Home | Databases | WorldLII | Search | Feedback Australian Indigenous Law Reporter

Editors --- "Brownly v Minara Resources Ltd [2006] WASC 93 - Case Summary" [2006] AUIndigLawRpr 47; (2006) 10(3) Australian Indigenous Law Reporter 47

BROWNLEY & ORS V MINARA RESOURCES LTD

Supreme Court of Western Australia (Sanderson M) 25 May 2006 [2006] WASC 93

Grounds for striking out parts of statement of claim — whether application for stay is champertous — case turns on objects of trust and agreement with litigation-funder

Court and Tribunal Decisions

Facts:

This is an application on the part of the defendant, Minara Resources, to strike out parts of the plaintiffs’ statement of claim. At the commencement of the hearing a minute of proposed amendments to the amended statement of claim (‘the minute’) was tendered by the plaintiffs and accordingly the issue fell away. The defendant then argued two points relating to the plaintiffs’ setting in place of a trust within the framework of the relevant agreement and the plaintiffs’ litigation arrangements.

In 1997 the predecessor of the defendant (‘Anaconda’) entered into negotiations with the Bibila Lungutjarra Native Title Claimant Group (the ‘Bibila people’) and the Goolburthunoo Native Title Claimant Group (the ‘Goolburthunoo people’) as part of the process of developing a mining project. The defendant signed a deed with the Goolburthunoo people in July 1998 (the ‘ancillary agreement’). The ancillary agreement was signed by the first plaintiffs who were collectively defined as the ‘Native Title Parties’ in the agreement – noting that the first plaintiffs together represented the Goolburthunoo people and were signatories to native title claims.

Under the ancillary agreement, Anaconda was to make annual payments to the second plaintiff (‘NEIB trust’). The NEIB were defined in the agreement to be: ‘the charitable trust to be established by the North East Independent Body…’. The trust was to be established for the principal objects of furthering the social, economic, business development, educational and cultural welfare of the Aboriginal people of the North-Eastern Goldfields region of Western Australia.

The ancillary agreement dealt with the circumstance where the NEIB was not established by 30 June 1998. If the trust was not established by the agreed date then an independent charitable trust would be established by an independent arbitrator appointed by and acceptable to all parties to satisfy the objects and criteria stated in the agreement. All annual payments under the agreement would then be paid by Anaconda to that trust. The NEIB trust was not established by the agreed date and nor had the North East Independent Body been incorporated.

The second plaintiff is trustee for the Wongatha Aboriginal Charitable Trust, as described in the title to the action. In the minute, the second plaintiff identified as the body contemplated by the ancillary agreement and as such was entitled to the benefits of the covenants in the ancillary agreement for the benefit of the North East Independent Body.

In August 2003 the defendant advised the plaintiffs that they intended to rescind the ancillary agreement. In November 2003 the first and second plaintiffs executed an agreement (the ‘Funding Agreement’) with IMF Australia Ltd (‘IMF’) and Insolvency Litigation Fund Pty Ltd (‘ILF’) with respect to these proceedings.

The defendant alleged that the trust had objects relating to the Wongatha people, stating that there is no evidence to establish that the Wongatha people and the Aboriginal people of the north-eastern goldfields area are different descriptions of the same people.

The defendant argued that the trust was not set in place in accordance with the framework of the agreement. The defendant contended that the temporal guidelines of the agreement were not followed and that, in accordance with the ancillary agreement, the trust could only be established after the appointment of an arbitrator as contemplated in the agreement. The defendant submitted that as neither of these requirements was satisfied, the second plaintiff was not properly a party to the proceedings.

The defendant also alleged that the plaintiffs’ litigation arrangement warranted a stay of the proceedings due to the arrangement being champertous and an abuse of the Court’s processes due to the litigation-funder having no bona fide community or pecuniary interest, religious or principles or problems in common with the respondents. The litigation agreement involved an aggravated form of maintenance with the litigation-funder being entitled to a substantial percentage of the proceeds from a successful action thus, distorting the proceedings. The litigation agreement ensured that the plaintiffs bore no risk with the funder of the litigation being liable for any costs awarded against the plaintiffs.

Held, Dismissing the Application:

1 The clause in the Ancillary Agreement which defines the NEIB Trust has no temporal qualification. Therefore, it is arguable that the second plaintiff satisfies the criteria which allow it to be recognised as the NEIB Trust: [14].

2 The submission of the defendant that there is no evidence to establish that the Wongatha people and the Aboriginal people of the north-eastern goldfields are different descriptions of the same people assumes that the word ‘all’ should read before the words ‘aboriginal people’. Whether that is the proper interpretation of the clauses in the deed is a matter for trial: [16].

3 The level of control that the litigation funder has over the litigation is of critical importance. As a matter of law, the terms of the funding agreement leave the plaintiffs in control of the litigation. The plaintiffs’ interests are not subservient to those of the litigation funder and they are not a mere cipher: [20]–[21], Clairs Keeley (a firm) v Treacy & Ors [2003] WASCA 299; (2003) 28 WAR 139; Clairs Keeley (a firm) v Treacy & Ors [2004] WASCA 277; (2005) 29 WAR 479; Clairs Keeley (a firm) v Treacy & Ors [2005] WASCA followed and applied; Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203 referred to.