Federal Court of Australia Mineralogy Pty Ltd v State of Western Australia [2020] FCA 1517 File number(s): QUD 257 of 2020 Judgment of: GREENWOOD ACJ Date of judgment: 19 October 2020 Catchwords: PRACTICE AND PROCEDURE – consideration of whether orders ought to be made in the principal proceeding before the Federal Court of Australia having regard to proceedings commenced in the High Court of Australia in which the question of the validity of the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) is to be determined Legislation: Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA), s 7 (introducing Part 3 into the primary Act) Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA), ss 7, 8, 10, 11, 19, 20 Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 45 Date of hearing: 15 October 2020 Counsel for the Applicants: Mr K S Byrne Solicitor for the Applicants: Alexander Law Counsel for the Respondent: Mr S Doyle QC with Mr S Webster Solicitor for the Respondent: Clayton Utz ORDERS QUD 257 of 2020 BETWEEN: MINERALOGY PTY LTD (ACN 010 582 680) First Applicant INTERNATIONAL MINERALS PTY LTD (ACN 058 341 638) Second Applicant AND: THE STATE OF WESTERN AUSTRALIA Respondent order made by: GREENWOOD ACJ DATE OF ORDER: 19 OCTOBER 2020 THE COURT ORDERS THAT: 1. These proceedings are adjourned generally pending the publication of orders and reasons for judgment by the High Court of Australia in proceedings B54/2020 entitled Mineralogy Pty Ltd & Anor v State of Western Australia, or earlier resolution or order determining those proceedings. 2. The costs of and incidental to the case management conference on Thursday, 15 October 2020, are reserved. 3. Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for judgment in support of these orders are made and published from Chambers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GREENWOOD ACJ: 1 These proceedings are concerned with the question of whether the Court ought to make particular procedural orders in the principal proceeding as sought by the respondent or whether no procedural steps ought to be taken pending the determination by the High Court of the validity of the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) (the "Amending Act") or the determination of the validity of particular provisions of the Amending Act. 2 The applicants contend that if the amendments introduced into the principal Act (the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA) (the "Act")), as from "midnight on Thursday morning, 13 August 2020" (Western Australia's State Solicitor's Office letter dated 14 August 2020), are within the legislative power of Western Australia and thus valid laws of that State, they have the effect, as a matter of construction, that the principal proceedings "are terminated". 3 The applicants have filed proceedings in the High Court of Australia in which they seek a declaration that the Amending Act is outside the legislative power of the State of Western Australia and thus invalid. Alternatively, they seek a declaration that a wide-range of provisions of the Amending Act are invalid. In light of those proceedings, the applicants contend that no further step ought to be taken and no further costs ought to be incurred until the High Court has determined the validity of the Amending Act as that matter bears so directly on the principal proceeding. 4 The respondent contends that there are fundamental difficulties with the principal proceeding as constituted; that it needs to be regularised independently of any other matters; that a proper pleading ought to be filed addressing those matters expressly and particularly having regard to the claim of "unconscionable conduct"; that the validity of the Amending Act is not in controversy in the proceeding; that the proceeding as constituted is susceptible of a likely successful strike-out application but such an application would be premature before the applicants have had an opportunity to file and serve a proper pleading; and that until the review on Thursday afternoon, 15 October 2020, the position of the applicants had been that they would be seeking to amend the originating application and the Concise Statement presently framing the claims. 5 I will return to those matters shortly. 6 Ordinarily, matters such as these would not require reasons explanatory of the making of the orders. However, having regard to the material filed in relation to the matters presently in issue and the submissions, some observations ought to be made. 7 The principal proceeding was commenced by Mineralogy Pty Ltd ("Mineralogy") and International Minerals Pty Ltd ("IMPL") against the State of Western Australia (the "State"). The applicants seek orders under s 232 of the Australian Consumer Law ("ACL") which operates on the footing of conduct by a person who has engaged, or is proposing to engage, in a contravention of a provision of Chapters 2, 3 or 4 of the ACL; or orders under s 237 of the ACL (loss suffered by reason of such conduct); or orders under s 243 of the ACL (orders relevantly related to ss 237(1), 238(1) or 239(1) of the ACL). The orders sought by the applicants require the State to "withdraw the Amendment Bill from Parliament"; to seek to reach agreement with Mineralogy and IMPL in respect of any amendments to an agreement called the "State Agreement" (which means the Iron Ore Processing (Mineralogy Pty Ltd) Agreement (being Schedule 1 to the Act)); to participate in an arbitration under the State Agreement; to cease purporting to amend the State Agreement contrary to its terms; to cease purporting to resume the property of Mineralogy contrary to the State Agreement; and to cease purporting to terminate an extant arbitration contrary to the State Agreement. The applicants claim damages for breach of contract, damages under s 236 of the ACL, alternatively compensation under ss 237 and 243 of the ACL, and other relief. 8 It can be seen from the originating application and the Concise Statement as lodged and ultimately "filed", that the principal proceeding addresses circumstances relating to the introduction into the Parliament of Western Australia of a Bill to amend the Act, and conduct relating to those steps said to have a particular character. 9 Subsequently, of course, the Amendment Bill was enacted and the Amending Act commenced as described earlier. 10 As to the moment in time when the principal proceeding was filed, these matters should be noted. 11 The originating application was "lodged" with the Court (Federal Court Rules 2011 (the "FCR"), r 2.21(1)) by being "sent by electronic communication" (r 2.21(1)(d)) to the Brisbane Registry of the Court in accordance with r 2.23(1) at 12:24:23pm on 12 August 2020. An originating application is a document that must be either signed or stamped with the Court seal (r 2.01(2)(a)), and it is a document required to be endorsed with a date for hearing (Form 15). If such a document "sent" to a Registry of the Court is "accepted at the Registry" (r 2.24(1)), a "notice of filing and hearing" (r 2.24(1)(a)) is inserted as the first page of the document and is taken to be part of the document (r. 2.24(2)). The "date for hearing" often endorsed on an originating application is either "A Date to be Advised" or "To be Advised" so as to enable the docket Judge to whom the matter is allocated to then nominate a first return date. A document is "filed" if it is "lodged" in accordance with r 2.21(1) and (in the case of an originating document such as an originating application), "accepted" in a Registry by being stamped as filed: r 2.25(1)(b)(ii). In this case, that occurred on 13 August 2020 at 2:29:56pm. Where such a document is sent by electronic communication to a Registry; and the whole document is received at the Registry before 4:30pm on the business day for the Registry; and the document is "accepted" at the Registry (in this case relevantly engaging r 2.25(1)(b)(ii)), the document is "taken" to have been "filed" on the day the whole document was received. In this case, that day was 12 August 2020. The originating application was accompanied by an electronic lodging of a Concise Statement at the same time as the originating application. 12 The Amending Act came into operation with effect from midnight on 13 August 2020, by which time the Federal Court proceeding had been commenced by having been filed on 12 August 2020. 13 Although it will be necessary to identify aspects of the subject matter of the Concise Statement shortly, the intersection of the Amending Act with the principal proceeding involves these considerations. 14 Section 10 of the Act, as amended, provides that any relevant arbitration that is in progress, or otherwise not completed, immediately before commencement of the Amending Act is terminated. 15 Section 11 of the Act, as amended, provides that on and after commencement, the State has, and can have, no liability to any person that is, or would be, in respect of any loss, or other matter or thing, that is, or is connected with a disputed matter or in any other way connected with a disputed matter: s 11(1). Any liability of the type described in s 11(1) that the State had to any person before commencement of the Amending Act is extinguished: s 11(2). On and after commencement, no proceeding can be brought, made or begun against the State to the extent that the proceedings are or would be in respect of any matter or thing that is or is connected with a disputed matter or in any other way connected with a disputed matter: s 11(3). Any proceedings brought, made or begun against the State to the extent falling within s 11(3) (relevantly proceedings related to a disputed matter), "are terminated" if either or both of the following apply: (a) the proceedings are brought, made or begun before commencement but are not completed before commencement; (b) the proceedings are brought, made or begun before the end of the day on which the Amending Act receives the Royal Assent but are not completed before the end of that day: s 11(4). 16 Section 19 of the Act, as amended, adopts a similar formulation in relation to protected matters in the sense that the State has no liability to a person concerning a protected matter; any such liability the State may have had to a person is extinguished; on and after commencement, no proceeding can be brought, made or begun against the State for the purpose of establishing such a liability; and any proceedings brought, made or begun against the State of such a kind are terminated if either or both of the matters earlier described in the context of s 11(4) subsist. 17 Section 20 provides that any conduct of the State that is, or is connected with, a protected matter cannot, in any proceedings, be challenged or called into question: s 20(1); the rules of natural justice do not apply to such conduct: s 20(2); and any proceedings engaging the subject matter of s 20(1) are terminated if either or both of the matters earlier described in the context of s 11(4) subsist. 18 The terms "conduct", "connected with", "disputed matter", "liability", "loss", "proceedings" and "protected matter" are given detailed and expansive definitions in the Amending Act, now the Act. It is not necessary to examine the expansive content of these terms. It is sufficient to note that there is a project in Western Australia described as the Balmoral South Iron Ore Project (the "BSIOP") which has been the subject of proposals put to the relevant Minister by either or both of Mineralogy and IMPL. As to that matter, the applicants say this in their Concise Statement: 7. On or about 8 August 2012, Mineralogy and IM submitted a comprehensive and detailed Project Proposal to the Minister pursuant to clause 6 of the State Agreement (BSIOP Proposal). … 8. … 9. The BSIOP was a proposed mining project in the Pilbara region of Western Australia on tenements held by Mineralogy and covered by the State Agreement. 10. On or about 4 September 2012, the Minister under the State Agreement refused to consider the BSIOP as a 'proposal'. 11. On or about 6 November 2012, Mineralogy and IM notified the Minister that a dispute had arisen in respect of the BSIOP Proposal and noted that the dispute was to be resolved by arbitration. 12. On 19 March 2013, Mr Michael McHugh AC QC was appointed as arbitrator to resolve the dispute referred to arbitration. 13. On 20 May 2014, Mr McHugh made an award in the arbitration (2014 Award). 14. The 2014 Award found the State had breached the State Agreement by, among other things, refusing to consider the BSIOP Proposal. 15. On 11 October 2019, Mr McHugh made an award (2019 Award) which declared that Mineralogy and IM were entitled to pursue damages for the breach of the State Agreement. 16. Mineralogy and IM have since made a claim for damages for breach of the State Agreement in an arbitration commenced under the State Agreement. 19 In the Concise Statement, the applicants say that the "Amendment Bill" has three features. First, it purports to resume property of Mineralogy including a valuable chose in action against the State in respect of the BSIOP in contravention of clause 30 of the State Agreement. Second, the Bill purports to vary the State Agreement without complying with clause 32 of the State Agreement. Third, the Bill purports to terminate the arbitration proceedings in relation to the assessment of the damages arising out of the breaches the subject of the findings in the 2014 Award and the 2019 Award. 20 Again, it can be seen that the principal proceeding is framed in terms of the criticisms of the applicants in relation to the consequences for them and their rights reflected in the Amendment Bill and the conduct of the State (and officers of the State) anterior to the formulation and introduction of the Bill into the Legislative Assembly. In the Concise Statement, the applicants say that the Amendment Bill, its preparation and introduction into the Parliament of Western Australia is a "breach" of the State Agreement and "conduct that is, and remains, in all the circumstances, unconscionable and in contravention of s 21 of the ACL". They claim that by reason of the breach and the State's unconscionable conduct, they have suffered, and will continue to suffer, loss and damage. 21 Clearly enough, the formulation of the causes of action relied upon by the applicants and the relief they claim, will need to be significantly amended in the context of the relevant events involving the enactment of the Amending Act. The State says that one of the fundamental difficulties with the principal proceeding (whether by reference to conduct relating to the introduction of the Amendment Bill into the Western Australian Parliament, or reformulated by reference to the enactment of the Amending Act and conduct relating to those steps) is that the conduct of the State, by its officers engaging in formulating briefing instructions and the Portfolio Minister introducing the Amendment Bill into the Parliament and the Parliament enacting the Amending Act, is not justiciable. The State says that such conduct cannot sustain an actionable breach of contract nor a contravention of the ACL. 22 It is not necessary in these reasons to examine with precision the statutory integers of ss 10, 11, 19 and 20 of the Act as amended and the detailed scope of those provisions as they sequentially engage with all of the detailed elements of the defined terms mentioned at [18] of these reasons which give operational content to the prescriptions, prohibitions and effects brought about by those sections. 23 It is sufficient to note that, as a matter of construction, the State contends that the arbitral Awards of 20 May 2014 and 11 October 2019 are of no effect and are taken never to have had any effect; the Arbitration Agreement applicable to the relevant arbitrations and under which the Awards were made is not valid and is taken never to have been valid; and the arbitration in relation to a claim for damages in connection with the August 2012 BSIOP Proposal and the claims for damages arising out of conduct in relation to the July 2014 matters is terminated. The Amending Act, as a matter of construction, renders the State as having no liability (and extinguishes any subsisting liability) to any person in respect of any loss, matter or thing in, or connected with, the subject matter of the disputes referred to arbitration, claims arising out of the subject matter of the defined disputes and brings to an end proceedings which seek to agitate any claim for such a loss in respect of the relevant matters or things so disputed and so connected. The Amending Act also imposes a statutory obligation upon Mineralogy, IMPL and Mr Palmer to indemnify the State against any loss or liability connected with any proceedings which fall within the definition of the term "protected proceedings". 24 By its defence filed in the High Court proceeding, the State says that the principal proceeding in the Federal Court is a proceeding to which s 11(4) "applies" because it was brought, made or begun before the commencement of the Amending Act but not completed before commencement (as defined): para 19(d)(i)(4). 25 The State says that the "termination" of the Federal Court proceeding (para 19(d)(iii)) is not contrary to Chapter III of the Constitution as the termination of the principal proceeding does not alter or vary the nature of any judicial process used to determine the merits of a dispute in the exercise of judicial power and does not require the Federal Court to make any order which determines the merits of a dispute in the exercise of judicial power. 26 By para 24 of its defence in the High Court proceeding, the State says that the Federal Court proceeding is the only proceeding of the type described in s 19(3) of the Act, as amended, brought, made or begun before commencement or before the end of the day on which the Amending Act received Royal Assent and consequently, the principal proceeding is the only proceeding to which s 19(4) applies: s 24(d). The State says that the legislative prescription, alteration or extinguishment of the substantive rights or liabilities of the relevant person, and/or the step of legislating to the effect that a Court shall not provide remedies in respect of such liabilities, does not impermissibly affect the jurisdiction of the Federal Court contrary to Chapter III of the Constitution. 27 Similarly, by para 25 of its defence in the High Court proceeding, the State says that the Federal Court proceeding is the only proceeding of the type described in s 20(1) of the Amending Act brought, made or begun before commencement or before the end of the day on which the Amending Act received Royal Assent and consequently the principal proceeding is the only proceeding to which s 20(4) "applies". The State says that the exclusion of conduct contemplated by s 20(1) from challenge, and/or legislating that the Federal Court shall not provide remedies in respect of excluded conduct does not impermissibly affect the jurisdiction of the Federal Court contrary to Chapter III of the Constitution. 28 Nevertheless, s 11(4), engaged as the State says it is by the principal proceeding, has the effect, if valid, of terminating by means of a State Act, a proceeding which seeks to invoke the exercise of the judicial power of the Commonwealth in quelling a controversy in which the jurisdiction of a Chapter III Court is enlivened. Similarly, ss 19 and 20 operate within the limits of the subject matter to which those sections are directed. 29 Nevertheless, even though the State contends that these provisions of the Amending Act apply to the principal proceeding, s 8(4) of the Act (a provision of Part 3 which was introduced into the Act by the Amending Act) provides that a provision of Part 3, or a provision of any Part 3 subsidiary legislation (that is, Regulations under s 29 or an order under s 30 of the Act), does not apply to a matter or thing to the extent (if any) that it is necessary to avoid the provision, or any part of the provision, applying to the matter or thing inconsistently with a law of the Commonwealth, or not being valid for any other reason. 30 Thus, to the extent of any s 109 difficulty or any other invalidity, the provision to that extent does not apply. 31 The question of whether the Amending Act is within or outside the legislative power of the State of Western Australia (and thus either a valid or invalid law of the State of Western Australia) does not fall to be determined in the principal proceeding. The High Court is seized of that question and the answer given will determine the validity of the Amending Act at large and, in particular, ss 10, 11, 19 and 20 construed in the context of the way in which those provisions engage with the defined terms mentioned earlier. 32 That being so, there seems little point in causing the State on behalf of its people to incur legal costs and related expenses or in causing the applicants to incur costs and expenses in addressing the principal proceeding until a point in time when the High Court has decided questions which immediately bear upon the present proceeding. 33 The State says that there is utility in making orders for further procedural steps in the principal proceeding for a number of reasons. 34 The State says that by an email of Friday, 14 August 2020, sent by the solicitors for the applicants to the solicitors for the State, the applicants' solicitor said that he had instructions to make amendments to the originating application and Concise Statement and would serve the amended documents upon the State within 14 days. 35 On 15 September 2020, the solicitors for the State sent a letter by email to the solicitors for the applicants observing that the 14 day period had expired on 28 August 2020 and the State had not been served with an amended application or an amended Concise Statement. The solicitors for the State also observed that unless the applicants withdrew the application or served an amended application and Concise Statement by 18 September 2020, the State would proceed on the basis of the existing material as filed and file an application to strike out the proceeding. 36 On 25 September 2020, the solicitors for the State wrote to the solicitors for the applicants observing that no amended application or Concise Statement had been served and that the applicants had not taken any steps in the proceeding since filing the application six weeks earlier. The solicitors for the State observed, as mentioned earlier, that the proceeding suffered from a number of fundamental defects with the result that the applicants had no reasonable prospects of successfully prosecuting the claims, as formulated, in the proceeding. The solicitors for the State contended that the proceeding was frivolous or vexatious or an abuse of process. They contended that the defects in the originating application and Concise Statement were not capable of being cured by way of amendment and they called for the discontinuance of the whole of the proceeding by 5 October 2020, absent which an interlocutory application would be made seeking an order for the dismissal of the proceeding or an order that judgment be entered in favour of the State. The request for discontinuance was made for the "express purpose" of avoiding the costs associated with an interlocutory application. 37 On 6 October 2020, the solicitors for the applicants responded in which they said this: Here, we are concerned with your client's breach of the Iron Ore (Mineralogy Pty Ltd) Agreement and its unconscionable conduct in and about the arbitration agreement made [on] 8 July 2020 to submit to arbitration and appoint the Honourable Michael McHugh, AC, QC as arbitrator [of] the disputes in recital B of the arbitration agreement and the mediation agreement made on or about 5 August 2020 to submit to mediation and appoint the Honourable Wayne Martin, AO, QC as mediator [of] the disputes in paragraph 1 of the mediation agreement. Other matters The purported reach of the Amendment Act is to extinguish any liability your client has, or can have, in the proceeding and to terminate the proceeding. It follows that while the validity of the Amendment Act remains in issue, our clients are purportedly prevented from filing an amended application and your client cannot make the foreshadowed strike-out application. The argument that our clients could not do so is similar to that put to the Honourable Justice Martin by senior counsel for our clients in proceeding number BS8766 of 2020 in the Supreme Court of Queensland. As you know, those submissions included an argument that your client should not be heard on its application and that your [client's] position was akin to a party who is in contempt of court and cannot be heard. His Honour reserved his decision. Once the decision is known, we will immediately revisit the need to file an amended application. (Although not submitted in the hearing in the Supreme Court, our clients also consider any attempt by your client to use the processes of the Court which involve the operation of the Amendment Act to require a decision which is favourable to your client is an abuse of the process of the court and any application by your client will be met by an application for a permanent stay of the application). [emphasis added] 38 The repugnancy point and the position adopted, as quoted above, seems to have been overtaken by an email of 12 October 2020 sent by the solicitor for the applicants to the solicitors for the State in which an adjournment of the review on Thursday, 15 October 2020, was sought for a period of 14 days on a particular basis. The applicants' solicitor said this: … [W]e advise that our clients intend on making amendments. In those circumstances, please advise if your [client] would consent to such an adjournment and by that time, an amended document will be finalised. 39 The solicitors for the State responded on 14 October 2020 and said this: In light of your letter dated 6 October 2020 and your email of 12 October 2020 our client does not propose to proceed immediately with a dismissal application. Instead our client proposes directions in terms of the attached draft order. The proposed order provides by order no 1 that your client be allowed your suggested period of 14 days in which to file and serve an amended claim and a statement of claim (we consider the matter should proceed on pleadings and not by way of "Concise Statement"). Order no 2 then provides for our client to either file and serve an application for dismissal/strike-out or, alternatively, file and serve its defence within 28 days, being the time provided under the rules for filing a defence. Order no 3 provides for a further case management review after those steps. 40 In other words, the State seeks to regularise the principal proceeding by seeking orders that require the applicants to identify in a coherent, properly particularised pleading, the material facts which are said to give rise to conduct on the part of the State constituting a breach of the State Agreement and conduct capable of being characterised as "unconscionable conduct in and around the arbitration agreement made on 8 July 2020 to submit to arbitration … and the mediation agreement made on 5 August 2020 to submit to mediation … [of] the disputes in paragraph 1 of the mediation agreement". The State says that once it has seen such a pleading, it can then determine whether the pleading identifies an arguable and justiciable controversy. The State contends that if the applicants are not capable of pleading the causes of action upon which they seek to rely and should those causes of action not give rise to a justiciable controversy, the State would seek to make an application for an order under s 31A(2) of the Federal Court of Australia Act 1976 (Cth). 41 The State says that if the causes of action upon which the applicants rely are incapable of being pleaded properly and are unmeritorious, independently of any question arising under the Amending Act, the State ought to have an opportunity to address that matter. 42 On the other hand, if the causes of action are unable to be pleaded in any coherent way or seek to assert questions of fact and law which are not justiciable, the Amending Act, if valid, has the effect of terminating the proceedings in any event. If the Act is found by the High Court to be valid, the principal proceeding is already terminated. If the proceeding is pleaded in a way which reflects propositions of law and fact which are thought to be plainly arguable and justiciable, the proceeding is already terminated if the provisions of the Amending Act are valid. 43 Perhaps the right course is to metaphorically put the principal proceeding to one side until the High Court has determined the question of validity of the Amending Act. 44 It should be remembered that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (s 37M) and, of course, the parties to a civil proceeding before the Court must conduct the proceeding in a way that is consistent with the overarching purpose: s 37N. In circumstances where the High Court is seized of the question of the validity of the Amending Act and the decision on the question of validity will have a direct bearing upon the principal proceeding, the overarching purpose suggests that the principal proceeding should be adjourned generally and brought on for review within seven days of judgment being delivered by the High Court on the validity question. In principle, if the judgment of the High Court reveals any area of operation within which a contended claim might be maintainable, an order can then be made requiring the applicants to deliver an amended originating application and a statement of claim in the principal proceeding within 21 days of the case management orders. 45 For present purposes, the only orders to be made are that the proceeding is adjourned generally pending the delivery of judgment or earlier resolution of the proceedings before the High Court, with costs reserved. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Greenwood ACJ. Associate: Dated: 19 October 2020