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Tuesday, 20 August 1996
Page: 2714

(Question No. 96)


Senator Margetts asked the Minister for Defence, upon notice, on 11 June 1996:

With reference to the litigation involving the department and the contractor in relation to the former Cockatoo Dockyard at Cockatoo Island in Sydney Harbour:

(1) What is the current position with the arbitration proceedings relating to Cockatoo Island and dockyard.

(2)(a) What awards have been made; (b) what awards are expected to be made; and

(c) what are the amounts of the awards.

(3)(a) What legal costs have been incurred by the parties to date; and (b) what further legal costs are expected.


Senator Newman —The Minister for Defence has provided the following answer to the honourable senator's question:

(1) The arbitration proceedings involved two main aspects. Cockatoo Dockyard Pty Ltd (CODOCK) sought damages for breach of contract arising from the former Government's 1990 decision to cease Oberon submarine refits at Cockatoo island dockyard. Arbitration hearings on that aspect are completed. An interim award, except for the matter of legal costs, has been given in a decision by the Arbitrator. The Commonwealth is seeking leave to appeal that decision in the NSW courts. The second aspect involves the Commonwealth's claim against CODOCK for alleged contamination of Cockatoo island. The arbitration is currently adjourned on that aspect pending a resolution of the Commonwealth's application to have its claims heard, as a preference, by the NSW Courts. The NSW Supreme Court hearings on that application commenced on 12 June 1996.

(2)(a) See the above answer.

(b) Decisions on legal costs and any award in the Commonwealth's contamination claim are outstanding.

(c) An interim award was given by the Arbitrator against the Commonwealth of $10,864,240 plus interest of $5,315,355 as at 8 December 1995. However, that interim award is being challenged as I have indicated.

(3)(a) Since 1992/93 the legal costs have involved three main elements: those borne by the Attorney General's Department totalling some $7.9m, the costs involved with non-Commonwealth support including barristers totalling some $5.7m, and expert consultancies including environmental studies amounting to $3.6m. These costs cover both aspects of the arbitration and NSW court proceedings related thereto. The legal costs incurred by CODOCK, or its parent Australian National Industries Ltd, are a matter for those parties to confirm.

(b) A further $1.5m has been budgeted for next financial year but this may vary depending upon the duration of legal proceedings and the outcome of appeal applications.