Owston Nominees No 2 Pty Ltd v Branir Pty Ltd [2000] FCA 145
NG 3184 OF 1995
EINFELD J
25 FEBRUARY 2000
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NG 3184 OF 1995 |
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BETWEEN: |
Owston
Nominees No 2 Pty Limited First Applicant Warren
Perry Anderson Second Applicant |
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AND: |
Branir
Pty Limited First Respondent Tovehead
Pty Limited Second Respondent Aburizal
Bakrie Third Respondent |
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JUDGE: |
EINFELD J |
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DATE: |
25 FEBRUARY 2000 |
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PLACE: |
SYDNEY |
CORRIGENDA
1 In the reasons for judgment handed down by Justice Einfeld on 25 February 2000 the following amendments should be made:
Page 5, line 9, after the word "right", please delete the word "of".
Page 80, paragraph 204, line 4, please delete the sentence "I will return to the events of 23 December 1993 in this connection later".
Page 81, paragraph 207, line 5, after the word "which", please delete the word "says" and insert the word "said".
Page 87, paragraph 223, line 2, please delete the word "It" and insert the words "The settlement". In line 3, after the words "dollars and", please insert the words "the Share letter".
Page 89, line 6, after the words "Branir Pty", please delete "Lt" and insert "Ltd".
Page 104, paragraph 270, line 1, after the words "seek to", please delete the word "achieve" and insert the words "agree on".
I certify that this is a true copy of the
Corrigenda made to the Reasons for
Judgment in this matter of the
Honourable Justice Marcus Einfeld.
Associate:
Dated: 21 March 2000
OWSTON NOMINEES No 2 PTY LTD
AND WARREN PERRY ANDERSON
AND ABURIZAL BAKRIE
The reasons for judgment in this case extend over 130 pages and
cover the many complex questions of law and fact which the case raised. This summary is produced to assist in the
public understanding of the judgment.
It is of course not the authorised judgment of the Court or any part of
it. It is at best a general overview
and summary of what has been a very difficult case. It still is, because there are still issues to be decided after
further argument, even possibly more evidence. If there is a difference between
what this summary says and what the judgment says, as I hope and believe is not
the case, the judgment is right and the summary is wrong. The full judgment is available in hard copy
on request to my Associate now and will shortly be on
the internet at:
· http://www.fedcourt.gov.au/ or
· http://www.austlii.edu.au/au/cases/cth/federal_ct/
The case concerned a complex of some seven properties in the Northern Territory known generally as Tipperary Station, with an aggregate area of some 10,000 square kilometres. In 1985-6, Owston Nominees, a company owned and controlled by Western Australian businessman Warren Anderson, acquired these properties to operate as a huge cattle station. Between 1985 and 1989 Anderson spent more than $50 million to develop Tipperary, building a large well equipped homestead and various service buildings including a school, and stocking it with cattle. He also introduced a large mango plantation. Also included in the development were a swimming pool, an indoor tennis court, an equestrian centre and stables, a polo field, and a 7000 feet bitumen airstrip. The homestead is 150 kilometres south of Darwin.
Between 1987 and 1989, as an extension of his long interest in the preservation of endangered species through his support for the work of the Wildlife Fund for Nature, Anderson spent more than $3 million on developing a wildlife sanctuary on Tipperary Station. The sanctuary is still in operation. It is not a zoo of animals for public display but a reserve for the breeding of rare and endangered species in order to preserve their gene pool for future generations. The animals in the sanctuary are not caged but roam freely in large enclosed areas. Considerable efforts are made to minimise environmental and other stresses. In fact, an earlier part of the proceedings involved a clash over whether a high class tourist resort at Tipperary, which was being considered at the time, was consistent with the interests and wellbeing of the animals because of the likelihood that they would be stressed by exposure to people en masse looking at and photographing them, and perhaps trying to feed them as at a public zoo.
Since the purchase of the entire stock of rare and endangered species from Lord MacAlpine's private zoo near Broome in 1990-2 for approximately $1.2 million, there are at the sanctuary at present about 1500 animals of about 29 species and 425 birds of about 54 species most of which are rare and whose survival as a species is endangered. All of them have either been bred at the sanctuary or bought by Anderson from sources overseas and in Australia. The current annual cost of running the sanctuary is said to be between $250,000 and $300,000. It is not, and is not intended to be, a commercial or profit making enterprise.
The Sanctuary is what is known as a class B quarantine facility under the regulatory supervision of the Australian Quarantine Inspection Service and the Australian Nature Conservation Agency. Most of the species of exotic animals which the Sanctuary has imported into Australia are not able to be subjected to the normal regime of quarantine and disease testing applied to commercial animals because they are inherently very susceptible to stress and will die if they are not handled with the utmost care. They are imported into Australia under regulations which severely restrict where they can be kept and subject them to lifetime surveillance by the quarantine authorities. The relevant licences were granted to and are held by Anderson personally. These animals can only be moved from the Sanctuary to another quarantine facility and such movements are a difficult and costly exercise which might cause the animals to die or suffer considerable stress.
In 1989 Owston sold half of its interest in Tipperary to Tovehead Pty Ltd, a company controlled by Aburizal Bakrie a wealthy Indonesian businessman who has been a senior economic adviser to Indonesian Presidents, for $US80 million. This price was later reduced to about $US60 million when Anderson forgave a debt by Bakrie to him of about $US20 million which was part of the original deal. Tipperary thereafter became a joint venture between the two companies, effectively meaning the two men. Part of the arrangement made at the time was that Anderson and Bakrie could each choose an area of 20,000 acres from the Tipperary land for his own use and purpose. Anderson's 20,000 acres was principally to enable him to expand the sanctuary and build himself a residence. On a joint inspection of the property, the two men generally identified the areas they wanted for themselves. There was some documentation of this exchange at the time but its legal status and meaning has been at great issue in this case.
In 1993, to assist him with meeting some pressing financial obligations, Anderson sold the remaining 50% of Tipperary and some related assets to Branir Pty Ltd, another Bakrie Company, for $A20 million. Anderson claimed that he was to keep operating the sanctuary and that he was to be given a minority shareholding (a little over 40%) in Branir. The shares have in fact never been issued but Anderson has continued to operate the sanctuary. The legal position of the sanctuary and those shares in the agreements made at the time of that sale and purchase have been at the centre of these proceedings. In fact the Court was asked to decide whether and to what extent ownership of the sanctuary was included in or excluded from the sale and what should now be done about the shares.
The result is important to both parties. Anderson has invested a significant amount of money and effort in the sanctuary. He alone has government permission to operate it. If he loses control, he will lose all or most of his investment, and the wildlife will have to be disposed of and dispersed at a very considerable cost and, quite possibly, some if not a complete loss to humanity of some species.
If, on the other hand, Bakrie does not own the sanctuary, he will lose control of a significant and obviously valuable portion of the Tipperary properties which he believed he had purchased at considerable cost, and will have to accommodate the need to supply access to the sanctuary and services such as water and electricity. The Branir shares will enable Anderson to exercise rights as a minority shareholder in a Bakrie company.
The case was heard over some 20 days between August 1998 and April 1999. The Court sat in Sydney, Bali (to take the evidence of Mr Bakrie who could not leave Indonesia at the time) and at Tipperary itself. The Court had an aerial and ground inspection of the sanctuary and parts of the broader property.
The case raised a number of legal issues which are detailed in the judgment, but essentially the case has been decided in favour of Owston and Anderson on the facts. In general, the principal witnesses for the Bakrie interests have not been believed on important issues whereas the evidence given by Anderson and his witnesses has been largely accepted. The Court concluded in particular that one of Bakrie's advisers, an Australian named Charles Graham, who died during a break in the Court's hearings in 1998 while still under cross examination, deliberately lied about a number of significant matters largely because of his strong personal antagonism to Anderson.
On the other hand, the Court has found that Bakrie and Anderson were close personal friends as well as business associates, and that they had a mutual desire to help each other through financial difficulties. In fact, the Court's impression was that despite this strongly contested and sometimes acrimonious litigation, the two men still have regard for each other and are reluctant antagonists, in some respects prisoners of advisers, circumstances and these proceedings themselves. Graham in particular contributed to this unfortunate state of affairs. The Court has found that due to his own passions about Anderson, Graham did not carry out Bakrie's wishes and instructions in a number of matters, with the consequence that many of the issues raised in this litigation were left deliberately vague and uncertain when they had in fact been resolved in discussions between the two principals.
The consent of the Northern Territory Minister in charge of pastoral land is required for any change of use or ownership of most of the land in question. Subject to that consent, and although final orders and declarations have not yet been made pending further submissions and argument from the parties, the result of the case is that Anderson will be granted a substantial interest, yet to be defined, in the land on which the sanctuary stands and the right to continue to care for and protect the wildlife. He will also be granted a form of ownership, yet to be defined, of the additional 20,000 acres which he seeks so that the breeding operations and wildlife numbers can be expanded and a residence and other necessary buildings can be constructed. Owston will also be granted its 40% shareholding in Branir.
I express my appreciation to counsel and their instructing solicitors and clerks for their assistance in this difficult case, and to the parties and their staffs for their many courtesies especially at the hearings in Bali and at Tipperary Station, and in the Court's inspection of the sanctuary and Tipperary itself. The written submissions of both parties at the end of the case were of a particularly high quality without which, in view of the complexity and detail of the case, these reasons for judgment would not have been achievable in any reasonable time frame or with the same degree of consideration of the issues. I acknowledge the work of those responsible for their excellence.
Owston
Nominees No 2 Pty Ltd v Branir Pty Ltd [2000] FCA 145
CONTRACT - oral agreement to grant a sub-lease or other interest over 20,000 acres of land subject to a pastoral lease for use as a wildlife sanctuary for the breeding and preservation of endangered and exotic animals - consent for change of use under a pastoral lease - lease in perpetuity under Crown Lands legislation - Statute of Frauds - requirement of evidence in writing of an agreement to transfer an interest in land - necessity to plead the doctrine of part performance - ascertainment and enforceability of terms under an oral agreement which is partly evidenced by writing - oral agreement to issue shares - admissibility of oral evidence - whether written document embodies the entirety of the agreement - establishment of precise terms of oral agreement where the written document does not adequately reflect the intentions of the parties
ESTOPPEL - proprietary estoppel - whether representations as to the granting of a sub-lease or other interest in land under a pastoral lease and reliance on those representations gives rise to an estoppel against denying the interest in land
MISLEADING AND DECEPTIVE CONDUCT - whether representations as to the granting of a sub-lease or other interest in land under a pastoral lease constituted misleading and deceptive conduct under the Corporations Law, the Trade Practices Act or the Fair Trading Act
Trade Practices Act 1974 (Cth) s 52
Fair Trading Act 1987 (NSW)
Crown Lands Act 1931 (NT) ss 23A, 26
Pastoral Land Act 1992 (NT) ss 3, 38, 61, 67, 68
Crown Lands Consolidation Act 1913 (NSW)
Roach v Bickle [1915] 20 CLR 663
Davies v Littlejohn [1923] 34 CLR 174
Massart v Blight [1951] 82 CLR 423
Brown v Heffer [1967] 116 CLR 344
Regent v Millett [1976] 133 CLR 679
The Wik Peoples v State of Queensland [1996] 187 CLR 1
Pejovic v Malinic [1960] 60 SR (NSW) 184
Millett v Regent [1975] 1 NSWLR 62
BHP v Hapag-Lloyd [1980] 2 NSWLR 571
Sidney Cooke Ltd v Hapag-Lloyd [1980] 2 NSWLR 587
Francis v Francis [1952] VLR 328
Riley v Osborne [1986] VR 193
Caton v Caton [1866] LR 1 Ch App 137
Maddison v Alderson [1883] 8 AC 467
White v Nealyon [1886] 11 AC 171 (PC)
Carr v McDonald's Australia Limited & Ors, Federal Court of Australia (Burchett J), unreported, 16 February 1994
NG 3184 OF 1995
EINFELD J
25 FEBRUARY 2000
SYDNEY
TABLE OF CONTENTS
INTRODUCTION
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1 |
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Tipperary |
1 |
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The Sanctuary |
2 |
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THE DISPUTE |
4 |
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THE NEGOTIATIONS IN
SUMMARY |
4 |
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The 1990 deal |
4 |
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After the 1990 deal |
7 |
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The Macquarie Bank deal |
7 |
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The December 1993 deal |
9 |
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After the Settlement |
11 |
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PERSONAL
RELATIONSHIPS |
12 |
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THE CLAIM |
20 |
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THE CROSS CLAIM |
22 |
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THE SANCTUARY |
22 |
|
Overview |
22 |
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The Facts |
23 |
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The 1989 events |
23 |
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The Joint Statement of Understanding |
27 |
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February 1990 to late 1993 |
27 |
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September - mid-December 1993 |
27 |
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Anderson's meetings in Jakarta |
29 |
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14 December - 23 December 1993 |
34 |
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Before Settlement on 23 December |
38 |
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After the Settlement |
39 |
THE CAUSES OF ACTION
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44 |
Threshold
Arguments
|
44 |
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The Crown Lands legislation |
44 |
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Private perpetual sub-leases |
51 |
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The Statute of Frauds |
52 |
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The 1993 settlement documents preclude
this action |
55 |
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Contract |
58 |
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Intention to contract |
59 |
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An enforceable agreement |
60 |
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The content of the agreement |
63 |
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The term of the agreement |
65 |
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Estoppel |
67 |
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Misleading and deceptive conduct |
69 |
THE SHARES
|
70 |
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Overview |
70 |
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The Facts |
72 |
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The Share letter |
80 |
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Intention to create a legally binding
agreement |
84 |
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Was the Share letter an accurate and
complete record of the agreement? |
84 |
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The Branir Shareholding Agreement |
92 |
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$A8 million payable only out of
dividends |
93 |
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Branir must be debt free on the issue
of shares to Owston |
97 |
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The $A8 million is payable to Bakrie
not Branir |
100 |
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Security for the debt |
102 |
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In summary |
103 |
CONCLUSIONS
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103 |