Court probes government deals

by Chris Griffith
Published 21 October 1995 in The Sunday Mail


my face


In Queensland, it looms as a trial that could probe the innermost workings of government almost as deeply as Western Australia's Easton Royal Commission.

Premiers, cabinet ministers, and top public servants could be asked to take the stand, as dozens of documents that strip bare the usually impenetrable secrecy of the Goss government's cabinet processes are revealed in all their glory.

At the heart of the case is a developer who is suing the state government for $77 million, claiming it reneged on an approval it gave him in to build a $25 million public riverside attraction at the bottom of Brisbane's Kangaroo Point cliffs.

Godfrey Mantle, a property developer and owner of the three Jimmy's on the Mall restaurants in Brisbane's Queen Street Mall, formed a company JL Holdings Pty Ltd which after an exhaustive tendering process, won government approval for its project to restore and redevelop the old naval stores site.

For four years the company invested money, employed lawyers, architects and other consultants, wrote submissions, and negotiated endlessly with ministers, government departments, and the Brisbane City Council.

It was the grandest of plans for the cliffs -- an aviary and noctarium, fauna park, children's museum, river deck, food court and restaurants, and theatre -- all to be enjoyed after a Brisbane vintage tram ride from a carpark past a waterfall of fine mist over the cliffs.

Mr Mantle's dream, of course, was never implemented. In 1991, the relatively new Goss government dumped the project. This is despite JL Holdings having all the necessary approvals from the outgoing National Party government, including Cabinet approval, and despite the initial support the project received from the incoming Goss government.

As a result, in early 1994 JL Holdings began legal action in the Federal Court against the Queensland Government and the South Bank Corporation for damages.

In its original statement of claim, the developer not only alleged the government had breached the Cabinet approval given in 1989, but also it had conspired with the South Bank Corporation to make sure South Bank opened before the Kangaroo Point redevelopment.

Further, JL Holdings alleged that some of its concepts and plans for the cliff development were incorporated in the South Bank development without permission.

In all, the Queensland Government and South Bank initially faced trial on 13 grounds including breach of contract, infringement of copyright, defamation, civil conspiracy, and a breach of the federal Trade Practices Act.

At first glance, this legal action may seem the predictable reaction of a developer unprepared to accept that the new Goss government may want to be more cautious in its approval of developments.

Some too may feel empathy for a new government for having the courage to halt design and development of another big public space so close to South Bank.

But this court case is not about examining which developments are best for the Kangaroo Point cliffs and for Brisbane, nor does it challenge the government's right to lawfully overturn approval of a major project.

Rather, this case is about the way the government acted in the events leading up to when it stopped the project.

Preliminary hearings in the Federal Court suggest this case will hone in on the integrity and lawfulness of the government's dealings with the developer through an examination of the minutest actions by the Premier, the Office of Cabinet, senior Ministers, public servants, and senior advisers that dealt with Mr Mantle and JL Holdings.

"The overwhelming feature of this, which is a feature that has not arisen in these cases before, is that there are serious challenges to the propriety of conduct by the Government of Queensland and Instrumentalities of it", said Justice John von Doussa, the first judge to hear the case in February last year.

Because of the nature of this case, the Federal Court has taken the highly unusual step of ordered the Queensland Government to release all its internal documents about JL Holdings, Mantle, and the project.

The resulting avalanche of material, known collectively as "MRB4", has been given to Mantle's lawyers.

It includes cabinet minutes, cabinet advice, cabinet submissions and briefing notes, minutes of a cabinet committee meeting , cabinet budget committee submissions, ministerial correspondence about cabinet submissions, decisions, or agendas, briefing notes by government officers to ministers, and even internal correspondence with the Crown Law office about the government's legal position with Mantle.

In arguing why normal Cabinet confidentiality should be waived, Federal Court judge Justice Susan Kiefel said the documents did not disclose financially sensitive information or actual deliberations of Cabinet.

"Some of the documents in question may properly be described as important to the applicant's case and, with respect to the events of 1990 and 1991 potentially crucial to a number of its claims," she said.

"Assuming that the document did disclose actual deliberations of Cabinet (but as to which I have some doubt) the topic with which they were concerned and the time which has passed are matters which affect the level of protection called for.

"The interest of justice would I consider be frustrated were production withheld."

The judgment is a lesson for the Queensland Government or indeed any government that believes Westminster cabinet conventions, or exemptions in its own Freedom of Information law will always protect the secrecy of some of its most secret dealings.

Mantle's lawyers have since examined these documents, and have added civil fraud to the company's list of grievances against the state government in a revised statement of claim submitted in July this year.

The new claim alleges that at least two months after the Premier decided the project should be axed, the government invited JL Holdings, still unaware of the impending rejection, to make a submission to Lands Minister Bill Eaton as to why the project should still proceed.

It says that by May 7th, 1991, Mr Goss "either alone or in consultation with others including Kevin Rudd", the then Director-General of the Office of the Cabinet, "and Ross Dunning", the then Director-General of the Department of Administrative Services, had already decided the plan for the Old Naval Stores was to be rejected.

Yet it says that in a letter dated July 17th, 1991, the government gave JL Holdings "the facade ... that it was being afforded natural justice and a reasonable opportunity for due consideration to be given to any submission."

The claim says the evidence for Mr Goss's position in May 1991 is a memo from Mr Rudd to then Acting Premier Tom Burns.

It says Rudd's memo also indicated that Mr Goss wanted the government to implement an alternative plan for a boardwalk from the Expo site to the Storey bridge, with funding support from Brisbane City Council.

Mr Burns, it says, was to speak to Administrative Services Minister Ron McLean about the alternative plan, speak with Brisbane City Council Lord Major Jim Soorley about the council's involvement with the alternative project, then "speak with the private developer and deliver him the bad news".

It says at 5pm on May 27th,1991, a meeting at which Mr Rudd and Premier's adviser David Barbagello were present discussed "advice or expression of opinion from Barbagello that no compensation would be paid to the applicant [JL Holdings] if the Boardwalk proposal proceeded".

The governments documents, it says, also show that the Senior Solicitor of the Council, Mr Terry Griffiths, had warned of a potentially litigious situation, and that there was a need for all parties to get together.

Then on July 1st, 1991 State Cabinet decided "that approvals will not be given to the development of Crown land adjacent to the Naval Stores" (Cabinet decision 01348).

This, according to the new JL Holdings claim, all happened before the company was aware that its project was to be dumped in favour of an alternative, and well before the government had offered Mantle the chance to submit his views prior to Mr Eaton finally deciding whether the Old Naval Ports development went ahead.

Finally, on October 4th, 1991, Mr Eaton advised JL Holdings that it had decided not to endorse the leases of its Crown Land crucial to the development.

"I invited you to forward to me submission you might care to make upon certain matters before I made my final decision as to whether to endorse approval on the proposed leases," Mr Eaton wrote.

"I have now given consideration to this matter, and I advise that I have decided not to endorse approval on the proposed lease".

JL Holdings is therefore claiming that the government was telling it one thing while it was off doing another.

For their part, the government and South Bank Corporation have denied all allegations. The government in particular says it never finally approved Mr Mantle's project, because it never officially signed the endorsement of the approval given by the National Party government in January 1989, and therefore there is nothing to answer for.

The preliminary hearing resumes in the Federal Court in Brisbane on October 31st; the case is expected to go to trial next year.

But the interest in this case and these documents will go beyond the immediacy of the dispute over the Kangaroo Point development.

A decade ago, business in Queensland enjoyed a rocky ride under the previous Nation Party government, led by Sir Joh Bjelke-Petersen. As the Fitzgerald Inquiry showed, that ride was somewhat more gentle for those companies prepared to donate to the National Party, either directly or through companies such as Kaldeal Pty Ltd, run by Sir Edward Lyons.

In the mid 90s, political donations may no longer be the issue, and the development at all costs adage is regarded with more scepticism.

But private sector business still seeks a lawful, honest, and predictable relationship with government.

The Federal Court will provide a litmus test as to whether this is happening in the Sunshine State.