Ok Tedi Court Case 2001 18 December

Transcript Of Proceedings
Supreme Court Of Victoria, Civil Jurisdiction, Melbourne
Tuesday 18 December 2001, Before The Honourable Justice Bongiorno

b e t w e e n

GABIA GAGARIMABU Plaintiff
- And -
BHP BILLITON LTD Firstnamed Defendant
- And -
OK TEDI MINING LTD Secondnamed Defendant

MR J. BEACH QC, with MR E. HEEREY appeared on behalf of the Plaintiff.
MR K. HARGRAVE QC, with MS M. SLOSS appeared on behalf of the Firstnamed Defendant.
MR J. MIDDLETON QC, with MR C. JOSE appeared on behalf of the Secondnamed Defendant.

HIS HONOUR: Gentlemen, with the best will in the world, I have still not completed reading, indeed I've found the material reasonably dense, I have not completed reading the material, indeed I'm about at the end of the plaintiff's material and I haven't yet got to the defendant's. I'm wondering whether it's useful to start or whether I should continue and finish reading all of it, I now understand the case a lot better having read the plaintiff's material rather than simply skimmed it as I did on the previous occasion. Have you got anything to say, Mr Beach? I think I'm going - it's taken a long time. It's reasonably - for somebody totally unfamiliar with it, it's - - -

MR BEACH: Your Honour, for my part I'm happy to commence. I see the real issue as being more the balance of convenience question rather than whether there's a serious question to be tried. Your Honour will have seen our material, there is answering material taking the opposite position, Your Honour's not in a position today to determine - - -

HIS HONOUR: To adjudicate on that, no.

MR BEACH: - - - any question of conflicts. The only thing Your Honour might be in a position to determine today is the pure legal question as to whether s.33V of the Act applies to the Mine Continuation Agreements, that is whether those agreements are subject to court approval, and if Your Honour decides that today then there should be no enforcement of those agreements until such time as there is a proper approval process and Your Honour decides whether the terms thereof are fair and reasonable. Now, that's a - - -

HIS HONOUR: It seems to be a reasonably major legal question, Mr Beach, doesn't it?

MR BEACH: It does.

HIS HONOUR: It's not a - I mean, it's not simply a matter of reading s.33V and saying, "Well, I think it means this", it's - - -

MR BEACH: It's a major point, Your Honour, but it's fairly straightforward in the sense that there's not terribly much authority. The only case I found was that of Justice Goldberg in Williams v. FAI where before the opt out process had been completed, His Honour was asked to approve a settlement under s.33V so there is one - - -

HIS HONOUR: What about that case you referred me to last time of Justice Bransen?

MR BEACH: Judge Howse decision really only goes so far as to say that settlement of a group member's claim needs court approval, whereas s.33V talks about the group proceeding in toto. That just says the general includes the narrower claims, it doesn't actually address the issue as to whether there should be court approval prior to the opt out process being completed. So although it's a major legal point, nevertheless it's a fairly simple point. All Your Honour needs to do is construe the statute. There's hardly authority one way or the other and the only other legal issue I suppose that Your Honour needs to consider is whether or not the entry into of the Mine Continuation Agreements constitute a settlement, and Your Honour has heard what I said on the last occasion, that OTML promised certain payments, and the price for that is released, sir. Normally on a settlement a plaintiff would discontinue a proceeding. OTML can't procure a discontinuance because that's in the control of the representative plaintiff, so all it can do is ask the group members to opt out. We would say on any ordinary meaning of settlement that that in fact's the settlement.

HIS HONOUR: That's the point though, isn't it, that it might require - well, it will require consideration in what settling an action really means in the context of this part of the Supreme Court Act, and it's all - it's all - it's an area that's still reasonably novel in the sense that questions like this haven't come up before as I understand it.

MR BEACH: No, it's certainly an important precedent, whatever Your Honour decides in this case and it has to be done carefully, but having said that the legal argument is within a fairly narrow compass. I'm prepared to argue that point finally today. There are other aspects though, that Your Honour can't decide today. The first issue is the authority question, whether the mine continuation agreements have been entered into.

HIS HONOUR: Has the Act been passed, the New Guinea Act?

MR BEACH: It has passed through the legislature but there's still some other process of assent that hasn't yet taken place. In fact Your Honour, coincidentally today there's a constitutional challenge in the PNG National Court dealing with the legislation as - - -

HIS HONOUR: Launched by Sir Michael Sumari.

MR BEACH: Well, it was launched by my client and has now been taken over essentially but I think there's a separate vehicle for it, but Sir Michael Sumari is now pursuing it, so as we speak today my present instructions are that the statute is not yet in force, so that's what's - - -

HIS HONOUR: I'll just see what the others - Mr Middleton, what do you say - do you say that I'll be assisted by continuing to read this material or do you - - -

MR MIDDLETON: I'm happy to - I don't think you'll be assisted, Your Honour.

HIS HONOUR: You're happy to go on now?

MR MIDDLETON: I think it's probably more useful to Your Honour if you do continue. You will see in the material there is allegation, a counter allegation.

HIS HONOUR: I'm sorry, you said it'd be more useful - - -

MR MIDDLETON: More useful if Mr Beach did continue to address you now and we can deal with those matters later on.

HIS HONOUR: Just before we do, just let me sort out some material that came up in the last half hour or so that I haven't looked at. There's an affidavit of Mr Grech of 17 December. Is that a copy of something I already have or is that a new affidavit? It's a new one, is it?

MR BEACH: We apparently gave Your Honour a copy of that last night. I don't know whether a separate copy's come up - - -

HIS HONOUR: I've probably got that. Yes, I have that. I have the original, that can be filed, and that disposes of that. I have a copy affidavit of Paras Parkop?

MR BEACH: That's new today, Your Honour, that deals with the question of whether you can have a village representative binding a village or whether you need a clan leader binding a clan.

HIS HONOUR: I have a copy of that, has the original of that been filed?

MR BEACH: Not yet, Your Honour, it's coming down from PNG as I understand it, but we will undertake to file that, Your Honour.

HIS HONOUR: Very well, now I have an affidavit of Mr (indistinct) Brown.

MR BEACH: Your Honour should have a copy of that already.

HIS HONOUR: Yes, I've read that I think - this is the original that's now - - -

MR BEACH: Yes, Your Honour.

HIS HONOUR: That can be filed. I have an affidavit of Timothy Jerome Hammond?

MR BEACH: That's probably an original Your Honour, the copy should have been given to Your Honour yesterday.

HIS HONOUR: I've got an original. I don't seem to have a copy. Did the copy of that come yesterday?

MR BEACH: It should have Your Honour, yes.

HIS HONOUR: Yes. All right. That may also be filed. I have an amended summons.

MR BEACH: Yes.

HIS HONOUR: Which presumably you seek leave to file?

MR BEACH: I do Your Honour.

HIS HONOUR: Yes.

MR BEACH: We did serve that, as I understand it, on 10 December on the other parties.

HIS HONOUR: Is there any objection, Mr Middleton, to the filing of the amended summons?

MR BEACH: No objection, Your Honour.

HIS HONOUR: Mr Hargrave?

MR HARGREAVE: No, Your Honour.

HIS HONOUR: The plaintiff will have leave to file an amended summons in the form of the document entitled "Amended Summons". This is a copy that I have. You will have leave to file an original of that, Mr Beach. And I have a set of written submissions on behalf of the plaintiff. I don't think I have any submissions on behalf of the defendants; is that right?

MR MIDDLETON: That is correct, Your Honour.

HIS HONOUR: Yes. Mr Hargrave, nothing from you?

MR HARGREAVE: No.

HIS HONOUR: That's all right, as long as I understand. I have some material from the defendant - just before I finish with the plaintiff, there's some minutes of proposed orders, Mr Beach. You've served copies of that on the others have you?

MR BEACH: I have Your Honour, this morning.

HIS HONOUR: And now I have some material from the defendant. I have a copy affidavit of Atameng Bahupe sworn 17 December. I have only a copy. Has the original of that been filed, Mr Middleton?

MR MIDDLETON: I understand it should have been, Your Honour.

HIS HONOUR: That's all right. I'll treat that then as filed, that's fine, and I have a supplementary affidavit of Mr Phillips, or a copy of that supplementary affidavit with a number of exhibits.

MR MIDDLETON: I believe that's filed, but I also have a further supplementary affidavit of Mr Phillips which I seek to file now, a very short affidavit, if I could have leave to do that, Your Honour.

HIS HONOUR: Yes, do you have a copy of that?

MR MIDDLETON: We will arrange for that immediately.

HIS HONOUR: I also have, back to you, Mr Beach, I've got an affidavit of Stewart Kirsch of Anne Arbour Michigan, or a copy of an affidavit of Stewart Kirsch.

MR BEACH: There should only be one affidavit and that should have been sent to Your Honour yesterday.

HIS HONOUR: Is that a copy of the affidavit - - -

MR BEACH: You might have an unsworn copy and that's a sworn copy that's been sent to Your Honour this morning.

HIS HONOUR: Yes, I have a copy that I received yesterday of what appears to be - - -

MR BEACH: There is only one, Your Honour, it was sworn on 14 December.

HIS HONOUR: No, it's not the same, it's a different affidavit.

MR BEACH: Can I have a look at - - -

HIS HONOUR: The one I've got today is dated 14 December.

MR BEACH: Yes.

HIS HONOUR: I'll give them both back to you and you can - you'll realise from - if you read the first paragraph that they're not the same. In fact this one's - give both of those to Mr Beach. The first paragraphs are not the same. Which one is it that's to be filed?

MR BEACH: Can I hand to Your Honour the one that is dated 14 December on the front cover.

HIS HONOUR: And I have got a number of copy exhibits, are they still - - -

MR BEACH: They are similar, Your Honour.

HIS HONOUR: I think they are annex to this, yes, all right. Is that, the copy that I've just handed back, has not been filed, has it?

MR BEACH: The unsworn one has not been filed, it seems to have been altered, and sworn in the form that I've just handed to Your Honour - - -

HIS HONOUR: So that is the one that will be - has been or will be filed.

MR BEACH: Has been? It hasn't been filed, it will be filed, Your Honour.

HIS HONOUR: Yes. Can you make sure that your solicitor ensures that the court file only has on it the document which is actually intended to be filed. I think that clears up everything - yes. I take it we start with your submissions, Mr Beach.

MR BEACH: Yes, Your Honour. Can I just make some general observations.

HIS HONOUR: Yes.

MR BEACH: I think that clears up everything - yes. I take it we start with your submissions, Mr Beach.

MR BEACH: Yes, Your Honour. Can I just make some general observations.

HIS HONOUR: Yes.

MR BEACH: Your Honour will appreciate that we seek to restrain the entry into or the enforcement of the various mine continuation agreements that have been executed by OTML, with what purported to be group members. We have a number of grounds that we say justify the injunction that we seek. The first is that each of the mine - - -

HIS HONOUR: You're now seeking an injunction pending the - you seek an interlocutory injunction pending the hearing of this matter.

MR BEACH: Your Honour, when the summons was originally filed, we were seeking an injunction until the hearting and determination of the main proceeding, but it strikes me, Your Honour, that you need to determine the s.33V issue finally and also the contempt issue finally, well before the hearing of a determination of the ultimate proceeding, and so what - - -

HIS HONOUR: I notice, I've read the pleadings, you haven't yet put on a reply.

MR BEACH: No.

HIS HONOUR: I assume that you would want to do so in light of some of the allegations in the defences.

MR BEACH: Certainly, and also once discovery has been completed to our satisfaction, we will then consider the issue of a reply.

HIS HONOUR: All right.

MR BEACH: The summonses originally drawn, sought injunctions until the hearing and determination of the main proceeding, but Your Honour would appreciate that we need to have the s.33V issue determined finally now in relation to the mine continuation agreements, and Your Honour also needs to determine finally, sooner rather than later, whether they've been entered into without the authority of group members, and also Your Honour needs to determine whether they've been entered into by Ok Tedi Mining Ltd in circumstances which interfere with the administration of justice in this proceeding. So, really, Your Honour, what we are now seeking, and this is reflected in the minutes of orders that have been circulated, is in essence, to have a final hearing of these matters as soon as the court can give us a fixture at some time in the new year, February or March, and to have a limited form of interlocutory injunction carried over until that time, so that Your Honour can then determine in February or March, whether court approval is necessary, whether group members have given proper authority and/or whether there should be restraint.

HIS HONOUR: How long is that - what do you say that that argument is likely to take, not very long?

MR BEACH: Perhaps three to four days. The difficulty with Your Honour dealing with the matter finally today is that, as Mr Middleton says, you have affidavits and counter affidavits.

HIS HONOUR: Yes.

MR BEACH: There is no cross-examination and a lot of the material is on information and belief and second and tertiary hearsay, so there's no way Your Honour can finally determine the issue of authority today, or the issue of whether these agreements have been entered into in circumstances which would amount to a contempt of this court.

HIS HONOUR: What about the issue of whether the PNG statute, assuming that it passes into law and assuming that it's not struck down by the Supreme Court, that issue impinges on all of this as well, doesn't it?

MR BEACH: It does, as Your Honour would appreciate. On the last occasion we said Ok Tedi's conduct had the tendency to interfere with group members claims in this proceeding, because it had procured persons to execute this mine continuation agreements on behalf of people that gave them no authority. It then was a party to the ninth supplemental agreement which had within it a condition that OTML had to give court approval to the bill that's now gone through Parliament, OTML have given approval to that bill and it's that bill which when passed into law will foreclose the issue of any challenge to authority.

HIS HONOUR: So that's no longer - I notice from material I've read of yours, there's an assertion by OTML that it signed the supplemental agreement on, I think, 25 November.

MR BEACH: Yes. We can't do anything more about that, that's right.

HIS HONOUR: That happened and you say it had to - that agreement required it to give consent to the legislation or to, in some way, agree to the legislation.

MR BEACH: Yes.

HIS HONOUR: I notice that the response from the defendants as to that, is that that allegation is misconceived. I don't know whether anything turns on that.

MR BEACH: It's fairly clear from the ninth supplemental agreement, that there's a specific clause that required the parties to the principal agreement including Ok Tedi Mining Ltd to give their approval to any bill which when passed enshrines as a matter of PNG law the ninth supplemental agreement.

HIS HONOUR: There seemed to be some constitutional problem about conferring it by contract upon a citizen, the right to veto or to not approve bills going to Parliament, but anyway, nothing much - it's happened, if it's happened it's happened anyway, hasn't it.

MR BEACH: And your point is one of the points that Sir Michael Somare is raising apparently according to the papers that I've seen as one of his constitutional points, which is that the PNG legislature has delegated legislative power to somebody else by having this a priori approval process.

HIS HONOUR: In any event, that doesn't need to concern me, does it?

MR BEACH: It's relevant to the contempt issue, because Your Honour can't do anything about PNG legislature going through and we don't seek to have Your Honour do anything about it. But Your Honour would appreciate that one of our arguments against Ok Tedi Mining Ltd is that in t he way it procured people's signatures to the mine continuation agreement and then foreclosed the issue of authority by approving a bill which contained a provision preventing any challenge to authority effectively, that it's that conduct by litigant before this court that has interfered with the prosecution by group members of their claims in this proceeding.

HIS HONOUR: Yes.

MR BEACH: And that was one of our contempt arguments. Your Honour really isn't in a position finally today, to deal with that.

HIS HONOUR: No.

MR BEACH: But we say that until the court is in a position to finally deal with it, then these agreements should not be enforced against group members.

HIS HONOUR: So what you're seeking today is a holding of the status quo until the issue of whether s.33V, whether the mine continuation agreements offend s.33V, and whether in the procurement of signatures to those agreements ought to be restrained as being - ought to be permanently restrained as being a potential contempt of this court.

MR BEACH: Exactly right.

HIS HONOUR: They're the two issues.

MR BEACH: Those are the two issues, and the other issue that really relates to both is that we say that many of the villagers didn't give authority to these mine continuation agreements, yet the way OTML have structured this entire process, it's made these people bound by mine continuation agreements against their wishes, and Your Honour will see, there's about 1,411 affidavits file by villagers that we've managed to obtain in the space of 48 hours saying that they didn't give their consent to these agreements, they don't want to be bound by them and they want to continue to prosecute their claims in this proceeding, so the authority issue is an issue that, really, I suppose crosses both boundaries.

HIS HONOUR: And that will be impinged upon by the law of Papua New Guinea ultimately.

MR BEACH: Yes, it will indeed. If the PNG statute is constitutionally invalid, then authority issues will just be dealt with in ordinary common law type concepts presumably.

HIS HONOUR: Yes.

MR BEACH: But the whole vice we say, of OTML's behaviour is that they've approved and procured a bill which forecloses this court or any court in PNG, from looking to see whether a particular group member has given authority to be bound by a mine continuation agreement. So that's a factual issue.

HIS HONOUR: All right. It's important then, isn't it, at this point, to explore when these two questions can be argued fully before the court, because that might - that might have some bearing upon the balance of convenience in relation to the continuation of injunctions, mightn't it?

MR BEACH: Exactly right. For our part, Your Honour, we are concerned to have these matters dealt with as expeditiously as possible.

HIS HONOUR: Yes.

MR BEACH: And that is to say, and let me make it quite clear, we don't seek to restrain settlements that have been approved by Your Honour as being fair and reasonable and which group member consent to. If those conditions are satisfied, we're quite happy for those group members claims to be released and for them to opt out, but we are concerned the proper processes are followed not only dealing with the question or authority or consent of a group member to be bound, but also with this court's processes which is a supervisory role in ensuring that the settlement is fair and reasonable. We would like Your Honour to deal with those matters as soon as practicable.

HIS HONOUR: Yes. Well, if it could be arranged that they could be dealt with in the first week of February - I'm not saying it can, but I'd need to consult the Listing Master - but if it were - when I say the first week, something like, I think the 4th is a Monday, something like the 6th of 7th, three or four days over the end of that week and the beginning of the following week.

MR BEACH: Yes.

HIS HONOUR: That would mean that any injunction you're presently seeking would only run really through the vacation period, a bit longer.

MR BEACH: Exactly.

HIS HONOUR: Just assume for the moment that I can arrange a date in the first week in February and leaving aside the question of injunctions, I'll just ask the others - Mr Middleton, do you agree that the two questions that Mr Beach has formulated are really the two things that have to be decided before this matter goes much further.

MR MIDDLETON: No.

HIS HONOUR: You don't.

MR MIDDLETON: No.

HIS HONOUR: You say there are other questions, or that they don't need to be - - -

MR MIDDLETON: They don't even get to those questions, Your Honour. No injunction should be granted at all, subject to one reservation I may have about that, depending on how the argument evolves, but simply no injunction - basically the answer, Your Honour, is no injunction is necessary, to protect my learned friend's clients, because this court can look after my learned friend's client without the injunction, there has been no interference with anything Your Honour can decide today, six months, eight months, 12 months, without an injunction, and whatever's going to happen in New Guinea, is gong to happen in New Guinea. It's already started. The proper place for a discussion about the law of New Guinea is, with the greatest respect to Your Honour, not in this court, but in the court in New Guinea. Already those who are associated with my learned friend clients have taken an action in the court of New Guinea and that will take its course in accordance with the justice that is dispensed in that country according to law. No injunction is necessary at all.

HIS HONOUR: I see - so you say there's no point in my exploring the possibility of getting days in February. You say there won't be anything to decide in February.

MR MIDDLETON: Won't be anything to decide, Your Honour, and can I say this, Your Honour, you won't have to decide the difficult questions my learned friend has asked you to decide, you can decide them, and we would say decide in our favour, but I will be putting to Your Honour, you simply do not have to decide this.

HIS HONOUR: Do you take the same position, Mr Hargrave?

MR HARGRAVE: We do, Your Honour.

HIS HONOUR: All right, Mr Beach, well I think then, I'd better hear your argument, and we'll leave aside the question at the moment, whether if and when we go back to this case. At the moment then, you should put your argument in terms of until the decision that you say has to be made and I'll have to determine whether that decision has to be made after I've heard the other side. So I'll let you develop your argument as you see fit.

MR BEACH: Yes. Your Honour, can I perhaps rather unusually start with the balance of convenience and explain why an injunction is necessary.

HIS HONOUR: Yes. Just before you do. At the last hearing, Mr Scerri asserted that all of - in effect, that all of the villagers - I can't now remember the exact numbers although I'll have them in here somewhere - he made an assertion from the Bar table that all of the villagers had signed who were going to sign and those who weren't going to sign, had decided not to, I think it was a hundred and something and 11 on the other side, and then there were - and that the rest of them who hadn't decided were not group member and therefore weren't affected. Has that been verified ultimately?

MR BEACH: Your Honour, we only have the assertion of Mr Scerri. Can I explain where that appears. It appears in Mr Grech's second affidavit.

HIS HONOUR: Yes. It seemed to me on that occasion that if that was right, this matter really resolved itself.

MR BEACH: No, Your Honour, because we were seeking an injunction to restrain the execution of the mine continuation agreements, our application is primarily now to restrain the enforcement of them until Your Honour determined the court approval process here, and the question of contempt.

HIS HONOUR: Yes. Mr Grech's second affidavit.

MR BEACH: Yes, Your Honour. It appears, paragraph 7, this is - - -

HIS HONOUR: That's the affidavit of - - -

MR BEACH: 17 December. Towards the foot of p.3 of the affidavit, Mr Scerri said that individuals from 138 villages had signed a mine continuation agreement, that there were a further 15 villages where there had been no individual signing for them, and only - and nine of those villages essentially involve my client's group members. So the evidence is really only at the moment, the assertion of Mr Scerri that for about nine villages.

HIS HONOUR: That doesn't appear in the defendant's material?

MR BEACH: No, Your Honour. This only appears - - -

HIS HONOUR: Mr Grech is deposing to what Mr Scerri said in here.

MR BEACH: Yes. We don't have any further information about the matter, Your Honour. We do have the executed mine continuation agreements.

HIS HONOUR: That was a distraction. I'll let you get back to where you were.

MR BEACH: We essentially, Your Honour, are seeking an injunction restraining the enforcement of these agreements until such time as this court has determined the priority and the authority question and the approval question.

HIS HONOUR: Yes.

MR BEACH: Your Honour, we say that an injunction to restrain the enforcement of the agreements is necessary for a number of reasons. The first is this, Your Honour, that the mine continuation agreements currently bind group members, put aside the question of authority for the moment, and so as we speak, they could be enforced in PNG, so Ok Tedi Mining Ltd could seek to restrain group members in PNG from pursuing their claims in this jurisdiction. Your Honour could have no control over that. So that's one area of potential prejudice that could occur between now and the time that the question of approval on authority is dealt with.

HIS HONOUR: So you say that those people who have signed - - -

MR BEACH: Could be the subject of an injunction in PNG by OTML, saying, "We have the contract with you, we want to restrain you from doing anything to undermine that contract i.e. pursuing your claiming this jurisdiction."

HIS HONOUR: They would have defences based on the sorts of things that are in the affidavits here that they didn't know what they were doing.

MR BEACH: They may or may they may not, because if the PNG legislation goes through and authority is foreclosed, the PNG court is going to apply PNG law, yet what may have happened may have been a contempt of this court, and so Your Honour can't restrain a PNG proceeding but you can certainly restrain Ok Tedi Mining Ltd, a party in this proceeding, from doing something to benefit from what we say is arguably a contempt of court.

HIS HONOUR: Yes.

MR BEACH: So that's the first thing that could happen between now and the time that the matter comes on for hearing. The second thing that could happen and has in fact happened is this, Your Honour, and I'll take Your Honour to these agreements in a moment. Contractually, group members are bound to file opt out notices, in other words if their village is bound by a mine continuation agreement, Ok Tedi Mining Ltd can go and say, "You must file an opt out notice in the Supreme Court, because that's what the contract specifies."

HIS HONOUR: They could seek, at least in theory, if not practically, they could seek mandatory injunctions that they do so.

MR BEACH: Yes, they could. And herein lies the difficulty, Your Honour, and the sense of urgency. Your Honour will appreciate that the opt out date fixed by this court for this proceeding is 7 January. So tomorrow, Ok Tedi Mining Ltd could go to a particular village, where there's been one person to sign on behalf of that whole village and say to everybody in that village, "Here's an opt out notice, you must sign it."

HIS HONOUR: Yes.

MR BEACH: And that can happen right up until 7 January when the opt out period expires.

HIS HONOUR: Somebody might say against that argument, "Well, you can come back later and challenge the validity of those opt out notices, but your point is otherwise good that there should have been court approval and that this is a contempt." The trouble, Your Honour, is that we can't unscramble the egg in this sense, that we won't know, we may have the opt out notice that's been procured by Ok Tedi Mining Ltd but we won't know whether it was procured in the enforcement of the mine continuation agreement or procured for some other purpose or whether a group member independently and voluntarily chose to give an opt out notice, we won't know. They could gather another 10,000 opt out notices for all we know, between today and 7 January, asserting that group member are compulsorily obliged to give those opt out notices. We'll see these 10,000 opt out notices on 8 January. If we establish to Your Honour's satisfaction later that this is all a contempt or in breach of s.33V, what do we do with those 10,000 opt out notices, they could have been genuinely given, they could have been done inappropriately in performance of the mine continuation agreement, and why should we have the onus of going to PNG and speaking with these 10,000 people and saying, "Did you only give that opt out notice because you thought you were obliged to do so under the MCA, or did you give it because you didn't want to be in the proceeding generally."

HIS HONOUR: The due date for the opt out notices being 7 January might cause some difficulty, mightn't it. I mean, if, in fact, you were to - the other side of the coin to what you're proposing is that if you get your injunction, well then people can't - - -

MR BEACH: No, they can. They can opt out but it won't be forced upon them. They could opt out today, make a free and conscious decision to do so based upon what they've seen in the notice and the court ordered meetings that have taken place.

HIS HONOUR: Yes. But if OTML have acquired a contractual right by - a valid binding enforceable contractual right by virtue of the mine continuation agreement.

MR BEACH: Yes.

HIS HONOUR: To require people to opt out, the passing of the opt out date would have an affect on their legal rights.

MR BEACH: No, it wouldn't, because Your Honour has the power to extent the opt out date.

HIS HONOUR: I was going to say that.

MR BEACH: That's the answer to that, yes.

HIS HONOUR: That's why I was saying that the extension of the opt out date might be a condition of an injunction in this case, might it not?

MR BEACH: I would have to accept that that would be a necessary consequence, Your Honour.

HIS HONOUR: So that the opt out date would not pass until this matter was determined.

MR BEACH: That's right, yes.

HIS HONOUR: Yes, all right, go on.

MR BEACH: But the flip side for us is that we could get 10,000 notices and then be forced to try and challenge each one of those and link it to an MCA which may prove an impossible, if not a very expensive task.

HIS HONOUR: Yes. All right.

MR BEACH: So that's another element of prejudice that we say would justify an injunction going. The next element that we would say justifies an injunction going is this, that when you look at the mine continuation agreements, and I'll take Your Honour to one shortly, the payments to be made to villagers, which in some cases, it's only the equivalent of about a hundred Australian dollars per year, are to be made within 30 days from the end of the calendar year, so in this context, if the mine continuation agreements go ahead, payments to villagers for this calendar year, to calendar year 2001, are due by the end of January. Now if you allow the mine continuation agreements to be performed and people receive their money and then it's found that all of it is invalid, you can imagine the unrest and dissatisfaction and great difficulty in unscrambling the egg. A group member will come along and say, "I gave no authority for the MCA," and OTML will come along and say, "Yes, but we wrote out a cheque to you for $100," and you'll have all sorts of issues.

HIS HONOUR: A hundred kina.

MR BEACH: It's a little bit more.

HIS HONOUR: It's $100 is it?

MR BEACH: Yes, it's - the exchange rate's something like 55 Australian cents for one Kina from recollection.

HIS HONOUR: Yes.

MR BEACH: But that's another difficulty about unscrambling the egg, that if the MCOs are performed, you will then have difficulty in unscrambling the payment, and - - -

HIS HONOUR: If they're invalid OTML would presumably be entitled to restitution in respect of the Kina per person, or $100 per person.

MR BEACH: That of course could freely and voluntarily outside the MCOs make payments anyway.

HIS HONOUR: If they want to.

MR BEACH: We don't seek to stop them from doing that, but it's a further difficult that ought to be avoided if possible, if the only price that's being paid is the delay of six weeks to two months for Your Honour to properly look at each of these issues. Now, Your Honour, on the other side of the equation, we say that there would be no prejudice to Ok Tedi Mining Ltd, or BHP, if the injunction were to go. There may be prejudice to villages by the delayed payment, delay in the first payment for a month or so, but the villagers have been waiting a long time, Your Honour, it won't be so much incremental disadvantage to wait another month from the end of January through until the end of February or even the end of March. The second thing, Your Honour, is that so far as OTML and BHP are concerned, this proceeding is going to go ahead anyway. The injunction is not going to stop the mine, the injunction is not going to stop the proceeding. OTML and BHP are going to have to defend this proceeding in any event, so it's difficult to see how the injunction causes them any prejudice whatsoever. Mr Phillips in his affidavit, and I'll take Your Honour to this later, says that any delay could cause dissatisfaction which might cause perception problems for Ok Tedi Mining Ltd, but if any delay was caused by Your Honour granting an injunction, well, that could no doubt be explained. There's more likely to be dissatisfaction to bind people to agreements that they've given no authority to be bound for, but in any event, and I'll take Your Honour to this, the Mine Continuation Agreement allows Ok Tedi Mining Ltd to suspend or withdraw payments in any event. So as I said to Your Honour at the outset, we see this case more on the question of balance of convenience and what is the utility of an injunction going or not going, rather than whether there's a serious question to be tried on the s.33V issue or on the authority issue or even on the contempt issue. Now, Your Honour, can I begin by tasking Your Honour to the form of Mine Continuation Agreement, and for this purpose, can I hand to Your Honour - - -

HIS HONOUR: The one that I've made some effort to understand is the one related to the South Fly, if that's convenient to you, because I've - it's Exhibit AAG11 I think.

MR BEACH: Your Honour, that was an unexecuted copy. The executed copies of the Mine Continuation Agreements now appear in one of the defendant's affidavits.

HIS HONOUR: Is there any difference?

MR BEACH: Your Honour, you'll need to look at how they've been signed, and I would prefer Your Honour to use an executed copy.

HIS HONOUR: Can you give me a reference?

MR BEACH: I can actually give Your Honour a copy of one of the agreements, and it's Exhibit MP2 to the affidavit of Martin Panning of 13 December. Can I hand to Your Honour - - -

HIS HONOUR: Would it be easier for my purposes, Mr Beach, if I use the material I've got, because in due course I will then see it in its context. Just tell me what it is and I'll find it. Exhibit?

MR BEACH: It's Exhibit MP2 to the affidavit of Martin Panning sworn 13 December.

HIS HONOUR: Martin?

MR BEACH: Panning.

HIS HONOUR: Yes, I have that.

MR BEACH: Your Honour, what I'm about to say about this agreement should be representative of the other four also agreements that have been executed.

HIS HONOUR: Yes.

MR BEACH: Now, Your Honour will see on the first page who the parties to the agreement are.

HIS HONOUR: This is the one for Highway?

MR BEACH: Yes.

HIS HONOUR: Yes.

MR BEACH: Your Honour will see that each of these agreements are undated. I'll come back to that later, but just focussing on the parties for a moment, Your Honour will see that the parties are Ok Tedi Mining Ltd and then each of the members of the specified communities.

HIS HONOUR: Just - I read this but I may not have completely grasped it. There are five or seven, is it, agreements that relate to particular areas. Is it seven?

MR BEACH: Five agreements.

HIS HONOUR: And Highway is one area.

MR BEACH: Yes.

HIS HONOUR: And it comprises a lot of villages or communities, is that right?

MR BEACH: That's right, Your Honour. There is an explanation for the different areas in Mr Grech's affidavit of 6 December.

HIS HONOUR: That's right. I don't want to distract you from where you're going. I can read that in due course.

MR BEACH: Yes, but there is a map exhibited to his affidavit which shows the various areas - - -

HIS HONOUR: Yes, I've looked at that, yes.

MR BEACH: Now, if Your Honour then goes over the page, Your Honour will see some recitals.

HIS HONOUR: Yes.

MR BEACH: And in Recital J there's the statement that the "State has agreed to give this agreement the force of law by enacting the Mine Continuation Agreement".

HIS HONOUR: Mine Continuation Act.

MR BEACH: Sorry, the Mine Continuation Act, yes. If Your Honour then goes to paragraph 3, this is a condition precedent, and it states that the "Agreement is conditional upon and shall be of no force or effect unless on or prior to the termination date the National Parliament has enacted" essentially the Mine Continuation Act. Now, paragraph 3.1 provides however that the condition precedent for the sole benefit of Ok Tedi Mining Ltd and may be waived, so tomorrow, Your Honour - I'm not sure one way or the other whether it's been waived at the moment - but tomorrow the right exists for Ok Tedi Mining Ltd to waive the condition precedent and for the agreement to have its full force and effect, whatever happens to the legislation and PNG, so - - -

HIS HONOUR: That's to extend it beyond the termination date or to elect to - - -

MR BEACH: Elect to waive reliance.

HIS HONOUR: - - - reliance on it completely, yes.

MR BEACH: Yes, exactly, so tomorrow this agreement could be enforced, and that's why I say we want an injunction restraining - - -

HIS HONOUR: Be enforced notwithstanding the non passing of the legislation?

MR BEACH: Yes, that's right, exactly right. That's what the agreement itself provides, Your Honour, in 3.1a. The termination date, Your Honour will see defined earlier to mean 31 December, so it would seem that what was intended practically was for the legislation to go through by no later than the end of the calendar year and for the agreement to then come into force for the New Year, but strictly under the provisions of paragraph 3, the agreement could be enforced tomorrow.

HIS HONOUR: Yes.

MR BEACH: In paragraph 4.2, can I just ask Your Honour to note there's reference to consultations, and with relevant clan leaders. Now, this will relate to an issue that I will come to later which is this issue of OTML using 100 or more village representatives when we say that the clear law in PNG is that you really need clan leaders to bind members of clan rather than village representatives to bind villagers.

HIS HONOUR: This recital asserts that clan leaders have been given the opportunity to make representation to the company and the State.

MR BEACH: Well, that's inaccurate even on OTML's own evidence, because what they say is there were village representatives appointed to a committee and that that committee was then briefed by OTML in relation to what was happening, but I'll come back to that, Your Honour. It's a difficult issue and Your Honour doesn't really need to decide it today. Your Honour just needs to accept that there's a serious question to be tried on that sort of issue.

HIS HONOUR: Yes.

MR BEACH: If Your Honour then goes to paragraph 11.2, there's a representation and warranty of authority, and then in paragraph 12, Your Honour, through to paragraph 14, there are set out various releases so that the parties release and discharge the company which is OTML, BHP and the company's shareholders, from all claims relating to the matters set out in 12.1 to 12.5. Can I make this point, Your Honour, that one of the company's shareholders is the State, PNG State, and that's clear if Your Honour goes back to the definition of "Company shareholders" in Clause 1 of the agreement. So no doubt there will be lots of reference to the principle of sovereignty and you can't interfere with the PNG State and all the rest of it, but the State itself here is a commercial enterprise, in a sense holding shares in Ok Tedi Mining Ltd, and Your Honour should read some of the affidavits from people who purport to be involved with the State and the Department of Mining in that light, that they are also themselves shareholders and have a financial interest in the structure of these commercial arrangements.

HIS HONOUR: At least in their capacity as public servants.

MR BEACH: And also as a shareholder Your Honour, so that as a shareholder - - -

HIS HONOUR: Insofar as the State is a shareholder, it's a shareholder in the sense that the body politic is a shareholder.

MR BEACH: True Your Honour, yes.

HIS HONOUR: No individuals.

MR BEACH: No, no. Paragraph 12.4 essentially deals with releases in relation to the settlement agreement. The settlement agreement is what we're suing on and settlement agreement is defined earlier to be the various terms of settlement and settlement agreement.

HIS HONOUR: The action that was brought in this court that this is - that now - the settlement of which is being sued on, was brought not by this plaintiff, was it?

MR BEACH: No. There were, as I recall, about three actions. There was Alex Maughan, Rex Dagi and there was a commercial fisherman, Mr Shackles, I can't remember whether there was a fourth action involving Mr Gagarimabu.

HIS HONOUR: They weren't group proceedings were they?

MR BEACH: No, because they were under the prior statute.

HIS HONOUR: They were prior to the statute.

MR BEACH: Yes, yes. One of them was one of those old proceedings under ss.35 and 36 of the Supreme Court Act and the other ones were individual proceedings, where there were a joinder of a number of individual plaintiffs. If Your Honour goes to Clause 13.1, this is one of the vices that we say justify Your Honour granting an injunction today. Clause 13.1 is a mandatory obligation on each member of the communities to opt out on or before 7 January, so if the agreement has force tomorrow or it has force after the termination date, contractually Ok Tedi Mining Ltd can go along to each member of each of the villages, and say, "You are obliged to opt out". All they need to do is say, "You're one of these villages specified on the front page, Mr X has signed on your behalf, you are obliged to opt out", in fact we say that process has in fact happened already. Now, we can't prevent at the moment what's gone on, when opt out notices that have already been executed are ultimately produced - we'll have to challenge the validity of those - but we can, by the process of, if Your Honour thinks it appropriate, an injunction, prevent this problem from occurring between now and 7 January.

HIS HONOUR: You can't prevent an individual villager deciding of his own motion that he's bound by the agreement and opting out unwillingly, but in compliance with the agreement?

MR BEACH: No, what we're seeking to do is only restrain Ok Tedi Mining Ltd from procuring the execution of any opt out notice under this agreement, and that's set out in paragraph 4C of our minutes. The other aspects to note about Clause 13 is Clause 13.2 which is that it operates as an immediate release and discharge when the agreement comes into force, so take the scenario, Ok Tedi Mining Ltd tomorrow weighs the condition precedent, a person is immediately bound to a release under 13.2; before that person has even opted out under Clause 13.1 we say on any ordinary meaning of the word "settlement" there must be a settlement. The person would still be a group member and there would be a settlement constituted by Clause 13.2.

HIS HONOUR: So that even if it was not contrary to s.33V to procure people to opt out of a group proceeding, you say that this clause effects a settlement before someone has opted out and not by the process of opting out?

MR BEACH: Yes, that's right, not by the process of s.33V.

HIS HONOUR: If you release somebody on an action does that necessarily mean you've settled it?

MR BEACH: If I receive a payment and the quid pro quo is a release, I would say that was a settlement in any ordinary sense.

HIS HONOUR: The argument surrounding s.33V is going to rotate around the question of what it means to settle an action, isn't it?

MR BEACH: Yes, and it might also rotate around the issue of when s.33V operates, in other words, might it be given a construction so that it only operates after the opt out process has finished so that the court is then dealing with a settlement involving group members who have wanted to or had stayed in the proceeding. See, there might be the issue of settlement, there might also be an issue about the temporal operation of s.33V, but as I said to Your Honour, Justice Goldberg's decision in Williams v. FAI General Insurance, did involve a s.33V process before the opt out date had lapsed in relation to that litigation. Clause 15, Your Honour, is important. Clause 15.1 says that if the proceedings otherwise continue in the Supreme Court and the remaining group members get some form of injunction requiring Ok Tedi Mining Ltd to construct a (indistinct) pipeline, then the requirement of OTML to continue to make payments may be suspended or cease.

HIS HONOUR: If they don't opt out, and notwithstanding the releases and discharges the Supreme Court makes/orders.

MR BEACH: Requiring the construction of the (indistinct) pipeline and storage facility - which is what we want, we don't want to stop the mine, we want to go ahead with a (indistinct) pipeline and storage facility.

HIS HONOUR: Or another waste mitigation scheme.

MR BEACH: Exactly. Then Ok Tedi Mining Ltd can cease to make further payments. So - - -

HIS HONOUR: This is make payments under this agreement.

MR BEACH: Yes.

HIS HONOUR: Yes.

MR BEACH: One of the arguments on balance of convenience raised against us by Ok Tedi Mining Ltd was, "If you prevent people from receiving their payments, that will cause great dissatisfaction with OTML". One of my responses is, "Well, OTML have drafted an agreement that might ultimately involve that, it might not involve that tomorrow but it could involve that in 12 months time or two years time", in other words it's not much of an argument.

HIS HONOUR: Say that again. The defendant says that you shouldn't stop payments going to people who will be entitled to them under this agreement within 30 days of the end of the year.

MR BEACH: Because - exactly, because that will cause great disaffection and dislike for Ok Tedi Mining Ltd and that will affect its commercial interests. It's important to note that the way this MCA is structured there is no absolute obligation to receive payments and in this context payments could be suspended or terminated, so disaffection might be caused at some stage down the track.

HIS HONOUR: By an ultimate order made by this court at some time in the future.

MR BEACH: Yes, exactly.

HIS HONOUR: Yes.

MR BEACH: It's just a point to indicate that Ok Tedi Mining Ltd are exaggerating this notion of disaffection because there was no absolute obligation enshrined in these agreements to pay for the next ten years anyway. One of the ways that Ok Tedi Mining could avoid its responsibilities is if this court were to make an order. And in a sense, Your Honour, this is a further vice, because this puts massive pressure on the villages that want to stay in the action, so this enshrines potentially a battle between the villages that opt out and those that stay in, because those that stay in, if they ultimately win, will cause prejudice to those that have gone out, because Ok Tedi Mining Ltd can suspend payment under this agreement, and it's quite offensive; the way it's structured is calculated to produce disaffection between competing villages. It would be different if Ok Tedi Mining Ltd said "If you opt out and release, you get these payments for the next ten years", but no, they're conditional payments. So - - -

HIS HONOUR: They're conditional - yes, conditional upon this court never making or not making an order for ten years.

MR BEACH: Yes. I can imagine what will be said finally at trial to Your Honour if Your Honour is lucky enough to be the Trial Judge; "Your Honour, if you make an injunction, you'll cause massive disadvantage, because we, Ok Tedi Mining Ltd will cease payment to these other villages who have already released their claims".

HIS HONOUR: And that would cause civil unrest.

MR BEACH: Yes. It's putting Your Honour and my clients in a cleft stick let alone the position in PNG General.

HIS HONOUR: Yes.

MR BEACH: Now, Your Honour, Clause 16 is also a related provision.

HIS HONOUR: Clause 15.2 has the same effect if it's a damages or - - -

MR BEACH: Yes, that's right. Clause 16 is related, what it says is that if this court, the Supreme Court of Victoria, makes an order for the construction of a (indistinct) pipeline then the parties agree to meet to review the payments available, so it's - well, Your Honour doesn't have to be told as to the unenforcability of such a provision, it doesn't say anything.

HIS HONOUR: Agreement to agree.

MR BEACH: Yes. Now, Your Honour, the provisions dealing with payment are set out in paragraphs 17 and 18, and Your Honour will see there reference to schedules 4 and 5. Can I say this, Your Honour, just stopping here for a moment, we have analysed what these payments are worth to individuals, and the analysis for that appears in the affidavit of Mr Grech, the second affidavit, and the table which sets that out appears at paragraph 30. This is Mr Grech's affidavit of 17 December.

HIS HONOUR: Yes, just let me get to the - yes.

MR BEACH: It begins at paragraph 24, we refer to the two schedules. Paragraph 25 sets out the different funds.

HIS HONOUR: Sorry, what paragraph are you looking at?

MR BEACH: I was looking at paragraph 25.

HIS HONOUR: Of Mr Grech's affidavit.

MR BEACH: Yes. Which just sets out the different funds.

HIS HONOUR: Yes.

MR BEACH: We then go to paragraph 29 because of a numbering problem, and we show how we've taken the gross amounts and worked out what that means per villager, and Your Honour will see the calculations then set out in the tables in paragraph 30. The first table is kina figures and the second table is Australian dollar figures, and If I can just focus on the Australian dollar figures, which is the top of p.9, you will see for the South Fly region that the compensation payments per person per year are worth $94.27.

HIS HONOUR: Per person, in the South Fly?

MR BEACH: Yes. The only group that does reasonably well is the Middle Fly, at $407 per year, and Your Honour will see that the Middle Fly region did in fact have external lawyers, there is some material filed by OTML that I will take you to.

HIS HONOUR: Is that the one that (indistinct) act for.

MR BEACH: Yes, that's right, yes.

HIS HONOUR: What is the - is there any evidence in Mr Grech's affidavit as to the annual income of people in this area?

MR BEACH: No. The only thing we have for paragraph 31 is the price of a tub of margarine at 5.34 kina, which is about two and a half Australian dollars.

HIS HONOUR: So it's about the Middle Fly, it's about less than 12 tubs of margarine a month. The South Fly it's three tubs of margarine a month, less than three.

MR BEACH: When Your Honour hears perhaps glowing reference to how good the settlements are and what prejudice is going to be caused to people if the injunctions that my clients (indistinct) Your Honour should put that in its proper perspective, that if I'm asking for a delay of a month or two for the South Fly region, they're being delayed the receipt of about $94 for a couple of months. Hardly likely to cause civil unrest, Your Honour, or prejudice to individuals.

HIS HONOUR: Yes.

MR BEACH: Can I just go back to the mine continuation agreement.

HIS HONOUR: Yes.

MR BEACH: In paragraph 19, the effect of the payments are set out.

HIS HONOUR: You've finished with 16.

MR BEACH: Yes. I was looking at 17 and 18 which were the payments and we've analysed those.

HIS HONOUR: Yes.

MR BEACH: In paragraph 19, we set out - the MCA sets out the effect, and it's stated that the payments to be made by the company are and shall be in full compensation for all loss and damage contemplated by the environmental predictions suffered or to be suffered by the communities. So it's a full release for everything and on its face it would also include not only economic loss but property damage and personal injury loss by the look of it.

HIS HONOUR: What is the compensation regime established by the Mining Ok Tedi Agreement Act?

MR BEACH: That's been amended from time to time, Your Honour. There was an earlier compensation arrangement that was enshrined in about 1996 at the time of the settlement agreement in the eighth, what we stated, eighth supplemental agreement. So there are certain compensation payments already being made, and these are additional - - -

HIS HONOUR: And these are in addition to those.

MR BEACH: These are additional compensation arrangements, yes. The only caveat to that, Your Honour, is that for one of the reasons - one of the settlement agreements provided for an additional $40m and on one construction of one of these agreements that $40m arguably may be subsumed and the payments made under the MCA, but I don't - it's in one of the affidavits, I think of Mr Grech, in fact, I'll just give Your Honour the reference to that, I don't want to get into a debate about it, because it's only put by Mr Grech as a possible construction and it's not something that Your Honour needs to get into, but it's in his second affidavit of 17 December, and it appears in paragraph 23.

HIS HONOUR: Yes.

MR BEACH: In a sense, Your Honour, given that this is additional compensation, rather than the whole compensation villages are receiving, it tips the balance of convenience for an injunction further our way. In other words, Your Honour's injunction is only going to have effect in relation to the additional compensation being paid under the mine continuation agreements, not the whole box and dice for all compensation received by the villages as a result of the mine's activities, and that in part, I suppose, explains why the additional compensation is not very large an amount set out in Mr Grech's affidavit. In terms of the timing, Your Honour - - -

HIS HONOUR: In terms of the claim for damages that's made in this proceeding, what sort of damages are claimed per head, or is that too broad a question?

MR BEACH: Look, it's unquantified in dollar terms, but it's loss of enjoyment of amenity, loss of the right to fish and that sort of issue, but I should point this out, Your Honour, that it's the damage flying from the breach of the 1996 agreement, so it's the incremental damage from not doing anything about it since 1996.

HIS HONOUR: Yes.

MR BEACH: It's not all of the damage, because - - -

HIS HONOUR: That had already happened.

MR BEACH: Exactly, yes. I don't want to overstate it.

HIS HONOUR: Yes.

MR BEACH: That's why our principal relief is we really want a mandatory injunction to stop the further pollution by the construction of the tailings pipeline and storage system. That was a primary relief in the statement of claim.

HIS HONOUR: Yes.

MR BEACH: In terms of the timing of payment in paragraph 21, I said to Your Honour that the payment would be made within 30 days. If the agreement were to go ahead the 30 days, as I read this agreement, would have been anticipated to have run from 31 December, that's strictly if the condition precedent is waived, then presumably payment could be made within 30 days of that waiver, so if the condition precedent were to be waived tomorrow, payment could be received.

HIS HONOUR: The condition precedent would be taken to have been satisfied.

MR BEACH: I'd assume so, Your Honour, yes, it's not perfect language.

HIS HONOUR: Yes.

MR BEACH: Paragraph 24, I just want Your Honour to note again the recognition of the concept of clans rather than villagers, that is cheques will be made pay able to clans.

HIS HONOUR: Does a banking system operate in these villages to which we are referring?

MR BEACH: Not as Your Honour would understand it. You would have to go to one of the towns, Your Honour.

HIS HONOUR: Yes.

MR BEACH: Paragraph 26.1, provides an overriding discretion for OTML as to wehther to withhold or defer payments. So, Your Honour, if contrary to the agreement, there are people in a village who are otherwise bound by the agreement but who don't opt out, then OTML in its discretion can withhold or defer payment. So again, there are conditions on the payment. Paragraph 26.2 says that if the mine ceases to operate before 2010, then the company's obligations will cease in relation to making payments, and again in 26.2(b), there's a statement of parties meeting to negotiate in good faith, which is not particularly useful, Your Honour, in terms of being enforceable. And if the mine continues after 2010, then there's provision for payments to continue.

HIS HONOUR: What is 26.2(b) meant to cover, it's meant to cover, if the mine stops before the ten years, before 2010, the parties will meet to negotiate appropriate compensation.

MR BEACH: For any uncompensated environmental effects that have occurred, or are likely to occur in the future.

HIS HONOUR: What do you say that means.

MR BEACH: Well, it doesn't mean anything, because it doesn't contain any obligation, but it seems to be throwing - well, I'll express it differently. If you're reading this agreement and your an unsophisticated villager, it would tend to lead you to believe that you might get something more if the mine stops before 2010, if you deserve something more because of uncompensated pollution effects. So you might think, well, not withstanding that it's stopped before then, you could legitimately expect something for the future. But there's no obligation to provide anything for the future. What is absolute, Your Honour, are the releases. The releases are absolute, but when it comes to compensation payments and different scenarios, they're all heavily drawn in favour of OTML as Australia lawyers would read these documents. They don't have any certainty or enforceability about them. And, Your Honour, the evidence is unambiguous on this point. All of these villagers are group members, none of them have had legal advice on these documents. The only ones, the only evidence of legal advice is in relation to the Middle Fly region which is one of the five regions. It's interesting, OTML are very quick to file affidavits when they know that there are other lawyers acting in a region to say, "What are you talking about, Your Honour should be comforted by the fact that there are these other lawyers giving them advice." And the only evidence that they've come up with is the one of five regions. Your Honour can see these sorts of agreements. If you were a commercial party on the other side, you wouldn't put up with drafting of this type. Paragraph 27.1 - - -

HIS HONOUR: Is 26.3 relevant, that's - - -

MR BEACH: That's just saying if the mine goes beyond 2010, then those annual payments will continue to be made.

HIS HONOUR: Yes.

MR BEACH: Clause 27.1, this deals with the environmental predictions, and it provides if the communities acknowledge and agree that if the environmental predictions are not accurate, then in 27.1, this right to discuss with the company a revision of payments under Clauses 17 and 18 - - -

HIS HONOUR: Just before - continue to monitor the environmental effects. What are the environmental predictions, that's defined in the beginning, is it?

MR BEACH: It is, Your Honour, yes. Your Honour will see a definition for that in Clause 1 which then takes you over to Schedule 2.

HIS HONOUR: Predictions that have been drawn from the MWMP, what's that - perhaps it doesn't matter.

MR BEACH: I think it's the mine waste management program, Your Honour, but I could be wrong about that.

HIS HONOUR: Yes, all right. So if the environmental effects of - exceed the environmental predictions, the parties shall meet to discuss revision of payments.

MR BEACH: And that will be their sole remedy.

HIS HONOUR: Taking into account the environmental effects in excess of those contemplated by the environmental predictions.

MR BEACH: The environmental predictions, Your Honour, are carefully drawn. It's said if the mine stays open, there will be more environmental effects down river than if the mine is closed now. The best way to reduce the effects is for the mine to close. What this demonstrates, Your Honour, is that the villagers, if they're bound, they provide all of full and certain releases, and if the environmental predictions for the Ok Tedi turn out to be worse than predicted, their only right is conferred in Clause 27.1 which is, "this right to discuss with the company, a revision of payments." I mean, that's, Your Honour - if Your Honour was operating under s.33V, Your Honour, well Your Honour would not approve of an agreement of that sort unless the monetary payments being made were overwhelmingly advantageous.

HIS HONOUR: That wouldn't be in any way enforceable, would it?

MR BEACH: No, no.

HIS HONOUR: I mean, you might be able to enforce a meeting - - -

MR BEACH: What's enforceable against us are the releases unfortunately, so we release for everything in terms of the environmental damage, that's provided in the absolute nature of Clause 12. If Your Honour goes to Clause 12.3, the generality of the foregoing, that release and discharge includes and extends to - - -

HIS HONOUR: Yes.

MR BEACH: - - - occurrences or circumstances contemplated by, or more adverse than, or in excess of the environmental predictions.

HIS HONOUR: So Clause 27.1, insofar as it's merely an expression of intention to confer a gratuitous benefit or to discuss the conferring of a gratuitous benefit.

MR BEACH: Yes.

HIS HONOUR: Because the right to claim anything is gone by the earlier release.

MR BEACH: Yes. Your Honour, I raise these points, because not only is there a serious question to be tried on the nice legal point of s.33V, but if we're right on that, and these agreements require court approval, I'm going to put to Your Honour that there's an overwhelming case that Your Honour wouldn't approve settlements in this form. It's trite law to observe that the stronger our case on the serious question to be tried, the less Your Honour needs to be concerned about the balance of convenience issue, is sort of a balancing exercise, that's why I'm taking Your Honour to some of these agreements.

HIS HONOUR: Yes.

MR BEACH: Not only to justify one injunction should go, but also to justify why, if we ever get to the 33V process, Your Honour would not approve agreements of this type. Can I take Your Honour to Clause 34, that's merely saying that if a village whose representative has signed and a village where there has been no signature of a representative, then the agreement takes effect, as between the village and the company, in relation to the village that has signed, that's really - - -

HIS HONOUR: Yes, so it's in effect, in relation to those who have signed, whether everyone has signed or not.

MR BEACH: Yes.

HIS HONOUR: Clause 35, Your Honour, is another provision which appears to have been misunderstood by one of Ok Tedi's own witnesses and I'll take Your Honour to the affidavit later, but it's said here, Your Honour, that the parties may, after the expiration of five years, meet to review the operation. Now, again, Your Honour, what does that mean?

HIS HONOUR: They could meet any time they like, to review the operation.

MR BEACH: Exactly. But interestingly, Your Honour, one of the deponents to one of the Ok Tedi affidavits, seems to have thought that that meant that although he was binding himself to something for five years, after five years, there'd be something else. It seems again, Your Honour, to an unsophisticated villager, to be a sort of a provision that's calculated to induce in their minds some comfort that something could happen later, and that they're not, once and for all binding themselves into an agreement that would release their claims forever. Why else would an agreement - such a provision be put in there other than for some appearance of reasonableness and the fact that we come back in five years, we might all review this, it's not binding perhaps after five years. Your Honour, perhaps if I can just find that affidavit - yes, it's an affidavit of Euriti Booer, it's one of the OTML - - -

HIS HONOUR: I think you've both filed affidavits by him, haven't you?

MR BEACH: Yes, that's right. I'm going to take you to Ok Tedi's affidavit, Your Honour.

HIS HONOUR: Yes. Do you know where it appears in the material - it's all right, I've got a very helpful index here.

MR BEACH: It's Euriti Booer of 13 December.

HIS HONOUR: Yes, that's No. 14. If Your Honour goes to paragraph 5, this is the worst of the case against my clients, to take the OTML affidavit.

HIS HONOUR: Yes.

MR BEACH: "Tim Hammond asked us why we signed the MCA, I told him ... (reads) ... review the agreement."

HIS HONOUR: Yes.

MR BEACH: Do you know what I mean, Your Honour? An unsophisticated person, believing, "Well things can be reviewed, I haven't committed myself absolutely to" - - -

HIS HONOUR: Yes.

MR BEACH: It's certainly stuck in his mind as being a salient feature whereas Your Honour would appreciate that for lawyers that part of the MCA says nothing.

HIS HONOUR: I think we'll leave it there.

MR BEACH: Yes.

HIS HONOUR: And we'll take the matter up at 2.15.

LUNCHEON ADJOURNMENT