

meanings, and in relation to which there is no challenge by Dr Jensen.

Those aspects of the 31 March publications are those that formed the

basis of the purveyor of smut imputation.

361 Those aspects of the 31 March publications are, in my view,

irrelevant to the assessment of reasonableness, in the sense that a

conclusion that it was reasonable to publish those matters could not

assist in establishing that it was reasonable to publish the 31 March

publications as a whole, insofar as they conveyed the parliamentary

letterhead imputation. This conclusion, of course, cuts both ways. That

is, if the conduct in relation to the matters that formed the basis of the

purveyor of smut imputation (and which has been found not to have

been conveyed) was unreasonable, it would not prevent the defence of

qualified privilege arising in relation to the matter insofar as it

conveyed the parliamentary letterhead imputation, if the conduct in

conveying that imputation was reasonable.

362 Different consideration arise in relation to the 1 April publications,

in relation to which there are multiple defamatory imputations

conveyed by each relevant 'matter' (i.e. the 1 April Article, the 1 April

Internet Article and the 1 April Tweet respectively).

363 In the case of those publications, where there are multiple

imputations, it is appropriate (adopting White J's approach) to consider

the reasonableness of the defendant's conduct in publishing each matter

as a whole, to the extent that they include the defamatory imputations.

Depending upon the conclusion reached in relation to each imputation

(for example if the conduct in relation to one imputation was perfectly

reasonable and the conduct in relation to another was not) difficult

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questions might arise as to the application of the defence to the

publication as a whole. For reasons that will later become apparent,

however, those questions do not arise in the present case.

364 Turning then to the application of these principles in the present

case.

Occasion of privilege – political communication

365 I am satisfied that all of the publications were published on an

occasion of qualified privilege. That is, I am satisfied, pursuant to

s 30(1)(a) and (b) of the Defamation Act, that the persons to whom the

matters were published had an interest in receiving information on the

subject matters of the 31 March publications and the 1 April

publications.

366 In particular, I am satisfied that each of the publications, to the

extent that they gave rise to defamatory imputations, concerned

'government and political matters that affect the people of Australia'

within the meaning of the interest of the Australian community

identified in Lange.

367 In that regard, it is important not to take too narrow a view of the

scope of what is meant by 'government and political matters', either as

to subject matter or geographically. As McHugh J observed in

Stephens v West Australian Newspapers Ltd:244

[A] narrow view should not be taken of the matters about which the

general public has an interest in receiving information. With the

increasing integration of the social, economic and political life of

Australia, it is difficult to contend that the exercise or failure to exercise

public functions or powers at any particular level of government or

administration, or in any part of the country, is not of relevant interest

to the public of Australia generally.

368 Similarly, in relation to the range of matters that may properly fall

within public discussion, Mason CJ, Toohey and Gaudron JJ in

Theophanous v Herald & Weekly Times Ltd said:245

244 Stephens v West Australian Newspapers Ltd [1994] HCA 45; (1994) 182 CLR 211 (Stephens), 264

(McHugh J) quoted in Lange 570-571 (Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow &

Kirby JJ). 245 Theophanous v Herald & Weekly Times Ltd [1994] HCA 46; (1994) 182 CLR 104, 124 (Mason CJ,

Toohey & Gaudron JJ).

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"political discussion" includes discussion of the conduct, policies or

fitness for office of government, political parties, public bodies, public

officers and those seeking public office.

369 The 31 March publications and the 1 April publications, of course,

all related to Dr Jensen as an elected representative for the division of

Tangney. Any matter that might be considered relevant to his fitness

for that office, or was relevant to his performance of the duties of that

office, properly falls within the broad concept of 'political discussion' or

'government or political matters'.

370 Dr Jensen, in closing submissions, accepted, for example, that

'abuse by a parliamentarian of their position through the personal use of

parliamentary letterhead', was a subject matter properly falling with the

definition of government or political matters.246 The parliamentary

letterhead imputation, he therefore accepted, was a matter in relation to

which readers of The Australian had an interest in receiving

information.

371 Nevertheless, Dr Jensen did not accept that his living

arrangements and his personal relationship status properly fell within

'political and governmental matters'.247 According to this submission,

the family values imputation, the moral standards imputation and the

best interests imputation did not concern information in relation to

which each member of the Australian community has an interest in

receiving (per s 30(1)(a) and (b) and Lange).

372 In addition, Dr Jensen submitted that it could not be said, in a

geographical sense, that all readers of The Australian had an interest in

information about his living arrangements (such as someone in

'Brisbane … Hobart or Launceston').248

373 I reject these submissions.

374 First, as to the geographical reach of the interest, it is clear from

the passages in Lange and Stephens referred to above249 that the

relevant interest in receiving information in relation to political matters

inheres in 'each member of the Australian community' and 'the

Australian public generally'. It cannot be confined to a particular

locality or State. Indeed, to confine the scope of protected discussion

246 Plaintiff's Closing Submissions dated 23 May 2019 [113]. 247 Plaintiff's Closing Submissions dated 23 May 2019 [113]. 248 Ts (24 May 2019) 505-506. 249 At [344] and [367] respectively.

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concerning a Member of Parliament to his or her particular electorate or

region would denude the constitutional principle reflected in Lange of

much of its force.

375 Secondly, the subject matters of the family values imputation, the

moral standards imputation and the best interests imputation, do, in my

view, sufficiently relate to performance and fitness for office of an

elected Member of Parliament. In that regard, the imputations

themselves specifically refer to qualities 'expected of a Member of

Parliament' and the 'best interests of persons … for whom [Dr Jensen]

was elected to represent'. The meanings for which Dr Jensen

contended, and which the jury accepted, are therefore on their face

connected to his fitness (in a general sense) for public office.

376 Regrettable as it may be to some, discussion of matters relating to

the personal, even private, behaviour of members of Parliament is now

a commonplace feature of Australian political life. Members' and

candidates' personal relationships, their religious beliefs and practices,

and other private conduct are all grist to the political mill. As

McHugh J said in relation to the related issue of unreasoned and

emotional communication:250

To many people, appeals to emotions in political and government

matters are deplorable or worse. That people should take this view is

understandable, for history, ancient and modern, is full of examples of

the use of appeals to the emotions to achieve evil ends. However, the

use of such appeals to achieve political and government goals has been

so widespread for so long in Western history that such appeals cannot

be outside the protection of the constitutional implication.

377 In the circumstances, in my view, particularly given they include

imputations as to the qualities 'expected of a Member of Parliament'

and the 'best interests' of the electorate of Tangney, each of the

publications was published on an occasion of qualified privilege and, in

all respects, concerned matters that the persons to whom the articles

were published had an interest in receiving information.

378 The defendants have, accordingly, satisfied the requirements of

s 30(1)(a) and (b) of the Defamation Act.

379 It remains to determine whether the defendants have proven that

their conduct in publishing each matter was reasonable in the

250 Levy v Victoria [1997] HCA 31; (1997) 189 CLR 579, 623 (McHugh J).

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circumstances (both for the purposes of s 30(1)(c) of the Defamation

Act and the Lange defence).

Was the defendants' conduct reasonable?

380 In light of the conclusions set out above (in particular at [355]-

[357]) it is necessary to consider the reasonableness of the defendants'

conduct in publishing each 'matter' (i.e. each article, internet article and

tweet).

381 While each of the individual publications may be separately

regarded as a 'matter' for the purposes of the Defamation Act, in my

view it is appropriate to consider reasonableness by reference to the two

broad groups of publications: i.e. the 31 March publications and the

1 April publications.251

382 This is because, insofar as reasonableness is concerned, the

content of each publication within those two groups is substantially the

same. That is, for example, the 31 March Article, the 31 March

Internet Article and the 31 March Tweet all relevantly raise the same

issues of reasonableness. Save for the headlines and the content of the

tweet, the contents of each publication was relevantly the same and the

defendants' conduct in relation to their publication was the same.252

The answer to the question whether that conduct was reasonable will be

the same in relation to each of the 31 March publications.

383 The same can be said of the 1 April publications (i.e. the 1 April

Article, the 1 April Internet Article and the 1 April Tweet). The answer

to the question of whether the defendants' conduct in publishing those

matters was reasonable will be the same in relation to each such

publication.

384 Accordingly I turn first to the 31 March publications.

Reasonableness of the conduct in publishing the 31 March publications

385 The only relevant imputation that arises for consideration in

relation to the 31 March publications is the parliamentary letterhead

imputation. The reasonableness of the conduct in publishing the

31 March publications is, therefore, to be assessed by reference to its

character in conveying that imputation.

251 See [40]-[45] above. 252 As noted at [41(b)] it was accepted that each tweet, by containing a link to the corresponding internet

article, constituted a publication of the contents of that internet article.

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386 For the reasons that follow, I am not satisfied that the defendants

have proved that their conduct in publishing the 31 March publications

was reasonable in the circumstances. On the contrary, I am satisfied

that the defendants' conduct in doing so was not reasonable.

387 I accept that the parliamentary letterhead imputation and the

publications as a whole were matters of public interest and that they

related to Dr Jensen's performance of his public functions.253 As I have

concluded above in relation to the application of the Lange defence, the

parliamentary letterhead imputation concerned a matter properly falling

within the scope of 'government or political matters'. The appropriate

use of a parliamentary letterhead was, therefore, a matter of substantial

or significant public interest.

388 For the same reason, however, the imputation conveyed by the

parliamentary letterhead imputation was undoubtedly a serious one.254

It conveyed an imputation that Dr Jensen improperly used his public

office for private benefit. In accordance with the guiding principles

referred to at [349] above, the more serious an imputation, the greater

the steps that may be required in order to establish reasonableness than

in the case of a less serious imputation.255 The seriousness of the

parliamentary letterhead imputation required a commensurate degree of

care in order for the defendants' conduct in publishing the matters

conveying that imputation to be reasonable.

389 Moreover, it is clear that Mr Burrell, and by extension Nationwide

News, intended to convey the parliamentary letterhead imputation. To

establish that their conduct was reasonable, it would be necessary for

them to establish, inter alia, that they believed in the truth of the

imputation and that the imputation conveyed was relevant to the

subject.256 I accept that Mr Burrell did (subjectively) believe in the

truth of the parliamentary letterhead imputation (whether or not there

were sufficient or proper grounds for that belief).

390 Belief in the truth of the imputation is not, however, the only

matter relevant to the reasonableness of the defendants' conduct. As

reflected in the principles set out at [349] above, it is necessary to

consider what reasonable steps were taken, before publication, to

ensure that the facts and conclusions stated in the publication were

253 Defamation Act s 30(3)(a) and (b). 254 Defamation Act s 30(3)(c). 255 Chau [109] (Wigney J). 256 Chau [110] (Wigney J).

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accurate. This invites consideration of whether the defendants made

proper or reasonable inquiries, checking the accuracy and reliability of

sources of information and ensuring that the conclusions followed

logically, fairly and reasonably from the information that had been

obtained.257

391 In this regard, as I have found, Mr Burrell had the anonymous

package for approximately one week prior to the 31 March

publications. He did not, in that time, take any steps to verify the

authenticity of the Curtis Brown letter or whether it had in fact been

sent to Curtis Brown. Mr Burrell did not make any inquiry with Curtis

Brown.

392 I leave aside for the moment Mr Burrell's conversation with

Dr Jensen.

393 Nor, in my view, was it reasonable to conclude, from the existence

of the Curtis Brown letter itself, that it was genuine and that it had been

sent to Curtis Brown.

394 As I have found, Mr Burrell did not know who the source of the

anonymous package was. He was, therefore, in no position to make

any assessment as to the reliability or authenticity of the Curtis Brown

letter by reference to its source.258 Indeed, what would have been

obvious to Mr Burrell was that the anonymous source was not a

supporter of Dr Jensen, and, it may be inferred, would wish to cause

him political damage. A reasonable person would, therefore, be put on

notice as to the potential for the Curtis Brown letter to be inauthentic.

395 The form of the Curtis Brown letter itself, without further

verification, could not reasonably establish its authenticity.

396 In this regard, I would observe that my conclusion that the Curtis

Brown letter was genuine is based upon a number of matters available

to the Court that were not known to Mr Burrell at the time the

defendants published the 31 March publications. For example, the

inference I have drawn that the Curtis Brown letter was genuine is

supported by the fact that it was addressed to Ms Gutierrez and that

Ms Gutierrez was indeed working at Curtis Brown in 2007 and was the

257 Chau [112] (Wigney J). 258 Defamation Act s 30(3)(g).

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person who answered telephone inquiries in relation to submissions.259

None of that was known to Mr Burrell.

397 Similarly, as I have found, the contents of the Curtis Brown letter

contain an accurate reflection of the very material that a person

inquiring of Curtis Brown would have been advised to submit.260 This

was not known to Mr Burrell either.

398 Nor was it reasonable for Mr Burrell (and by extension

Nationwide News) to conclude that the Curtis Brown letter was itself

authentic from his conversation with Dr Jensen. I have found that

Mr Burrell did not refer to a 'parliamentary letterhead' in that

conversation. As it was, Dr Jensen had denied sending the book for

publication until Mr Burrell said that he had proof that it was sent.

399 Nor could it be said that it was in the public interest for the

circumstances of the matter to be published expeditiously, in the sense

that there was insufficient time for reasonable enquiries to be made.261

Mr Burrell had the material in the anonymous package for a week prior

to its publication. Were there any need for expedition, it would have

been expected that the publications would have been made earlier. As

it was, there was ample time to make an inquiry with Curtis Brown in

order to determine whether the Curtis Brown letter had in fact been

received by Curtis Brown.

400 Significantly, as is set out in the guiding principles referred to at

[349] above, a defendant must generally establish that it gave the

person defamed an opportunity to make a reasonable response 'to the

defamatory imputation'. The Court in Lange went so far as to suggest

that 'the defendant's conduct will not be reasonable unless the defendant

has sought a response from the person defamed and published the

response made' except where that is not practicable or unnecessary.262

That opportunity ought to provide sufficient detail to enable the person

defamed the opportunity to provide a meaningful response. That will

generally require the opportunity to make a reasonable response to the

defamatory imputation itself.263

401 In the present case, as I have found, Mr Burrell did not refer to a

'parliamentary letterhead' in the conversation with Dr Jensen. At most,

259 See [262] above. 260 See [263] above. 261 Defamation Act s 30(3)(e). 262 Lange, 574 (Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow & Kirby JJ). 263 Chau [115] (Wigney J).

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Mr Burrell may have referred to being in possession of a letter. There

was, I find, nothing in the conversation between Mr Burrell and

Dr Jensen to put Dr Jensen on notice that the use of a parliamentary

letterhead would feature as part of the potential publications.

Dr Jensen, therefore, had no meaningful opportunity to respond to that

issue.

402 Nor is there any doubt that Mr Burrell did not put to Dr Jensen that

Dr Jensen had improperly exploited his position as a Member of

Parliament by using his parliamentary letterhead. There was no

suggestion by Mr Burrell that he did so.

403 In those circumstances, while Mr Burrell may well have, and I

find did, tell Dr Jensen that he had proof that Dr Jensen had sent the

book to a publisher, he did not give Dr Jensen a reasonable opportunity

to respond to the imputation that was in fact conveyed by the 31 March

publications.

404 For these reasons, I find that the defendants have not proved:

(a) that their conduct in publishing the 31 March Article and 31

March Internet Article was reasonable in the circumstances; or

(b) that Mr Burrell's conduct in publishing the 31 March Tweet was


405 To the contrary, I find that the defendants' conduct in publishing

each of the 31 March publications (as a whole) was not reasonable.

406 Accordingly, if, contrary to the jury's verdict, the 31 March

publications were defamatory of Dr Jensen, the defendants' defence of

qualified privilege in relation to those publications would fail.

Reasonableness of the conduct in publishing the 1 April publications

407 The 1 April publications contain a number of imputations: the

family values imputation, the moral standards imputation, the best

interests imputation and, again, the parliamentary letterhead imputation.

408 I have found that the defendants' conduct in publishing the

31 March publications containing the parliamentary letterhead

imputation was not reasonable. It does not necessarily follow,

however, that inclusion of the parliamentary letterhead imputation in

the 1 April publications compels the conclusion that the defendants'

conduct in publishing the 1 April publications was also unreasonable.

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409 By the time of the 1 April publications, further information was

available to the defendants that was not available prior to the 31 March

publications. In particular, as is evident from the 1 April publications

themselves, between the two groups of publications, Dr Jensen had

publicly accepted (on ABC Radio) that he had used his parliamentary

letterhead to seek to have The Skywarriors published. Unlike in the

telephone conversations with Mr Burrell on 30 March 2016, Dr Jensen

was, by the time of that public acceptance, well aware that it had been

suggested that he had improperly used his parliamentary letterhead.

With that knowledge, Dr Jensen accepted that he had done so.264

410 While I accept Dr Jensen did so for the reasons I have set out

above (at [302] to [305]), which were themselves attributable to

Mr Burrell's conduct, his acceptance of the gist of the parliamentary

letterhead imputation on ABC Radio might have formed a reasonable

basis for the defendants' conduct in including that matter in the 1 April

publications.

411 Indeed, those parts of the 1 April publications giving rise to the

parliamentary letterhead imputation, in essence, amounted to little more

than a report of that acceptance by Dr Jensen in the ABC Radio

interview. Accordingly, in my view, while the defendants should have

taken more reasonable steps in initially publishing the parliamentary

letterhead imputation on 31 March 2016, by the time of the 1 April

publications, it may have been reasonable for them to publish the

parliamentary letterhead imputation in the form that it appeared in those

publications.

412 Considered in isolation, therefore, I might have been satisfied that

the defendants' conduct in publishing a matter conveying the

parliamentary letterhead imputation on 1 April 2016 was reasonable.

413 The 1 April publications, however, did not merely repeat the

parliamentary letterhead imputation. They also contained the other

defamatory imputations found by the jury: the family values

imputation, the moral standards imputation and the best interests

imputation. And it is the reasonableness of the conduct in publishing

each 'matter' as a whole, having regard to all of the defamatory

imputations conveyed by them, that must be assessed.

414 In that regard, it is apparent that the principal focus of the 1 April

publications (as reflected in the headlines) was the suggestion that

264 See [301] above.

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Dr Jensen had recently left his family home and electorate to live with

his new girlfriend in Halls Head. It is that suggestion that gave rise to

the family values imputation, the moral standards imputation and the

best interests imputation.

415 In my view the defendants have not proven that their conduct in

publishing the 1 April publications as a whole, and by conveying those

imputations, was reasonable. Indeed, I am firmly of the view that their

conduct was unreasonable.

416 First, while I have accepted that the 1 April publications

(including the family values imputation, the moral standards imputation

and the best interests imputation) were matters concerning government

or political matters, and so in the public interest, they were not matters

with the same degree of connection to the performance of Dr Jensen's

public functions as the parliamentary letterhead imputation.

417 Indeed, insofar as the family values imputation and the moral

standards imputation are concerned, they related to Dr Jensen's personal

and private affairs and were only indirectly related to his public

functions. The nature of the imputations were such as to suggest moral

failing on Dr Jensen's part by 'leaving' his family for a 'new girlfriend'.

418 Secondly, none of the matters giving rise to these imputations

concerning his living arrangements was ever put to Dr Jensen for his

response.

419 As I have found, Mr Burrell made no reference to, nor did he ask

Dr Jensen any questions concerning, Dr Jensen's living arrangements in

the course of their conversation on 30 March 2016.

420 Nor did Mr Burrell make any attempt to contact Dr Jensen or

Dr Hoad on 31 March 2016 in relation to their living arrangements,

prior to the publication of the 1 April publications.

421 Apart from the reference to Halls Head in the preselection form,265

the only source of the information relevant to the imputations

concerning Dr Jensen's living arrangements was Mr Conway. I will

come back to Mr Conway in a moment.

422 As I have said, insofar as the family values imputation and the

moral standards imputation are concerned, the imputations were such as

265 See [109] above.

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to suggest moral failing on his part by 'leaving' his family for a 'new

girlfriend'.

423 There was no reasonable basis for conveying such an imputation

given that Mr Burrell did not ask anyone, and was not told, when

Dr Jensen had moved, when (or how) his marriage had broken down or

when he had formed a relationship with Dr Hoad.

424 These matters were important. The sequence of events conveyed

by the 1 April publications was that Dr Jensen had left his family home

in order to live with his new girlfriend (hence the imputation that he

was devoid of the family values or high moral standards expected of a

Member of Parliament).

425 Those imputations were clearly false. In particular:

(a) Dr Jensen had not left his former wife;

(b) he had moved to the Halls Head residence as a result of a

separation initiated by his former wife; and

(c) he had met Dr Hoad after that separation.

426 The falsity of all of those matters would have been made clear if

the substance of the family values imputation and the moral standards

imputation had been put to Dr Jensen, with a reasonable opportunity for

him to respond. As it was, none of those matters were put to Dr Jensen,

nor was there a reasonable basis for publishing them.

427 In particular, to have relied upon Mr Conway's reference to

Dr Jensen living in Halls Head with his girlfriend was an unreasonable

basis for publishing matters that conveyed those imputations.

428 It should be recalled, as set out in [199] above, that the defendants'

pleaded case, in relation to both the 31 March publications and the

1 April publications, was that, prior to the publications, Mr Burrell had

contacted Dr Jensen and Mr Conway who, the defendants pleaded, 'had

on previous occasions been contacted to and who did deal with media

enquiries for and on behalf of' Dr Jensen.

429 As it transpired there were no 'previous occasions' on which

Mr Burrell had spoken with Mr Conway. In fact, as the evidence

revealed, other than the telephone conversation on 30 March 2016,

Mr Burrell had only spoken to Mr Conway once. That was on

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28 January 2016.266 On that occasion Mr Conway did not profess to be

able to speak on behalf of Dr Jensen and indeed advised Mr Burrell that

Dr Jensen would not comment on preselection matters. Mr Burrell

gave evidence that, after that call, he believed that Mr Conway had

authority to speak on Dr Jensen's behalf.267 There was, in my view, no

objective basis for such a belief. Neither Mr Conway nor Dr Jensen

had so advised Mr Burrell.

430 Still less, in my view, on the basis of that telephone conversation

could Mr Conway be taken to be authorised to answer or respond to

matters concerning Dr Jensen's private life, or his relationship with his

former wife.

431 In relation to the conversation with Mr Conway on 30 March

2016, Mr Burrell said that he assumed that Mr Conway would have told

Dr Jensen about their conversation concerning Dr Jensen's living

arrangements.268 Such an assumption was not a reasonable basis for not

raising the matter directly with Dr Jensen for his response, particularly

given the inaccurate conclusions Mr Burrell drew from the conversation

with Mr Conway. Indeed, Mr Burrell accepted in cross-examination

that assumptions are not a proper basis for an article.269

432 Even if it was reasonable to rely upon his assumption as to

Mr Conway's authority to respond to questions concerning Dr Jensen's

living arrangements and private life (which in my view it was not), the

conversation with Mr Conway on 30 March 2016 did not provide a

reasonable basis for publications conveying the family values

imputation and the moral standards imputation. As I have found,

Mr Conway did not use the expression 'new' girlfriend and he did not

say that Dr Jensen had moved 'recently'. Mr Burrell had no information

to support those aspects of the imputations that were false (see [423] to

[425] above). Nor did he seek any.

433 These conclusions are sufficient, in my view, to conclude that the

defendants' conduct in publishing each of the 1 April publications as a

whole was not reasonable in the circumstances.

434 I would add, however, that I have reached the same view in

relation to the best interests imputation.

266 See [85] to [86] above. 267 Ts (24 May 2019) 1483 (Burrell). 268 Ts (20 May 2019) 1533 (Burrell). 269 Ts (21 May 2019) 1673 (Burrell).

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435 The best interests imputation does not carry the same sting as the

family values imputation and the moral standards imputation in relation

to Dr Jensen's moral character. It is concerned rather with his

performance as a Member of Parliament. It was, in my view, less

serious in the circumstances. Nevertheless, as with those other

imputations, in my view, reasonableness required that Dr Jensen be

given the opportunity to respond to the imputation.

436 The significance of an opportunity to respond to the best interests

imputation is that the meaning clearly conveyed by the first two

paragraphs of the 1 April article was that Dr Jensen had 'recently' left

the electorate 'even as' the preselection bid intensified. The jury

accepted the characterisation of the relevant imputation as being that

Dr Jensen had 'abandoned' the electorate.

437 That meaning may not have been conveyed were it apparent that,

for perfectly understandable reasons, Dr Jensen had been living in Halls

Head since July 2014; such that his move out of the electorate was

wholly unrelated to the preselection.

438 For these reasons, I find that the defendants have not proved:

(a) that their conduct in publishing the 1 April Article and 1 April

Internet Article was reasonable in the circumstances; or

(b) that Mr Burrell's conduct in publishing the 1 April Tweet was


439 I find that the defendants' conduct in publishing each of the

1 April publications (as a whole) was not reasonable.

440 Accordingly, the defendants' defence of qualified privilege in

relation to those publications must fail.

Malice

441 It follows from my conclusions in relation to the defendants'

conduct that the defence of qualified privilege must fail in relation to

each of the publications. While each publication was published on an

occasion of qualified privilege, I have found that the conduct of the

defendants in publishing each publication was not reasonable.

442 For this reason it is not strictly necessary for me to consider

whether the 31 March publications or the 1 April publications were

actuated by malice.

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443 It is sufficient, then, for me to briefly state my reasons for

concluding that, had the defendants otherwise established a defence of

qualified privilege, it would not have been defeated by malice. That is,

I am not satisfied that Dr Jensen has proven that the publication of the

defamatory matters was actuated by malice.

444 Malice in this context is concerned with improper purpose. As the

High Court explained in Roberts v Bass, qualified privilege is, and can

only be, destroyed by the existence of an improper motive that actuates

the publication: 270

Improper motive in making the defamatory publication must not be

confused with the defendant's ill-will, knowledge of falsity,

recklessness, lack of belief in the defamatory statement, bias, prejudice

or any other motive than duty or interest for making the publication. If

one of these matters is proved, it usually provides a premise for

inferring that the defendant was actuated by an improper motive in

making the publication. Indeed, proof that the defendant knew that a

defamatory statement made on an occasion of qualified privilege was

untrue is ordinarily conclusive evidence that the publication was

actuated by an improper motive. But, leaving aside the special case of

knowledge of falsity, mere proof of the defendant's ill-will, prejudice,

bias, recklessness, lack of belief in truth or improper motive is not

sufficient to establish malice. The evidence or the publication must also

show some ground for concluding that the ill-will, lack of belief in the

truth of the publication, recklessness, bias, prejudice or other motive

existed on the privileged occasion and actuated the publication.

(Footnotes omitted)

445 In the present case, while there were a variety of particulars given

in relation to Dr Jensen's plea of malice, the improper motive identified

by Dr Jensen was in each case that the defendants had the collateral

purpose of 'tarnishing the reputation of Dr Jensen and thereby

influencing the outcome of' his preselection and his election at the 2

July 2016 federal election.271

446 Dr Jensen pleads a number of matters from which such malice

may be inferred, including the sensational nature of the articles, the

timing of the articles, and the text messages with Source A. Ultimately,

however, while ill-will, knowledge of falsity, recklessness, bias or

prejudice may, depending upon the circumstances, provide a basis for

inferring an improper purpose, they are themselves not sufficient to

establish malice. 270 Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1 [76] (Gaudron, McHugh & Gummow JJ) [184]-[185]

(Kirby J). 271 See Reply [4.2] and [7.3].

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447 In the end I must feel an actual persuasion that the publications

were actuated by an improper motive.

448 In that context there is a real question whether the motive pleaded

by Dr Jensen would indeed be an improper motive for the purposes of

establishing malice. As the High Court said in Lange:272

[H]aving regard to the subject matter of government and politics, the

motive of causing political damage to the plaintiff or his or her party

cannot be regarded as improper.

449 This observation was endorsed in Roberts v Bass, including in the

following passage: 273

Publishing material with the intention of injuring a candidate's political

reputation and causing him or her to lose office is central to the

electoral and democratic process. There is nothing improper about

publishing relevant material with such a motive as long as the

defendant is using the occasion to express his or her views about a

candidate for election. That purpose is not foreign to the occasion that

gives qualified privilege to such publications. The Constitution's

protection of freedom of communication on political and governmental

matters would be of little effect if an elector was liable in damages

because he or she had the motive of injuring the political reputation of a

candidate for election to the legislature.

450 It should be noted that these remarks in Roberts v Bass were made

in the context of an elector who had sought to damage the reputation of

a candidate, where the elector was 'using the occasion to express his or

her views about a candidate for election'. In that regard, the position

may be different if the occasion is not, for example, to express a view

about a candidate, but rather as part of a piece of journalistic reporting.

In those circumstances, an article presented as 'reportage' might be

attended by malice if there is a 'hidden' political motive that is cloaked

by the apparent objectivity of reporting.

451 I will therefore proceed, without finally deciding, that the motive

of 'tarnishing the reputation of Dr Jensen and thereby influencing the

outcome of' the preselection and election would, in the case of a

journalist and newspaper in publishing news (rather than opinion)

would be improper (and sufficient to prove malice).

272 Lange 574 (Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow & Kirby JJ). 273 Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1 [107] (Gaudron, McHugh & Gummow JJ), [184]-

[185] (Kirby J). See also [76] (Gaudron, McHugh & Gummow JJ).

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452 In the present case, however, I am not satisfied that it was

Mr Burrell's motive to cause political damage to Dr Jensen for the

benefit of Mr Morton. I find that Mr Burrell (and by extension the first

defendant), did not have an improper motive and that the publications

were not attended by malice.

453 In this context, I readily accept that the anonymous source of the

extract from The Skywarriors and the Curtis Brown letter may himself

or herself have been motivated by a desire to injure Dr Jensen's

reputation and adversely affect his prospects of preselection or election.

454 Nevertheless, any such motive cannot be automatically attributed

to Mr Burrell. As I have already found, Mr Burrell does not know who

the source of the anonymous package was and I am not satisfied that he

was involved in a scheme with the source to injure Dr Jensen (see [217]

above). While he could readily have inferred that the source would

have a motive to damage Dr Jensen (see [394] above), in my view it

would be commonplace for the sources of newsworthy information to

have their own, ulterior, motives for providing that information to

journalists. The fact that the journalist uses that information does not

mean that the journalist is thereby taken to have the same motive as the

source. Were that the case, journalists would be unable to use a great

deal of information provided to them, much of which may be in the

public interest to be published.

455 Of course, the fact that a source obviously has an ulterior motive,

may place a journalist on notice of the need to scrupulously check the

accuracy of the information. But while that might go to the

reasonableness of the journalist's conduct, it is not itself sufficient to

impute malice.

456 Nor could the motive of Source A be imputed to be Mr Burrell.

Mr Burrell specifically denied that it was and said that his only motive

for the publications was newsworthiness.274 I accept that evidence as

truthful. Even though the 'newsworthiness' to which Mr Burrell

referred may have been driven, to a significant degree, by the

sensational appeal of the salacious parts of The Skywarriors that does

not mean that his motive was improper.

457 Finally, it should also be emphasised that the foreseeable effect of

a publication must not be conflated with its motive or purpose. Many

stories written by political journalists will foreseeably (and perhaps

274 Ts (21 May 2019) 1552, 1720 (Burrell).

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inevitably) affect their objects' political fortunes. The fact that a story

might be likely to have that effect, however, does not mean that such an

effect should be taken to be the motive for the story. Otherwise much

political journalism would be unjustifiably tarred with the epithet

'malicious'.

458 For these reasons, in my view, if (contrary to my principal

findings) the defendants had established the defence of qualified

privilege in relation to the 31 March publications or the 1 April

publications, those defences would not have been defeated by malice.

Conclusions in relation to liability

459 For the above reasons, in my view, the defendants have not

established any of the defences pleaded in relation to the publications in

the present case.

460 For this reason, had the jury found that the parliamentary

letterhead imputation was conveyed by the 31 March publications and

that that imputation was defamatory, Dr Jensen would have established

a right to damages in relation to each of the 31 March publications. In

accordance with the course identified at [25] and [26] above, I

provisionally so find.

461 In relation to the 1 April publications, the defendants have failed

to prove any of the pleaded defences. Each of the defendants is

therefore liable to pay damages to Dr Jensen in relation to the 1 April

Article and 1 April Internet Article. Mr Burrell is also liable in relation

to the 1 April Tweet.

462 I therefore turn to the issue of damages.

Damages

463 In addressing the issue of damages, I propose, first, to assess the

damages payable to Dr Jensen as a consequence of the publications

found by the jury to contain defamatory material, namely, the 1 April

publications. It is from those publications that the family values

imputation, the moral standards imputation and the best interests

imputation arise.

464 I will provisionally assess the damages in respect of the

parliamentary letterhead imputation separately. That imputation would,

of course, arise from both the 31 March publications and the 1 April

publications. In the circumstances, however, I consider that the

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appropriate course is to provisionally assess a single sum in relation to

the effect of that imputation.

Damages in respect of the 1 April publications

465 While there are, strictly, three causes of action in relation to the 1

April publications (i.e., the 1 April article, the 1 April internet article

and the 1 April Tweet respectively), I propose to assess damages by

way of a single sum for all of those causes of action.

466 This is consistent with the manner in which the parties conducted

the case and is expressly permitted by s 39 of the Defamation Act. It

also accords with the practical reality concerning the relationship

between the various publications.

467 In that regard, the reality is that the 1 April Tweet only conveyed

the relevant defamatory imputation by reason of the tweet providing a

hyperlink to the 1 April Internet Article. For this reason, consistent

with the manner in which the parties have conducted the case, there is

no basis for distinguishing between the first defendant (Nationwide

News) and the second defendant (Mr Burrell) in the assessment of

damages. Both defendants are properly to be regarded as jointly liable

for the single sum.

468 In assessing the quantum of damages, I propose to deal with the

issues in the following order:

(a) the extent of publication and republication;

(b) the principles in relation to damages for non-economic loss;

(c) the effect of the defamation on Dr Jensen;

(d) whether the circumstances of the publication of the defamatory

matter is such as to warrant an award of aggravated damages;

(e) the amount of non-economic loss; and

(f) damages for economic loss (special damage).

469 Before turning to the first of these matters, it is appropriate to

observe that in assessing damages in relation to the defamatory matters,

I must recognise that the plaintiff did not establish any claim in respect

of the purveyor of smut imputation. That has significance for the

assessment of damages in the following way.

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470 First, I should exclude from the assessment of damages any

matters that are attributable to, and only attributable to, the purveyor of

smut imputation. Personal distress or hurt to Dr Jensen as a

consequence of the revelation of the 'sex scene' in The Skywarriors, for

example, is not a matter that sounds in damages. By way of example,

in his evidence Dr Jensen described difficulties in his relationship with

his son following the publications, including that his son had made

hurtful comments to him such as 'You write porn'.275

471 Impacts of that kind do not, in my view, sound in damages. It is

important that I focus upon the effect of the publications, to the extent

that they contain defamatory imputations.

472 Nevertheless, the matters giving rise to the alleged purveyor of

smut imputation in the 31 March Article are not wholly irrelevant in the

assessment of damages. Their relevance is as follows.

473 There can be little doubt, in my view, that the salacious parts of

the publications (i.e. the 'sex scene') were the most sensational aspect of

the reporting concerning The Skywarriors. This is reflected in the fact

that it was that aspect of the story that became the focus of many of the

articles relied upon by Dr Jensen as republication. While not actionable

themselves, those parts of the articles it would, in my view, naturally

have attracted readers' attention.

474 As a result, I infer, the salacious aspects of the articles as a whole

would likely have resulted in more persons being drawn to read the

articles (including the 1 April publications) than might otherwise have

been the case in relation to a 'dry' article about a federal politician

writing a novel. Having been drawn to the publications generally, those

readers would then be more likely to have had conveyed to them the

matters that are actionable.

475 This is in my view a legitimate consideration when it comes to

assessing the extent of publication.

476 Turning then to the particular issues identified by me.

The extent of publication and republication

477 The extent of publication is obviously a matter relevant to the

assessment of damages. In the present case, the defendants admitted

that The Australian newspaper, in hard copy, has an average weekday

275 Ts (13 May 2019) 1038 (Jensen).

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circulation of approximately 100,000. Mr Burrell swore an affidavit on

behalf of the first defendant in relation to the readership and circulation

numbers in respect of the various publications. Relevantly, the

affidavit reveals, and I find, that the circulation figures for the 1 April

2016 edition of The Australian were approximately 100,351 copies

with a readership of approximately 547,000 people. Of that number,

the circulation in Western Australia of that edition was approximately

10,490 with an approximate readership of 81,000. The website traffic

for the 1 April internet article reveals that that article was visited a total

of 532 times by 462 unique visitors. The 1 April Tweet was liked by

four persons, although no information is known as to the number of

times it was viewed.276

478 It is apparent from these figures that the hard copy edition of The

Australian was the most significant means of publication of the

defamatory material in this case.

479 Dr Jensen also relied upon a number of publications that were said

to have republished the defamatory material. In relation to

republication, of course, a plaintiff has a choice with respect to how it

chooses to pursue redress for republications. A plaintiff may sue the

defendant both for the original publication and any republications as

separate causes of action or may sue the defendant in respect of the

original publication only, seeking to recover as a consequence of the

original publication the damage suffered by reason of the

republications.277

480 The matters said to constitute republication in the present case

were collected as Exhibit 153. Insofar as the imputations established

before the jury are concerned, many of the publications do not repeat or

republish the matters giving rise to the family values imputation, the

moral standards imputation or the best interests imputation. Most of

the articles contained in Exhibit 153, republish matters concerning the

content of The Skywarriors, including the 'sex scene' and the matters

concerning the use of Dr Jensen's parliamentary letterhead. I am not

satisfied that the articles relied upon as republications republished the

substance of the family values imputation, the moral standards

imputation or the best interests imputation.

276 See exhibit 4. 277 See Toomey v Mirror Newspapers Ltd (1985) 1 NSWLR 173, 182 (Hunt J); Rayney v The State of

Western Australia (No 9) [2017] WASC 367 [823] (Chaney J).

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481 Nevertheless, the publication of the 1 April Article itself was to a

large number of persons. I take into account the significant extent of

the publication.

482 In addition, in assessing damages, it is appropriate to have regard

to the 'grapevine' effect as described by Dixon J in Wilson v Bauer

Media Pty Ltd:278

In determining the damage done to a plaintiff's reputation, the court

should also take into account the 'grapevine' effect arising from the

publication of the defamatory material. This phenomenon is no more

than the realistic recognition by the law that, by the ordinary function of

human nature, the dissemination of defamatory material is rarely

confined to those to whom the matter is immediately published. It is

precisely because the 'real' damage cannot be ascertained and

established that damages are at large. It is often impossible to track the

scandal and to know what quarters the poison may reach. The award of

damages must be sufficient to ensure that, the damage having spread

along the 'grapevine', and being apt to emerge 'from its lurking place at

some future date', a bystander will be convinced 'of the baselessness of

the charge'.

Damages for non-economic loss - general principles

483 The principles in relation to the assessment of damages for

non-economic loss (general damages) may be briefly summarised.

484 An award of general damages for defamation is intended to serve

three purposes. Those purposes are: consolation for the personal

distress and hurt caused to the plaintiff by the publication, reparation

for the harm done to the plaintiff's personal (and, if relevant, business)

reputation and vindication of the plaintiff's reputation.279

485 The first of these two purposes are often considered together and

constitute consolation for the wrong done to the plaintiff. Vindication

looks to the attitude of others to the plaintiff.280

278 Wilson v Bauer Media Pty Ltd [2017] VSC 521 [59] (Dixon J). While the Court of Appeal concluded

that his Honour, in that case, overestimated the scale and impact of the grapevine effect (particularly as it

affected economic loss), that conclusion did not, in my view, affect this description of the phenomenon (see

Bauer Media Pty Ltd v Wilson (No 2) [2018] VSCA 154; (2018) 56 VR 674 [573] (Tate, Beach & Ashley

JJA). In some respects, the metaphor of the 'grapevine' to describe the phenomenon of dissemination of

defamatory material is inapposite, inasmuch as it suggests a single chain of communication. A better

metaphor might have been to refer to the 'feather' effect (see Shanley JP, Doubt, A Parable (2005), TCG Inc,

Act VI, 36-37). 279 Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44 (Carson v John Fairfax & Sons

Ltd) 60 (Mason CJ, Deane, Dawson & Gaudron JJ). 280 Carson v John Fairfax & Sons Ltd 60-61.

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486 As the High Court said in Carson v John Fairfax & Sons Ltd, the

sum awarded must be at least the minimum necessary to signal to the

public the vindication of the plaintiff's reputation.281 In this way a

plaintiff, by the award of damages, seeks to 'nail the lie' and set the

record straight. As will be seen, this is particularly relevant in the

present case, in relation to the family values imputation and moral

standards imputation, which falsely impugned Dr Jensen's moral

character.

487 In addition, the following four principles identified by White J in

Hockey are, in my view, of particular relevance in the present case:282

(a) damage to reputation need not be proved as it is presumed;283

(b) damages for injured feelings, however innocent the publication

by the defendant may have been, form a large element in the

assessment. The harm caused to applicants by defamatory

material often lies more in their own feelings about what others

are thinking of them than in any actual change manifest in the

attitude of others towards them;284

(c) a person publishing defamatory imputations must take plaintiffs

as they find them. Accordingly, it is appropriate to have regard

to the individual sensitivities of the particular plaintiff; and

(d) the level of damages should reflect the high value which the law

places upon reputation and, in particular, upon the reputation of

those whose work and life depends upon their honesty, integrity

and judgment.285

488 Finally, damages are 'at large' in the sense described by McHugh J

in Carson v John Fairfax & Sons (while recognising that the 'good

sense and sound instincts' in the present case must be mine rather than

those of jurors):286

No doubt the rough-and-ready process by which juries assess damages

in a defamation action is not one which appeals to the many

sophisticated minds of the spreadsheet generation. It does not, as the

speech of Lord Shaw makes plain, purport to be a scientific, or even a

281 Carson v John Fairfax & Sons Ltd 61 (Mason CJ, Deane, Dawson & Gaudron JJ). 282 Hockey [446] (White J). 283 Bristow v Adam [2012] NSWCA 166 [20]-[31]. 284 Broome v Cassell & Co Ltd [1972] AC 1027, 1125. 285 Crampton v Nugawela [1996] NSWSC 651; (1996) 41 NSWLR 176, 195; John Fairfax Publications Pty

Ltd v O'Shane (No 2) [2005] NSWCA 291 [3]. 286 Carson v John Fairfax & Sons Ltd 115 (McHugh J).

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pseudo-scientific, process. There are no columns and rows into which

the components of the verdict can be conveniently placed, no

relationships which can be made the subject of mathematical formulas.

The assessment depends upon nothing more than the good sense and

sound instincts of jurors as to what is a fair and reasonable award,

having regard to all the circumstances of the case. That is why the

damages are said to be 'at large'.

489 In addition, there are a number of matters arising from the

Defamation Act that impact upon the assessment of general damages.

490 Section 34 of the Defamation Act requires that, in determining the

amount of damages, 'the court is to ensure that there is an appropriate

and rational relationship between the harm sustained by the plaintiff

and the amount of damages awarded'.

491 In relation to the required causal connection between the

defamation and any harm, it is clear that Dr Jensen need only show that

the relevant defamatory statement was a cause of his loss or harm,

rather than the cause. That is a question of fact to be resolved as a

matter of common sense and experience.287

492 In applying that approach, however, it must be recognised that it is

not enough to prove that the defamatory matter may have been a cause

of the relevant loss; it must be established on the balance of

probabilities that it was such a cause.288 That enquiry will invite

considerations as to whether the defamatory matters were a necessary

condition of the relevant loss (i.e. 'but for' causation). In that regard,

the 'but for' test retains an important role as a negative criterion (that is,

to exclude causation if it is not satisfied).289

493 In relation to the issue of causation, the parties made

supplementary submissions, at my request, as to whether s 5C of the

Civil Liability Act 2002 (WA) (Civil Liability Act), which provides a

statutory test of causation in relation to claims for damages for harm

caused by the 'fault of a person' applies to a claim for defamation.290

287 Selecta Homes & Building Co Pty Ltd v Advertiser-News Weekend Publishing Co Pty Ltd [2001] SASC

140; (2001) 79 SASR 451, 470 [142]-[143] (Gray J); March v E & MH Stramare Pty Ltd [1991] HCA 12;

(1991) 171 CLR 506, 522 (Deane J); Rayney v The State of Western Australia (No 9) [2017] WASC 367

[841]-[842] (Chaney J). 288 Amaca Pty Ltd v Ellis [2010] HCA 5; (2010) 240 CLR 111 [68]-[70] (French CJ, Gummow, Hayne,

Heydon, Crennan, Kiefel & Bell JJ). 289 March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506, 515-516 (Mason CJ); Medlin v

State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1, 6 (Deane, Dawson, Toohey &

Gaudron JJ). 290 Civil Liability Act 2002 (WA) s 5A.

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494 Neither Dr Jensen nor the defendants positively contended that

s 5C of the Civil Liability Act applied in the present case. In that regard

they each submitted that, as defamation is a tort of strict liability, it

does not have 'fault' as an element, although the defendants submitted

that it was arguable that the failure of a defence of qualified privilege

was arguably 'fault'.291

495 In that context, while I am inclined to agree with Dr Jensen that

s 5C of the Civil Liability Act has no application to a case of

defamation, ultimately it is not necessary to finally decide that question

in this case. Both parties submitted, and I accept, that (as it would

apply to this case) the test for causation under the Civil Liability Act

was relevantly the same as the common law principles discussed

above.292 No different result would ensue in the present case were the

Civil Liability Act to be applied.

496 Section 35(1) of the Defamation Act places a monetary limit (a

'cap') on the damages for non-economic loss that may be awarded

unless the court orders otherwise under s 35(2). The current monetary

limit is $389,500.293 The authorities make clear that s 35(1) does not

create a 'range' or 'scale' the upper limit of which is the statutory cap.294

Damages are to be assessed in accordance with general law principles,

to which the cap is then applied (if necessary).

497 It is also the case, pursuant to s 35(2) of the Defamation Act that

the Court may award damages for non-economic loss that exceed the

maximum damages amount (the 'cap') if, and only if, the Court is

satisfied that the circumstances of the publication of the defamatory

matter to which the proceedings relate are such as to warrant an award

of aggravated damages.

498 Where s 35(2) applies, the Defamation Act does not operate to

require a separate award for aggravated damages. Aggravated damages

are not a separate head of damages, but rather an aspect of

compensatory damages, 'where the conduct of the defendant

exacerbates or increases the subjective hurt of the plaintiff'.295 In many

cases, the aggravated component of an award of damages will comprise 291 See Plaintiff's Supplementary Closing Submissions dated 7 June 2019, [4]; Defendants' Supplementary

Submissions on Causation Issue dated 9 June 2019 [12]-[13]. 292 See Plaintiff's Supplementary Closing Submissions dated 7 June 2019 [8]; Defendants' Supplementary

Submissions on Causation Issue dated 9 June 2019 [11]. 293 Defamation (Damages for Non-economic Loss) Order 2017, (Western Australia Government Gazette, No

132 (30 June 2017) 3575). 294 See Bauer Media Pty Ltd v Wilson (No 2) [2018] VSCA 154 [213], [228] (Tate, Beach & Ashley JJA). 295 Bauer Media Pty Ltd v Wilson (No 2) [225] (Tate, Beach & Ashley JJA).

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an element of the 'inextricable considerations' that make up the total

amount awarded.296

499 Of course, even if the Court is satisfied that an award of

aggravated damages is warranted, it is not then compelled to make an

award for non-economic loss in excess of the statutory maximum. The

award itself remains to be determined by the application of the

principles set out above, in light of all of the relevant circumstances.

500 I turn now to the effect that the defamatory publications had on

Dr Jensen.

The effect of the defamation on Dr Jensen

501 Dr Jensen gave evidence in relation to his reaction to the

publications, including those aspects of the publications that involved

defamatory imputations. I am satisfied that I am able to distinguish

between the personal distress and hurt caused to Dr Jensen by the

defamatory aspects of the publications and those which, in accordance

with the jury's verdict, were not found to be defamatory.

502 Dr Jensen described his reaction to the 1 April Article as being

furious and deeply hurt, in particular because the breakdown of his

marriage was nothing like as expressed in the article.297 Dr Jensen

described the breakdown of his marriage, when his previous wife had

left him, as having 'smashed' the family and having left the family

'significantly damaged'. He said that the 'real guts' of the 1 April

publications getting to him was that they got the 'thing the wrong way

around and [made] me out to be the perpetrator of a smashed up

family'.298

503 I accept that the family values imputation and the moral standards

imputation had a particularly strong emotional effect on Dr Jensen.

Dr Hoad's evidence, which I accept, corroborated Dr Jensen's evidence

in this regard.

504 First, for the reasons I have earlier set out, those imputations

presented a false picture of the circumstances of Dr Jensen's marriage

breakdown. In the circumstances, given the familial difficulties that

that breakdown would already have caused, such a public falsehood, I

accept, would have particularly hurt Dr Jensen. In that regard I accept

296 Rayney v The State of Western Australia (No 9) [2017] WASC 367 [855] (Chaney J). 297 Ts (13 May 2019) 987-988 (Jensen). 298 Ts (13 May 2019) 988 (Jensen). See also Ts (15 May 2019) 1247-1248 (Jensen).

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that Dr Jensen's, at times, indignant demeanour in the witness box was,

in part, a result of the sense of grievance that he feels as a result of

having been defamed by those imputations.

505 Secondly, there was nothing to warn Dr Jensen of the potential for

imputations such as these to be conveyed. As I have found, Dr Jensen

was not provided with the opportunity to respond to the imputations

concerning his living arrangements and, so therefore, had no warning

that they would be published in a national newspaper. The surprise that

would have attended the publication of those matters would, in my

view, have legitimately affected Dr Jensen's reaction to the articles at

the time.299

506 In addition, Dr Jensen had an understandable emotional reaction to

the fact that Dr Hoad had, as he put it, 'been dragged into this in the

way that she had.'300

507 Dr Jensen did not give specific evidence as to the effect that the

best interests imputation had upon him, beyond his insistence that it

was quite untrue and unjustified. While not as significant as the family

values imputation and the moral standards imputation, I accept that the

best interests imputation caused Dr Jensen additional hurt. It also

related to a different aspect of Dr Jensen's reputation, namely his

commitment to serving the electorate of Tangney. The effect on his

reputation in that regard is relevant to the assessment of general

damages.

508 Dr Jensen described other effects upon him such as his poor sleep

pattern, and in particular his intense worry as to whether he would work

again. Similarly, he referred to effects upon his physical activity and his

relationship with his friends. 301

509 To some extent, these effects related not directly to the family

values and moral standards imputations per se, but arose from

Dr Jensen's lack of work and his loss of his position as the Member for

Tangney. They do, however, properly form part of the assessment of

general damages for the following reasons.

510 I have addressed whether Dr Jensen's loss of the preselection for

the seat of Tangney can be attributable to the defamatory matters

below. For the reasons there set out, I have concluded that Dr Jensen's

299 Ts (13 May 2019) 989 (Jensen). 300 Ts (13 May 2019) 1035 (Jensen). 301 Ts (13 May 2019) 1036 (Jensen).

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loss of preselection, and subsequent loss of the 2016 federal election,

were not causally connected to the defamatory publications.

511 Nevertheless, I do accept that, subjectively, Dr Jensen genuinely

believes that his loss of preselection (and subsequent loss of his

position as member for Tangney) were caused, at least in part, by the

defamatory publications. Dr Jensen gave evidence of his own views as

to his prospects in the preselection. His evidence was that when he

went to the preselection room, he was shocked that there were a lot of

people in the faction that had opposed him, and that the nature of the

preselection membership had changed significantly. He said that he felt

that there had been a massive shift in sentiment in relation to his

preselection.302 He clearly attributed that feeling to the publications.

512 As I have stated above,303 I do not consider Dr Jensen's own

assessment of his prospects prior to this preselection was reliable. Nor

do I consider that his own view as to the effect of the publications on

the preselection is reliable. Rather, in my view, Dr Jensen over-

estimated his prospects of success in the preselection, even prior to the

publications. Nevertheless, the defendants must take Dr Jensen as they

find him. Clearly, Dr Jensen subjectively attributes the loss of his

political career to the articles published by the defendants. While I do

not accept that to be the case, as an objective fact, in my view,

Dr Jensen's subjective view is readily understandable, particularly

given that it is a reasonable inference that the person who provided the

anonymous package to Mr Burrell did so with the intention of

damaging Dr Jensen's reputation. In those circumstances, Dr Jensen

has been left with a lingering sense that his political misfortunes were

the result of the defamatory publications. That lingering resentment

and anger, in my view, can be properly attributed to the publications

themselves.

513 Dr Jensen also gave evidence in relation to the effects of matters

arising after the publications, which are alleged to have been

aggravating circumstances.

514 I, therefore, turn to Dr Jensen's claim that the defamatory matters

are such as to warrant an award of aggravated damages.

302 Ts (13 May 2019) 991-992 (Jensen). 303 See [177].

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Aggravating conduct?

515 As I have noted above, aggravated damages are an aspect of

compensatory damages and are not awarded to punish a defendant.304

Conduct constituting aggravating circumstances must be capable of

being regarded as unjustifiable, improper or lacking in bona fides.305

While the Defamation Act makes reference to the 'circumstances of

publication', the Court may consider the entirety of a defendant's

conduct, 'from the commission of the tort up until the day of

judgment'.306

516 Matters commonly relied upon as establishing circumstances of

aggravation include:

(a) the failure to apologise for, or retract, the defamatory

imputations;307

(b) continuing to publish or further publishing the defamatory

imputations;

(c) conduct calculated to deter the plaintiff from prosecuting his or

her action;308

(d) where the defendant's conduct involves recklessly inflicting

damage on the plaintiff's reputation or failing to investigate the

defamatory allegations before publishing;309 and

(e) the defendant's conduct of the proceedings. In that regard, the

conduct of litigation can, in some circumstances, justify

aggravated damages. Nevertheless, mere persistence, even

vigorous persistence, in a bona fide defence, in the absence of

improper or unjustifiable conduct cannot be used to aggravate

compensatory damages.310

304 Hockey [446(f)] (White J). 305 Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497, 514 (Dixon, Williams, Webb & Kitto JJ);

Mirror Newspapers Ltd v Fitzpatrick (1984) 1 NSWLR 643, 653 (Samuels JA); Gacic v John Fairfax

Publications Pty Ltd (2015) 89 NSWLR 538 [109] (McColl JA, Macfarlan JA agreeing). 306 Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496 [723] citing Broome v Cassell & Co Ltd [1972]

AC 1027, 1071 and Wilson v Bauer Media Pty Ltd [2017] VSC 521 (statement of principle undisturbed on

appeal); Rayney v The State of Western Australia (No 9) [856] (Chaney J). 307 Rush v Nationwide News Pty Ltd (No 7) [724] (Wigney J); Rayney v The State of Western Australia (No

9) [2017] WASC 367 [895], [897] (Chaney J). 308 See Wilson v Bauer Media Pty Ltd [2017] VSC 521 [88] (Dixon J). 309 Rush v Nationwide News Pty Ltd (No 7) [726] (Wigney J). 310 Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211, 327 (Toohey J, Dawson &

McHugh JJ agreeing); Rush v Nationwide News Pty Ltd (No 7) [727] (Wigney J).

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517 In the present case, Dr Jensen, at [40] of the Statement of Claim,

pleads 33 separate circumstances of aggravation. The relevant

pleadings are reproduced in Schedule C to these reasons. I do not

propose to address each pleaded circumstance of aggravation

separately, but rather will deal with the broad matters that arise from

those particulars.

518 A significant number of the matters pleaded as aggravating

conduct consist of publications, by the defendants, which repeat the

salacious aspects of The Skywarriors. Those paragraphs plead that the

relevant publications were calculated to embarrass and humiliate

Dr Jensen in circumstances where the only sexualised excerpt from the

book comprised 157 words out of a 69,000 word manuscript.311

519 These publications do not, in my view, amount to aggravating

conduct. In the first place, each of those matters amounts, in essence,

to a republication of the matters giving rise to the purveyor of smut

imputation, which, of course, the jury rejected. Nor do I find that the

republication of those matters, in the circumstances pleaded, were

calculated to deter Dr Jensen from prosecuting the action.

520 Rather, in my view, the repeated reference to the salacious

material was more likely done for the purpose of 'keeping alive' the

story in relation to the content of The Skywarriors. That purpose is

more likely to be connected with selling newspapers than to deterring

Dr Jensen from continuing his action for defamation. The position may

have been different had Dr Jensen established the purveyor of smut

imputation as part of his cause of action, given the persistence of the

defendants in repeating those matters over a significant period of time.

In fairness to Dr Jensen, I acknowledge his closing submissions in

relation to the aggravating conduct did not place particular emphasis

upon these aspects of the pleading.312

521 Nor do I find the circumstance of aggravation to the effect that the

defendants published the defamatory publication with the intention of

causing political damage to Dr Jensen for the benefit of Mr Morton.313

This is, essentially, the same allegation of bad faith or improper motive

made in relation to the plea of malice in response to the claim for

qualified privilege. I have rejected the allegation of improper motive in

the context of the plea of malice. For the same reasons I do not find

311 See Statement of Claim [40.5], [40.6], [40.7], [40.8], [40.9], [40.10], [40.11], [40.14], [40.18]. 312 Plaintiff's Closing Submissions dated 23 May 2019 [193]. 313 Statement of Claim [40.24].

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that the circumstances of the publications were aggravated by an

improper purpose.

522 Insofar as the family values imputation and the moral standards

imputation are concerned, I gave close consideration to Dr Jensen's

claim that the defendants' conduct was aggravated by the fact that the

defendants failed to make any inquiry of Dr Jensen or Dr Hoad

regarding their living arrangements before publishing the 1 April

publications.314 The defendants' conduct in that regard was

unreasonable and, in my view, clearly so. In the end, however, I would

not go so far as to characterise that conduct as reckless or lacking in

bona fides. On balance, I am not satisfied that those are circumstances

of aggravation in the present case.

523 There are, however, a number of matters pleaded by Dr Jensen

that I am satisfied aggravated the harm caused by the publications (and

in particular the harm caused by the family values imputation and the

moral standards imputation). Those matters are as follows.

524 The first is the failure of the defendants to apologise for the

defamatory imputations when, in my view, an apology was called for.

Dr Jensen pleaded this failure both in general terms,315 and with

reference to a specific request for an apology by Dr Jensen to

Mr Burrell on 7 April 2016.316 On that day, Dr Jensen, in response to a

request from Mr Burrell (by text message) to speak with him, asked Mr

Burrell whether it was intended that Mr Burrell would apologise to him.

Mr Burrell responded 'No'.317

525 That specific failure to apologise, on 7 April 2016, is related to

another circumstance of aggravation which I am satisfied is established

in the present case. In that regard, the text message on 7 April 2016

related to an article that Mr Burrell was writing in relation to the

preselection that had taken place days earlier.

526 That article, written by Mr Burrell and published by the

defendants on 8 April 2016, was entitled 'Jensen; his love, she wrote

them a letter' (the 8 April Article). The 8 April Article published

314 Statement of Claim [40.26], [40.27]. 315 Statement of Claim [40.1], [40.2]. 316 Statement of Claim [40.14A]. 317 Exhibit 6.

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aspects of the letter written by Dr Hoad to preselectors in in support of

Dr Jensen.318

527 The 8 April Article included the following passages:

Dr Jensen claims Christian preselectors withdrew their support for him

after a story in The Australian last week noted that he had split up with

his wife and no longer lived in Tangney.

The inference in the story would have been 'very distasteful' to

Christians, he said.

He claimed the vote had previously been on a 'knife edge' and the story

caused him to be dumped at last Sunday's preselection vote.

However, the letter obtained by The Australian this week shows

Ms Hoad had already provided Liberal preselectors with confirmation

of Dr Jensen's new living arrangements.

528 In my view it is clear from these passages that the 8 April Article

expressly sought to convey to readers that Dr Jensen's complaints in

relation to the 1 April publications were unfounded (i.e. ''However …).

529 The 8 April Article was written at a time when Dr Jensen had

already commenced these proceedings against the defendants.

Mr Burrell knew that he and his employer had been sued on 4 April

2016.319 On that day (4 April 2016) Mr Burrell heard Dr Jensen on the

radio specifically complaining in relation to the falsity of the matters

giving rise to the family values imputation and moral standards

imputation (including the reference to the 'so-called "new

girlfriend"').320

530 That Mr Burrell was specifically aware of those complaints is

clear from an email he sent to Ms Rees, Mr Madden and Ms Taylor that

morning, which said:321

Jensen on ABC radio this morning says The Australian was part of a

smear campaign against him and that's why he lost the vote yesterday,

and that he will launch defamation action today.

He claims our story about him not living in the electorate was wrong -

but didn't seem to specify how it was wrong. He did say his "new"

318 See Exhibits 19 and 20. Copies of Dr Hoad's letter are Exhibit 44 and Exhibit 123. 319 Ts (13 May 2019) 1614 (Burrell). 320 Ts (21 May 2019) 1686-1687 (Burrell). 321 Exhibit 146.

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girlfriend was not actually new - they have been together for more than

a year.

531 Two days later, on 6 April 2016, Mr Burrell received a copy of

Dr Hoad's letter by email from another confidential source, who

Mr Burrell had spoken to prior to the email.322

532 It is clear, in my view, that the 8 April Article was intended to be a

rebuttal of Dr Jensen's claims as to the falsity of the 1 April

publications in relation to his living arrangements. Mr Burrell accepted

as much in cross-examination.323 As a rebuttal, it was something of a

non sequitur. While purporting to provide a rebuttal to Dr Jensen's

complaints, it did not address Dr Jensen's principal grievances, namely

that:

(a) he had not left his former wife;

(b) he had moved to Halls Head in July 2014 as a result of a

separation initiated by his former wife; and

(c) he had met Dr Hoad after that separation.

533 None of those complaints of falsity (of which Mr Burrell was well

aware324) were addressed, or sought to be addressed, in the 8 April

Article. The 8 April Article was, rather, presented as a complete

justification of the previous reporting, which it was not. Indeed, there

is no reason to suppose that the untutored reader of the 1 April

publications would necessarily have understood the 'new girlfriend'

referred to in those publications to be Dr Hoad. Dr Hoad is not

mentioned by name in the 1 April publications. A reasonable reader

could well have understood the publications to be referring to an

entirely different 'new girlfriend'.

534 In all of these circumstances, in my view the publication of the

8 April Article was lacking in bona fides and was intended to deter

Dr Jensen from taking this action. There is no doubt, in my view, that

the 8 April Article aggravated the hurt to Dr Jensen which, as he put it

'doubled down on issues that were obviously personal'.325

322 Exhibit 142; Ts (21 May 2019) 1622 (Burrell). 323 Ts (21 May 2019) 1708-1709 (Burrell). 324 See the content of the 4 April 2016 radio interview at Ts (21 May 2019) 1686 (Burrell). 325 Ts (13 May 2019) 994 (Jensen).

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535 Finally in relation to the pleas of aggravating conduct, there are a

number of matters concerning the conduct of these proceedings that are

relied upon by Dr Jensen.

536 First, Dr Jensen pleads that there were a number of matters

pleaded by the defendants throughout the proceedings that made

allegations of fact that were without foundation.326 In relation to most

of these matters, the defendants' conduct cannot, in my view, be

characterised as improper or unjustified conduct aggravating the harm

done by the defamation. Many of those matters (such as the use of

plural expressions where the singular was called for) are, in my view,

simply examples of a somewhat casual indifference to detail in the

pleadings than anything more sinister.

537 There is, however, one matter that should not have been included

in the Defence or, at the very least, should have been withdrawn at the

first available opportunity. As noted above, in their plea of truth in

relation to the best interests imputation, the defendants pleaded that

Dr Jensen had falsely held himself out as living in the electorate (the

Booragoon allegation). The relevant pleading was as follows:327

[I]n or around January 2014, and whilst sitting as the Federal Member

of Tangney, the Plaintiff held himself out as residing in the seat of

Tangney in a Booragoon property, which was a leasehold property with

the Plaintiff's name upon the lease as tenant and was at the address 7/36

Shadbolt Street, Booragoon.

[T]he Plaintiff did not live in Booragoon, did not pay rent for the house

in Booragoon, and continued to live in Halls Head.

538 This pleading was included in the Defence for the first time on

12 December 2017.328 That pleading remained in that form through

various iterations of the Defence up until the trial.329

539 This pleading was without foundation. As pleaded in the reply

and confirmed in evidence, Dr Jensen had not held himself out as living

in the property in Booragoon but had co-signed a lease so as to assist

his eldest daughter, Madeleine, to rent the property as her residence,

given that his daughter did not have a credit or rental history.330

326 See Statement of Claim [40.20.1]-[40.20.6], [40.21], [40.22]. 327 Defence substituted Defence and Counterclaim pursuant to orders of Tottle J made 6 June 2018 dated

12 June 2018 [23A(f) and (g)]. 328 Exhibit 93. 329 Exhibit 94, 95 and 96. 330 See [318].

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540 The defendants made no effort to prove the Booragoon allegation,

which counsel for the defendants confirmed would not be pursued on

the first day of trial (after Dr Jensen had opened on the issue).331

541 Dr Jensen gave evidence that when he read the relevant pleading

in the Defence, he was furious on the basis that it had nothing to do

with the defamation and was patently untrue. He described it as 'simply

attempting to dig around for dirt'.332 I accept Dr Jensen's evidence that

the Booragoon allegation aggravated the hurt to him.

542 The aggravation caused by the Booragoon allegation is related to

the other circumstance of aggravation that I find to have been

established concerning the conduct of the proceedings. That is the

circumstance of aggravation pleaded by way of an amendment moved

during the trial on 16 May 2019.333 It also relates to Dr Jensen's

daughter, Madeleine.

543 The events the subject of this pleading, which I find to be proven,

may be briefly stated.

544 Dr Jensen and his eldest daughter are estranged. Dr Jensen gave

evidence to that effect. He stated that he did not know how much

impact the publications had had on her.334 In that regard Dr Jensen also

gave evidence that when he made his original witness statement prior to

trial he had included 'a fairly soft statement' in relation to whether the

publications had affected his relationship with his daughter.335 By this

evidence, I understand Dr Jensen to have meant that his witness

statement reflected his uncertainty as to the extent to which the

deterioration of their relationship was because of the publications.

545 In response, the defendants' solicitors obtained a witness statement

from Dr Jensen's daughter. The witness statement itself was not

tendered in evidence but, I infer, dealt with the nature of her and Dr

Jensen's relationship.336 Following service of the witness statements,

331 Ts (8 May 2019) 810-811, 820. 332 Ts (14 May 2019) 1047 (Jensen). 333 Ts (16 May 2019) 1278-1280; Statement of Claim [40.33]. As the amendment arose after Dr Jensen had

completed his evidence, in allowing the amendment I granted the defendants leave to further cross-examine

Dr Jensen (which they did) and leave to call evidence from the author of the letter pleaded at Statement of

Claim [40.33.2] (which they did not). 334 Ts (13 May 2019) 1037 (Jensen). 335 Ts (15 May 2019) 1253 (Jensen). 336 See the references to 'interfering in my relationship' (Ts 1254, 15 May 2019) and the evidence at Ts

(16 May 2019) 1287.

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on 12 November 2018, the defendants' solicitors wrote to Dr Jensen's

solicitors in the following terms:337

We refer to our client's witness statements.

We request that you remind your client not to attempt to send any

messages to our clients' witnesses discouraging them to give evidence,

and that any such actions would constitute a contempt of court.

546 It was only during cross-examination of Dr Jensen that the

defendants advised that they would not be calling Madeleine to give

evidence (hence the late amendment to the Statement of Claim).338

547 Dr Jensen described his reaction to the witness statement and the

letter from the defendants' solicitors as being 'absolutely furious'.339 He

said that he saw it as the defendants' solicitors trying to constrain a

potential relationship with his daughter and an issue of 'bullying'.340

His response to knowing that the defendants' did not intend to call

Madeleine, again was 'absolute fury'.341

548 The defendants challenged this evidence in cross-examination, on

the basis that the deterioration in Dr Jensen's relationship with his

daughter predated the letter and that he had said nothing about the issue

in evidence-in-chief.342 As to the latter point, of course, there was good

reason for counsel for Dr Jensen not to explore the issue in examination

in chief. It was at that time as yet unknown whether Madeleine would

be called. As for the former, I accept Dr Jensen's evidence as to the

hurt caused by 'the entirety of the issue with the dealing of Maddy'.

549 Dr Jensen's reaction is precisely what one would expect from the

events that occurred. The relevance of his relationship with his

daughter to the issues in these proceedings was tangential at the very

best. I have also accepted Dr Jensen's evidence that there was only

'soft' reference to her in his witness statement.

550 For the defendants to then obtain a witness statement from

Dr Jensen's daughter as to the nature of their relationship was, in my

view, bound to be seen as an interference in that relationship (for what,

in my assessment, could only ever have been of the slenderest forensic

337 Exhibit 120. 338 Ts (15 May 2019) 1210. 339 Ts (15 May 2019) 1254 (Jensen). 340 Ts (16 May 2019) 1286-1287 (Jensen). 341 Ts (15 May 2019) 1255 (Jensen). 342 Ts (16 May 2019) 1286-1287 (Jensen).

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value). To follow that conduct with correspondence reminding

Dr Jensen as to the risks (including contempt of court) in contacting the

defendants' witnesses was inevitably going to produce the reaction that

it did. Nor was such correspondence necessary; there was nothing to

suggest that Dr Jensen's solicitors needed reminding as to their client's

obligations in the litigation. The letter was entirely gratuitous.

551 For the cause of that hurt to have been rendered entirely

unnecessary by the late advice that Madeleine would not be called to

give evidence, I accept, served to compound that distress. I am

satisfied that it aggravated the hurt caused by the publications.

552 The final matter, concerning the conduct of the proceedings, is the

allegation that two journalists employed by Nationwide News,

Ms Taylor and Ms Laurie, avoided service of subpoenas issued at the

request of Dr Jensen. I am satisfied, based upon the evidence from the

process server, that Ms Taylor and Ms Laurie (at the very least)

endeavoured to make it difficult to effect service upon them.343

553 I am not satisfied, however, that this constitutes a circumstance of

aggravation that may be attributable to the defendants. First, while

Ms Taylor and Ms Laurie are employees of the first defendant, it does

not necessarily follow that their actions in this regard can be attributed

to the first defendant as their employer. Each of them could well be

have been acting out of their own desire not to be involved in the

litigation.

554 Secondly, still less could the conduct be attributed to Mr Burrell,

without further evidence of his involvement in it. In that context, given

that the defendants are sued jointly in relation to the 1 April Article and

1 April Internet Article, the assessment of damages, including any

aggravated damages must represent the highest common factor between

them, that is the lowest sum for which any of the defendants can be

held liable on this score.344

555 For the above reasons, in my view, Dr Jensen has established that

the circumstances of the publication of the defamatory matter is such as

to warrant an award of aggravated damages. In particular, I am

satisfied as to the following circumstances of aggravation:

343 See e.g. Exhibit 122, [10], [14]. 344 Broome v Cassell & Co Ltd [1972] AC 1027, 1063.

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(a) the failure of the defendants to apologise for the defamatory

imputations when, in my view, an apology was called for;

(b) the publication of the 8 April 2016 article;

(c) the pleading, and maintenance of the plea, of the Booragoon

allegation; and

(d) the circumstances surrounding the witness statement from

Madeleine Jensen.

556 I am not satisfied that any of the other pleaded aggravating

conduct has been established.

The amount of non-economic loss

557 As I am satisfied that the 1 April publications were published in

circumstances of aggravation, the cap on non-economic loss provided

for in s 35(1) of the Defamation Act does not apply. That does not, of

course, mean that the award must be in excess of the cap. It remains

necessary to ensure that there is an appropriate and rational relationship

between the harm sustained by Dr Jensen and the amount of damages

awarded,345 including for the harm caused by the circumstances of

aggravation.

558 I have taken into account all of the matters described above in

relation to the extent of the publications and the effect of the

defamation on Dr Jensen. I accept that the family values imputation,

the moral standards imputation and the best interests imputation all had

an emotional effect upon Dr Jensen, particularly the first two

imputations, as they related to his private family life. The defamation

imputed moral failings to Dr Jensen that were unjustified and, in that

sense, were particularly damaging to him and his personal reputation.

The best interests imputation was also damaging to his business (or

professional)346 reputations.

559 Nevertheless, the nature of the defamation in this case was not as

serious as some of the far more serious imputations in a number of the

decided cases referred to by Dr Jensen as comparable awards. They did

not, for example, suggest that Dr Jensen had committed serious

345 Defamation Act s 34. 346 See [633] below.

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criminal offences or was guilty of predatory behaviour.347 Of course,

each case must be determined in light of its own circumstances and

having regard to the purposes of an award of damages identified in

Carson v John Fairfax & Sons Ltd.348

560 In all of the circumstances, including the circumstances of

aggravation that I have found, I have determined that, by way of

damages for non-economic loss, Dr Jensen should be awarded the sum

of $325,000. None of the mitigatory matters in s 38 of the Defamation

Act apply.

Damages for economic loss

561 Dr Jensen's claim for special damage in respect of economic loss

is based on the proposition that the publications caused him to lose the

preselection for the Tangney division, to be unsuccessful in contesting

the 2 July 2016 federal election and to be unable to obtain alternative

employment.

562 In particular, Dr Jensen pleads at Statement of Claim [43]:

But for the publications:

43.1 on or about 3 April 2016, the Liberal Party of Australia (WA

Division) Inc would have selected the Plaintiff at their

preselection meeting, alternatively the State Council of the

Liberal Party of Australia (WA Division) Inc would have

endorsed the Plaintiff, as their candidate to contest the 2 July

2016 federal election for the division of Tangney; and

43.2 the Plaintiff would have been elected as the federal member for

the division of Tangney representing the Liberty Party or as an

independent;

43.3 alternatively, the Plaintiff would have been able to obtain

alternative employment.

Particulars

43.3 Further and better particulars of the Plaintiff's claim for special

damages will be provided in due course. At this stage, the

Plaintiff's loss and damage includes:

347 See, for example, Rayney v The State of Western Australia (No 9) [2017] WASC 367 (imputation of

murder, award of $600,000); Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496 (imputations of

sexually predatory behaviour, award of $850,000). 348 See [484] above.

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43.3.1 loss of the opportunity to contest the 2 July 2016

federal election, on behalf of the Liberal Party of

Australia (WA Division) for the division of Tangney;

43.3.2 loss of expected future revenue from earnings as the

member for the division of Tangney for the Liberal

Party or as an independent;

43.3.3 any expenses incurred in securing alternative

employment;

43.3.4 loss of capacity to earn income from alternative

employment.

563 Dr Jensen, quite properly, pleads his case in this regard on a 'but

for' basis. As I have noted above, the publications need not be the

cause of the special damage; they need only be a cause. Nevertheless,

that does, as I have said, invite consideration as to whether or not the

defamatory matters were a necessary condition of the relevant loss.

The finding of causation requires satisfaction, on the balance of

probabilities, that the publications were a cause of the special damage

claimed. It is not enough, in that context, that they were possibly a

cause. I must be satisfied to the required standard that they were more

likely than not a cause (of the loss pleaded).

564 In approaching this question, in the context of the claim for

economic loss, I have not sought to distinguish between the different

imputations and content of the publications. That is, I will assume, for

the purposes of considering the question of causation in relation to the

special damage claim, that if the publications as a whole (including

both the 31 March publications and the 1 April publications) were a

cause of Dr Jensen's loss, that his claim for economic loss would be

established.

565 Similarly, as noted at [494] above, I am satisfied that there is no

relevant difference, for the purposes of the present case, between the

test for causation that applies at common law and that which applies

pursuant to s 5C of the Civil Liability Act. Both parties accepted that

the test was relevantly the same.349

566 The question of economic loss in this context can be considered

under three broad subheadings:

349 See Plaintiff's Supplementary Closing Submissions dated 7 June 2019 [8]; Defendants' Supplementary

Submissions on Causation Issue dated 9 June 2019 [11].

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(a) whether the publications caused Dr Jensen to lose the

preselection and the 2016 federal election;

(b) whether the publications caused Dr Jensen's failure to obtain

alternative employment; and

(c) whether or not an amount of damages should be awarded by

way of Andrews damages.350

The loss of the preselection and the 2016 federal election

567 There is no question, of course, that the publications in the present

case were proximate in time to the preselection meeting on 3 April

2016. And, as I have already found, Dr Jensen genuinely believes that

the publications were a cause of his loss of preselection.

568 As I have noted at [89] above, Dr Jensen's view prior to the

preselection was that it was on a 'knife edge'. He gave evidence that he

maintained a running sheet of the discussions that he had with

preselectors (the running sheet). The running sheet was tendered as

evidence as to Dr Jensen's state of mind and not for the truth of its

contents.351

569 Dr Jensen's evidence of discussions and the running sheet could

not, of course, be evidence as to the voting intentions of any of the

preselectors. Such statements are inadmissible as hearsay. Indeed, the

nature of the communications that the running sheet records provide a

paradigm example of the unreliability of hearsay evidence. In that

regard, there are good reasons why one would be cautious about relying

upon a statement from an elector to a candidate, to the effect that the

candidate has the elector's support, as evidence of the truth of that

statement. The expression of an elector's (or preselector's) voting

intentions to the candidate may well be affected, at the time of that

expression, by equivocation, awkwardness or the disingenuity that

occasionally attends the political process.

570 There was no evidence called by Dr Jensen from any person

attending the preselection meeting on 3 April 2016 to give evidence

that the publications were a cause of them voting against Dr Jensen.

That is perhaps unsurprising. It would have been difficult for Dr Jensen

to obtain such evidence.

350 Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 (Andrews). 351 Exhibit 50; Ts (13 May 2019) 1000-1001 (Jensen).

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571 Nevertheless, it remains the case that there is no direct evidence

that, at the preselection, any preselector placed any reliance at all on the

publications. The finding of a causal connection between the

publications and Dr Jensen's loss of the preselection could only be

established by way of inference from all of the surrounding

circumstances. Such an inference might be able to be supported by

evidence that the publications were the subject of significant discussion

or debate at the preselection.

572 In that context, there was evidence called from the persons present

at the preselection meeting, namely, the evidence of Mr Schuster,

Mr Lowe, Mr Youngs, Mr Earl and Mr McGregor. In addition, of

course, Dr Jensen was present at the meeting prior to the vote being

taken.

573 According to the preselector witnesses, there was little, if any,

reference to the publications in the course of the preselection meeting.

The evidence in that regard is summarised below.

574 Mr Schuster gave evidence that he voted against Dr Jensen. He

said that he spoke against the preselection of Dr Jensen as he did not

consider Dr Jensen to be an effective Member of Parliament and gave

evidence as to his reasons for that view.352 As he accepted in cross-

examination, Mr Schuster had opposed Dr Jensen's preselection on a

number of occasions in the past. It was therefore not surprising that he

opposed Dr Jensen's preselection in 2016.

575 Mr Schuster gave evidence that when he addressed the

preselection meeting, Dr Jensen spoke about 'the article about the book'.

He gave evidence, however, that to his recollection, no-one else

mentioned the book, Dr Jensen's living arrangements, or his marital

arrangements or difficulties.353

576 I found Mr Schuster a measured witness who, while not a

supporter of Dr Jensen, gave his evidence in relation to the preselection

meeting honestly and fairly. I accept his evidence that there was no

particular discussion at the meeting in relation to the matters arising

from the publications.

577 Mr Lowe I have already found to be an impressive witness. He

was clearly the most impressive of the preselector witnesses to give

352 Ts (9 May 2019) 882 (Schuster). 353 Ts (9 May 2019) 891 (Schuster).

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evidence and was honest, measured and careful in his answers. He was

prepared to give Dr Jensen credit where credit was due.

578 Mr Lowe gave evidence that neither of the articles affected the

way he voted at all. He said that he had basically lost faith in Dr Jensen

as an effective local Member of Parliament.354 Indeed, he gave

evidence that he had previously withdrawn his support for Dr Jensen in

2009.355

579 Mr Lowe gave evidence in relation to the speeches of both

Dr Jensen and Mr Morton at the preselection meeting. He said that

Dr Jensen gave the impression of 'hectoring' the audience and a sense of

'almost indignity [sic indignation]' that the preselectors would even

contemplate not preselecting him. Mr Lowe considered that

Dr Jensen's approach was extremely arrogant and that he was

disappointed by it.356

580 By contrast, Mr Lowe described being of the impression that

Mr Morton was very competent politically and that he argued his case

for preselection extremely competently and calmly.357

581 Mr Lowe was aware of the letter from Dr Hoad. He said he was

impressed with the letter.358

582 It was put to Mr Lowe in cross-examination that, while he knew

about 20 of the preselectors and their intention to vote, there was going

to be '20 either way … and a group in the middle'.359 He agreed 'that's a

reasonable thing'. I did not take this evidence to be, and I do not accept

that it was, necessarily reflective of the voting intentions of the

preselectors. It was simply an acceptance of one possible scenario that

may, or may not, have existed.

583 Mr Lowe's evidence in relation to whether there was any

discussion of the articles was that there were some comments

afterwards to the effect that it was foolish of Dr Jensen to send the letter

and was not 'good, sort of, common sense politics'.360 He said it was

kind of careless but 'it didn't change any of the views'.361 Of course,

354 Ts (16 May 2019) 1315 (Lowe). 355 Ts (16 May 2019) 1313 (Lowe). 356 Ts (16 May 2019) 1320 (Lowe). 357 Ts (16 May 2019) 1322 (Lowe). 358 Ts (16 May 2019) 1328 (Lowe). 359 Ts (16 May 2019) 1354 (Lowe). 360 Ts (16 May 2019) 1355 (Lowe). 361 Ts (16 May 2019) 1355 (Lowe).

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Mr Lowe's evidence as to the views of others are not evidence of the

truth of those matters but it does provide some indication of the nature

of the conversation at the preselection.

584 In all of the circumstances, I accept Mr Lowe's evidence that the

articles were not the focus of the conversation at the preselection

meeting.362

585 Mr Youngs was somewhat argumentative in cross-examination

and there were a number of matters in relation to which I found his

evidence unreliable. For example, Mr Youngs said that he had not read

the publications but, at the same time, said he was aware that Dr Jensen

had written a novel 'that had a fairly steamy sex scene in it' and that he

had known about it well prior to the preselection. Indeed, Mr Youngs

said that he had talked to Dr Jensen about the novel at a time prior to

the publication of the articles.363 This evidence was wholly inconsistent

with all other available evidence in relation to the Skywarriors and I

find it to be unreliable. It is more likely that Mr Youngs became aware

of the novel as a consequence of the publications.

586 In the end, I place little weight on Mr Youngs' evidence.

Ultimately, in any event, that evidence was entirely neutral. It did not,

for example, contradict Mr Schuster and Mr Lowe's evidence that there

was no significant discussion or attention given to the articles in the

discussions at the preselection.

587 Mr Earl was the president of the Tangney Young Liberals. He

presented as a confident, if somewhat sophomoric, witness who was

eager to demonstrate his political acumen. His evidence was quite

disparaging of Dr Jensen (and in particular the letter from Dr Hoad) and

in my assessment his evidence was adversely coloured by that

disparaging attitude.364 I take that into account in weighing the

reliability of his evidence.

588 Mr Earl gave evidence in relation to the speeches at the

preselection. He described Dr Jensen's demeanour as 'passionate, but

bordering on angry'. He said that Dr Jensen raised the issue of the

articles, referring particularly to the 'purveyor of smut' allegation.365

362 Ts (16 May 2019) 1356 (Lowe). 363 Ts (16 May 2019) 1385 (Youngs). 364 See for example the evidence at Ts (17 May 2019) 1439, particularly the disparaging references (that were

reflected in his manner and tone of voice) to Dr Jensen's 'girlfriend'. 365 Ts (17 May 2019) 1414 (Earl).

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Mr Earl said he did not regard those as relevant to his consideration and

said that he 'kind of put them to an aside'.366

589 Mr Earl described Mr Morton's speech in far more complimentary

terms. He also recalled persons speaking after the candidates had left

the room. Three in particular had the strongest impact upon him:

Mr Lowe, Mr Anthony Spagnolo and another person that he could not

recall. He said that each of those speakers spoke in favour of

Mr Morton.367

590 Mr Earl said, and I accept, that the publications did not have any

effect on his vote at the preselection.368 That is not surprising, given his

already 'strongly negative feelings' about the letter from Dr Hoad.369

As with Mr Youngs, I place little weight on Mr Earl's evidence.

Nevertheless, it did not contradict Mr Schuster and Mr Lowe's evidence

that there was no significant discussion or attention given to the

publications in the discussions at the preselection.

591 Finally, Mr McGregor gave evidence. He also presented as a

measured witness. He said that he had not seen the 31 March

publications or the 1 April publications before. I accept that evidence.

592 Mr McGregor said that, at the preselection, Dr Jensen spoke about

an article in The Australian that he thought was written to stop him

getting preselected. Mr McGregor said that 'no one had read it'.370

While this cannot, of course, be evidence in relation to whether

anybody at the preselection meeting had read the articles, it does

support the inference that the articles were not the topic of a substantial

discussion at the preselection meeting.

593 Mr McGregor said that seven or eight people spoke prior to the

voting, and from the best of his recollection, the speeches that were

given in favour of Mr Morton were that they were voting for the best

candidate. 371

594 The above evidence from the preselectors has, of course, a number

of limitations. I accept, for example, that each of the preselectors who

were prepared to give evidence were persons inclined to vote against

Dr Jensen in any event, regardless of the content of the publications. 366 Ts (17 May 2019) 1414 (Earl). 367 Ts (17 May 2019) 1423 (Earl). 368 Ts (17 May 2019) 1413 (Earl). 369 Ts (17 May 2019) 1422 (Earl). 370 Ts (17 May 2019) 1456 (McGregor). 371 Ts (17 May 2019) 1464 (McGregor).

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Nor is it possible to draw an inference as to what other preselectors

thought based upon their evidence. Nevertheless, none of them gave

evidence that the content of the publications was a matter of significant

discussion at the preselection. I accept that to be the case.

595 By contrast, there was no evidence to the contrary called by

Dr Jensen.

596 Dr Jensen relied upon data from the Australian Electoral

Commission as to his electoral popularity in the seat of Tangney over

successive elections and the fact that he had increased his electoral

margin in both the 2004, 2010 and 2013 federal elections. Various

comparisons were made between the swings in the seat of Tangney

compared with the electorate as a whole.372 In my view, little can be

drawn from these statistics. I cannot infer from these matters that Dr

Jensen was more, or less, likely to win the preselection, but for the

publications. Tangney was, and is, obviously a safe Liberal seat, and,

whether particular swings in particular elections may be attributable to

the personal popularity of the candidate, is a matter best left to social

scientists, pollsters and Antony Green AO.

597 In any event, those electoral results, in my view, provide no

assistance as to how the preselectors of Tangney in 2016 would have

voted in the preselection but for the publications. Clearly different

political considerations are at play in a preselection for a safe seat than

in a general election.

598 In my view, the most significant matter relevant to whether a

causal connection can be inferred between the publications and the

result of the preselection is the size of the margin of the vote in favour

of Mr Morton. Mr Morton was successful by a margin of 57 to 7 votes

(i.e. 57 out of a total 64 votes).

599 As counsel for Dr Jensen quite properly accepted in closing

submissions, the inference that I am asked to draw is that a majority

(i.e. 33) of the preselectors would have voted for Dr Jensen but for the

publications. I would therefore need to infer that 26 additional

preselectors would have voted for Dr Jensen, but for the publications.373

372 See general Exhibits 107, 108, 109 and 110; Ts (13 May 2019) 961-962; Ts (15 May 2019) 1169; Ts (15

May 2019) 1205 (Jensen). 373 I incorrectly calculated this number as 24 votes in closing submissions, although counsel for Dr Jensen

accepted the nature of the calculation as 'the delta' (Ts (24 May 2019) 535).

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600 That inference, in my view, is simply not open on the evidence.

Even accepting the possibility that some preselectors might have been

influenced by the publications, it is beyond the realms of common

sense that such a margin could have been created as a consequence of

the publications in the three or four days prior to the publication.

601 The publications were unseemly and unjustified, and as a matter of

law are presumed to have damaged Dr Jensen's reputation. They were

not, however, of such a serious nature that I can infer, on the balance of

probabilities, that they caused such a dramatic change in the voting

intentions of the preselectors. I do not consider that they would, or

could, have had that effect.

602 In addition, I accept the evidence of Mr Schuster, Mr Lowe and

Mr McGregor, in particular, that Mr Morton was a strong and

impressive candidate. He was, after all, a former State Director of the

Liberal Party. It was to be expected, and I infer, that the likelihood of

his selection by the preselectors was significantly greater than in the

case of previous challengers to Dr Jensen.

603 Accepting, as I do, that the publications need only be a cause of

the loss of preselection, I am not satisfied that they were. Rather, I am

positively satisfied that, even if the defendants had not published the

31 March publications or the 1 April publications, Dr Jensen would

have lost the preselection vote to Mr Morton in any event.

604 For these reasons, insofar as the economic loss claim is based on

the loss of preselection, I reject the economic loss claim.

605 For similar reasons, in my view, the publications were not a cause

of either Dr Jensen not being endorsed by State Council or losing the

2016 general election when he ran as an independent.

606 As to the former, Dr Jensen did not seek the endorsement of State

Council following the loss of local preselection. He said in evidence

that he knew he would not have the support of State Council on this

occasion despite the fact that he had had their support twice before

(when he had lost local preselection).374

607 In that assessment, in my view, Dr Jensen was correct. Not,

however, because of the publications. As I have found, Dr Jensen

convincingly lost the local preselection for reasons unrelated to the

374 Ts (13 May 2019) 992 (Jensen).

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publications. Regardless of the publications, it would have been

unlikely that the State Council would, in effect, override the local

preselectors on this occasion.

608 In that regard, the margin of the local preselection vote (which in

my assessment, was not caused by the publications) was so significant

that success in overriding it at State Council was, in my view, highly

unlikely. Moreover, Dr Jensen would have been competing against

Mr Morton, a former State Director of the Liberal Party. Realistically,

as I have found, Mr Morton was likely to command significantly

greater support within the party (including State Council) than other

contenders generally.

609 In relation to the general election, once Dr Jensen was dis-

endorsed as the Liberal candidate, in my view, it was inevitable that he

would lose the 2016 general election running as an independent

candidate. Tangney was, as I have said on a number of occasions, a

safe Liberal seat, which was at all times likely to be retained by the

endorsed candidate for the Liberal Party. The fact that the endorsed

candidate was Mr Morton, a former State Director of the party and (as

Mr Lowe said) 'very competent politically',375 would have strengthened

that likelihood. In that regard, Dr Jensen's portion of the first

preference vote (11.88%) was sufficiently low, when compared with

the other candidates,376 that there is no rational basis to conclude that

his loss of the election was caused (in whole or in part) by the

publications.

610 The economic loss claim based on Dr Jensen not being endorsed

by State Council or losing the 2016 general election must also fail. It

follows from the conclusion that the publications were not a cause of

Dr Jensen's loss of preselection and loss of the general election, that nor

were they a cause of the costs associated with his attempts to obtain


611 It is to those attempts that I now turn.

Dr Jensen's failure to obtain alternative employment

612 Dr Jensen produced a substantial body evidence of his attempts to

obtain alternative employment following the loss of the 2016 general

election.

375 Ts (16 May 2019) 1322 (Lowe). 376 Dr Jensen had the fourth highest primary vote after Mr Morton (48.81%), the Labour Party candidate

(23.55%) and the Greens candidate (12.39%): see Exhibit 111.

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613 In that regard he produced evidence of a large number of job

applications (including applications for board positions) made by him

to various prospective employers since July 2016.377 Nothing came of

the applications and, apart from some relief teaching,378 Dr Jensen has

not secured gainful employment since leaving Parliament. Indeed,

other than some minor references to a very small number meetings or

first-stage interviews,379 Dr Jensen's applications appear to have

received no response at all.

614 There is no direct evidence that Dr Jensen's failure to secure any

of those positions was causally connected to the publications. None of

the prospective employers were called to give evidence. Many of the

applications were for board positions, directorships and managerial

positions, although some were in the research field (in which Dr Jensen

had previous experience). Dr Jensen has no experience as a member of

a board of a public company or, in my view, significant managerial

experience.380 There is no basis to infer that he would have been likely

to obtain employment in those fields but for the publications.

Dr Jensen's experience as a Member of Parliament does not lead me to

infer that that experience would have otherwise been particularly

attractive to those employers.

615 There was one job opportunity that became the subject of

evidence. That was the employment opportunity that arose in 2019 and

was the matter the subject of the further cross-examination when the

trial was re-opened on 3 July 2019.

616 Dr Jensen gave evidence that he had been in contact with a person

he had known many years earlier, who suggested a business

opportunity to him in December 2018. The business involved being

managing director of an Australian franchisee of an overseas

business.381 Ongoing discussion occurred from that time throughout

2019, and included Dr Jensen entering into non-disclosure agreements

in relation to the nature of the business and, ultimately, the exchange of

a Contract of Employment, which Dr Jensen signed on 2 June 2019.382

That contract was not countersigned by the prospective employer and,

as at the close of the evidence in the trial (3 July 2019), the opportunity

had yet to come to pass.

377 See Exhibits 63-84, 86-91, 98. 378 Ts (13 May 2019) 1035 (Jensen). 379 Ts (13 May 2019) 1018, 1033 (Jensen). 380 Ts (15 May 2019) 1221 (Jensen). 381 Ts (3 July 2019) 568 (Jensen). 382 Exhibit 156.

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617 Ultimately, the evidence in relation to this prospective

employment opportunity amounted to very little. In my view, it neither

undermines Dr Jensen's case that he has had difficulty finding

employment since leaving Parliament, but nor does it provide any

evidence that those difficulties were causally related to the publications.

618 In the end, I am, again, asked to draw an inference of a causal

connection between the publications and Dr Jensen's difficulties finding


619 I am not satisfied that Dr Jensen has established that there is such

a causal connection. The reality is that Dr Jensen spent 12 years as a

Member of Parliament and, during that time, was effectively away from

the public and private employment sector. Much can change in relation

to a person's employment prospects in 12 years, particularly if they seek

to move into new areas of employment for which they do not have

substantial experience. Dr Jensen's experience in Parliament was not

such, in my view, to be immediately attractive to prospective employers

(as might be the case, for example, for a former Minister). I am not

prepared to infer that Dr Jensen would have obtained alternative

employment but for the effect of the publications.

620 As noted above, the nature of the defamatory imputations accepted

by the jury, while presumed to have damaged his reputation, did not

directly relate to his 'employability'. The family values imputation and

the moral standards imputation, for example, while having the greatest

impact upon Dr Jensen personally, are not of their nature such as to

directly relate to his suitability for employment. Even the best interests

imputation and the parliamentary letterhead imputation, while more

relevant to Dr Jensen's professional reputation, do not, in my view so

clearly relate to his fitness for alternative employment as to support,

without more, an inference of causation.383 Those matters were very

much centred on matters of a political nature.

621 It may be accepted that a number of the prospective employers, if

they had considered Dr Jensen's application, may have been aware of

the publications. I am prepared to accept that, with access to internet,

some of them would have been aware of the publications. It is a

different question whether I can be satisfied that such knowledge was a

cause of Dr Jensen failing to obtain those positions (or any other

employment).

383 As might be the case, for example, in relation to a defamatory imputation to the effect that a person is

lazy, unqualified or incompetent.

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622 For the reasons set out above, I am not so satisfied.

Andrews damages?

623 At the conclusion of the trial, a question arose as to whether, if

Dr Jensen had not made out his claim for special damage, as pleaded, I

ought to make an award, in the alternative, for a general decline in

Dr Jensen's 'business' in accordance with the principles in Andrews

(Andrews damages).384 The parties filed supplementary submissions in

relation to the issue.385

624 Andrews, and cases like it, concern an award of damages that is

made for 'general loss of business' where that loss is established to be

caused by the relevant defamation. It may arise in circumstances in

which the Court is satisfied there has been a general loss of business

caused by the defamatory publications but where it is 'impossible to be

precise as to the amount of that loss or as to its duration'.386

625 There is some ambiguity in the authorities as to whether Andrews

damages are to be regarded in the nature of general damages or as a

form of special damage. The ambiguity probably arises by reason of

the use of the expression 'special damages' in other areas of the law

(particularly in personal injuries cases) to refer to out-of-pocket

expenses and past loss of earnings.387 In my view, the better view, (as

Dr Jensen contended in the present case) is that Andrews damages are

in the nature of special damage for the purposes of defamation law.388

626 The general principles in relation to Andrews damages are, in my

view, usefully set out in the judgment of Mahoney JA in Andrews

itself. Mahoney JA's judgment, while in dissent in the result, was

endorsed in Chakravarti by Gaudron and Gummow JJ (with whom

Brennan CJ and McHugh J agreed) and by the Court of Appeal in

Bauer Media Pty Ltd v Wilson [No 2].

627 Justice Mahoney said in Andrews:389

384 Andrews v John Fairfax & Sons Ltd (1980) 2 NSWLR 225. 385 Plaintiff's Supplementary Closing Submissions dated 7 June 2019; Defendants' Supplementary

Submissions upon Question relating to Damages dated 7 June 2019. 386 Todd v Swan Television & Radio Broadcasters Pty Ltd [2001] WASC 334; (2001) 25 WAR 284 [58]

(Steytler J). 387 Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; (1998) 193 CLR 519 (Chakravarti) [99]

(Gaudron & Gummow JJ). 388 See Chakravarti [98]-[99] (Gaudron & Gummow JJ). See also Bauer Media Pty Ltd v Wilson (No 2)

[2018] VSCA 154; (2018) 56 VR 674. 389 See Andrews [259] (emphasis added); Bauer Media Pty Ltd v Wilson [No 2] [556].

[2019] WASC 451

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A businessman who claims that the publication has affected his

business ... is normally required to show that persons who would

otherwise have done business with him have not done so, and that this

resulted from the publication. But the customers of an innkeeper’s

business are a ‘floating and transitory class’. Because of this, if the

innkeeper were required to prove that particular customers or potential

customers would have dealt with him and have not, and that the cause

of their not doing so was the publication, he would be, in a practical

sense, unable to do so; he would not know who would have dealt with

him or be able to find them and, therefore, he could not call them to

explain why. ... In Ratcliffe v Evans, the Court examined the application

of these considerations to the various kinds of defamation and to similar

wrongs. It pointed out that, where a general loss of business is what

may be expected to flow directly and in the ordinary course of business

from what the defendant did, the allegation and proof of a general loss

of business (which I take to mean a fall in fact in the amount of business

done) may be sufficient to enable the inference to be drawn that there

was a relevant loss, and that it was caused by the defamation.

But, in my opinion, these cases do not establish that, in every case, it is

sufficient for a plaintiff to prove merely that the business that he did

after the publication was less than he did before. The extent of the proof

required will depend upon the kinds of consideration to which, in

Ratcliffe v Evans, the Court referred. The extent to which they or similar

considerations are not present, to that extent the ordinary proof of loss

will be required. Thus, to prove that there has been an actual loss of

business, prima facie, it is not sufficient to show merely that the

plaintiff did less business after than before the publication. It must

appear that there was available in the post-publication period relevant

business which was available to be awarded to the plaintiff, and which

was not awarded to him. In the case of an innkeeper whose business

consists of a multitude of individual customers, it may be proper to

infer that, in the absence of contrary evidence, the amount of business

available after the publication was no less than that available before.

That assumption will not be open where the nature of the plaintiff’s

business is different.

628 In my view, the established principles do not enable any additional

sum by way of Andrews damages to be awarded in the present case.

629 I have already found that I am not satisfied that the pleaded case as

to the special damage associated with the attempts to obtain alternative

employment has been established.

630 Moreover, while I accept that a general award for loss of earnings

(in the nature of Andrews damages) can be available in relation to cases

involving employment,390 in my view it will more readily apply in 390 Chakravarti is an example of such a case.

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relation to effects upon ongoing business operations, where a fall in

custom or profits occurs after the relevant defamatory publications.

This can be seen in Mahoney JA's reference to losses which may be

expected to 'flow directly and in the ordinary course of business'. So,

for example, defamatory statements which impact upon the very

business conducted by the plaintiff might more easily establish a causal

connection where there is a discernible loss of custom after the

defamatory publication.

631 Dr Jensen's case is quite different. He lost his position as a

Member of Parliament, as I have found, for reasons causally unrelated

to the defamatory statements.

632 Dr Jensen's efforts to find alternative employment therefore are

not akin to a change in custom or performance from which it may be

inferred that there was an effect in the ordinary course of Dr Jensen's

'business'. In that regard, I accept the defendants' submission that the

present case is simply not a case involving a downturn of business (or

of trade or employment) in the area that Dr Jensen operated in at the

time of the defamation and to which the defamation relates. As the

defendants submitted, 'post politics, these were new ventures'.391 There

is therefore no direct and ordinary downturn in the sense referred to in

Andrews from which damage might be inferred.

633 It is, of course, true that a plaintiff is to be compensated for their

loss of 'reputation' generally, which includes their 'business' reputation.

In relation to an individual such as Dr Jensen, the word 'professional' is

perhaps more apt. So, for example, applying the expression in Carson

v John Fairfax & Sons Ltd, Dr Jensen is to be awarded 'reparation for

the harm done to personal (and, if relevant, [professional])

reputation'.392 I am satisfied that I have given proper account to the

damage to both Dr Jensen's personal and professional reputation in

arriving at an award for general damages in the sum of $325,000.

634 For these reasons, I am satisfied that there is no basis for an

additional award for Andrews damages.

Damages in respect of the parliamentary letterhead imputation

635 In accordance with the need to make provisional findings in

relation to the parliamentary letterhead imputation, I am satisfied that

the parliamentary letterhead imputation did affect a different discrete 391 Defendants' Supplementary Submissions on Question relating to Damages dated 7 June 2019 [7]. 392 Carson v John Fairfax & Sons Ltd [60] (Mason CJ, Deane, Dawson & Gaudron JJ).

[2019] WASC 451

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aspect of Dr Jensen's reputation. For that reason, were the

parliamentary letterhead imputation established to have been

defamatory, in my view, the award for general damages would have

been greater.

636 Had I been finally assessing general damages, including in relation

to the parliamentary letterhead imputation, rather than making a

provisional assessment, in my view, it would have been appropriate to

assess the damages in a single sum in accordance with s 39 of the

Defamation Act. In making a provisional assessment of damages,

however, it is appropriate that I simply identify the amount by which

the total sum for general damages would be increased (were the

parliamentary letterhead imputation included).

637 In this context, it is important to recognise there are a number of

matters going to the effect of the defamatory imputations that are

common to those for which damages are to be awarded (the family

values imputation, the moral standards imputation and the best interests

imputation) and the parliamentary letterhead imputation. In addition, a

number of the features of aggravation, such as the failure to apologise

and the circumstances surrounding the witness statement from

Madeleine Jensen are common to all of the imputations.

638 On the assumption (for the purposes of the provisional

assessment) that the parliamentary letterhead imputation was

defamatory, it is of course presumed to have damaged Dr Jensen's

reputation. In this context, as I have noted above, that includes his

professional reputation. It was a serious imputation, albeit about events

many years earlier.

639 That imputation, however, did not have the same impact, in terms

of hurt and distress, on Dr Jensen as the family values imputation and

moral standards imputation. This is perhaps reflected in Dr Jensen's

conduct following the 31 March publications (but prior to the 1 April

publications) in which, while affected by them, Dr Jensen initially

appeared willing to 'ride out' the story. Dr Jensen, for example,

appeared good humoured in the ABC Radio interview on 31 March

2016. Indeed, the proceedings, as originally commenced, did not make

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a claim in relation to the 31 March publications but related to the 1

April Article.393

640 In my view, the additional award in relation to the parliamentary

letterhead imputation would be $75,000. This would bring the total

final award of general damages for all of the publications to $400,000

(were the parliamentary letterhead imputation included).

641 In this regard, it is important to note that the assessment of general

damages in respect of the parliamentary letterhead imputation, were it

the only defamatory imputation, may well have been greater.

Nevertheless, given that a number of the effects on Dr Jensen were

common to all of the alleged defamatory imputations, it is necessary to

avoid 'double counting' in assessing the additional damages that would

have been payable in respect of the parliamentary letterhead

imputation.

Conclusion

642 For the foregoing reasons, Dr Jensen is entitled to judgment

against the defendants for damages for defamation in respect of the

1 April Article, the 1 April Internet Article and the 1 April Tweet.

643 I make a single award of damages in relation to all of the causes of

action in respect of the 1 April publications in the sum of $325,000,

together with interest. I am of the preliminary view that interest should

be awarded at the rate of 6% per annum from 1 April 2016.

644 I will, however, hear the parties as to the final orders in relation to

interest and costs.

393 Exhibit 117. The Writ of Summons was amended to include the 31 March publications on 4 August 2016

(see Exhibit 118) and the first Statement of Claim did not plead the parliamentary letterhead imputation (see

Exhibit 119).

DRAFT QUINLAN CJ

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Schedule A – The 31 March Article

MP's novel approach to foreign relations bound to get people steamed up

EXCLUSIVE

ANDREW BURRELL

If federal MP Dennis Jensen is dumped by Liberal Party preselectors in his blue-ribbon

West Australian seat of Tangney on Sunday, he can always pursue a back-up career as a

writer of far-fetched fiction.

The Australian can reveal that Dr Jensen secretly used his parliamentary letterhead to seek

a publishing deal for what he described as his "controversial" first book, The Sky Warriors,

about a fictional war between Australia and a coalition of Indonesia and China.

It's not the sort of book likely to foster closer relations between Australia and its two giant

Asian neighbours, nor is it what you'd expect from a longtime member of parliament's

joint standing committee on foreign affairs, defence and trade.

And for a Liberal MP who's being backed by the evangelical Christian Right in the coming

preselection vote, the unpublished novel contains some surprisingly graphic sex scenes.

One of the female protagonists has breasts "as firm as they had been in her late teens" and

moans in delight as her married lover gropes "her inner thigh until he felt the warm

wetness with his hand".

"She pulled his trousers off, ripped the underpants off excitedly, and took him in her

mouth," Dr Jensen writes.

The plot of The Sky Warriors begins when a crazed dictator, who despises Australia, seizes

power in Jakarta and invades Papua New Guinea in an attempt to prevent the further break-

up of his country. The dictator, Rajiv Rono, tries to put Australia "off the scent" by

shooting down a PC-3 Orion aircraft near the North West Shelf off the coast of Western

Australia.

Indonesia takes an oil rig, along with the Cocos and Keeling Islands. Australian responds

with airstrikes against Indonesia and sends troops to PNG.

The Indonesians enlist the aid of China, which sends personnel and equipment. In the end,

happily, Australia wins the war.

The Australian has obtained a copy of a letter Dr Jensen sent to Sydneybased literary

agent Curtis Brown seeking a publishing deal in 2007. "As I mentioned during our

conversation, I am a Federal Member of Parliament," he wrote to agent Victoria Gutierrez

on his parliamentary letterhead.

DRAFT QUINLAN CJ

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"The contents of this work will be controversial. If it is published then it must be under a

pseudonym. The fact that I am the author must remain a closely guarded secret, known

only to you."

When contacted last night, Dr Jensen rejected suggestions he had spent any time on the

book after he was elected to parliament in 2004.

He initially denied marketing the book to agents while a serving MP, but when told of the

2007 letter he admitted he had done so.

Dr Jensen said he did not want The Australian to publish details of the book because it

would be inappropriate for a federal MP to be writing about a war between Australia and

its neighbours.

"These are not my current thoughts," said the one-time defence analyst and physicist.

Dr Jensen is facing a strong challenge in Tangney, in Perth's southern suburbs, from former

West Australian Liberal Party state director Ben Morton.

He outraged backers of Tony Abbott last February by becoming the first Coalition MP to

say publicly that the prime minister should resign. He also played a key role in Mr Abbott's

elevation to the leadership in 2009, when he launched a spill motion against Malcolm

Turnbull.

Dr Jensen's grip on Tangney has long been tenuous. In 2006, John Howard intervened to

save him after he lost preselection. Dr Jensen was rejected again by Liberal members in

2009, only to be saved then by the state council.

Last October, Western Australia's Emergency Services Minister Joe Francis told Liberal

members in Tangney that his German shepherd Rex could do a better job than Dr Jensen.

DRAFT QUINLAN CJ

Page 142

THE SKY WARRIORS

Dr Dennis Jensen MP

I am a Federal Member of

Parliament. The contents of

this work will be

controversial. If it is

published then it must be

under a pseudonym.

THE PLOT…

The book involves a fictional war between Australia and Indonesia, with Chinese

involvement. The book begins with a takeover of the government of Indonesia by a military

dictator who despises Australia. He decides to prevent any further breakup of Indonesia by

invading Papua New Guinea.

THE DICTATOR…

Rajiv Rono was in a buoyant mood; his nation has struck first blood in a clandestine war with

the hated enemy, a war that at the moment, the enemy was not even aware had begun. "Those

decadent Australians must pay … they are continually confiscating our people's boats while

they are quite legitimately fishing in what should be international waters. They look down

their long noses at us, as if we are some inferior species.

THE SEX…

Yasmine didn't believe in wearing bras;

in fact, she really didn't need to wear

them as her breasts were still as firm as

they had been in her late teens. Rono

massaged her small, soft, brown

breasts, luxuriating in the silk

complexion of the skin. He moved his

hand up her inner thigh. "Yes," she

moaned. "Do it now please, don't wait

any longer."

DRAFT QUINLAN CJ

Page 143

Schedule B – The 1 April Article

New chapter as Jensen leaves family home

EXCLUSIVE

ANDREW BURRELL

Dennis Jensen has moved out of his blue-ribbon electorate of Tangney even as the federal

Liberal MP intensifies his bid to convince local preselectors they should allow him to

extend his 11-year career in parliament.

It has emerged Dr Jensen recently left the family home in Leeming, in suburban Perth, to

live about 60km away with his new girlfriend.

His application for preselection, obtained by The Australian, lists his new residential

address as Halls Head, a coastal area south of Perth.

It is understood Dr Jensen owns the property, previously a family holiday retreat.

Dr Jensen's opponent for preselection, former West Australian Liberal Party director Ben

Morton, lives in Tangney with his wife and two young children.

Liberal members in Tangney have previously twice rejected Dr Jensen. In 2006, John

Howard intervened to save him after he lost preselection. Three years later, he was rejected

again by preselectors but was saved on that occasion by the Liberal Party state council.

Dr Jensen yesterday admitted he was wrong to have used his parliamentary letterhead to

spruik a racy novel he wrote about Australia going to war with Indonesia and China,

although he described the book as a "ripping yarn" he hoped would still be published. His

comments came after The Australian revealed the existence of the book, The Sky Warriors,

which he said he wrote before entering parliament in 2004 but was still spruiking to

literary agents in 2007.

He said he believed the leaking of the manuscript was an attempt to damage him ahead of

this weekend's preselection vote.

"It's really interesting it's come out a few days before the preselection," he told ABC radio

in Perth. "I see this as an attempt to trash my reputation."

Dr Jensen said he believed the vote in Tangney would be close. "There are unknown

preselectors where I don't know how they are going to vote. That's the middle ground I

need to try to win."

He conceded he should not have used his official stationery to send sample chapters of the

novel to literary agents. "That was in my first term," he said. "I shouldn't have done it - it

was a mistake."

The novel contains descriptions of graphic sex.

[2019] WASC 451 QUINLAN CJ

Page 144

Schedule C – Pleadings of Aggravated Conduct

Aggravating Conduct

40 The Defendants' publication of the 31 March 2016 Newspaper Article, the 31

March 2016 Internet Article, the First Tweet, the 1 April 2016 Newspaper Article,

1 April 2016 Internet Article and the Second Tweet (Publications) was and the

Defendants conduct has been improper, unjustifiable and lacking in bona fides, in a

manner which has aggravated the hurt, damage and distress suffered by the Plaintiff

in that:

40.1 the Defendants have failed to apologise for the defamatory allegations

contained in the Publications when such an apology was self-evidently

called for;

40.2 the Defendants have failed to retract the defamatory allegations contained in

the Publications when a retraction was self-evidently called for;

40.3 the Defendants continue to publish the 31 March 2016 Internet Article and

the 1 April 2016 Internet Article on The Australian Website, the effect of

which is to continue to publish or attempt to publish the defamatory

allegations;

40.4 the Second Defendant continues to publish the First Tweet (including via

the re-tweets of Ms Paige Taylor and Mr Jamie Burnett) and the Second

Tweet (including via the re-tweet of Ms Jane Cattermole) on his Twitter

Page, the effect of which is to continue to publish or attempt to publish the

defamatory allegations;

40.5 on or about 31 March 2016 at 1:01pm, the Second Defendant wrote and the

Defendants published on The Australian Website and the Plaintiff read the

article entitled "Dennis Jensen admits mistakes over attempt to publish

steamy novel" (with a hyperlink to this electronic publication having also

been published by the Second Defendant on or about 30 March 2016 at

7:33pm on his Twitter Page) which article commented upon and reproduced

the following extracts of the Plaintiff's book and was therefore conduct

calculated to embarrass and humiliate the Plaintiff in circumstances where

the only sexualised excerpt from the book comprised 157 words out of a

69,000 word book:


Page 145

...

The novel contains some surprisingly graphic sex scenes. One of the

female protagonists has breasts "as firm as they had been in her late teems"

and moans in delight as her lover gropes "her inner thigh until he felt the

warn [sic] wetness with hand". "She pulled his trousers off, ripped the

underpants off excitedly, and took him in her mouth," Dr Jensen writes. ...

40.6 on or about 1 April 2016, the First Defendant published and the Plaintiff

read:

40.6.1 at page 13 of The Australian Newspaper the article entitled

"Strewth!";

40.6.2 on The Australian Website the article entitled "Strewth: the steamy

age of Dennis Jensen" (being the same article referred to in the

preceding sub-paragraph but with an alternative heading);

which article commented upon and reproduced the following extract from

the Plaintiff's book and was therefore conduct calculated to embarrass and

humiliate the Plaintiff in circumstances where the only sexualised excerpt

from the book comprised 157 words out of a 69,000 word book:

Strewth has yet to recover from our colleague Andrew Burrell's revelations

yesterday about Liberal MP Dennis Jensen's novel The Sky Warriors and

its tracts of erotica. Exhibit A: "She pulled his trousers off, ripped the

underpants off excitedly, and took him in her mouth." ...

40.7 on or about 3 April 2016 at 1:58pm, the Second Defendant wrote and the

Defendants published on The Australian Website, and the Plaintiff read, the

article entitled "Dennis Jensen loses preselection for Tangney" (with a

hyperlink to this electronic publication having also been published by the

Second Defendant on or about 2 April 2016 at 9:21pm on his Twitter Page

and also by re-tweet) which contained the following hyperlink to the 31

March 2016 Internet Article the effect of which was to perpetuate the 31

March 2016 Internet Article:

...

The Australian revealed last week that Dr Jensen used his

parliamentary letterhead to spruik a racy novel he wrote about

Australia going to war with Indonesian and China

...

and included the following comment in respect of the Plaintiff's book and

was therefore conduct calculated to embarrass the Plaintiff in circumstances


Page 146

where the only sexualised excerpt from the book comprised 157 words out

of a 69,000 word book:

…

The novel also contains a graphic sex scene.

...

40.8 on or about 3 April 2016 at 4:27pm, the First Defendant published on The

Australian Website the article entitled "Jensen misses out on Tangney

preselection", which article contained the following comment in respect of

the Plaintiff's book and was therefore conduct calculated to embarrass and

humiliate the Plaintiff in circumstances where the only sexualised excerpt

from the book comprised 157 words out of a 69,000 word book:

Liberal pre-selectors have dumped West Australian MP Dennis Jensen as

the candidate for Tangney after extracts from a novel he wrote containing

graphic sex scenes were publicly leaked.

...

40.9 on or about 4 April 2016, the Second Defendant wrote and the Defendants

published and the Plaintiff read:

40.9.1 at page 4 of The Australian Newspaper the article entitled "Liberal

MP storms out after losing preselection";

40.9.2 on The Australian Website the article entitled "Liberal MP Dennis

Jensen storms out after losing preselection" (with a hyperlink to this

electronic publication having also been published by the Second

Defendant on or about 3 April 2016 at 5:03pm on his Twitter Page);

which article contained the following comment in respect of the Plaintiff's

book and was therefore conduct calculated to perpetuate the defamatory

allegations and embarrass and humiliate the Plaintiff in circumstances

where the only sexualised excerpt from the book comprised 157 words out

of a 69,000 word book:

...

The Australian revealed last week that Dr Jensen used his parliamentary

letterhead to spruik a racy novel he wrote about Australia going to war

with Indonesia and China.

...

40.10 on or about 4 April 2016, the First Defendant published and the Plaintiff

read:


Page 147


"Strewth!";

40.10.2 on The Australian Website the article entitled "Strewth: sweating

ballots" (being the same article referred to in the preceding sub-

paragraph but with an alternative heading);

which article made the following comment in respect of the Plaintiff's book

and was therefore conduct calculated to embarrass and humiliate the

Plaintiff in circumstances where the only sexualised excerpt from the book

comprised 157 words out of a 69,000 word book:

Dennis Jensen was excited, but he was nervous, too. Everything had led

to this very moment for the Liberal MP, but even with the blood roaring

in his veins, his nerve endings tingling with electricity, his heart pumping

away like Errol Flynn on a free weekend, he was unable to stop

wondering: could he attain a preselection? His breath quickening, he

reached out to feel his support, hoping it would be firmer than it had been

in past years when he'd needed an emergency dose of John Howard and

state executive to get up. "Do it now, please," shouted the voice in his

head in a frenzy of longing, "don't wait any longer!" Then someone else's

voice — altogether calmer — sounded in the room: "Anyone for

Dennis?" Alas for Jensen, the answer proved to be almost entirely "no".

...

40.11 on or about 4 April 2016 at 11:52am, the First Defendant published on The

Australian Website, and the Plaintiff read, the article entitled "Dennis

Jensen can only blame himself for losing preselection: Michael Kroger"

(with a hyperlink to this electronic publication having also been published

by the Second Defendant on or about 3 April 2016 at 7:48pm on his Twitter

Page) which contained the following hyperlink to the 31 March 2016

Internet Article the effect of which was to further publish or attempt to

publish the 31 March 2016 Internet Article:

...

After losing yesterday's preselection ballot by a 57-7 landslide, Dr Jensen

yesterday alleged a "smear campaign" against him and threatened legal

action over revelations in The Australian that he used his parliamentary

letterhead to spruik a racy novel he wrote about Australia going to war

with Indonesia and China.

...

and included the reference to the Plaintiff's "racy novel", being conduct

calculated to embarrass and humiliate the Plaintiff in circumstances where


Page 148

the only sexualised excerpt from the book comprised 157 words out of a

69,000 word book.

40.12 on or about 4 April 2016 at 5:48pm, the First Defendant published on The

Australian Website, and the Plaintiff read, the article entitled "WA Liberal

MP sues over 'smut' reports", which article contained the following

comment in respect of the Plaintiff's book and was therefore conduct

calculated to embarrass and humiliate the Plaintiff and deter him from

prosecuting this within action in circumstances where the only sexualised

excerpt from the book comprised 157 words out of a 69,000 word book:

...

The loss came after The Australian newspaper reported racy

extracts from a novel the MP penned in 2002, then claimed he had

recently left his family home within the electorate to live with his

new girlfriend.

...

40.13 on or about 5 April 2016 the Second Defendant wrote and the Defendants

published, and the Plaintiff read:

40.13.1 at page 5 of The Australian Newspaper the article entitled "Liberal

factions brawl over Kroger campaign to take control"; and

40.13.2 on The Australian Website the article entitled "Dennis Jensen turns

on party after losing preselection battle" (being the same article

referred to in the preceding sub-paragraph but with an alternative

heading);

which article contained the following comment and was therefore conduct

calculated to publicly suggest that there was no substance to the Plaintiff's

action and thereby deter him from prosecuting the within action:

...

Dr Jensen yesterday sued The Australian over the reports, which he

claimed had led WA Liberal Party powerbroker Nick Goiran, the

leader of the Christian Right, to withdraw support for his

preselection.

The Australian intends to defend the suit.

...

40.14 on or about 6 April 2016, the First Defendant published, and the Plaintiff

read:


Page 149


"Strewth!";

40.14.2 on The Australian Website the article entitled "Strewth: Dennis

Jensen office's position vacant" (being the same article referred to

in the preceding sub-paragraph but with an alternative heading);





It's possibly not the job with the greatest level of security in the world

given that preselection misfortune the other day, but Dennis Jensen – the

Liberal MP and noted author of thrillers with incidental steamy bits – is

advertising for an electorate officer.

The probation period is optimistically set at three months but, on the plus

side, the job does, a bit like Jensen's fiction, call for "excellent oral and

written communication skill".

40.14A on 7 April 2016, the Plaintiff requested an apology from the Second

Defendant and the Second Defendant refused, as set out in the following

text message exchange:

40.15 on or about 8 April 2016 the Second Defendant wrote and the Defendants

published, and the Plaintiff read:

40.15.1 at page 4 of The Australian Newspaper the article entitled "Jensen:

his love, she wrote them a letter"; and

40.15.2 on The Australian Website the article entitled "Dennis Jensen

preselection: his love, she wrote them a letter" (being the same

article referred to in the preceding sub-paragraph but with an


Page 150

alternative heading and with a hyperlink to this electronic

publication having also been published by the Second Defendant

on his Twitter Page on or about 7 April 2016 at 3:27pm and on or

about 7 April 2016 at 5:12pm);

the text of which is set out below, which article was calculated to publicly

debate and question the Plaintiff's action against the Defendants and thereby

improperly attempt to deter him from prosecuting the within action:

Liberal Party members in the blue-ribbon West Australian seat of

Tangney were told last month that federal MP Dennis Jensen had split

from his wife and started a new relationship, undermining his claim that

media coverage caused the influential Christian Right to abandon him.

It has emerged that Dr Jensen's girlfriend, Trudy Hoad, took the unusual

step of writing to all Liberal preselectors about the MP's strengths as a

politician and to detail his marriage breakdown.

Dr Jensen claims Christian preselectors withdrew their support for him

after a story in The Australian last week noted that he had split up with

his wife and no longer lived in Tangney.

The inference in the story would have been "very distasteful" to

Christians, he said.

He claimed the vote had previously been on a "knife edge" and the story

caused him to be dumped at last Sunday's preselection vote.

However, the letter obtained by The Australian this week shows Ms Hoad

had already provided Liberal preselectors with confirmation of Dr

Jensen's new living arrangements.

In the letter, she details the MP's divorce from his former wife and

describes him as "my partner in life" and a man of integrity, strength and

honesty.

"Dennis's other passion, I soon realised, was his family and the concept of

family, and very sadly for him his family had been torn apart by divorce,

something he had not initiated, never envisaged and would never have

countenanced," she wrote last month. "Despite his obvious grief over the

demise of his marriage and separation of the family, Dennis showed great

strength and was always positive about his situation."

Ms Hoad wrote of her deep love and admiration for Dr Jensen. "For any

of you who still don't know, aside from having a seriously 'good' man as

your representative in Tangney, you have a smart, thinking, deeply

analytical and committed person who will always seek to deal with the

important issues on the minds of constituents, even at the risk of his own

career prospects."

Former Liberal Party state director Ben Morton won the Tangney

preselection vote 57-7, sparking Dr Jensen's claims that he lost only

because of a "smear campaign" against him.

An earlier article in The Australian revealed that Dr Jensen had used

parliamentary letterhead to spruik a novel he had written about Australia


Page 151

going to war with Indonesia and China, which included descriptions of

graphic sex.

Senior figures in the Liberal Party have dismissed Dr Jensen's

complaints.

This week, Victorian powerbroker Michael Kroger said the MP had only

himself to blame for his resounding loss and that the media reports had

"nothing to do with the result".

"It does surprise me that members of parliament — not just Dennis, but

many members of parliament — think they have a job for life, and they

don't," he said.

It was the third time Liberal members in Tangney have rejected Dr

Jensen. In 2006, John Howard intervened to save him after he lost

preselection. Three years later, he was saved by the Liberal Party state

council.

Last weekend's preselection vote is strongly expected to be endorsed by

the Liberal Party state council on Saturday, spelling the end of Dr

Jensen's career after 12 years in federal parliament. Dr Jensen yesterday

declined to comment.

40.16 on or about 13 April 2016, the First Defendant published, and the Plaintiff

read:

40.16.1 at page 5 of The Australian Newspaper the article entitled "Jensen's

'rattling yarn' on Amazon"; and

40.16.2 on The Australian Website the article entitled "Dennis Jensen

selling his 'rattling yarn' on Amazon for $6.51" (being the same

article referred to in the preceding sub-paragraph but with an

alternative heading);

the text of which is set out below, which article was calculated to denigrate

the Plaintiff and improperly attempt to deter the Plaintiff from prosecuting

the Plaintiff's action against the Defendants:

Disendorsed Liberal MP Dennis Jensen has launched Skywarriors, the

"rattling, fast-paced yarn" he once did not want to be linked to, and is

inviting Australians to get to know its "red-blooded characters" by paying

$6.51 on Amazon.

The MP for Tangney said it was surprisingly easy to self-publish on

Kindle, and he chose as the cover art a photograph of himself in an F-18

taken at the Williamtown RAAF base in 2009 while on an attachment for

parliamentarians who wanted to familiarise themselves with the

Australian Defence Force.

The Australian revealed last month Dr Jensen used his parliamentary

letterhead in 2007 to seek a publishing deal for what he described as his

"controversial" first book about a fictional war between Australia and a

coalition of Indonesia and China.


Page 152

Dr Jensen claimed that graphic sex in the book was used by The

Australian to make him out as "a purveyor of smut". He also claimed

Christian preselectors withdrew their support for him after The Australian

noted he had split up with his wife and no longer lived in Tangney.

However, preselectors were already aware of his living arrangements

because Dr Jensen's partner, Trudy Hoad, earlier wrote a letter detailing

his marriage breakdown and highlighting his qualities.

Liberal preselectors this month chose the party's former state director Ben

Morton to contest Tangney at the next federal election. The vote was 57-

7.

Yesterday, Dr Jensen reflected on what went wrong between him and his

party colleagues. Without regret, he said he did not do some of the

unpleasant things that "unfortunately are way too much part of the job" of

a parliamentarian. "I was a good member, when you have a look at the

election results it clearly shows that," he said.

"But what I wasn't so great at was branch-stacking and massaging

overgrown Liberal office bearers' egos."

Dr Jensen has launched legal action against The Australian over reports

published ahead of his preselection contest. The Australian is defending

the suit.

40.17 on or about 9 May 2016 at 5:37pm the Second Defendant wrote and the

Defendants published at 5:37pm on The Australian Website, and the

Plaintiff read, the article entitled "Federal election 2016: Dennis Jensen to

contest WA seat of Tangney" (with a hyperlink to this electronic publication

having also been published by the Second Defendant on or about 9 May

2016 at 12:41am on his Twitter Page), an extract of which is set out below,

which article was calculated to publicly denigrate the Plaintiff's action

against the Defendants and thereby improperly attempt to deter the Plaintiff

from prosecuting the within action:

...

The Australian revealed last month Dr Jensen used his parliamentary

letterhead in 2007 to seek a publishing deal for what he described as his

"controversial" first book about a fictional war between Australia and a

coalition of Indonesia and China. Dr Jensen claimed that graphic sex in the

book was used by The Australian to make him out as "a purveyor of smut".

He claimed Christian preselectors withdrew their support for him after The

Australian noted he had split up with his wife and no longer lived in

Tangney. However, preselectors were already aware of his living

arrangements because Dr Jensen's partner, Trudy Hoad, earlier wrote a

letter detailing his marriage breakdown and highlighting his qualities.

Liberal preselectors chose Mr Morton over Dr Jensen by 57 votes to seven.

Dr Jensen has launched legal action against The Australian over the

reports. The Australian is defending the suit.


Page 153

40.18 on or about 10 May 2016, the First Defendant published, and the Plaintiff

read:


"Strewth!"; and

40.18.2 on The Australian Website the article entitled "Strewth: Bill

Shorten is going the triple" (being the same article referred to in the

preceding sub-paragraph but with an alternative heading);





...

... In the meantime, don't forget Jensen's novel The Skywarriors (a

"thriller with incidental steamy bits" — Strewth, April 6) is available for

download at Amazon for just $6.51. There are only two reviews so far,

but both give it five stars. "The writing is breathtaking in much the same

way as carbon monoxide is breathtaking," says one. The other is a little

more wholehearted: "I love it!!!"

40.19 on or about 11 August 2017, the Second Defendant co-wrote and the

Defendants published, and the Plaintiff read:

40.19.1 at page 5 of The Australian Newspaper the article entitled "ExLib

MP defects to Bernardi"; and

40.19.2 on The Australian Website the article entitled "Ex-Liberal MP

Jensen defects to Bernardi's New Party" (being the same article

referred to in the preceding sub-paragraph but with an alternate

heading and with a hyperlink to this electronic publication having

also been published by the Second Defendant on his Twitter Page

on or about 11 August 2017 at 8:06 am);

an extract of which is set out below, which part of the article was calculated

to publicly denigrate the Plaintiff's action against the Defendants and

thereby improperly attempt to deter the Plaintiff from pursuing the within

action:


Page 154

"[The Plaintiff] has launched legal action against The Australian over

reports published ahead of his preselection contest last year. The

Australian is defending the suit.

Dr Jensen's legal action includes his claims that a story that described

graphic sex in a book he wrote was used by The Australian to make him

out as "a purveyor of smut"."

40.20 on 12 December 2017 the Defendants filed a Further Amended Defence and

Counterclaim by which they pleaded defences of truth at common law and

justification under section 25 of the Defamation Act 2005 (WA) and

provided particulars by which the Defendants, without foundation:

40.20.1 made various assertions of knowledge, awareness and state of mind

on the part of the Plaintiff;

40.20.2 referred to plural 'sexual scenes' and 'sexually charged passages' in

the Plaintiff's book, The Sky Warriors;

40.20.3 alleged that the Plaintiff sent a letter to Curtis Brown (Australia)

Pty Ltd (Curtis Brown) notwithstanding:

(a) Curtis Brown's letter to the Supreme Court dated 20 October

2017;

(b) Curtis Brown's log of manuscripts submitted in 2007;

(c) Bennett + Co's letter to Macpherson Kelly dated 24 October

2017,

each of which identified that Curtis Brown did not have any record

of any work submitted to them by the Plaintiff or entitled 'The Sky

Warriors' and that had such a work been submitted Curtis Brown

would have had such a record;

40.20.4 alleged, by use of the words 'among others', that the Plaintiff had

sent the letter to other prospective publishers;

40.20.5 alleged, by use of the plural words 'conversations and discussions

with publishers or prospective publishers … promoting his book',

that the Plaintiff had contacted multiple publishers or prospective

publishers;

40.20.6 alleged that the Plaintiff 'purported to live at a rental property in

Booragoon';


Page 155

40.21 on 21 May 2018, the Defendants purported to file a Second Further Re-

Amended Defence and Counterclaim by which they pleaded defences of

truth at common law and justification under section 25 of the Defamation

Act 2005 (WA) and provided particulars by which the Defendants

maintained the allegations identified in sub-paragraphs 40.20.3, 40.20.4 and

40.20.5, hereof and further alleged that the Plaintiff "held himself out as

residing in the seat of Tangney in a Booragoon property";

40.22 on 29 May 2018, the Defendants purported to file a Third Further

ReAmended Defence and Counterclaim by which they pleaded defences of

truth at common law and justification under section 25 of the Defamation

Act 2005 (WA) and provided particulars by which the Defendants

maintained the allegations identified in sub-paragraphs 40.20.3, 40.20.4,

40.20.5 and 40.21, hereof; 40.23 on 12 June 2018, the Defendants filed a

Substituted Defence and Counterclaim by which they pleaded defences of

truth at common law 38 Statement of Claim and justification under section

25 of the Defamation Act 2005 (WA) and provided particulars by which the

Defendants maintained the allegations identified in paragraphs 40.20.3,

40.20.4, 40.20.5 and 40.21, hereof.

40.23 the Defendants wrote the articles in the terms and manner in which they did

despite having in their possession only 50 pages of the book, The Sky

Warriors;

40.24 the Defendants wrote the 31 March Publications and 1 April Publications

with the intention of causing political damage to the Plaintiff for the benefit

of Mr Ben Morton;

Particulars

The Defendants' intention is evidenced by alternatively to be inferred from:

(i) the Defendants' failure to identify, in the articles or in the

proceedings, the source of the information the subject of the

articles;

(ii) the sensational terms in which the articles were written;

(iii) the articles' reference to Christian voters;

(iv) the juxtaposition of the Plaintiff's living arrangements with

Mr Morton's living arrangements within the 1 April Publications;


Page 156

(v) the Defendants' conduct in publishing subsequent articles of and

concerning the Plaintiff and the subject matter of the articles,

namely the subsequent articles pleaded in paragraphs 40.5 to 40.19

hereof;

(iv) the Defendants not seeking legal advice as to the content of the

articles which were on their face defamatory;

(v) the Second Defendant's text messages with a person unknown to

the Plaintiff on 30 March 2016 by which the Second Defendant:

(a) sent a picture of a page of the draft of the book that featured

the sex scene to the person;

(b) informed the person that the story to be published about Dr

Jensen (i.e. the 31 March Publications) would "run big

tomorrow", notwithstanding the matter pleaded at paragraph

3.2.3(c) hereof; and

(c) asked the person to keep the story secret.

(d) requested the Plaintiff's address from the person;

(e) informed the person that he had been told that the defendants

were sending a photographer to photograph the Plaintiff;

(f) sought information regarding the Plaintiff's marital status

from the person.

Further particulars may be provided after further discovery is given

and in any event prior to trial.

40.25 the Defendants failed to make any enquiry of Ms Victoria Gutierrez or

Curtis Brown prior to publishing the 31 March Publications and 1 April

Publications;

40.26 the Defendants failed to make any enquiry of the Plaintiff regarding his

living arrangements before publishing the 1 April Publications;

40.27 the Defendants failed to make any enquiry of the Plaintiff's then partner

(now wife), Dr Trudy Hoad (now Dr Trudy Jensen) regarding her living

arrangements before publishing the 1 April Publications;

40.30 Ms Victoria Laurie, a journalist employed by the First Defendant and

Ms Paige Taylor, a journalist employed by the Second Defendant, avoiding

service of subpoenas issued by the Plaintiff;


Page 157

40.31 on or about 25 November 2018, the First Defendant published, and the

Plaintiff read, at page 5 of The Australian Newspaper an article entitled

"Journo's sources ruled off limits" and on The Australian Website an article

entitled "Journo's sources ruled off limits in case linked to former MP",

which article, notwithstanding the Plaintiff denies using his parliamentary

letterhead to promote his book, contained the following statements which

repeated the substance of the 31 March Publications:

"Dr Jensen is suing Burrell and Nationwide News (publisher of The

Australian) over articles published in 2016 that said Dr Jensen had written

a novel containing a "surprisingly graphic" sex scene, had used his

parliamentary letterhead in an attempt to have it published and wrote to a

literary agent stating that his identity was to remain a closely guarded

secret. Burrell, who is The Australian's chief reporter in Western Australia,

also wrote that Dr Jensen had left the family home to live with his new

girlfriend, had admitted it was wrong to use parliamentary letterhead to

promote the publication of his book and conceded he should not have used

official stationery to send sample chapters to literary agents."


Plaintiff and to publicly suggest that there was no substance to the Plaintiff's

action;

40.32 on or about 25 November 2018, the Second Defendant:

40.32.1 tweeted a link to the online version of the article with the comment

"Journos sources off limits."; and

40.32.2 retweeted a tweet by Ms Taylor which linked to the online version

of the article, by which the Second Defendant sought to attract and

attracted publicity to the article and was therefore conduct

calculated to embarrass and humiliate the Plaintiff and to publicly

suggest that there was no substance to the Plaintiff's action;

40.33 in circumstances where the Plaintiff filed and served his witness statement

on 10 October 2018 and in that statement disclosed that he felt that his

daughter Madeline Ruby Jensen had lost respect for the Plaintiff as her

father as the Plaintiff did not have a job and because of the way the Plaintiff

had been made out in the media but had not been able to discuss this with

Madeline:

40.33.1 filed and served on 5 November 2018 a witness statement of

Madeline Ruby Jensen in which she gave detailed personal reasons


Page 158

as to why she did not have a good relationship with the Plaintiff as

her father;

40.33.2 by email letter sent 12 November 2018 at 12.19pm from the

Defendants' solicitors to the Plaintiff's solicitors (which letter came

to the attention of the Plaintiff) wrote:

"We refer to our client's witness statements.

We request that you remind your client not to attempt to send any

messages to our clients' witnesses discouraging them to give

evidence, and that any such actions would constitute a contempt of

Court."

40.33.3 such letter having the effect that the Plaintiff considered himself

unable to contact his daughter thereafter until the trial of the within

matter;

40.33.4 on 15 March 2019 whilst the Plaintiff was in cross-examination the

Defendants informed the Court that they did not intend to call

Madeline Ruby Jensen to give evidence at the trial; which conduct

caused the Plaintiff hurt and distress in that the Plaintiff considered

that such conduct compromised his ability to restore any parental

loving relationship with his daughter.



BC

Principal Associate to the Honourable Chief Justice Quinlan

19 DECEMBER 2019

SUPREME COURT OF WESTERN AUSTRALIA (COURT OF APPEAL)

Strzelecki Holdings Pty Ltd v Jorgensen

[2019] WASCA 96

Murphy, Mitchell and Pritchard JJA

6 November 2018, 4 July 2019

Costs — Whether successful party who fails on particular issue should bedeprived of costs of that issue — Where only issue on which successfulparty succeeded not pleaded until three years after proceedingscommenced — Where other issues occupied a substantial part ofpleadings, evidence and argument.

Costs — Indemnity costs — Calderbank offers — Where offers made before trial— Where successful party had not yet pleaded only issue on which theywere successful when offers made — Whether rejection of offersunreasonable — When reasonableness of rejecton of offer to be assessed.

Costs — Special costs orders — Whether matter of unusual diffıculty, complexityor importance — Where successful party awarded only a proportion of itsoverall costs of the action — Legal Profession Act 2008 (WA) s 280.

In May 2007, the respondents entered into a contract with the appellant topurchase an “off the plan” apartment from the appellant (Contract). The Contractwas conditional on certain events occurring, one of which was the registration ofthe proposed strata plan which was annexed to the Contract.

The respondents paid the appellant an agreed deposit, with the balance of thepurchase price for the apartment to be paid at settlement.

In March 2011, the appellant advised the respondents that it was ready, willingand able to settle the sale of the apartment. However, settlement did not occurbecause a dispute arose between the parties, which relevantly concerned whetherother apartments in the apartment complex would be used for short-stayaccommodation under the proposed strata plan.

In April 2011, the appellant issued a default notice under the Contract, andsubsequently purported to terminate the Contract for the respondents’ allegedbreach in failing to settle.

The appellant then commenced proceedings against the respondents, seeking adeclaration that it was entitled to the deposit, and damages for the alleged breachof contract by the respondents. The respondents subsequently filed a defence andcounterclaim.

On 11 and 16 October 2013, the respondents, through their solicitors, madeCalderbank offers to the appellant to settle the action. Both offers were rejected bythe appellant.

388 SUPREME COURT OF WESTERN AUSTRALIA [(2019)

On 21 February 2014, the respondents amended their defence and counterclaimto plead that the appellant had failed to comply with its obligation under s 69C ofthe Strata Titles Act 1985 (WA) (ST Act) to give full particulars of a notifiablevariation of the strata plan annexed to the Contract. The respondents had firstnotified the appellant of this alleged failure in their first Calderbank offer.

Following a nine day trial in the District Court in 2014 and 2015, theappellant’s claim was dismissed, and the respondents’ counterclaim was allowed.The primary judge relevantly held that the appellant had failed to comply with itsobligations under s 69C of the ST Act, and that the appellant’s purportedtermination of the Contract was invalid as a result.

The appellant appealed from the primary judge’s decision. Although theappellant succeeded in a number of its grounds of appeal, it did not succeed inimpugning the primary judge’s orders, and the appeal against the primary judge’sdecision was dismissed.

Following this appeal, the primary judge ordered that the appellant pay twothirds of the respondents’ costs up to the date of the second Calderbank offer, andthat the appellant pay the respondents’ costs on an indemnity basis after that date.

The appellant appealed, and the respondents cross-appealed, from the primaryjudge’s costs decision.

Held (per curiam) (appeal allowed, cross-appeal dismissed):

(1) It was not unreasonable or plainly unjust for the primary judge to order thatthe appellant pay two thirds of the respondents’ costs up to the date of the secondCalderbank offer. In making this order, the primary judge took into account theissues on which the respondents were unsuccessful at trial, and the fact that therespondents did not plead the only issue on which they were successful until theiramendment of the defence and counterclaim. [58]-[66]

(2) The primary judge did not err in making a deduction from the proportion ofcosts recovered by the respondents, to reflect the fact that they were not successfulon all issues. The primary judge clearly brought to bear his knowledge of thepleadings, the issues raised by the parties, the time occupied by those issues in theaction, and formed the view that there should be a departure from the general rulethat costs follow the event. [71]-[78]

Mickelberg v Western Australia [2007] WASC 140 (S), referred to.

(3) The unreasonable rejection of a Calderbank offer by an unsuccessful party isa well-recognised basis for an award of indemnity costs, although it is the partywho made the offer that bears the onus of satisfying the court that the rejectionwas unreasonable. In determining whether the rejection of an offer isunreasonable, all relevant facts and circumstances must be considered. [82]-[83]

Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1; SakariResources Ltd v Purvis [2016] WASCA 24 (S), referred to.

(4) The appellant was entitled to assess the Calderbank offers having regard tothe strength of the respondents’ case, as it was advanced, at the time the offerswere made. The primary judge erred in assessing the appellant’s refusal of theCalderbank offers by reference to the cause of action on which the respondentsultimately succeeded at trial, being a case which the respondents had not advancedat the time the offers were made. [87]-[90]

Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 13) [2007]VSC 516, referred to.

(5) Having regard to the fact that the respondents were not wholly successful attrial, a just apportionment of costs is that the appellant pay two thirds of therespondents’ costs of the action, and of the costs hearing before the primary judge.[96]-[100], [114]-[118]

38954 WAR 388] STRZELECKI v JORGENSEN

(6) No special costs order should be made in favour of the respondents. Therespondents have not established a fairly arguable case that the bill will properlytax at an amount greater than the scale limits, or that the matter as a wholeinvolved unusual difficulty, complexity or importance. [102]-[113]

Sino Iron Pty Ltd v Mineralogy Pty Ltd (No 2) [2017] WASCA 76 (S), referred.

Cases Cited

Amaca Pty Ltd v Moss [2007] WASCA 162 (S).

Bond Corporation Holdings Ltd, Re (1990) 1 WAR 465.

Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S).

Calderbank v Calderbank [1976] Fam 93.

Cardno BSD Pty Ltd v Water Corporation (No 2) [2011] WASCA 161.

Electricity Generation and Retail Corporation (t/as Synergy) v WoodsideEnergy Ltd [2014] WASC 469 (S).

EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59.

Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1.

Frigger v Lean [2012] WASCA 66.

Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2)(2005) 13 VR 435.

Heartlink Ltd v Jones (as liquidator of HL Diagnostics Pty Ltd) [2007] WASC254 (S).

House v The King (1936) 55 CLR 499.

Keet v Ward [2011] WASCA 139.

Kidd v Western Australia [2015] WASCA 62 (S).

Manjimup, Shire of v Cheetham [2010] WASCA 225.

McGarry v The Queen (2001) 207 CLR 121.

Mickelberg v Western Australia [2007] WASC 140 (S).

Naidoo v Williamson (2008) 37 WAR 516.

Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394.

Norbis v Norbis (1986) 161 CLR 513.

Oshlack v Richmond River Council (1998) 193 CLR 72.

Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76 (S).

Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 13) [2007]VSC 516.

Sakari Resources Ltd v Purvis [2016] WASCA 24 (S).

Sino Iron Pty Ltd v Mineralogy Pty Ltd (No 2) [2017] WASCA 76 (S).

Souter v Condor Developments Pty Ltd [2012] WASCA 227.

Strzelecki Holdings Pty Ltd v Jorgensen [2016] WASCA 177.

Strzelecki Holdings Pty Ltd v Jorgensen (No 3) [2015] WADC 115.

Strzelecki Holdings Pty Ltd v Jorgensen (No 4) [2018] WADC 19.

Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 (S).

Yara Australia Pty Ltd v Oswal [2012] WASCA 264.

Appeal from the District Court of Western Australia

M L Bennett, for the appellant.

N Dillon, for the respondents.


Cur adv vult

4 July 2019

The Court

This appeal and cross-appeal concern a decision as to the costs ofproceedings determined following a trial in the District Court in 2014 and 2015(Action). The Action comprised a claim by Strzelecki Holdings Pty Ltd(Strzelecki) and a counterclaim by the Jorgensens. The Action concerned thealleged breach of a contract for the sale of land (Contract) by which theJorgensens agreed to purchase from Strzelecki an apartment (Apartment) in aresidential and commercial complex in Mandurah (Complex) “off the plan”. Theoutcome of the decision of the primary judge (Primary Decision),1 and anappeal to this Court (Appeal Decision),2 was that the claim by Strzelecki wasdismissed, and the counterclaim by the Jorgensens was allowed.

After the Appeal Decision, the primary judge heard submissions from theparties in relation to the costs orders which should be made in respect of theAction. His Honour published a decision on the question of costs (CostsDecision)3 and made the following orders (Costs Orders):

1. The Plaintiff [Strzelecki] is to pay two thirds of the Defendants’[Jorgensens’] costs (including reserved costs) of the Action fromcommencement to 15 October 2013, the costs to be taxed if not agreed.

2. The Plaintiff [Strzelecki] is to pay the Defendants’ [Jorgensens’] costs(including any reserved costs) of the Action from 16 October 2013 on anindemnity basis so that the Defendants [Jorgensens] are to recover all oftheir costs incurred except insofar as they are of an unreasonable amountor have been unreasonably incurred so that, subject to those exceptions,the Defendants [Jorgensens] are completely indemnified for their costs, thecosts to be taxed if not agreed.

Strzelecki appeals against the Costs Orders on three grounds. They are set outbelow. In so far as the appeal against order 1 of the Costs Orders is concerned,Strzelecki’s complaints, in essence, are that the primary judge erred in makingan order that Strzelecki pay two thirds of the Jorgensens’ costs to15 October 2013, when an issue that the Jorgensens pleaded in their defenceand counterclaim (DCC), but on which they were unsuccessful, dominatedmuch of the pleadings, and of the trial, and that order 1 was plainlyunreasonable and unjust in all of the circumstances. In so far as the appealagainst order 2 of the Costs Orders is concerned, Strzelecki contends that theprimary judge erred in concluding that an offer or offers to settle, made by theJorgensens on, or shortly prior to, 15 October 2013, were Calderbank offers,4

and that his Honour erred in concluding that Strzelecki’s rejection of the offer oroffers was unreasonable, so as to justify an indemnity costs order. Strzeleckisubmitted that the indemnity costs order was plainly unreasonable and unjust inthose circumstances.

The Jorgensens filed a cross-appeal in respect of the Costs Orders. Theycontend that the primary judge erred in respect of order 1 of the Costs Orders by

1 Strzelecki Holdings Pty Ltd v Jorgensen (No 3) [2015] WADC 115.

2 Strzelecki Holdings Pty Ltd v Jorgensen [2016] WASCA 177.

3 Strzelecki Holdings Pty Ltd v Jorgensen (No 4) [2018] WADC 19.

4 Calderbank v Calderbank [1976] Fam 93.

39154 WAR 388] STRZELECKI v JORGENSEN (The Court)

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ordering that Strzelecki pay only two thirds of their costs from thecommencement of the Action to 15 October 2013. They contend that theyshould have been awarded all of their costs to that point, essentially on thebases that they were successful in the Action; that in so far as they pleaded, intheir defence, a number of matters on which they were unsuccessful, thosematters were not improperly or unreasonably raised; and that in thosecircumstances, order 1 was plainly unreasonable and unjust.

Strzelecki and the Jorgensens sought leave to appeal, in respect of the appealand cross-appeal respectively. The applications for leave to appeal in each casewere referred to the hearing of the appeal and the cross-appeal. However,previous decisions of this Court have established that leave to appeal is notrequired because the appeal is from a decision of a judge of the District Court.5

The Jorgensens require an extension of time within which to cross-appeal,because they were one day late in filing their Notice of Cross Appeal. TheJorgensens’ application for an extension of time in which to cross-appeal wasreferred to the hearing of the appeal and cross-appeal.

For the reasons outlined below, the appeal should be allowed, both of theCosts Orders should be set aside, and in lieu thereof there should be an order inthe following terms:

1. The plaintiff is to pay two thirds of the defendants’ costs (includingreserved costs) of the Action, including the costs of the hearing on27 July 2017 and 6 February 2018, those costs to be taxed if not agreed.

In so far as the cross-appeal is concerned, an extension of time in which tocross-appeal should be granted, but the cross-appeal should be dismissed.

The history and outcome of the Action

The long history of this Action, and its outcome, are set out in the PrimaryDecision, and in the Appeal Decision. However, for ease of reference, thefollowing summary provides some context for the discussion of the issuesraised in the present appeal.

The issues raised at trial

The Jorgensens entered into the Contract with Strzelecki to purchase theApartment in May 2007. The Contract was conditional upon certain eventsoccurring, one of which was the registration of the proposed strata plan whichwas annexed to the Contract (Contract Plan). The Contract also contained acondition that “the purchaser acknowledges that the property is zoned tourismwhich limits occupancy by any individual to a maximum of 90 days” (UseRestriction). That condition reflected the fact that the land on which theComplex was to be built was zoned for tourism under the relevant planninginstruments.

The Jorgensens paid the agreed deposit, and the balance of the purchase pricewas to be paid on settlement, after the Complex was built.

Between 2008 and 2010, and before the registration of a strata plan for theComplex, Strzelecki endeavoured to secure a change in the Use Restrictionwhich applied under the relevant planning instruments. It ultimately succeededin securing the removal of the Use Restriction in respect of some of the

5 Cardno BSD Pty Ltd v Water Corporation (No 2) [2011] WASCA 161 at [9]-[11] (Martin CJ),[12] (Newnes JA), [95]-[102] (Murphy JA); Souter v Condor Developments Pty Ltd [2012]WASCA 227 at [23]-[25] (Newnes JA, Buss JA and Murphy JA agreeing).


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apartments. Strzelecki also sought to achieve the same outcome by varying thestrata plan it proposed to lodge in relation to the Complex. It lodged a strataplan for registration in which the Use Restriction applied only to thoseapartments that it had already sold (November Plan). However, the NovemberPlan was never registered. The strata plan which was registered (DecemberPlan) was endorsed with a Use Restriction which applied to all of theapartments.

The Complex was completed and a certificate of title was issued for theApartment. On 22 March 2011, Strzelecki advised the Jorgensens that it wasready, willing and able to settle the sale of the Apartment. However, settlementdid not occur because a dispute arose between the parties, which concerned,amongst other things, whether all of the apartments in the Complex would, infact, be used for short-stay accommodation. On 1 April 2011, Strzelecki issueda default notice under the Contract, and on 21 April 2011, it gave the Jorgensensa notice purporting to terminate the Contract for their breach in failing to settle.

Strzelecki then commenced these proceedings against the Jorgensens in theDistrict Court for breach of the Contract. It sought a declaration that it wasentitled to the deposit, and damages for the alleged breach of contract by theJorgensens.

In the Jorgensens’ DCC, they sought a declaration that the Contract was voidor unenforceable, the return of their deposit, damages for breach of the Contractor of a collateral contract, and a permanent injunction against Strzelecki. Insummary, the planks of the Jorgensens’ counterclaim were as follows.

First, the Jorgensens alleged that Strzelecki had acted in breach of the expressor implied terms of the Contract, or of a collateral contract. The express termswere said to include a term to the effect that the residential portion of theComplex was to be used exclusively for short-stay accommodation. The impliedterms were said to include terms that Strzelecki would act in good faith ingiving effect to the Contract, that it would not take steps to deprive theJorgensens of the benefit of the Contract, and that it would not offer to sell anyapartment in the Complex other than on terms that the purchaser would use theapartment exclusively for short-stay accommodation. The Jorgensens contendedthat Strzelecki breached those terms, that that breach manifested an intention torepudiate the Contract, that the Jorgensens accepted that repudiation, andthereby terminated the Contract, and that as a result, they were entitled to thereturn of their deposit, and any accrued interest.

Secondly, the Jorgensens alleged that prior to their entry into the Contract,agents of Strzelecki made representations to them to the effect that theresidential portion of the Complex would be exclusively occupied by tourists orshort-stay residents, and that Strzelecki would only enter into agreements for thesale of apartments on the basis that they would be used for short-stayaccommodation (Representations). The Jorgensens alleged that after theContract was entered into, Strzelecki acted in breach of the Representations andin doing so, evinced an intention to repudiate the Contract, which theJorgensens accepted, as a result of which they were entitled to the refund oftheir deposit.

Thirdly, the Jorgensens alleged that after the Contract was entered into,Strzelecki engaged in conduct which was unconscionable, or in breach of


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various provisions of the Trade Practices Act 1974 (Cth), or which gave rise toan estoppel against any claim to damages, or constituted a failure by Strzeleckito mitigate its loss.

Fourthly, the Jorgensens alleged that Strzelecki had failed to comply with therequirements of s 69C and s 69D of the Strata Titles Act 1985 (WA) (ST Act).They contended that s 69C(1) required a vendor under a proposed strata lot toprovide written notice to a purchaser of full particulars of any “notifiablevariation”, as soon as possible after the vendor became aware of the notifiablevariation.6 The Jorgensens contended that if a vendor failed to comply with thenotice requirement, the purchaser had a right to avoid the contract by notice inwriting given to the vendor before the settlement.7 The ST Act also providedthat if the vendor provided a notice which substantially complied with thenotice requirement, and the purchaser was materially prejudiced by any matterin the notice by which the purchaser had not agreed to be bound, the purchaserhad a right to avoid the contract by a notice in writing within seven days ofreceiving the notice from the vendor.8

The Jorgensens contended that Strzelecki failed to give them notice of threenotifiable variations (Variations), namely the change to the Use Restrictionwhich was made in the November Plan (the Use Variation), a variation to theproposed strata plan to increase the area of the strata lot for the Apartment by7.7% (the Area Variation), and a variation of the proposed strata plan whichreduced the area of common property in the car park of the Complex andtransferred that area into a ground floor commercial strata lot (the CarparkVariation). The Jorgensens contended that they gave notice of Strzelecki’sfailure to comply with its statutory obligations by accepting its repudiation ofthe Contract prior to settlement, or by filing their DCC in the Action.

The trial of the Action took nine days. A number of witnesses gave evidence.That evidence primarily concerned the terms of the Contract and anyRepresentations made; Strzelecki’s conduct in securing, or attempting to secure,the Variations, and the extent of the information provided by Strzelecki to theJorgensens in relation to the Variations to the Contract Plan; what theJorgensens knew of the Variations and what they did about them; and theprocess by which the strata plans were lodged at Landgate for registration.

In summary, the primary judge found that the Contract contained an impliedterm that the parties would act in good faith; the November Plan whichStrzelecki lodged for registration differed in material particulars from theContract Plan in respect of the Use Variation, the Area Variation and theCarpark Variation; Strzelecki was subject to the obligation in s 69C of the STAct to provide notice of each of those Variations; Strzelecki’s obligation to givethe notice was not (at least in respect of the Use Variation) affected by the factthat the December Plan did not differ from the Contract Plan in respect of theUse Restriction; Strzelecki did not give the notice required under the ST Act;the Jorgensens retained a right to avoid the Contract by giving notice in writingprior to settlement, notwithstanding that they had, by their own endeavours,

6 A notifiable variation occurred if, before the registration of the purchaser as the proprietor ofthe lot, the registered or proposed strata plan was varied in a material particular, or theregistered strata plan differed in a material particular, from the proposed strata plan: StrataTitles Act 1985 (WA) s 69C(3).

7 Strata Titles Act 1985 (WA) s 69D(1).

8 Strata Titles Act 1985 (WA) s 69D(2).


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become aware of Strzelecki’s attempts to secure the Variations of the strataplan; the Jorgensens’ statutory right to avoid the Contract was not extinguishedby Strzelecki’s purported termination of the Contract; and that by filing theDCC on 6 September 2011, the Jorgensens gave Strzelecki notice in writing oftheir election to avoid the Contract pursuant to the ST Act. In addition, theprimary judge found that Strzelecki’s conduct in calling on the Jorgensens tosettle while it was in breach of its statutory obligations constituted a breach ofits contractual duty of good faith, and was unconscionable; and that Strzelecki’spurported termination of the Contract, when it was in breach of its contractualand statutory obligations, was wrongful and invalid.

The outcome of the appeal

In the Appeal Decision, this Court discerned three separate bases for theprimary judge’s decision to dismiss the Action and allow the counterclaim.Those three bases were that Strzelecki’s purported termination of the Contractwas ineffective because it was in breach of its implied contractual obligation toact in good faith by failing to honestly comply with s 69C of the ST Act;Strzelecki’s purported termination was ineffective because it had actedunconscionably in calling on the Jorgensens to settle when they were, by virtueof Strzelecki’s conduct, ignorant of the existence of a notifiable variation and oftheir right to avoid the Contract; and because, in the absence of an election bythe Jorgensens to proceed, the purported termination of the Contract byStrzelecki could not have extinguished the Jorgensens’ right to avoid theContract. Each of these bases depended on a failure by Strzelecki to complywith the obligation in s 69C of the ST Act to give full particulars of a notifiablevariation of the Contract Plan.9

In so far as the Use Variation was concerned, this Court held that the primaryjudge had erred in his conclusion that the November Plan was different from theContract Plan in that it restricted the use of some apartments (namely thosewhich had already been sold) to short-stay accommodation, and removed theUse Restriction on the remaining apartments. That was because the ContractPlan did not actually impose any restriction on the uses to which apartments inthe Complex could be put.10 In so far as the November Plan sought to impose aUse Restriction on the apartments which had already been sold, it merelyreflected the same restriction which had initially applied under the relevantplanning instruments, and so could not be regarded as giving rise to a materialchange.11 In so far as the unsold apartments were concerned, the only change inrelation to the use of those apartments had resulted from an amendment to aplanning instrument, and that was not a “notifiable variation” for the purposesof s 69C of the ST Act.12

In so far as the Area Variation was concerned, this Court held that the primaryjudge erred in concluding that it was a “notifiable variation”. The Contractspecified that variations in area of less than 10% were not treated as significantand could occur without any change in the purchase price. The court held thatthis contractual provision was a relevant, but not controlling, consideration and,in all the circumstances, the 10% threshold presented as an objectively

9 Strzelecki Holdings Pty Ltd v Jorgensen [2016] WASCA 177 at [17]

10 Strzelecki Holdings Pty Ltd v Jorgensen [2016] WASCA 177 at [53], [59].

11 Strzelecki Holdings Pty Ltd v Jorgensen [2016] WASCA 177 at [61].



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significant threshold for the floor area increase. The court found that the 7.7%change in the area of the Apartment was not a material change in the strataplan.13

In the appeal, Strzelecki did not challenge the primary judge’s finding that anotifiable variation occurred by reason of the Carpark Variation, or the findingthat it did not give the Jorgensens written notice of that variation. As this Courtnoted, the appeal thus proceeded on the basis that Strzelecki had failed tocomply with its obligations under s 69C of the ST Act.14 Having regard to itsconclusions in respect of the Use Variation and the Area Variation, this Courtconcluded that the only contravention of s 69C of the ST Act which had beenestablished concerned the Carpark Variation.

This Court concluded that the primary judge’s findings that Strzelecki hadbreached an implied term of good faith and acted unconscionably could notstand, for reasons which need not be elaborated on here.15 That left the thirdbasis identified by this Court for the primary judge’s decision, namely that inthe absence of an election by the Jorgensens, Strzelecki’s purported terminationof the Contract did not, and could not, as a matter of law, extinguish theJorgensens’ right to avoid the Contract. This Court held that a vendor’stermination for a breach of contract for the sale of a strata lot did not extinguisha purchaser’s right to avoid that contract pursuant to s 69D of the ST Act.16

Once the Jorgensens exercised their statutory right to avoid the Contract, theContract was set aside entirely, and the parties’ rights and obligations would bedetermined as if they had never entered into the Contract.17 Accordingly, thisCourt held that the primary judge correctly concluded that Strzelecki’spurported termination of the Contract did not extinguish the Jorgensens’statutory right to avoid the Contract, and from the point when they exercisedthat right, they ceased to be liable to Strzelecki for the damages it claimed fortheir alleged breach in failing to settle.18

Accordingly, while Strzelecki succeeded in a number of its grounds ofappeal, it did not succeed in impugning the primary judge’s orders, and theappeal against the primary judge’s decision was dismissed. This Court orderedthat Strzelecki should pay 85% of the Jorgensens’ costs of the appeal, includingany reserved costs, as taxed or agreed.

The Costs Decision

Following the outcome of the appeal against the primary decision, theprimary judge made the Costs Orders in relation to the costs of the Action.

The Jorgensens sought orders that Strzelecki pay their costs up to11 October 2013 without regard to certain limits imposed by the applicablecosts scale (scale),19 and thereafter on an indemnity basis, or alternatively, that

13 Strzelecki Holdings Pty Ltd v Jorgensen [2016] WASCA 177 at [71]-[73].






19 The applicable scales for the relevant periods when work was done appear to be the Legal

Practitioners (Supreme Court) (Contentious Business) Report 2010; Legal Practitioners

(Supreme Court) (Contentious Business) Report 2012; Legal Practitioners (Supreme Court)

(Contentious Business) Report 2014.


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Strzelecki pay the Jorgensens’ costs of the proceedings throughout, withoutregard to certain limits imposed by the applicable scale. Strzelecki initiallysought an order that the Jorgensens pay 50% of its costs of the Action.However, Strzelecki’s eventual position was that each party should bear theirown costs up to 14 February 2014 (to reflect the date when the Jorgensens firstamended the DCC to plead Strzelecki’s failure to comply with its obligationsunder the ST Act)20 and that thereafter, Strzelecki should be required to pay25% of the Jorgensens’ costs.

The basis for Strzelecki’s submission on costs was that the Jorgensens wereunsuccessful on all the issues they raised in the trial apart from compliance withthe ST Act, and that those other issues dominated the trial.21 The learnedprimary judge found that while the Jorgensens raised issues on which they wereultimately unsuccessful, those issues were not improperly or unreasonablyraised.22

Strzelecki contended that as the only issue on which the Jorgensenssucceeded, namely Strzelecki’s failure to provide notice of the CarparkVariation, was first pleaded in their re-amended DCC dated 21 February 2014,they could not claim for their costs prior to that point. The learned primaryjudge rejected that contention, because Strzelecki was subject to the obligationto provide notice of the Carpark Variation pursuant to the ST Act, it did not doso, and it ultimately failed in the action it commenced by reason of its ownfailure to comply with the law.23

The primary judge’s reasoning in relation to order 1 of the Costs Orders

The learned primary judge concluded that Strzelecki should pay two thirds ofthe Jorgensens’ costs, including the reserved costs, of the Action from itscommencement until 15 October 2013. His Honour appears to have concludedthat that order should be made, having regard to the following considerations.

First, his Honour considered the extent to which the Carpark Variation issueaccounted for the time taken in relation to the pleadings and at trial. Theprimary judge accepted that the subject matter of the trial “substantially relatedto the law of contract and evidence as to the contract”24 rather than the issuesarising from the ST Act and accepted that a substantial part of the pleadings,evidence and argument concerned the alleged Representations.25 He alsoaccepted that the ST Act issues “played no part in the litigation” until mentionedin an offer to settle made by the Jorgensens immediately prior to a pre-trialconference on 15 October 2013. However, he also observed that from that pointonwards, the ST Act issues “began to loom large”.26

Secondly, his Honour noted that while the ordinary approach was that asuccessful party would recover their costs, the court in the exercise of itsdiscretion to award costs could depart from that approach, having regard to a

20 The date of 14 February 2014 is incorrect. The DCC was re-amended to plead Strzelecki’sfailure to comply with its obligations under the Strata Titles Act 1985 (WA) on21 February 2014.

21 Strzelecki Holdings Pty Ltd v Jorgensen (No 4) [2018] WADC 19 at [53].


23 Strzelecki Holdings Pty Ltd v Jorgensen (No 4) [2018] WADC 19 at [54]-[58].





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variety of considerations, including the issues on which a successful andunsuccessful party had succeeded, whether the conduct of a successful party hadresulted in costs being unnecessarily or unreasonably incurred, and whether thesuccessful party had introduced an issue or issues on which it ultimately failed,but which increased the costs of the proceedings.27 The primary judge notedthat the general approach was to avoid tallying up “wins” and “losses” on issuesraised in a case, and instead to focus on the exercise of the costs discretion toachieve an outcome most consonant with the justice of the case, and which wasnot reached as a matter of arithmetic.28

Thirdly, his Honour noted that there may be a difference in approach to theapportionment of costs as between unsuccessful plaintiffs and defendants, basedon the premise that a defendant has no choice but to defend a plaintiff’s action(other than to settle). Consequently, “[a] defendant who proves substantiallysuccessful in defending an action should not be penalised in costs on issues onwhich the defendant failed to the same extent as the plaintiff, who elected tosue”.29 In this respect, his Honour concluded that the Jorgensens “were facedwith a ‘crippling’ judgment in the event they did not defend the action. Theywere clearly unwilling litigators and made a number of attempts to settle thelitigation”.30

Finally, the primary judge had regard to the fact that Strzelecki had conceded(in the appeal) that the Carpark Variation was a notifiable variation, and thusthat it had acknowledged its failure to comply with its obligations under the STAct. He noted that Strzelecki nevertheless purported to terminate the Contract,sue the Jorgensens for damages and rejected all of their attempts to settle theAction.31

The primary judge’s reasoning in relation to order 2 of the Costs Orders

In order 2 of the Costs Orders, the learned primary judge concluded that from15 October 2013, Strzelecki was to pay the Jorgensens’ costs of the Action,including reserved costs, on an indemnity basis, to be taxed if not agreed. HisHonour appears to have reached that conclusion on the basis that offers to settlemade by the Jorgensens in October 2013 were Calderbank offers,32 and thatStrzelecki’s rejection of those offers was unreasonable in all of thecircumstances.

The first of the offers made by the Jorgensens in October 2013 was in a letterdated 11 October 2013 from the Jorgensens’ solicitors to Strzelecki’s solicitorsin advance of a pre-trial conference listed for 15 October 2013 (first Calderbankoffer).33 It was in that letter that the Jorgensens’ solicitors first claimed that theJorgensens were entitled to avoid the Contract, on the basis that Strzelecki had


28 Strzelecki Holdings Pty Ltd v Jorgensen (No 4) [2018] WADC 19 at [96], quoting G E DalPont, Law of Costs (3rd ed) [8.7].





33 GAB 112.


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failed to inform the Jorgensens of the Use Variation, and thus that it hadbreached s 69D of the ST Act. Strzelecki’s solicitors rejected the firstCalderbank offer.34

On 14 October 2013, the Jorgensens’ solicitors wrote again to Strzelecki’ssolicitors urging further consideration of their offer.35

The dispute was not settled at the pre-trial conference on 15 October 2013.On 16 October 2013, the Jorgensens’ solicitors wrote to Strzelecki’s solicitorsoffering to settle on a different basis (second Calderbank offer).36 That offer wasrejected by Strzelecki’s solicitors with a counter-offer made on the same day.37

The learned primary judge considered whether it was reasonable forStrzelecki to reject the first and second Calderbank offers, having regard to thewell-established factors which inform that assessment of reasonableness.38 Thelearned primary judge found that the offers were made well prior to thecommencement of the trial in August 2014, and that the second Calderbank

offer was expressly left open for acceptance for 14 days, which was ample timefor Strzelecki to consider it.39 He found that the offers were clear in theirterms.40 He also found that both the first and second Calderbank offers wereoffers of substance, which involved substantial compromises on the part of theJorgensens, and which would have resulted in Strzelecki being paid substantialsums of money.41 The learned primary judge noted that the second Calderbank

offer specifically raised the issue of indemnity costs.42 Finally, his Honourconcluded that from the point at which the first Calderbank offer was made,which referred to the Jorgensens’ intended reliance on Strzelecki’s failure tocomply with its obligations under the ST Act, Strzelecki should have reassessedits prospects of success in the Action.43 He rejected Strzelecki’s submission thatthe first Calderbank offer could not be assessed on that basis because it did notspecifically refer to the Carpark Variation, or any failure by Strzelecki to givenotice of that variation.44 Instead, his Honour concluded that the reference inthat offer to the ST Act, and to Strzelecki’s obligations under that Act, wassignificant in the context of an offer to settle “because it squarely raised amatter, albeit not then pleaded, which was of some consequence”.45

Evidently, his Honour concluded that Strzelecki’s unreasonable rejection ofeither the first or the second Calderbank offer, warranted an order thatStrzelecki pay the Jorgensens’ costs on an indemnity basis from 16 Octo-



36 GAB 119.


38 Strzelecki Holdings Pty Ltd v Jorgensen (No 4) [2018] WADC 19 at [86], referring to Ford

Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at [19] (Buss JA).



41 Strzelecki Holdings Pty Ltd v Jorgensen (No 4) [2018] WADC 19 at [85], [88].






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ber 2013 onwards. He observed that from that point onwards, the issues arisingunder the ST Act, which had been referred to for the first time in the firstCalderbank offer, “began to loom large”.46

Principles in relation to appeals against costs orders

As orders as to costs involve the exercise of a discretion, the well-establishedprinciples applicable to appeals against discretionary decisions apply in respectof costs decisions. An appellate court is not entitled to substitute its owndecision for the decision under appeal merely because it would have reached adifferent decision, or because it considers that a different result would be morejust and equitable. Instead, before it intervenes, an appellate court must besatisfied that the order made stands outside the limits of a sound discretionaryjudgment.47 In order to establish that that was so, an appellant must establisheither an express error (namely that the primary judge acted upon a wrongprinciple, mistook the facts, took into account an irrelevant consideration, orfailed to take into account a relevant consideration) or demonstrate that an errorcan be inferred.48 An error may be inferred if the order under appeal is shown tobe unreasonable or plainly unjust.49

The grounds of appeal

The grounds of appeal are:

1. Having correctly identified that a specific issue (on which the respondentsfailed) namely the tourist/short-stay representation issue, ultimatelyunsuccessful, dominated much of the pleadings and the trial [95], theprimary Court erred in fact and law in making an order that the appellantpay two thirds of the respondents’ costs (including reserved costs) of theaction from commencement to 15 October 2013 to be taxed if not agreed.

2. The primary Court erred in fact and law in making an order that theappellant pays the respondents’ costs of the action (including reservedcosts) from 16 October 2013 on an indemnity basis to be taxed if notagreed.

3. The primary Court erred in law in making the orders the subject of thisappeal in that the order is plainly unreasonable and unjust.

Strzelecki seeks that the Costs Orders be set aside, and in lieu thereof, thatorders in the following terms be made:

1. The parties bear their own costs of the action up to and including21 February 2014;

2. The appellant [Strzelecki] pay 25% of the respondents’ [Jorgensens’] costsof the action (including reserved costs) from 22 February 2014 to be taxedif not agreed;

3. The respondents [Jorgensens] pay the appellants’ [Strzelecki’s] costs ofthe hearing before the Honourable Judge Eaton on 27 July 2017 and6 February 2018 [the hearing of the argument on costs, and the hearing atwhich the Costs Orders were made following publication of the CostsDecision].


47 House v The King (1936) 55 CLR 499 at 504-505; Norbis v Norbis (1986) 161 CLR 513 at520 (Mason and Deane JJ).

48 House v The King (1936) 55 CLR 499 at 504-505.

49 House v The King (1936) 55 CLR 499 at 504-505.


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As we have already observed, 21 February 2014 was the date on which theJorgensens amended their DCC to plead a failure by Strzelecki to comply withthe ST Act by failing to notify them in relation to the Carpark Variation.

Disposition of the appeal — ground 1 and ground 3 (in so far as itpertains to order 1 of the Costs Orders)

Before turning to consider Strzelecki’s submissions in relation to order 1 ofthe Costs Orders, it is convenient to recall the well-established principlesapplicable to the award of the costs of an action.

The costs of any action in the District Court may be paid or apportionedbetween the parties in such manner as a District Court judge directs.50 Subjectto the District Court of Western Australia Act 1969 (WA), a District Court judgehas the same power in relation to the payment of costs by any party as a judgeof the Supreme Court.51 Subject to any inconsistency between the DistrictCourt Rules 2005 (WA) and the Rules of the Supreme Court 1971 (WA) (RSC),the RSC apply to and in respect of any case in the District Court.52 TheSupreme Court has a wide discretion to award costs in respect of allproceedings in the Court.53 Despite its breadth, the discretion to award costs isnot unfettered, and must be exercised judicially.54

Without limiting the Court’s wide discretion as to costs, the starting point inrelation to the award of costs under the RSC is that the Court will generallyorder that the successful party to the action or matter recover their costs.55 Itwas incumbent on Strzelecki, as the unsuccessful party, to satisfy the primaryjudge that there were good reasons why it should not pay the Jorgensens’costs.56

What constitutes “success” in proceedings is to be determined by the realityof the circumstances involved in the case.57 The Court may depart from thegeneral rule that costs follow the event and modify a costs order to take intoaccount matters such as any unreasonable conduct of a generally successfulparty, or to the failure of that party on one or more specific issues. The exerciseof the discretion in that way is recognised by a number of rules in the RSC,58

together with the practice of the Court, and authority.59 So, for example, if theCourt is of the opinion that the conduct of a successful party — either before orafter the commencement of the litigation — has resulted in costs beingunnecessarily or unreasonably incurred, the Court may deprive that party ofcosts, either wholly or in part, and it may further order that party to pay the

50 District Court of Western Australia Act 1969 (WA) s 64(1).

51 District Court of Western Australia Act 1969 (WA) s 64(3).

52 District Court Rules 2005 (WA) Pt 1 r 6.

53 Supreme Court Act 1935 (WA) s 37(1); Naidoo v Williamson (2008) 37 WAR 516 at [39](Steytler P, Pullin JA and Murray AJA agreeing).

54 Frigger v Lean [2012] WASCA 66 at [53].

55 Rules of the Supreme Court 1971 (WA) O 66 r 1(1).

56 cf Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394 at 407; Bowen v Alsanto

Nominees Pty Ltd [2011] WASCA 39 (S) at [5].

57 Oshlack v Richmond River Council (1998) 193 CLR 72 at [70] (McHugh J).

58 Amaca Pty Ltd v Moss [2007] WASCA 162 (S) at [6]; see, for example, Rules of the SupremeCourt 1971 (WA) O 66 r 1(2), r 1(3) and r 2(a).

59 See, for example, Keet v Ward [2011] WASCA 139 at [18]-[21]; Souter v Condor

Developments Pty Ltd [2012] WASCA 227 at [28]-[29] (Newnes JA, Buss JA and Murphy JAagreeing).


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48

49

50

costs of an unsuccessful party, either wholly or in part.60 In the present case,Strzelecki did not contend that the issues raised by the Jorgensens, and onwhich they were unsuccessful, were raised unreasonably or improperly.61

Under O 66 r 1(3) RSC, where a party, though generally successful in anaction, has, by the introduction of some issue or issues on which it has failed,increased the costs, the Court may order such party to pay the costs of suchissue or issues. It is well-recognised that an order that a successful party recoveronly a portion of its costs, where it has not been wholly successful, should notbe made as a matter of course, for at least two reasons. First, it is often the casethat a successful party will not succeed on every issue raised. Secondly, toattempt, in every case, an analysis of which party was successful on which issuewould add uncertainty and complexity to the outcome of litigation, and add tothe time and cost of costs arguments.62 Consequently, the power to apportioncosts in this way should only be exercised where there are discrete andseverable issues on which the generally successful party failed, and whichadded to the cost of the proceedings in a significant and readily discernibleway.63 Furthermore, while parties should be encouraged to consider carefullywhat matters they put in issue, justice may not be served if, by too ready aresort to deciding questions of costs according to success on particular issues,parties are dissuaded by the risk of costs from canvassing all issues which mightbe material to the decision in the case.64

Where the Court decides, in the exercise of its discretion, to modify the usualcosts orders to reflect the limited success of the successful party, that power willbe exercised broadly, and as a matter of impression, and without any attempt atmathematical precision (which is likely to prove illusory in any event).65 Thatapproach reflects the fact that it may be difficult to separate the factual andevidentiary substratum of different issues,66 the fact that some issues are moreimportant than others, and the fact that some issues are subsidiary to others.

Strzelecki’s submissions

In respect of ground 1 of the grounds of appeal, Strzelecki’s submissions inessence advanced four contentions.

Strzelecki’s first contention was that the primary judge “ignored the fact thatthe [Jorgensens] were ultimately successful on an extremely narrow basis and ina manner that was not advanced at trial”.67 Strzelecki submitted68 that theapportionment of costs should have had regard to the realities of the case, whichincluded the fact that the Jorgensens raised a large number of issues in theirpleadings, evidence and in their submissions, on which they failed; that theissues on which the Jorgensens were unsuccessful, especially the alleged

60 Rules of the Supreme Court 1971 (WA) O 66 r 1(2).


62 Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S) at [6]; Oshlack v Richmond River

Council (1998) 193 CLR 72 at [67]-[68] (McHugh J).

63 Amaca Pty Ltd v Moss [2007] WASCA 162 (S) at [7].

64 Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S) at [7].

65 Amaca Pty Ltd v Moss [2007] WASCA 162 (S) at [6]; Shire of Manjimup v Cheetham [2010]WASCA 225 at [7].

66 cf Amaca Pty Ltd v Moss [2007] WASCA 162 (S) at [8].

67 Appellant’s submissions [14].



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53

54

Representations, occupied a substantial part of the pleadings, evidence andargument at trial;69 and that the sole ground on which the Jorgensens weresuccessful at trial was pleaded on the basis that the Contract was invalidlyterminated by Strzelecki, whereas the Court of Appeal held that the Contractcould be avoided even if it had been validly terminated by Strzelecki.70

Secondly, Strzelecki submitted that the Jorgensens did not plead reliance onthe ST Act until September 2011 and at that point, only relied on Strzelecki’salleged failure to notify them of the Use Variation, on which they wereunsuccessful; and that it was not until 21 February 2014, nearly three years afterthe commencement of the Action, and after the Action had been listed for trial,that the Jorgensens amended the DCC to raise the only issue on which theywere ultimately successful — namely Strzelecki’s failure to notify theJorgensens in relation to the Carpark Variation.71 The contention at the heart ofthose submissions appeared to be that none, or few, of the costs incurred in theperiod of almost three years before that amendment was made, related to anyissue on which the Jorgensens were successful, and yet Strzelecki had beenrequired to pay two thirds of the Jorgensens’ costs during that period.

Thirdly, Strzelecki contended that the only issue on which the Jorgensenswere successful occupied “approximately 25% of the costs of the action”.72

Strzelecki submitted that settling on the figure of two thirds of the Jorgensens’costs to 15 October 2013 was “without textual warrant”.73

Fourthly, Strzelecki submitted that the primary judge made no attempt toexplain the exercise of his discretion in reaching his ultimate conclusion as tothe Costs Orders.74 Strzelecki submitted that the “unexplained basis forattributing only 33% of the cost to the vast majority of the trial” revealed an“inherent [error] of principle”.75

No error shown in relation to Order 1 of the Costs Orders

Although ground 1 alleged an error of fact and law on the part of the primaryjudge, no express error was identified, other than that the learned primary judgereached the wrong conclusion as to the appropriate apportionment of costs. Thatcomplaint is, in truth, no different from the inferred error the subject of ground3, namely that it was unreasonable and plainly unjust to require Strzelecki topay two thirds of the Jorgensens’ costs from the commencement of the Actionuntil 15 October 2013.

Strzelecki has not established that order 1 of the Costs Orders wasunreasonable or plainly unjust.

The first and second contentions advanced by Strzelecki must be rejected. HisHonour started from the orthodox position that costs follow the event. Heconcluded that despite the fact that the Jorgensens succeeded in theircounterclaim, Strzelecki should not be required to pay all of their costs, havingregard to the fact that the Jorgensens did not succeed on all of the issues theyhad raised. His Honour clearly took into account the fact that the issues on


70 Appellant’s submissions [10.13].




74 Appellant’s submissions [17]; appeal ts 21.



55

56

57

58

59

60

which the Jorgensens were unsuccessful, including the Representations,occupied a substantial part of the pleadings, evidence and argument.76 Thelearned primary judge also clearly had regard to the fact that the Jorgensens didnot plead the only issue on which they were successful — Strzelecki’s failure tonotify them of the Carpark Variation — until the amendment made on21 February 2014,77 although his Honour noted that other aspects ofStrzelecki’s compliance with the ST Act had been raised well before that time.He noted that from October 2013 — when the Jorgensens relied uponStrzelecki’s non-compliance with the ST Act in making the first Calderbankoffer — that issue “began to loom large”.78

In so far as Strzelecki’s second contention is concerned, it appears to assumethat the ST Act issues eventually raised by the Jorgensens had no factual orlegal connection with the remaining issues in the Action. However, there wasclearly some commonality in the underlying factual substratum. Further, in sofar as the ST Act issues concerned the interaction between Strzelecki’sobligations under the ST Act, and its right to terminate the Contract, there wasalso an overlap in the legal issues concerning termination of the Contract.

Furthermore, while order 1 of the Costs Orders pertains to a period of about2½ years from the commencement of the Action until October 2013, the Actionwas not actively litigated throughout that period. The learned primary judgeclearly also took that consideration into account. As his Honour noted, fromMarch 2012, the Action was on the inactive cases list, and subsequentlydismissed for inaction, until it was reinstated in July 2013.79

As the trial judge, the learned primary judge was able to bring to bear hisknowledge of the pleadings, the factual matters underlying the issues raised, andthe conduct of the Action as a whole, in order to make an assessment of whatapportionment of the costs of the Action would be just. Strzelecki has notestablished that the learned primary judge’s discretion miscarried, in respect ofany aspect of the analysis undertaken by his Honour.

Turning next to Strzelecki’s third contention, it is, with respect, withoutmerit. It proceeds on the premise that the apportionment of costs can or shouldbe undertaken on some precise mathematical basis, having regard to the numberof issues on which a successful party has won or lost. As the authorities towhich we have referred at [49]-[52] make clear, that approach is misconceived.

As for Strzelecki’s fourth contention (at [57] above), the grounds of appealdid not include any contention that the learned primary judge erred in law infailing to give adequate reasons for the Costs Orders. Consequently, theadequacy of the learned primary judge’s explanation does not arise for separateconsideration in this appeal.

Ground 1, and ground 3 in so far as it pertains to order 1 of the Costs Orders,are not established.

It is convenient at this point to deal with the Jorgensens’ cross-appeal, whichpertains only to order 1 of the Costs Orders.


77 Strzelecki Holdings Pty Ltd v Jorgensen (No 4) [2018] WADC 19 at [54], [59].




61

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63

64

65

66

67

The cross-appeal

The grounds of the cross-appeal are:

1. The Primary Court erred in law or in fact in making an order that theAppellant [Strzelecki] pay only two thirds of the Respondents’[Jorgensens’] costs (including reserved costs) of the action fromcommencement to 15 October 2013.

Particulars(a) The Primary Court found:

(i) the Appellant [Strzelecki] had breached its statutoryobligations under the Strata Titles Act 1985 (WA) in failingto give notice of the deletion from the [Contract Plan] ofthe [Carpark Variation];

(ii) if notice had been given, the Respondents would have hadthe opportunity to avoid the [Contract] (and avoided theentire proceedings);

(iii) although the Respondents [Jorgensens] were successful andthe Appellant’s [Strzelecki’s] Action was dismissed, indefending the proceedings the Respondents raised defenceissues on which they were ultimately unsuccessful —however, those defence issues were not improperly orunreasonably raised;

(b) In the premises of the matters set out above, the Primary Courtshould then have found the Respondents were entitled to all theircosts of the proceedings including those from its commencementto 15 October 2013 — the costs to be taxed if not agreed.

2. The Primary Court erred in making the order the subject of this crossappeal in that the order is plainly unreasonably and unjust.

Particulars

The particulars to ground 1 are repeated.

The Jorgensens seek that order 1 of the Costs Orders made by the learnedprimary judge be set aside, and that in lieu thereof, the following order bemade:80

The Plaintiff [Strzelecki] is to pay the Defendants’ [Jorgensens’] costs of theAction (including reserved costs) from commencement to 15 October 2015, thecosts to be assessed or taxed if not agreed.

In addition, the Jorgensens seek an order that those costs be paid on anindemnity basis. They seek the following order:81

The appellant [Strzelecki] is to pay all the costs incurred by the Respondents[Jorgensens] except insofar as they are of an unreasonable amount or have beenunreasonably incurred, so that, subject to these exceptions, the Respondents[Jorgensens] be completely indemnified by the Appellant [Strzelecki] for theircosts and expenses, the costs to be assessed or taxed if not agreed.

Disposition of the cross-appeal

Counsel for the Jorgensens submitted that it was an error of principle for theprimary judge to have made a deduction from the proportion of costs recoveredby the Jorgensens, to reflect the fact that they were not successful on all

80 Respondents’ orders wanted in the cross-appeal: WAB 67.

81 Respondents’ orders wanted in the cross-appeal: WAB 67.


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71

issues.82 There was no such error of principle. The learned primary judge’sapproach was consistent with the court’s rules and relevant principles discussedabove at [49]-[52].

Counsel for the Jorgensens also submitted that the approach taken by theprimary judge was contrary to the general principle that, provided that asuccessful defendant has acted reasonably in running its defence, it should notbe deprived of the recovery of all of its costs, even if it was not successful inrespect of all issues.83 To the extent that that submission contended for theexistence of a principle different from the general rule that a successful party isordinarily entitled to its costs, it ought to be rejected. Counsel for the Jorgensensrelied on the decision in Mickelberg v Western Australia84 as authority insupport of the principle for which he contended. However, the passage on whichcounsel relied simply reflected the principles outlined at [49]-[52] above. Noauthority supports the principle now advanced by counsel for the Jorgensens,and the principle for which counsel contended does not sit comfortably with theexpress rules of the Court, and the authorities which have discussed those rules,and to which we made reference at [49]-[52].

Counsel for the Jorgensens submitted that the primary judge’s decision thatthe Jorgensens were entitled to recover only 66% of their costs from thecommencement of proceedings until 15 October 2013 was an error, in that theprimary judge appeared to have acted on a wrong principle. However, counselfor the Jorgensens conceded that the learned primary judge had referred to thecorrect principles.85 Counsel for the Jorgensens also submitted that the learnedprimary judge had given weight to an irrelevant factor (which was not specified)or had failed to give sufficient weight to relevant factors (none of which werespecified).86 No express error of the kind alleged was shown.

Counsel for the Jorgensens further submitted, in respect of ground 1, that theprimary judge’s decision on order 1 of the Costs Orders was so plainlyunreasonable as to enable this Court to conclude that the discretion had not beenexercised properly.87 In other words, both grounds of appeal in respect of thecross-appeal were directed to the same implied error, that order 1 of the CostsOrders was so plainly unreasonable and unjust as to permit an error to beinferred.

Finally, counsel for the Jorgensens submitted that the learned primary judgefailed to give reasons for his conclusion that Strzelecki should pay only twothirds of the Jorgensens’ costs to 15 October 2013.88 In the absence of anyground of appeal challenging the failure to give reasons, he submitted that theabsence of reasons supported the conclusion that the reduction in the costsawarded to the Jorgensens was plainly unreasonable, so as to permit an error tobe inferred in the primary judge’s exercise of discretion.89

82 Appeal ts 40.

83 Appeal ts 40-41.

84 Mickelberg v Western Australia [2007] WASC 140 (S) at [43] (Newnes J).

85 Respondents’ submissions in the cross-appeal [23].



88 Appeal ts 40-41.

89 Appeal ts 41.


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73

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75

The approach taken by the learned primary judge, which we have alreadyoutlined at [32]-[36] above, reveals that his Honour clearly brought to bear hisknowledge of the pleadings, the issues raised by the parties, the time occupiedby those issues in the Action, and the general conduct of the Action, and formedthe view that there should be a departure from the general rule that costs followthe event. He assessed the extent of the departure from that general rule whichwould be just as warranting an order that Strzelecki pay only two thirds of theJorgensens’ costs up to 15 October 2013. The Jorgensens have not establishedthat the learned primary judge’s discretion miscarried, in respect of order 1 ofthe Costs Orders.

In so far as the Jorgensens seek that order 1 of the Costs Orders should be setaside, and in lieu thereof an order made that Strzelecki pay their costs fromcommencement to 15 October 2013 on an indemnity basis, the Jorgensens didnot advance any basis on which an indemnity costs order should be made forthe period prior to the date of the Calderbank offers.

We would grant the Jorgensens an extension of time of one day in which tofile the cross-appeal, but the cross-appeal should be dismissed.

Disposition of the appeal — ground 2 and ground 3 (in so far as itpertains to order 2 of the Costs Orders)

We return, now, to the balance of Strzelecki’s appeal, which concerns order 2of the Costs Orders. Ground 2 of Strzelecki’s grounds of appeal contends thathis Honour erred in fact and law in making order 2 of the Costs Orders.

The learned primary judge concluded that after 15 October 2013, Strzeleckishould pay the Jorgensens’ costs on an indemnity basis, having regard to itsunreasonable rejection of the first and second Calderbank offers. That indemnitycosts order permitted the Jorgensens to recover all of their costs, except thosewhich were unreasonable in amount, or unreasonably incurred.90

The learned primary judge appears to have concluded that Strzelecki’srejection of the Calderbank offers was unreasonable, notwithstanding that, atthe time at which the Calderbank offers were made, the only allegation that theJorgensens had pleaded in relation to Strzelecki’s breach of the ST Actconcerned the Use Variation. His Honour took the view that that did not matterbecause “[t]he reference to the provisions of the [ST] Act and to the vendor’sobligations in that regard in the context of an offer to settle … squarely raised amatter, albeit not then pleaded, which was of some consequence”.91 It appears(although he did not say so expressly) that the learned primary judge was of theview that once the Jorgensens alleged that Strzelecki had breached the ST Act inrespect of the Use Variation, Strzelecki should also have realised that it was inbreach of its obligation under the ST Act in respect of the Carpark Variation andshould therefore have appreciated that its position in the litigation was weaker.His Honour’s conclusion appears to have been informed by his view thatvendors of strata units are in a position to know of notifiable variations underthe ST Act and that the ST Act therefore required a degree of diligence on theirpart in order to ensure compliance with the provisions of the ST Act.92

90 EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59 at 71; Re Bond Corporation

Holdings Ltd (1990) 1 WAR 465 at 479.




76

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81

Before turning to the parties’ submissions in relation to ground 2 of thegrounds of appeal, it is convenient to recall the principles in relation to costs inlight of Calderbank offers. There must be some special or unusual feature of acase to warrant an award of indemnity costs.93 One well-recognised basis for anaward of indemnity costs is that the unsuccessful party unreasonably rejected aCalderbank offer.94 The party who makes a Calderbank offer that is rejectedbears the onus of satisfying the court that it should make an award of indemnitycosts in their favour.95

The mere fact that the recipient of a Calderbank offer is ultimately worse offthan they would have been had the offer been accepted, does not mean that itsrejection was unreasonable.96 Instead, in determining whether the rejection ofthe offer was unreasonable, all relevant facts and circumstances must beconsidered.97 Ordinarily, regard should be had to at least the stage of theproceeding at which the offer was received; the time allowed to the offeree toconsider the offer; the extent of the compromise offered; the offeree’s prospectsof success, assessed as at the date of the offer (and not with the benefit ofhindsight as to the result of the proceedings); the clarity with which the terms ofthe offer were expressed; and whether the offer foreshadowed an application forindemnity costs in the event of the offeree’s rejection of it.98

Strzelecki advanced a number of bases for its contention that the primaryjudge erred in fact and in law in ordering that Strzelecki pay the Jorgensens’costs from 16 October 2013 on an indemnity basis. As counsel for Strzeleckiacknowledged, the best of those arguments was that the reasonableness ofStrzelecki’s refusal of the Calderbank offers made in October had to be assessedby reference to the pleadings as they stood or were proposed at the time of theoffers, which at that stage made no reference to the Carpark Variation.99 Hesubmitted that although the pleadings as they then stood alleged that Strzeleckihad failed to notify the Jorgensens of a notifiable variation of the proposedstrata plan, the only failure then pleaded was Strzelecki’s alleged failure tonotify the Jorgensens of the Use Variation.100 It was not until February 2014,after the Calderbank offers expired, that the Jorgensens further amended theirDCC to plead that the Carpark Variation was a notifiable variation about whichStrzelecki had failed to give them notice, in breach of the ST Act.101

Counsel for Strzelecki further submitted that the recipient of a Calderbankoffer is not obliged to consider any future amendment that may be raised at alater time in the proceedings, and that the reasonableness of that party’s refusalto accept a Calderbank offer could not be judged by reference to later

93 Yara Australia Pty Ltd v Oswal [2012] WASCA 264 at [33] (Murphy JA, McLure P agreeing).

94 Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at [16], [23] (Buss JA,Wheeler JA agreeing); Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA76 (S) at [9].

95 Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at [21].

96 Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at [18]; Sakari Resources Ltd

v Purvis [2016] WASCA 24 (S) at [13].

97 Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at [17].

98 Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at [19], citing Hazeldene’s

Chicken Farm Pty Ltd v Workcover Authority (Vic) (No 2) (2005) 13 VR 435 at [23], [89].

99 Appeal ts 15.

100 Re-amended defence and counterclaim [16.1.5], [19A.3]; BAB 73, 77.

101 Re-amended defence and counterclaim [19B]; BAB 77-78.


82

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85

amendments.102 He accepted that in assessing all of the circumstances relevantto the reasonableness of the rejection of a Calderbank offer, it would be relevantto take into account a proposed amendment of the pleading,103 but submittedthat that was not the case here, because the Carpark Variation had not beenraised by the Jorgensens at all at the time when the Calderbank offers weremade.104

Counsel for the Jorgensens submitted that the fact that the DCC, as atOctober 2013, did not expressly refer to the Carpark Variation was irrelevant.The question of Strzelecki’s failure to comply with its obligations under the STAct had been raised, even if that specific breach had not been raised; the factthat that issue had been raised should have caused Strzelecki to reassess itsprospects of success; and it knew or ought reasonably to have known of itsbreach in respect of the Carpark Variation, given that that breach had occurredby November 2010.105 Counsel’s submission, in effect, was that the firstCalderbank offer raised the issue of Strzelecki’s compliance with s 69D of theST Act, in circumstances where Strzelecki was then under an obligation to givenotice of the Carpark Variation and had failed to do so, and that Strzelecki oughtto have anticipated that that was the case, and in the circumstances, it was opento the primary judge to find that it was unreasonable for Strzelecki to haverefused that offer.106

We are unable to accept the submissions of counsel for the Jorgensens. Thereasonableness of Strzelecki’s conduct in refusing the Calderbank offers mustbe assessed without the benefit of hindsight, and having regard to the strength ofthe parties’ cases as they then stood. At the time when the Calderbank offerswere made, the DCC did not contain an allegation that Strzelecki had breachedits obligations under the ST Act by virtue of its failure to notify the Jorgensensof the Carpark Variation. Even though the first Calderbank offer made a generalreference to Strzelecki’s breach of s 69D of the ST Act, the Jorgensens’solicitors went on to explain, in that offer, what was meant by that reference,namely Strzelecki’s alleged failure to notify the Jorgensens of the UseVariation.107 Furthermore, at the time of the Calderbank offers, there was noindication that the Jorgensens intended to further amend the DCC to allege abreach of the ST Act arising from Strzelecki’s failure to notify the Jorgensens ofthe Carpark Variation. It was not until February 2014 that the Jorgensens furtheramended the DCC but by then the second Calderbank offer had long sinceexpired.108

As for the submission that although Strzelecki’s breach of the ST Act hadbeen pleaded only in relation to the Use Variation, it ought nevertheless to havecaused Strzelecki to reassess its prospects in the litigation, having regard toother possible breaches of the ST Act, that submission is without merit. It maybe inferred that Strzelecki’s assessment was that its prospects in respect of theonly alleged breach of the ST Act then advanced — the Use Variation — weregood. It cannot be assumed that at the time of the receipt of the Calderbank

102 Appeal ts 17.

103 Appeal ts 18.

104 Appeal ts 18.

105 Respondents’ amended submissions [30]-[31].

106 Appeal ts 26.

107 GAB 112.

108 GAB 119.


86

87

88

offers, Strzelecki was conscious of its breach of the ST Act in respect of theCarpark Variation. There was no evidence, or finding, as to when Strzeleckibecame aware of its obligation to notify the Jorgensens in respect of the CarparkVariation. It is well-established that a party’s erroneous prediction about theprospects of litigation, on the basis of which it rejects a Calderbank offer, maynot be regarded as unreasonable if that party was not, at the time, and for goodreason, in possession of sufficient information to make a proper assessment ofits prospects, or if the circumstances upon which its assessment was based laterchanged.109

In any event, Strzelecki was entitled to assess the Calderbank offers havingregard to the strength of the Jorgensens’ case as it was advanced, either bypleadings or a communicated proposal to amend the pleadings, at the time theoffers were made. Strzelecki was not required to undertake an assessment byreference to a case that the Jorgensens had not then advanced, and might neveradvance. To assess the reasonableness of a party’s rejection of a Calderbankoffer by reference to other potential causes of action that might be open to itsopponent to run, but which had not been advanced, would be both unfair anddivorced from the realities of litigation, which is decided on the basis of thecase advanced by each party in its pleadings.

Ground 2 of the grounds of appeal should be upheld. Strzelecki hasestablished an express error of principle in the exercise of the primary judge’scosts discretion, in that his Honour assessed the reasonableness of Strzeleki’srefusal of the Calderbank offers by reference to a case which the Jorgensens didnot then advance. In view of that conclusion, it is unnecessary to deal with theother submissions advanced by Strzelecki in support of ground 2, or withground 3 of the appeal (to the extent that it pertained to order 2 of the CostsOrders).

The costs order which should now be made

As ground 2 of the grounds of appeal has been made out, the exercise of thetrial judge’s costs discretion under s 64 of the District Court of WesternAustralia Act has miscarried.

The award of indemnity costs by order 2 of the Costs Orders reflects oneaspect of the costs of the Action as a whole, and no error of principle has beenestablished in making order 1. However, the Costs Orders made by the primaryjudge constituted one instance of the exercise of the costs discretion under s 64,albeit one which was expressed by two components. An error in either of thosecomponents is thus an error which infects the exercise of the discretion as awhole. Once that discretion has been shown to have miscarried in a materialrespect, the whole of the costs discretion falls to be exercised again according tolaw.110 It is therefore necessary for this Court to consider, afresh and for itself,the orders which should be made for the costs of the whole Action (includingthose incurred before 16 October 2013) under s 64, or remit that matter forreconsideration.

Remittal of the question of costs to the learned primary judge is not open (inlight of his Honour’s retirement) but such a course would have had littleattraction in any event, in view of the protracted history of the Action. This

109 Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 13) [2007] VSC 516 at [13](Byrne J), quoted in Ford Motor Co of Australia Ltd v Lo Presti (2009) 41 WAR 1 at [20].

110 See, by analogy, McGarry v The Queen (2001) 207 CLR 121 at [3], [8]-[9].


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Court has before it all of the material which was before the learned primaryjudge, and is therefore in a position to exercise the costs discretion afresh. Thatis clearly the appropriate course in this case. However, to adopt that course isnot to understate the difficulty for an appeal court in making determinationsabout the apportionment of the costs of an action as a whole, particularly incases such as this, where numerous legal and factual issues were in dispute andwhere the successful party did not enjoy complete success.

The orders Strzelecki sought in the event that the Costs Orders were set asideare set out at [45] above.

In the course of dealing with the cross-appeal, we discussed the orders theJorgensens sought in the event that order 1 of the Costs Orders was set aside.Counsel for the Jorgensens also submitted that if this Court found that theprimary judge erred in making order 2, then in exercising its discretion tosubstitute an alternative costs order, this Court should order that Strzelecki paythe Jorgensens’ costs of the proceedings, or alternatively of the proceedingsfrom 16 October 2013, to be taxed without the limits imposed by items 3(b),3(c), 17, 20(a) and 20(c) of the applicable scale, and with an allowance fortranscripts (a special costs order) pursuant to s 280(2) of the Legal ProfessionAct 2008 (WA) (LP Act).111 (For the sake of completeness, we note that theJorgensens’ solicitors made other Calderbank offers later in the course of theAction,112 and after the amendment of the DCC, to include an allegation thatStrzelecki breached the ST Act by failing to notify the Jorgensens of theCarpark Variation. However, the Jorgensens did not contend, on the appeal, thatthe learned primary judge should have made an indemnity costs order on thebasis that Strzelecki’s rejection of those offers was unreasonable.)

The Jorgensens were successful in the Action. However, they were notwholly successful. They were unsuccessful in respect of a significant number ofissues. In our view, this is clearly a case where some apportionment should bemade to reflect the fact that the Jorgensens were not wholly successful.

Having reviewed the affidavits tendered in evidence in the trial, the transcriptof the trial, and the opening and closing submissions filed by counsel, andbearing in mind that the apportionment of costs should be undertaken as amatter of impression and not mathematical precision, we have reached the viewthat, subject to the question of special costs (which we discuss below) the justapportionment of costs in this case would be reflected in an order that Strzeleckipay two thirds of the Jorgensens’ costs of the Action. We have reached thatconclusion for the following reasons.

First, in our view, the Action as a whole can properly be regarded as havingthree components: Strzelecki’s claim for relief (namely a declaration and anaward of damages) for the Jorgensens’ alleged breach of the Contract; that partof the DCC which advanced claims pursuant to the ST Act; and the balance ofthe DCC which comprised all remaining defences and claims (alleged breach ofimplied terms or of the terms of a collateral contract, breach of theRepresentations, unconscionability, estoppel, and Strzelecki’s alleged failure tomitigate). Broadly speaking, the Jorgensens were successful in two of thesethree components of the Action — Strzelecki’s claim was dismissed, and theJorgensens’ succeeded in respect of that part of the DCC which relied on the ST

111 Respondents’ amended submissions [35].

112 GAB 123, 130.


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Act. That broad analysis supports the conclusion that Strzelecki should berequired to pay the Jorgensens’ costs for the two components of the Action inwhich the Jorgensens were successful, but not for the third component.

Secondly, in our view, as a matter of broad impression, these threecomponents of the Action should be regarded as approximately equivalent, interms of their significance in the Action as a whole. That assessment takesaccount of the fact that the focus of the proceedings changed over time. By wayof example, although the ST Act issues were not raised until October 2013, asthe learned primary judge observed, they began to “loom large” from that pointon. That assessment also takes account of the progress of the trial. Four days ofthe trial113 were taken up with the evidence of witnesses, which appears to havelargely focused on evidence relevant to the terms of the Contract and theRepresentations, and factual issues relating to the ST Act claims. The first fourdays of the trial114 and the final day of the trial, were taken up with legalargument (objections and questions of further discovery) and the parties’opening and closing submissions. The ST Act issues received significantattention in those submissions.

Thirdly, although the Jorgensens ultimately succeeded only in respect of oneof their ST Act claims, in our view it is not appropriate to reduce the measure oftheir success on that component of the Action on that account. While each of theST Act claims had a different factual basis, there was a common factualsubstratum in relation to the amendments to the proposed strata plan. Further,each of the ST Act claims gave rise to identical legal issues. These included theconstruction of the ST Act (and in particular, what constituted a “notifiablevariation”), and whether the Jorgensens’ right to avoid the Contract, as a resultof Strzelecki’s failure to comply with its obligations under the ST Act, survived,despite Strzelecki’s purported termination of the Contract for the Jorgensens’failure to settle.

We turn, next, to consider whether a special costs order should be made.

Whether a special costs order should be made

The principles in relation to special costs orders are well-established.Ordinarily, the taxation of bills of costs charged by a legal practice is regulatedby costs determinations made by the Legal Costs Committee established underthe LP Act.115 However, the applicable limits under the scale of costs set out insuch costs determinations are able to be raised or removed by the Courtpursuant to the power in s 280(2) of the LP Act, which provides:

(2) Despite subsection (1), if a court or judicial officer is of the opinion thatthe amount of costs allowable in respect of a matter under a costsdetermination is inadequate because of the unusual difficulty, complexityor importance of the matter, the court or officer may do all or any of thefollowing —

(a) order the payment of costs above those fixed by the determination;

(b) fix higher limits of costs than those fixed in the determination;

(c) remove limits on costs fixed in the determination;

(d) make any order or give any direction for the purposes of enablingcosts above those in the determination to be ordered or assessed.

113 30 and 31 March 2015, 1 April 2015 and 26 May 2015.

114 11 August 2014, 24, 25 and 26 November 2014.

115 Legal Profession Act 2008 (WA) s 280(1).


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The principles concerning special costs orders under s 280(2) of the LP Actare well-established. They were recently set out in Sino Iron Pty Ltd vMineralogy Pty Ltd (No 2)116 where this Court said:

By s 280(1) of the Act, a party’s recoverable costs are confined, in effect, by thescale limits. To that extent, s 280(1) is protective of the party charged and, moregenerally, serves the due administration of justice by limiting the allowable scopefor legal costs. Section 280(2) operates as an exception to s 280(1) of the Act.Section 280(2) of the Act operates to give the successful party the opportunity torecover those costs which have been reasonably and properly incurred where, inthe court’s opinion, the scale is inadequate because of the unusual difficulty,complexity or importance of the matter. To that extent, s 280(2) of the Act isprotective of the successful party to the litigation and, on that account, also servesthe administration of justice by facilitating, within the limits imposed by thestatutory criteria, the operation of the general principle that a successful party isentitled to its costs of the litigation. Even where orders are made under s 280(2) ofthe Act, it nevertheless remains the task of the taxing officer to consider thereasonableness of and necessity for the work undertaken, and to make a judgmentabout the remuneration reasonably required.

Before such a power will be exercised, the court must form an opinion that hastwo components. First, the court must form the view that the maximum amountallowable under the relevant scale item is inadequate in the sense that there is afairly arguable case that the bill to be presented to the taxing officer may properlytax at an amount which is greater than the limit which would be imposed by therelevant cost determination. Secondly, the court must also form the opinion thatthe inadequacy of the costs allowable under a costs determination arises becauseof the “unusual difficulty, complexity or importance of the matter”. Issues of thekind which arise are addressed as matters of impression, rather than as matters ofdetailed evaluation, precision or science.

For the purposes of exercising the powers conferred by s 280(2) of the Act, itwill not ordinarily be necessary for the court to determine what amount should beallowed on taxation, but only whether there is a fairly arguable case that a greateramount should be allowed than that which is allowable under the relevantdetermination: Electricity Generation and Retail Corporation trading as Synergy vWoodside Energy Ltd.

A fairly arguable case to that effect will not be established merely because aparty incurred greater costs than those allowable under the relevant determination.However, depending on the particular case and all the circumstances, the fact thata party has applied significantly greater legal resources to each step in thelitigation than those for which allowance is made under items of the relevantdeterminations, when viewed in the context of the difficulty, complexity orimportance of the matter, may sustain the conclusion that there is a fairly arguablecase that each of the items identified is inadequate (and thereby the amount ofcosts allowable in respect of the matter is inadequate) because of the unusualdifficulty, complexity or importance of the matter.

The word “unusual” in s 280(2) of the Act qualifies only the “difficulty” of thematter, and not its “complexity” or “importance”. The word “unusual” in thiscontext means unusual having regard to what one might describe as the usual runof civil cases determined in the court. That essentially involves the making of avalue judgment by the court, having regard to the court’s experience of theparticular case when compared with the usual run of cases: Wainwright v BarrickGold of Australia Limited. Also, the reference to “importance” in this contextallows the court to have regard to the significance of the issues that arose in the

116 Sino Iron Pty Ltd v Mineralogy Pty Ltd (No 2) [2017] WASCA 76 (S) at [11]-[16].


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litigation. Significance can arise either because of the significance of the issues tothe parties, or because of the significance of the issues to other prospective parties,or to the public or community generally: Heartlink Ltd v Jones as liquidator of HLDiagnostics Pty Ltd (in liq).

In Kidd v The State of Western Australia, this court observed, with reference toElectricity Generation, that the question of unusual difficulty, complexity orimportance arises in respect of the proceedings as a whole and not in respect ofeach individual item in the relevant costs determination. In Electricity Generation,Martin CJ observed:

[T]here are no words within [s 280(2)] which suggest that the court isrequired to assess the difficulty, complexity or importance of the work donein respect of each and every item in the relevant determination beforeexercising the power conferred by s 280(2). The natural and ordinarymeaning suggested by the words used is that the “matter” is the matter inrespect of which legal services were provided.

(Footnotes omitted.)

The Jorgensens applied to the primary judge for special costs orders under theLP Act. In support of their application for a special costs order, the Jorgensensrelied on an affidavit sworn by their solicitor, Mr Bernard Cummins, to whichhe annexed a draft bill of the Jorgensens’ costs.117

In submissions to the learned primary judge, Strzelecki conceded that therewas “ultimately some complexity” in the Action, but submitted that thatcomplexity did not arise from the issues which had absorbed the time of theparties, and of the Court, during the course of the Action and of the trial.118

The learned primary judge concluded that the aspects of the Action whichconcerned the ST Act were:

of some importance and complexity. It is the case that those issues played no partin the litigation until mentioned in an offer made by the Jorgensens immediatelyprior to the pre-trial conference of 15 October 2013. Thereafter they began toloom large.119

It appears to have been for that reason that his Honour declined to make aspecial costs order in respect of the Jorgensens’ costs for the period from thecommencement of the Action until 15 October 2013.120 Special costs did notarise for consideration in respect of the period after 15 October 2013 becausehis Honour had ordered that Strzelecki pay the Jorgensens’ costs on anindemnity basis.

Counsel for the Jorgensens submitted that the unchallenged evidence in theaffidavit filed on behalf of the Jorgensens was that their costs of the Action weresubstantially above the scale allowances, so that the bill could reasonably beexpected to exceed the scale limits on a taxation. Counsel also submitted thatthe Action was one of unusual difficulty, having regard to the length of the trialand the number of issues, that it was complex because of the number and nature

117 GAB 132-138.





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of the issues, and was of importance, both to the Jorgensens, given the financialramifications for them of the litigation, and more widely, because contracts ofsale for “off the plan” apartments were commonplace.121

We are not persuaded that the special costs order sought by the Jorgensensshould be made, for three reasons.

First, the Jorgensens have not established, in respect of each of the items forwhich they seek to lift the limits of the applicable scale that there is a fairlyarguable case that the bill will properly tax at an amount greater than the scalelimits. By way of example, the draft bill of costs indicates that the work done inthe preparation of the DCC (items 3(b) and (c)) amounted to $8,580, which isthe same as the limit under the scale. Similarly, in respect of counsel’s fees forthe second, third, fifth and sixth days of the trial, those fees either did notexceed the maximum amount allowed under the scale, or alternatively onlyexceeded the maximum under item 20(c) by a small margin. In thosecircumstances, it cannot be said that it is fairly arguable that the amountsallowed on a taxation for those items of work would exceed the maximumpermitted for those items under the scale.

Secondly, in respect of the work covered by items 17 and 20(a), and the workcovered by item 20(c) (in respect of counsel’s fees for the fourth, seventh andeighth days of the trial), there is a fairly arguable case that the bill of costs willtax at an amount greater than the maximum limit for those items under thescale. However, we are not persuaded that the inadequacy of the costs allowablefor those items under the scale arises because of the unusual difficulty, or thecomplexity, or the importance, of the Action. By way of example, in respect ofthe work covered by item 20(c) (counsel fees) on the fourth, seventh and eighthdays of the trial, the draft bill indicates that on each of those occasions, the trialresumed after having been adjourned part-heard for at least a few weeks. Ineach case, the fees for counsel greatly exceeded the counsel fees charged for thesecond, third, fifth and sixth days, because on each of those occasions, counsel’sfees included a large number of hours by way of “refresher”. On the basis of theinformation presently available, we are not satisfied that the limit under thescale for work done under item 20(c) will be inadequate because of the unusualdifficulty, complexity or importance of the Action. Instead, the more compellingexplanation for the disparity appears to be that, on each occasion, counselrequired considerable time to refresh his preparation for the hearing, whereasthe scale item does not include any component for a “refresher” when a trial isresumed after being part-heard.

Thirdly, we are not persuaded that the Action overall can be said to haveinvolved unusual difficulty, complexity or importance. As we have alreadynoted, the learned primary judge concluded that the ST Act issues were of“some importance and complexity”.122 That finding is not challenged on theappeal. However, the ST Act issues were not the only issues which wereventilated in the proceedings. The other issues of significance in the Action,particularly the alleged breach of the Representations, do not appear to haveinvolved unusual difficulty, or complexity or importance. Consequently, we arenot persuaded that the Action as a whole can be described as involving unusualdifficulty, or complexity or importance. For that reason, even if the Jorgensens

121 Respondents’ amended submissions [37]-[38].



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had established that there is a fairly arguable case that the bill of costs will taxat an amount greater than the maximum limit for each of the items in question,there is no basis on which to conclude that the inadequacy of the costsallowable under the scale arises because of any unusual difficulty, or complexityor importance of the Action.

In view of these conclusions, it is unnecessary to express any view as towhether a special costs order under s 280(2) of the LP Act can properly be madein a case such as this, where a successful party is awarded only a proportion ofits overall costs of an action, having regard to the fact that it was not successfulon all of the issues it raised.

Costs of the costs hearing before the primary judge

Counsel for Strzelecki submitted that as a consequence of order 2 of theCosts Orders, Strzelecki was required to pay the Jorgensens’ costs, in respect ofthe costs hearing before the primary judge, on an indemnity basis.123 As theCosts Orders are to be set aside, the question arises whether a separate ordershould be made in respect of the costs of the costs hearing before the primaryjudge.

Counsel for Strzelecki submitted that “[t]he costs of the hearing on costsshould be considered and determined on the usual principles of the relativesuccess of the parties assessed on a party to party basis”.124

It is apparent that at the costs hearing, the Jorgensens were successful, in thatcosts orders were made in their favour. However, they were not whollysuccessful. That outcome remains the same in light of this appeal.

Having regard to the fact that the Jorgensens were not wholly successful, toour mind the just result would be to require that Strzelecki pay two thirds of theJorgsensens’ costs of the costs hearing also.

The order which should be made in lieu of the Costs Orders is that:

The plaintiff is to pay two thirds of the defendants’ costs (including reservedcosts) of the Action, including the costs of the hearings on 27 July 2017 and6 February 2018, to be taxed if not agreed.

The orders which should be made

The orders which should be made on the appeal and the cross-appeal are asfollows:

1. The appeal is allowed.

2. The orders made by Eaton DCJ on 6 February 2018 are set aside, andin lieu thereof, the following order is made:

1. The plaintiff is to pay two thirds of the defendants’ costs (includingreserved costs) of the Action, including the costs of the hearings on27 July 2017 and 6 February 2018, to be taxed if not agreed.

3. The time in which the Respondents may file their cross-appeal isextended to 7 March 2018.

4. The cross-appeal is dismissed.

Given that neither party has been wholly successful in the present appeal, anadvance copy of these reasons will be provided to the parties so that they havethe opportunity to confer and to attempt to reach agreement on the costs orders




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which should be made in respect of the appeal itself. Having regard to thelengthy history of the dispute between the parties, it will be most regrettable iffurther costs have to be incurred in a hearing in relation to the costs of thepresent appeal.

Orders accordingly

Solicitors for the appellant: Bennett + Co.

Solicitors for the respondents: Murcia Pestell Hillard.

GREGORY JOHN STOCKTON


Bennett + CoBennett + Co was founded in 2011 on a

handshake between a small group of legal

practitioners dedicated to providing advice

and expertise at the highest level. Today,

Bennett + Co is a cohesive and dedicated

team of 43 legal practitioners focused on

solving our clients’ most important legal

problems. Impressively, the firm has notched

up over 556 decisions, across Commonwealth

and State Courts and Tribunals. Bennett + Co

has consistently been recognised by Doyle’s

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