A Northern Territory Supreme Court judge has rejected evidence given by former high-ranking NT Government officials — including ex-chief minister Adam Giles — and Darwin developer Halikos Group’s senior managers during legal action over a $300 million accommodation deal with Japanese gas giant Inpex.
- Developer Halikos sued Japanese company Inpex for damages, alleging the gas giant walked away from a $300m deal
- Justice Judith Kelly ruled in favour of Inpex last August, but the reasons for her decision were only released this week
- The awarding of costs for the legal action is expected to be in the millions and will likely be awarded against Halikos at a later date
Halikos was seeking damages of more than $100 million, claiming Inpex did not follow through on a contract to lease accommodation from Halikos’s H 105 hotel in Darwin in 2014.
Justice Judith Kelly ruled in favour of Inpex last August, but the reasons for her decision were only released this week.
Justice Kelly rejected evidence provided by Mr Giles, his then chief of staff and current CLP president Ron Kelly, Halikos Group’s managing director Shane Dignan and hospitality manager Geoff Weeks.
The court heard that Mr Dignan repeatedly pushed Darwin Inpex general manager Sean Kildare and construction manager Chris Wheeldon to expand the gas giant’s existing accommodation agreement with Halikos from February to October 2014.
Halikos manager’s account ‘improbable’
Mr Dignan had told the Supreme Court Mr Kildare and Mr Wheeldon had agreed at a meeting in February 2014 to a contract variation that would see Inpex lease an additional 225 units at the H105 building on Mitchell Street, which Halikos was constructing at the time.
Mr Dignan testified that they verbally agreed to the contract.
Justice Kelly found Mr Dignan’s account of that meeting was inconsistent with documented evidence.
“I consider that Mr Dignan’s account of the meeting is highly improbable,” she wrote.
“It is not consistent with any of the objective evidence of communications between the parties.”
She also found that the Darwin Inpex representatives Mr Dignan claimed agreed to the contract did not have the authority to approve a $300 million deal and that Mr Dignan was well aware of Inpex’s internal approval processes.
“It is inherently unlikely that Inpex, a subsidiary of a large, multinational corporation and operator of a commercial joint venture, objectively intended to bind itself legally to a long-term contract supposedly worth … hundreds of millions of dollars by one of its employees telling Halikos that he was ‘happy with that agreement’,” she wrote.
Adam Giles’s evidence rejected
Mr Giles became involved in the matter when he, Mr Kelly and then chief NT public servant Gary Barnes met with Halikos and Inpex representatives at local eatery Hanuman restaurant in March 2014, resulting in a drafted NT government press release celebrating the deal that was never released.
Mr Giles told the court in May 2017 Mr Kildare had told him that a 15-year agreement had been reached between the two companies that would see Inpex lease units at the H 105 building.
“All the objective evidence points to there being no such agreement at that time and I do not accept that Mr Kildare told Mr Giles there was,” Justice Kelly found.
“Nor do I accept the evidence of Mr Dignan, Mr Weeks or Mr Giles about what happened at the dinner … nor, in so far as it conflicts with the evidence of Mr Kildare, do I entirely accept the accuracy of the evidence of Mr Kelly.”
Mr Barnes did not provide evidence during the trial.
Offers of finance conditional on lease
Justice Kelly found that when the signed accommodation contract failed to materialise in the months following the dinner — and numerous meetings with Halikos were cancelled by Inpex — Mr Dignan requested Mr Giles write a letter to Inpex’s most senior Australian executive, warning Inpex’s reputation would be harmed if a resolution was not found.
Justice Kelly found that letter “does not appear to have been well received by the Inpex executives with whom Halikos had been dealing” and that Inpex reiterated there was no accommodation contract in a subsequent meeting with Halikos.
Inpex’s lawyers had argued Mr Dignan was insistent on obtaining a written assurance of Inpex’s intentions in order to secure millions of dollars in financing to build the H 105 building.
Justice Kelly said in her ruling that claim was substantiated.
“There is evidence that Halikos had one or more offers of finance that were conditional on there being in existence a four-year lease of H 105 to Inpex and that Halikos had represented that such a lease had been agreed to or was about to be entered into,” she wrote.
The awarding of costs for the legal action is expected to be in the millions, and will most likely be awarded against Halikos at a later date.
A spokeswoman for Halikos said the company was reviewing the reasons for the decision and would not say whether it intended to appeal.