Coalpac Pty Ltd/State of New South Wales/Gundungurra Tribal Council Aboriginal Corporation #6 (NC97/7), Wiray-dyuraa Maying-gu (NC11/3), Warrabinga-Wiradjuri People (NC11/4)/State of New South Wales

[2012] NNTTA 145

NATIONAL NATIVE TITLE TRIBUNAL

Coalpac Pty Ltd/State of New South Wales/Gundungurra Tribal Council Aboriginal Corporation #6 (NC97/7), Wiray-dyuraa Maying-gu (NC11/3), Warrabinga-Wiradjuri People (NC11/4)/State of New South Wales, [2012] NNTTA 145 (24 December 2012)

Application No:              NF12/1

IN THE MATTER of the Native Title Act1993 (Cth)

- and -

IN THE MATTER of an inquiry into a future act determination application

Coalpac Pty Ltd   (Applicant/Grantee party)

- and -

Gundungurra Tribal Council Aboriginal Corporation #6    (First native title party)

Wiray-dyuraa Maying-gu  (Second native title party)

Warrabinga-Wiradjuri People  (Third native title party)

- and -

The State of New South Wales   (Government party)

DECISION ON WHETHER THE TRIBUNAL HAS POWER TO CONDUCT AN INQUIRY

Tribunal:  President Graeme Neate
Place:  Brisbane
Date of decision:  24 December 2012

Hearing dates:  5 July 2012, 24 August 2012

Representatives:

Grantee party:  Ms Georgia Denisenko, Just Outcomes
First native title party:            Mr Eddy Neumann, Eddy Neumann Lawyers

Second native title party:        Mr Philip Teitzel, Teitzel & Partners

Third native title party:          Mr Simon Blackshield, Blackshield and Co.

Government party:                 Mr James Herrington, Lawyer, on behalf of the Department       of Industry & Investment

Catchwords:             Native title – future act – application for determination for the grant of mining leases and permission for prospecting activities – three native title parties – agreement reached between Grantee party and First and Third native title parties – no agreement with Second native title party – whether Grantee party negotiated in good faith with Second native title party – Second native title party alleged that Grantee party did not negotiate in good faith in its behaviour in relation to the conduct of the negotiations, the content of the negotiations and the form of outcome which the Grantee party sought to negotiate – legal principles on good faith negotiations

Legislation:    Native Title Act 1993 (Cth), ss 29, 30, 30A, 31, 33, 35, 36, 38, 75, 151

Environmental Planning and Assessment Act 1979 (NSW)

Mining Act 1992 (NSW)

National Parks and Wildlife Act 1974 (NSW)

Cases:Austmin Platinum Mines Pty Ltd v Western Australia

Brownley v Western Australia (1999) 95 FCR 152

Brownley v Western Australia (No 1) [1999] FCA 1139; (1999) 95 FCR 152

Cameron v Hoolihan (2005) 196 FLR 37

Coalpac Pty Ltd/State of New South Wales/Gundungurra Tribal Council Aboriginal Corporation #6 (NC97/7), Wiray-dyuraa Maying-gu (NC11/3), Warrabinga-Wiradjuri People (NC11/4)/State of New South Wales ([2012] NNTTA 117

Coalpac Pty Ltd/State of New South Wales/North Eastern Wiradjuri People of the Bathurst, Lithgow, Mudgee area, [2009] NNTTA 133

Coalpac Pty Ltd/State of New South Wales/North Eastern Wiradjuri People of the Bathurst, Lithgow, Mudgee area, [2009] NNTTA 137

Cox v Western Australia (2008) 219 FLR 72

Drake Coal Pty Ltd v Smallwood (2012) 257 FLR 276

FMG Pilbara Pty Ltd v Cox (2009) 175 FCR 141

FMG Pilbara Pty Ltd/Cheedy/Western Australia ([2009] NNTTA 38

The Griffin CoalMining Co Pty Ltd v Nyungar People ((2005) 196 FLR 319 (‘Griffin Coal’)

Gulliver Productions Pty Ltd v Western Desert Lands Aboriginal Corporation (2005) 196 FLR 52

June Ashwin and Others on behalf of the Wuthi People/Western Australia/Contact Uranium Limited [2008] NNTTA 129

Magnesium Resources Pty Ltd; Anthony Warren Slater/Puutu Kunti Kurrama and Pinikura People; Puutu Kunti Kurrama and Pinikura People #2/Western Australia [2010] NNTTA 211

Placer (Granny Smith) v Western Australia (1999) 163 FLR 87

South Blackwater Coal Ltd v Queensland ((2001) 165 FLR 232

South Blackwater Coal Ltd/Queensland/Cliff Kina and Others on behalf of the Kangoulu People (QC98/25) and Lindsay Kemp and Others on behalf of the Ghungalu People (QC99/16) ([2001] NNTTA 23

Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303

Townson Holdings Pty Ltd & Anor/Ron Harrington-Smith & Ors on behalf of the Wongatha People and June Ashwin & Ors on behalf of the Wutha People/Western Australia [2003] NNTTA 82

Walley v Western Australia (1999) 87 FCR 565

Western Australia/Cyril Gordon & Others on behalf of the Kariyarra People/Pilbara Livestock Depot, NNTT WF09/32, [2010] NNTTA 55

Western Australia v Daniel (2002) 172 FLR 168

Western Australia/David Daniel & Ors on behalf of the Ngarluma and Yindjibarndi People; Valeria Holborow & Ors on behalf of the Yaburara and Mardudhunera People; Wilfred Hicks & Ors on behalf of the Wong-goo-tt-oo People, [2002] NNTTA 230

Western Australia v Dimer (2000) 163 FLR 426

Western Australia/Thomas on behalf of the Walgen People/Anaconda Nickel Ltd [1998] NNTTA 8

Western Australia/Cyril Gordon & Others on behalf of the Kariyarra Peo Townson Holdings Pty Ltd & Anor/Ron Harrington-Smith & Ors on behalf of the Wongatha People and June Ashwin & Ors on behalf of the Wutha People/Western Australia [2003] NNTTA 82

White Mining (NSW) Pty Ltd v Franks ((2011) 257 FLR 205

REASONS FOR DECISION

Introduction       

1. On 4 March 2011, the State of New South Wales (‘the Government party’) gave notice under s 29 of the Native Title Act 1993 (Cth) (‘the Act’):

   (a)of its intention to grant Mining Lease (ML) 393 to Coalpac Pty Limited (‘the Grantee party’) pursuant to the Mining Act 1992 (NSW)

   (b)of its intention to grant ML 392 to Lithgow Coal Company Pty Limited, and

   (c)apparently, that the Minister for Primary Industries would give consent to the Grantee party to conduct prospecting activities on Exploration Licence (EL)7517.

In accordance with s 29(5) of the Act, 24 March 2011 was specified as the notification day in relation to these proposed future acts. The Grantee party in its future act determination application lodged with the National Native Title Tribunal (‘the Tribunal’) on 6 June 2012 stated that it purchased the Lithgow Coal Company Pty Limited in 2008.

1. The notices for MLA 392 and MLA 393 stated that the grant of these tenements would authorise the mining of coal by open cut methods for a term of 21 years. The notice for EL 7517 stated that the Grantee party is the holder of the EL in relation to Group 9 minerals. It specified that the licence contains a condition that the holder must not prospect on any land or waters on which native title exists without the prior consent of the Minister for Primary Industries and that the licence holder has sought the Minister’s consent to conduct prospecting activities. The Minister’s consent requires that EL 7517 be notified pursuant to s 29 of the Act.

2. Although the Grantee party holds EL 7517, for ease of reference, MLA 392, MLA 393 and EL 7517 are described collectively in these reasons as ‘the proposed tenements’. The proposed tenements are located adjacent to the township of Cullen Bullen, in the Central Tablelands region of New South Wales. MLA 392 has an area of 865 hectares and MLA 393 has an area of 335 hectares. They are situated approximately to the north and east of Cullen Bullen respectively. EL 7517, which was granted on 16 April 2010, covers an area of 1803 hectares and is situated east of Cullen Bullen. The location of each of the proposed tenements is shown on a plan Mining Lease Applications Subject To Native Title & Proposed Boreholes prepared by the Grantee party. The plan is Annexure GED-1 referred to in the Affidavit of Georgia Elizabeth Denisenko sworn on 17 August 2012, and is reproduced as Attachment A to these reasons for decision.

3. At the time that notice of the proposed future acts was given by the Government party, there was a registered native title determination application by Elsie Stockwell and Pamela Stockwell on behalf of members of the Gundungurra Tribal Council Aboriginal Corporation (‘the First native title party’) which overlaps more than half (about 10.6385 square kilometres) of the area covered by EL 7517.

4. On 17 June 2011, William (Bill) Allen, Joe Bugg, Stephen Riley and John Brasher on behalf of the Wiray-dyuraa Maying-gu Native Title Claim Group (‘the Second native title party’, ‘WDM’) filed a native title determination application in the Federal Court in response to the s 29 notices for the proposed tenements. The application, NSD955/11 (NC11/3), covers only the proposed tenements and was filed within three months after the notification date, as required by s 30(1)(a)(i) of the Act.

5. On 22 June 2011, Wendy Lewis, Mavis Agnew and Martin de Launey on behalf of the Warrabinga-Wiradjuri People (‘the Third native title party’) filed a native title determination application in the Federal Court in response to the s 29 notices for the proposed tenements. This application, NSD1000/11 (NC11/4), was also filed within the three month period after the notification date and covers only the proposed tenements, and MLA 376 (which has an area of 309.5 hectares situated approximately 7 kilometres east of Portland).

6. On 19 July 2011 and 21 July 2011, respectively, a delegate of the Native Title Registrar accepted the native title determination applications for registration and entered them on the Register of Native Title Claims. Each application was registered within a four month period after the notification date. Consequently, both of the registered native title claimants are a ‘native title party’ within the meaning of s 30(1) of the Act, with status as a ‘negotiation party’ under the right to negotiate provisions (s 30A).

7. In summary, at the end of the four months after the notification date there were registered native title determination applications by the following native title parties in respect of the proposed tenements:

   MLA 392       Second native title party
     Third native title party

   MLA 393       Second native title party
     Third native title party

   EL 7517         First native title party (part of EL 7517)
     Second native title party

   Third native title party.

8. On 6 June 2012, being a date more than six months after the s 29 notices were given, the Grantee party made an application pursuant to s 35 of the Act for a future act determination under s 38. The application stated that the Grantee party had ‘not been able to reach agreement’ with the Second native title party in relation to the proposed tenements. On 7 June 2012, I was appointed as the Member to conduct the inquiry in relation to the application.

9. The future act determination application states that the proposed tenements form part of the Grantee party’s Consolidation Project of the Invincible Colliery and Cullen Valley Mine, located within the Western Coalfields area (the Project). There are more than nine other tenements within close proximity to each other in the area of these proposed tenements, and the area is underlain by old underground workings in the Lithgow Seam which were the subject of historical tenements. According to the Grantee party, underground mining has occurred ‘beneath the greater part of the EL 7517 area’. The Grantee party states that there is a long history of mining in the immediate vicinity of Cullen Bullen dating back over a period of 120 years and that the Invincible Colliery ‘has been in existence for over 100 years operating predominately as an underground mine up until 1998 when underground operations were suspended. It has operated as an open cut mine since that time’. The application also lists a number of other large resource areas and mines within the immediate vicinity of the Project.

The ‘good faith issue’

1. The Act states that the negotiation parties ‘must negotiate in good faith’ with a view to obtaining the agreement of ‘each of the native title parties’ to the doing of the future act or the doing of the future act subject to conditions to be complied with by any of the parties (s 31(1)(b)). The Act also provides that if any negotiation party satisfies the Tribunal that any other negotiation party (other than a native title party) did not negotiate in good faith, the Tribunal must not make a determination pursuant to s 38 (see s 36(2)).

2. On 5 July 2012, a preliminary conference was convened by the Tribunal to consider whether any of the native title parties wished to contend that either the Government party or the Grantee party had failed to negotiate in good faith and to set directions for the inquiry. The preliminary conference was attended by the legal representatives for each of the native title parties, representatives from the State and representatives from the Grantee party. At the preliminary conference the Grantee party indicated that it was close to finalising an agreement with both the First and Third native title parties. This view was confirmed by the representatives of these two native title parties. On 30 October 2012, the Tribunal was advised that the Grantee party had settled an Ancillary Deed with the First native title party and the Third native title party.

3. At the preliminary conference, the legal representative of the Second native title party contended that the Grantee party did not negotiate in good faith with the Second native title party as required by s 31(1)(b) of the Act. He stated that the Second native title party made no such contention in relation to the Government party. He confirmed that position at the directions hearing on 24 August 2012.

4. Neither the First native title party nor the Third native title party contended that any other negotiation party did not negotiate in good faith as required by s 31(1)(b).

5. Consequently, there is only one issue to be resolved in order to decide whether the Tribunal has power to exercise its jurisdiction in relation to the future act determination application: is the Tribunal satisfied that the Grantee party did not negotiate in good faith with a view to obtaining the agreement of the Second native title party to the grant of the proposed tenements or the grant of the proposed tenements subject to conditions to be complied with by any of the parties? (see ss 36(2), 31(1)(b)) That question is referred to as ‘the good faith issue’ in these reasons for decision.

6. On 5 July 2012, the Tribunal issued directions to the parties for the filing of statements of contentions and supporting documentary evidence in relation to the good faith issue.

7. The statement of contentions and supporting documentary evidence of the Second native title party were lodged with the Tribunal on 30 July 2012 (this was accepted as a late compliance with the directions made on 5 July 2012). On 7 August 2012, the Grantee party lodged its statement of contentions and supporting documentary evidence (the Grantee party sought a variation of the directions, which were subsequently amended on 2 August 2012). The Government party confirmed in writing on 7 August 2012 that it would not be seeking to make any contentions on the good faith issue. On 15 August 2012, the Second native title party filed its statement of reply to the Grantee party’s statement of contentions (this was accepted as a late compliance with the amended directions of 2 August 2012). On 17 August 2012, the Grantee party filed additional material in relation to the good faith issue and further material in the form of a correcting Affidavit of Anthony John Hanrahan on 23 August 2012.

8. In accordance with Directions 1, 2 and 3 made on 5 July 2012 and varied on 2 August 2012, the negotiation parties lodged the following documents with the Tribunal in relation to the good faith issue:

   (a)Statement of contentions on behalf of the Second native title party and Annexures 1–7

   (b)Statement of contentions on behalf of the Grantee party and Affidavit of Anthony John Hanrahan dated 6 August 2012 and Annexures AJH1–AJH4, AJH5a–AJH5d and AJH6–AJH20.

   (c)Statement of reply to Grantee party’s Statement of contentions on behalf of the Second native title party and Annexures 1–5.

   (d)Additional material on behalf of the Grantee party: Affidavit of Georgia Elizabeth Denisenko dated 17 August 2012 and Annexures GED1–GED6.

   (e)Additional material on behalf of the Grantee party: Affidavit of Anthony John Hanrahan dated 23 August 2012, to correct previous affidavit dated 6 August 2012.

9. On 24 August 2012, a directions hearing was held to identify whether any of the parties was of the view that a hearing was required in relation to the good faith issue and, if so, what facts or issues were outstanding. The Second native title party contended that a hearing ‘on country’ was required in order for the Tribunal to determine the issue. The remaining parties were of the view that a decision on the good faith issue could be made on the papers (see s 151(2)).

10. At that directions hearing, the issue of the conduct of a cultural heritage survey by the Second native title party (which had not been undertaken and is referred to in the statements of contentions by the Second native title party and the Grantee party) was isolated as one where further discussion between the Second native title party and the Grantee party was possible, and could potentially lead to the resolution of an aspect of the dispute. Both parties undertook to conduct further discussions and seek to resolve the issue by agreement. Directions were set for:

    (a)the Second native title party and the Grantee party to advise the Tribunal of the outcome of discussions regarding the conduct of a cultural heritage survey

    (b)the lodging of contentions by the Second native title party identifying the outstanding issues to be dealt with at a hearing, the persons to give evidence, an estimated time and proposed venue, and

    (c)a reply to be made by the Grantee party.

11. In accordance with Directions 1, 2 and 3 made on 24 August 2012 and varied on 7 September 2012, the negotiation parties lodged the following documents with the Tribunal in relation to whether the Tribunal should conduct a hearing in relation to the good faith issue:

    (a)Letter from Second native title party dated 31 August 2012 advising of the outcome of discussions with the Grantee party regarding a cultural heritage survey.

    (b)Statement of contentions on behalf of the Second native title party regarding the issues requiring a hearing.

    (c)Statement of reply on behalf of the Grantee party regarding the requirement for a hearing.

12. Having considered the submissions of the Second native title party and the Grantee party in relation to the request by the former for a hearing to deal with the good faith issue and the affidavits and other material provided by the parties for this purpose, I decided that the Tribunal can decide the good faith issue without holding a hearing, by considering the documents lodged with or provided to the Tribunal. The reasons for that decision are provided with these reasons for deciding the good faith issue (see [308]–[313]).

Issues raised by the Second native title party in relation to the good faith issue

1. In summary, the Second native title party contends that the Grantee party failed to negotiate with it in accordance with s 31(1)(b) of the Act because of the way the Grantee party behaved in relation to the conduct of the negotiations, the content of the negotiations and the form of outcome which it sought to negotiate. With respect to the conduct of the negotiations, the Second native title party contends that the Grantee party did not negotiate in good faith because:

   (a)the Grantee party failed to enter into a negotiation protocol with the Second native title party (see [54]–[67])

   (b)the Grantee party failed to appropriately fund negotiation and meet reasonable costs of the Second native title party (see [68]–[93])

   (c)the negotiations consisted of one meeting held in Lithgow on 24 July 2011 which was recorded inaccurately in minutes produced by the Grantee party, and one mediation meeting conducted by the NNTT, which mediation was then terminated at the Grantee party’s request (see [94]–[105]), and

   (d)the Grantee party asserted that it would seek Tribunal arbitration, and that assertion is a ‘threat’ (see [106]–[118]).

1. With respect to the content of the negotiations, the Second native title party contends that:

   (a)the Grantee party refused to provide financial information and hence obviated the possibility of conducting meaningful discussions regarding financial compensation (see [119]–[148])

   (b)the Grantee party refused to discuss any financial compensation and that represented a unilateral and rigid position (see [149]–[155])

   (c)the Grantee party failed to allow the native title party to conduct cultural heritage surveys of the area (see [156]–[247]), and

   (d)the offer made by the Grantee party in its letter dated 26 September 2011 (from NMC) provides for no direct benefits to the Second native title party (see [248]–[264]).

2. The Second native title party contends that the Grantee party did not negotiate in good faith with respect to the form of outcome because the Grantee party’s requirement for a single ancillary agreement with all three native title parties is contrary to s 31(1)(b) of the Act, and is a unilateral and non-negotiable requirement imposed on the native title parties (see [265]–[299]).

3. Before turning to the evidence and contentions provided by the Second native title party and the Grantee party, it is useful to outline the legal context within which the good faith issue is to be decided.

The good faith issue – Overview of legal principles

1. As noted earlier, s 31(1)(b) of the Act states that the negotiation parties ‘must negotiate in good faith’ with a view to obtaining the agreement of ‘each of the native title parties’ to the doing of the future act or the doing of the future act subject to conditions to be complied with by any of the parties. The term ‘negotiation parties’ is defined in s 30A to include the Government party, any native title party and the grantee party. Any negotiation party may, pursuant to ss 35 and 75, apply to the Tribunal for a determination pursuant to s 38 if at least six months have passed since the notification day and no agreement of the kind mentioned in s 31(1)(b) has been made in relation to the future act.

2. If any negotiation party satisfies the Tribunal that any other negotiation party (other than a native title party) did not negotiate in good faith, the Tribunal must not make a determination pursuant to s 38 (see s 36(2)). The implications of s 36(2) were explained by the Full Federal Court in  FMG Pilbara Pty Ltd v Cox (2009) 175 FCR 141 (‘Cox’) (at [11]) as follows:

   ... the statutory prohibition at s 36(2) affects the ‘power’ of the Tribunal to make an arbitral determination rather than its ‘jurisdiction’. The prohibition on exercise of the power only arises when the good faith point is both taken and taken successfully by a negotiation party. If there were no good faith but the point were not taken, the Tribunal would still have jurisdiction and power. The power to make a determination is a function of the jurisdiction conferred on the Tribunal.

3. Subsection 31(1) provides that, unless a s 29 notice includes a statement that the Government party considers that the future act attracts the expedited procedure:

   (a)the Government party must give all native title parties an opportunity to make submissions to it, in writing or orally, regarding the act; and

   (b)the negotiation parties must negotiate in good faith with a view to obtaining the agreement of each of the native title parties to the doing of the act (with or without conditions to be complied with by any of the parties).

4. The obligation is to negotiate in good faith with a view to obtaining each native title party’s agreement to the doing of the future act. A minimum six month period after notification is prescribed before arbitration can be sought. As Member O’Dea pointed out in FMG Pilbara Pty Ltd/Cheedy/Western Australia ([2009] NNTTA 38 at [67]):

   the Act does not require any party to negotiate in any physical sense for a period of six months. What is required is that the parties negotiate in good faith with a view to obtaining an agreement with the native title party to the doing of the [a]ct ... . The actual period of negotiation which would need to take place in order to establish that the parties had negotiated in good faith, is not necessarily related to the length of time spent negotiating. Rather it is the quality of the process that will be determinative of the question of whether the parties have engaged in the process in good faith.

5. Once the six month period has elapsed it is open to any negotiation party to exercise its statutory right to seek a future act determination. It is not necessary that the negotiations have reached any particular ‘stage’ before a party seeks arbitration.  This was explained by the Full Federal Court in Cox (at [19]) as follows:

   The expression “negotiate in good faith” is to be construed in its natural and ordinary meaning and in the context of the Act as a whole: Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303 at 319. Accordingly, the act of lodging an application under s 35, taken alone, cannot be relied upon in order to establish bad faith in the negotiating process (Strickland 85 FCR at 322). If negotiations reach a standoff, notwithstanding attempts in good faith to negotiate within the relevant six-month period, there are no further obligations after the completion of the six-month period on a party which wishes to lodge a notice under s 35 of the Act. There is no need, for example, to give further warning of the intention to do so.

6. Although negotiations are not required to have reached any particular stage before a future act determination is sought, ‘it is not sufficient for good faith negotiations to merely “go through the motions” with a closed mind or a rigid or predetermined position’ (at [24]). The Full Court highlighted that the requirement for good faith in negotiations is directed towards ‘the quality of a party’s conduct’. Drawing on previous Federal Court and Tribunal decisions, the Full Court stated:

   It is to be assessed by reference to what a party has done or failed to do in the course of negotiations and is directed to and is concerned with a party’s state of mind as manifested by its conduct in negotiations. (at [20])

7. Accordingly, it is important to ascertain whether negotiations have not advanced due to one of the parties engaging in misleading conduct or a stalling process so that by the time the six month period has elapsed there was never any real intention to reach agreement. In White Mining (NSW) Pty Ltd v Franks (White Mining) ((2011) 257 FLR 205 at [33]) Deputy President Sosso observed:

   ... it is central to a good faith assessment to have regard to a negotiation party’s state of mind as manifested by its conduct.  A party will fail to negotiate in good faith if it proposes a course of action which could be characterised as stalling, and then seeking arbitration after six months when the other party or parties reasonably would have expected that negotiations be on-going. In short, while good faith is not evaluated on the basis of the “status”, “stage” or “substance” of negotiations, it is evaluated on how negotiations are conducted. Consequently, if a party has deliberately taken advantage of another party’s understandable misapprehension that the negotiations would lead to an accord and delays in putting offers on the table or engaging in substantive negotiations to “buy time” so that the six months would elapse and arbitration could be sought, then the Tribunal will find that there have not been good faith negotiations.

8. The Full Federal Court also held in Cox (at [38]):

   The Act does not dictate the content and manner of negotiations by compelling parties to negotiate in a particular way or over specified matters. Providing what was discussed and proposed was conducted in good faith and was with a view to obtaining agreement about the doing of the future act, the requirements of s 31(1)(b) will be satisfied.

9. A useful and succinct statement of what constitutes negotiating in good faith was provided by Member (later Deputy President) Sumner in Placer (Granny Smith) v Western Australia (1999) 163 FLR 87 (‘Placer (Granny Smith)’) at [30]:

   Negotiation involves ‘communicating, having discussions or conferring with a view to reaching an agreement’: Western Australia v Taylor (1996) 134 FLR 211 at 219. Good faith requires the Government party to act with subjective honesty of intention and sincerity but this, on its own, is not sufficient. An objective standard also applies. The Government and grantee parties’ negotiating conduct may be so unreasonable that they could not be said to be sincere or genuine in their desire to reach agreement. The Tribunal must look at the conduct of the Government party as a whole but may have regard to certain indicia which were outlined in Western Australia v Taylor as a guide to whether the obligation has been fulfilled.  One of these indicia is whether the negotiation party has done what a reasonable person would do in the circumstances.  There is no requirement that the Tribunal be satisfied that the Government party has made reasonable offers or concessions to reach agreement but is permitted to have regard to the reasonableness or otherwise of them if it assists in the overall assessment of a party’s negotiating behaviour.  Lack of good faith in the negotiations by the native title party will be relevant to whether the parties have fulfilled their obligation and may impose a lesser standard on them.

It should be noted that the references to the Government party in that passage should be read (following the commencement of the 1998 amendments to the Act, including to s 31(1)(b)), as applying to all negotiation parties.

1. Subsection 36(2) of the Act is also significant to these proceedings. As noted earlier, it provides that the Tribunal must not make a determination on the application if any negotiation party satisfies the Tribunal that any other negotiation party (other than the native title party) did not negotiate in good faith as mentioned in s 31(1)(b). The Tribunal has held that the practical effect of s 36(2) is to place an evidential burden on the party alleging that another party did not negotiate in good faith which would normally require it to produce evidence to support its contentions (see e.g. Placer (Granny Smith) at [28]; Gulliver Productions Pty Ltd v Western Desert Lands Aboriginal Corporation (2005) 196 FLR 52 (‘Gulliver Productions’) at [10]).

2. The passage from Placer (Granny Smith) just quoted referred to the good faith negotiating indicia which were outlined in Western Australia v Taylor (1996) 134 FLR 211 at 2245, often referred to as the Njamal indicia. These indicia were set out in full in the judgment of RD Nicholson J in Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303 (‘Strickland’) at 312–313 with apparent approval. The indicia of failing to negotiate in good faith are as follows:

   (i)unreasonable delay in initiating communications in the first instance

   (ii)failure to make proposals in the first place

   (iii)the unexplained failure to communicate with the other parties within a reasonable time

   (iv)failure to contact one or more of the other parties

   (v)failure to follow up a lack of response from the other parties

   (vi)failure to attempt to organise a meeting between the native title and grantee parties

   (vii)failure to take reasonable steps to facilitate and engage in discussions between the parties

   (viii)failing to respond to reasonable requests for relevant information within a reasonable time

   (ix)stalling negotiations by unexplained delays in responding to correspondence or telephone calls

   (x)unnecessary postponement of meetings

   (xi)sending negotiators without authority to do more than argue or listen

   (xii)refusing to agree on trivial matters, for example a refusal to incorporate statutory provisions into an agreement

   (xiii)shifting position just as agreement seems in sight

   (xiv)adopting a rigid non-negotiable position

   (xv)failure to make counter-proposals

   (xvi)unilateral conduct which harms the negotiating process, for example, using inappropriate press releases

   (xvii)refusal to sign a written agreement in respect of the negotiation process or otherwise

   (xviii)failure to do what a reasonable person would do in the circumstances.

3. It is important to note that these are indicia only.  They provide a guide to assist the Tribunal when evaluating evidence about the negotiations.  When assessing whether a party has negotiated in good faith, the Tribunal will consider all of the material before it and not make a decision mechanistically on the basis that a party has not met all of the indicia or even most of them. The correct approach was summed up by Member Lane in Western Australia v Dimer (2000) 163 FLR 426 (at [85]) as follows:

   In determining whether parties have negotiated in good faith, the criteria developed in Njamal will be relevant.  But these criteria do not constitute a checklist or series of conditions.  It is not necessary that parties engage in all of the activities described there in order to negotiate in good faith. Likewise, the failure to do one or more of the things described in the criteria will not require the Tribunal to find that the parties have not negotiated in good faith.

4. When determining whether the parties have negotiated in good faith, a contextual evaluation is required.  The approach taken by one party is normally influenced by the approach taken by, or the conduct and actions of, another.  The obligation to negotiate in good faith applies to all parties, so the Tribunal will not ignore the relevant actions of others when assessing the negotiation conduct of the party being challenged. For example, as the passage in Placer (Granny Smith) quoted above indicates, lack of good faith in the negotiations by a native title party will be relevant to whether other parties have fulfilled their obligation and may impose a lesser standard on them.  Similarly, if a grantee party is a small miner with few resources and limited capacity to make offers or give concessions in relation to a small project, what would be regarded as negotiating in good faith could be different from that of a large mining company with the capacity to make substantial offers and concessions in relation to a large project (see Drake Coal Pty Ltd v Smallwood (2012) 257 FLR 276 (‘Drake Coal’) at [85]).

5. Importantly for dealing with some of the contentions made in these proceedings, s 31(2) provides that if any of the negotiation parties refuses or fails to negotiate about matters unrelated to the effect of the future act on the registered native title rights and interests of the native title parties, this does not mean that the negotiation party has not negotiated in good faith for the purposes of s 31(1)(b). The operation of s 31(2) is discussed later in these reasons.

6. In summary, when considering the contentions of the Second native title party in respect of  the Grantee party, the Tribunal needs to bear in mind:

   (a)the obligation on the negotiation parties to negotiate in good faith with a view to obtaining the agreement of each of the native title parties to the grant of the proposed tenement or the grant subject to conditions to be complied with by any of the parties (s 31(1)(b))

   (b)that if any of the negotiation parties refuses or fails to negotiate as mentioned in s 31(1)(b) about matters unrelated to the effect of the act on the registered native title rights and interests of the native title parties, this does not mean that the negotiation party has not negotiated in good faith for the purposes of s 31(1)(b) (s 31(2))

   (c)the need to consider the behaviour of each party as a whole and in context (e.g. by reference to the approach taken by, and the conduct and actions of, one or more of the other parties), to assess the party’s state of mind as manifested by its conduct in negotiations, and to assess the quality of the party’s conduct by reference to what it has done or failed to do

   (d)that the Act does not require the Tribunal to evaluate the reasonableness of each proposal or counter-proposal or that negotiations have reached any particular stage, and

   (e)that it is for the negotiation party that asserts that another negotiation party did not negotiate in good faith as mentioned in s 31(1)(b) to satisfy the Tribunal of that.

7. In these proceedings, the Second native title party contends that the Grantee party failed to negotiate in good faith with a view to obtaining the Second native title party’s agreement as required by s 31(1)(b) of the Act. In support of that contention, the Second native title party identifies and makes submissions in relation to a range of things (summarised earlier in these reasons for decision) which the Grantee party is said to have done or failed to do in relation to the negotiations. Each of those submissions is considered separately below. It will then be necessary to consider the cumulative effect of the findings in relation to those matters to decide whether the Second native title party has satisfied the Tribunal that the Grantee party has not negotiated in good faith as mentioned in s 31(1)(b) (see s 36(2)).

The evidence – some introductory comments

1. Before considering each of the contentions made by the Second native title party and the replies of the Grantee party, it is appropriate to make some brief comments on the nature of the evidence before the Tribunal in relation to the good faith issue.

2. Although it is for the Second native title party to satisfy the Tribunal that the Grantee party did not negotiate in good faith as mentioned in s 31(1)(b) (see s 36(2)), it is appropriate to have regard to all the evidence irrespective of which party provided it. That evidence includes letters and emails between the representatives of the Second native title party and the Grantee party as well as the Grantee party’s Information for Native Title Parties about the Project, draft negotiation protocols, draft minutes of a meeting between representatives of the Grantee party and the Second native title party in Lithgow, NSW, on 24 August 2011, affidavits from representatives of the Grantee party, and documents in relation to an Aboriginal archaeological and cultural heritage impact assessment undertaken on behalf of the Grantee party. Some of those documents are relevant to more than one of the contentions made by the Second native title party. Consequently, there is repetition in references to and quotes from some of those documents in these reasons for decision.

3. Generally speaking, these reasons will refer to the Grantee party and the Second native title party, but occasionally (particularly in quoted passages) they are described as Coalpac and WDM (for the Wiray-dyuraa Maying-gu claim group) respectively.

4. Although the legal representative of the Second native title party is the law firm of Teitzel & Partners, Mr Philip Teitzel has had carriage of the matter and signed the correspondence. Accordingly, Mr Teitzel is referred to as the author of correspondence and his client, the Second native title party, as the party by whom, on whose behalf, contentions are made.

5. The Grantee party is represented concurrently by its lawyers Just Outcomes (Aust) Pty Ltd, an incorporated legal practice under the Legal Profession Act 2004, and by Mr Anthony John Hanrahan, the Managing Director of National Management Consultants Pty Ltd (NMC) a company incorporated under the Corporations Act 2001 (Cth). Those representatives are referred to as Just Outcomes and Mr Hanrahan respectively.

6. It is appropriate, at various parts of these reasons for decision to refer to the draft minutes of the meeting in Lithgow on 24 August 2011. Those minutes were prepared by Mr Hanrahan and were provided to Mr Teitzel as an attachment to a letter from Just Outcomes to him dated 31 August 2011. Aspects of the minutes were described by Mr Teitzel in his letter to Just Outcomes dated 7 September 2011. He referred to ‘major flaws’ in the minutes which, it appears, he attributed to having a representative of the Grantee party rather than an independent person recording the minutes. He stated that the minutes were not ‘correct or accepted’. Mr Teitzel identified two specific omissions from the minutes, namely:

   (a)specific undertakings given by Mr Hanrahan in relation to accepting the Negotiation Protocol, and

   (b)the undertaking given by Dr Follington (the Chief Executive Officer of Coalpac) in relation to maintenance of confidentiality in relation to the Second native title party’s negotiations with the Grantee party.

1. In a letter to Mr Teitzel dated 14 September 2011, Just Outcomes maintained that the minutes ‘are, in the main, an accurate summary of the discussions’ at the Lithgow meeting. It noted that the minutes provided for Mr Teitzel were not intended to be a transcript of the Lithgow meeting, and invited him, if he had a different view of what transpired, to ‘return a marked up copy of the draft minutes for our consideration, so the minutes can be settled’.

2. It should be noted that the draft Negotiation Protocol provided by Mr Teitzel to Mr Hanrahan on 19 August 2011, and the subsequent revised version provided on 24 August 2011, stated in clause 30:

   Coalpac will take meeting notes and document meeting outcomes and forward to the Negotiation Committee and WDM’s legal adviser for review and agreement within a reasonable amount of time after the conclusion of each negotiation meeting.  This does not preclude the Negotiation Committee from appointing their own representative to take meeting notes and to record and document meeting outcomes.

3. Nonetheless, in its Statement of Reply to the Grantee party’s contentions, the Second native title party states that Teitzel & Partners did not respond to the invitation to provide amended minutes at that time because it was not considered productive in advancing negotiations and the Second native title party intended to approach the Tribunal to mediate and thus ‘eliminate the problem of minute keeping’.

4. The Second native title party does not completely refute all of the minutes. For example, in the Statement of Reply to the Grantee party’s statement of contentions, the Second native title party (at paragraph 8) refers to the minutes and, while stating that they ‘do not agree with the contents of those minutes as they are not a true and accurate record of that meeting’, it relies on the record of Sharon Riley suggesting that a heritage survey of the entire area of the Coalpac tenements be undertaken.

5. Because there is an issue about the completeness and accuracy of aspects of the minutes, they will be referred to and relied on in these reasons for decision with those qualifications in mind.

Failure of Grantee party to enter into a negotiation protocol with Second native title party

1. Contentions: The Second native title party contends that the failure to conclude a Negotiation Protocol with the Grantee party means that there was no negotiation process in this case. While recognizing that failure to conclude a negotiation protocol does not itself necessarily mean that there is no negotiation process, the contentions are made on the basis that, in order to negotiation in good faith, there must be negotiations. The Second native title party submits that negotiations are not the unilateral conduct or actions of one party but reasonable steps taken to facilitate and engage in discussions and to constructively discuss proposals and counter proposals so that there is a genuine attempt to reach agreement. The Second native title party contends, in essence, that there was not a bona-fide negotiation but a ‘proscriptive procedure’ which is an attempt to comply with the formal steps in the s 31 process and not a genuine attempt to reach agreement in respect of the effect of the Grantee party’s future act (mining) on the Second native title party’s native title rights and interests.

2. The contentions on this point cover not only the negotiation process or protocol but also more substantive matters that might be dealt with in the negotiations. In particular, the Second native title party submits, the Grantee party adopted rigid and preconceived positions by not entering into an agreement containing conditions that extended the obligations of the Grantee party to any significant degree beyond the conditions likely to be imposed by the Tribunal if it made a favourable determination about the doing of the Act (see Western Australia v Dimer (2000) 163 FLR 426). Futhermore, it submits, the Grantee party’s failure to enter into a negotiation protocol so as to limit the Grantee party’s ability to refer this matter to the Tribunal under s 35 of the Act is further evidence of the Grantee party’s lack of intention to reach an agreement with the Second native title party. (This aspect is also considered later in these reasons at [106]–[118]).

3. The Second native title party also submits that good faith negotiations would not require the Grantee party to enter into identical protocols with all three native title parties. Rather, a negotiation protocol that is agreed by one native title party might not be acceptable to another native title party. This proposition, it submits, is supported by the fact that the Grantee party prepared a modified negotiation protocol which it provided to the Second native title party on 14 September 2011.

4. In reply, the Grantee party contends that there is no prescribed content or manner for negotiations under s 31(1)(b). The Act does not compel parties to negotiate in a particular way, but requires parties to negotiate in good faith with a view to obtaining the native title party’s (or parties’) agreement about the doing of the future act. The Grantee party submits that it met its good faith requirements within the six months negotiation period that was completed on 24 September 2011 and continued to negotiate with all three native title parties, sending them an offer on 26 September 2011 and sending the Second native title party a proposed timetable for the continuation of the bilateral negotiations.

5. In particular, the Grantee party notes that it had not supported the Second native title party’s insistence that the signing of the particular negotiation protocol prepared by the Second native title party (the Negotiation Protocol) would bring about a sound basis from which the parties could negotiate in good faith. In its submission, the insistence on the Negotiation Protocol appeared to be largely directed at the funding of the Second native title party and its representatives (an issue that is dealt with later in these reasons for decision). Furthermore, when the Grantee party changed its position and agreed to enter into a modified version of the Negotiation Protocol, the Second native title party did not take up the offer. Indeed, the Grantee party contends, the Second native title party has attempted to have it both ways by acting in a way that precluded the development of negotiations, but then claiming the Grantee party has failed to negotiate in good faith while failing to respond itself to the Grantee party’s counter offer to sign a modified version of the Negotiation Protocol.

6. In reply, the Second native title party contends that it did not insist on the signing of a Negotiation Protocol as a pre-condition and that it participated and wished to continue participating in the mediation conducted by the Tribunal which was ‘unilaterally terminated’ by the Grantee party. Furthermore, the modified version of the Negotiation Protocol offered by the Grantee party was objectionable because it:

   (a)would have forced the Second native title party into tripartite negotiations rather than negotiations as an individual party as required by s 31(1)(b) of the Act, and

   (b)maintained the Grantee party’s right to apply to the Tribunal under s 35 for a future act determination within 10 days of receipt of the document by the Second native title party.

7. Consideration: For the purpose of considering this contention, it is not necessary to describe in detail the contents of the various draft negotiation protocols prepared by the Second native title party and the Grantee party respectively (aspects of which are considered elsewhere in these reasons for decision). Rather, it is sufficient to outline the communications between the representatives of the parties as to whether there would be a negotiation protocol. Those communications, as contained in letters (and emails), can be summarised as follows:

   (a)On 1 August 2011, Mr Hanrahan wrote on behalf of the Grantee party to Mr Teitzel advising that it wished to commence negotiations toward settlement of a s 31 deed and an ancillary agreement as soon as possible. He stated:

   For practical purposes we intend to negotiate with each group separately however our client will enter into one ancillary agreement only which will be designed to benefit the Aboriginal Community overall but particularly the various Claim Group members.

   We seek your early advice regarding the establishment of a suitable time and place to conduct the initial meeting. We would also suggest the initial meeting is used to establish negotiation protocols and an overall timeframe in the interest of all parties. (emphasis added)

   Mr Hanrahan also stated that it would be advantageous if an overview of what the Second native title party may wish to have contained in the ancillary agreement could be made available for the meeting.

   (b)On 19 August 2011, Mr Teitzel wrote to Mr Hanrahan in reply to his letter of 1 August 2011 and referred to their subsequent telephone conversation about attempting to convene an initial meeting on 24 August 2011. The letter dealt with various issues. Attached to it was a draft of the Negotiation Protocol which was provided ‘on the basis that our client reserves its rights to amend that document as WDM have not been able to provide final instructions, at this time’.

   (c)On 19 August 2011, Mr Hanrahan sent Mr Teitzel an email which acknowledged receipt of the documents that detailed the Second native title party’s ‘preferences concerning a formal negotiation protocol between the respective parties’. He stated that Coalpac would ‘respond in detail’ to the document but, as advised, the response would not be available before the meeting on 24 August 2011. He continued:

   That said and as we have discussed I suggest we utilise the time available on Wednesday [24 August 2011] to discuss and where possible agree to an overall timetable and approach to a good faith negotiation process between your clients and Coalpac. (emphasis added)

   (d)The minutes of the meeting on 24 August 2011 record that the meeting discussed ‘various aspects contained within’ the draft Negotiation Protocol, and that Mr Hanrahan informed the meeting (consistently with earlier advice to Mr Teitzel) that a formal response would be provided to the Second native  title party by close of business on Friday 26 August 2011. The minutes also record that Dr Ian Follington (the Chief Executive Officer of Coalpac) ‘reiterated developing the overall protocols and keeping the process and negotiations moving forward and making it work’. At that meeting, Mr Teitzel provided Mr Hanrahan with a further draft of the proposed Negotiation Protocol.

   (e)On 26 August 2011, Just Outcomes sent a letter to Mr Teitzel by email advising that Just Outcomes act for the Grantee party together with Mr Hanrahan. The letter referred to both versions of the draft Negotiation Protocol and continued:

   Coalpac is in agreement with many of the individual matters contained with the Protocol. However our client believes that within the present circumstances of a multi-party right to negotiate (RTN) process, it would be more practical to agree to an overall process that can be adopted by all three native title parties, rather than sign a document with one particular claim group.

   Coalpac also considers that an approach of consistency and transparency is necessary to the conduct of good faith negotiations with the three separate native title parties.

   Accordingly, if Coalpac was to enter into a Protocol arrangement with the WDM it would also be necessary, in terms of good faith, to enter into similar – if not identical – arrangements with the other native title parties.

   Our client has indicated to those native title parties which it has met to date, that it wishes to conduct and if possible conclude the negotiation process for MLAs 392, 393 & EL 7517 in a timely manner. That being the case, it is Coalpac’s view that considerable time may be spent finalising a document between separate native title parties, where that time could be better utilised in reaching a mutually acceptable Ancillary Agreement to the satisfaction of all the native title parties.

   Notwithstanding the above, Coalpac (as discussed on a number of occasions during the recent Lithgow meeting) will conduct the current negotiations with WDM (and the other native title parties) in accordance with many of the principles contained in the Protocol, consistent with its duty to negotiate in good faith.

   The letter then provided the Grantee party’s response to some of the specific matters in the draft Negotiation Protocol.

   (f)On 26 August 2011, Mr Teitzel sent an email to Just Outcomes referring to the letter of that date and advising that ‘we disagree with almost all’ of its contents and asserting that those contents were ‘inimical to the conduct of fair, reasonable and informed negotiations between WDM and your client and therefore contrary to the possible conduct of good faith negotiations’. In conclusion, he stated: ‘We will be unable to proceed further with this matter until the Negotiation Protocol as provided to your client and as discussed on 24.8.11 is executed and returned to this office’.

   (g)Just Outcomes responded by letter dated 31 August 2011 to Mr Teitzel’s email of 26 August 2011 stating, among other things:

   2.Coalpac’s reasoned decision not to formally negotiate and enter into a negotiation Protocol (‘Protocol’) with any of the 3 native title parties is in no way an indication or reflection of a failure to negotiate in good faith. The statutory requirement to negotiate in good faith under the Native Title Act does not require a negotiation party to enter into a negotiation protocol or MOU. This office has conducted scores of right to negotiate and ILUA matters over the past 10 years, and we cannot recall one matter that has involved the signing of a negotiation protocol.

   3.Given our client’s firm position that it will not be entering into the Protocol, please confirm in writing that the final statement in your email constitutes a refusal by your clients, the Wiray-dyuraa Maying-gu (WDM) claim group, to negotiate further with Coalpac in this matter.

   The letter also stated that the Second native title party’s ‘refusal to negotiate further in this matter’ would ‘effectively preclude there being a successful outcome’ to this right to negotiate process overall.

   (h)On 7 September 2011, Just Outcomes wrote to Mr Teitzel referring to their letter of 31 August 2011 and noting that Mr Teitzel had not responded to it. In particular it sought a response ‘as soon as practicable’ to their query whether the Second native title party had elected to ‘withdraw’ from good faith negotiations with the Grantee party ‘in the absence of a signed negotiation protocol’. The letter asked whether the Second native title party wished to be included, along with the other two native title parties, in a draft suggested negotiation timetable being finalised by Mr Hanrahan for the right to negotiate process.

   (i)In his letter to Just Outcomes dated 7 September 2011, Mr Teitzel responded to the letters from Just Outcomes dated 26 and 31 August 2011. He stated that the comments made in the third paragraph of the letter of 26 August 2011 relating to the Negotiation Protocol were ‘not consistent with comments made by Mr Hanrahan’ at the Lithgow meeting. At that meeting, according to Mr Teitzel, Mr Hanrahan and Dr Follington advised that there were ‘only one or two matters’ that would inhibit the Grantee party from signing the Negotiation Protocol (and these related to the extended period for negotiations and the requirement for the Grantee party to provide commercial information). Mr Teitzel stated that no discussion took place at all in respect of ‘an overall process that can be adopted by all three native title parties’.

   In relation to the letter of 31 August 2011, Mr Teitzel referred to omissions and ‘other major flaws’ in the draft minutes of the meeting on 24 August 2011. He stated that he could find no ‘reasoned decision’ in the letters for Coalpac not to enter into a negotiation protocol. He contended that the only reason given in their letter of 26 August 2011 was based on multi-party negotiations, and continued:

   There is no logical basis for claiming that multi-party negotiations are a bar to signing a Negotiation Protocol as Coalpac has chosen to conduct separate negotiation processes and the different parties can each agree to differing negotiation processes.

   We accept that there is no statutory requirement to enter into a Negotiation Protocol but in every negotiation we have conducted on behalf of native title claimants, there has been an agreed funded basis for proceeding. Over the past twelve months we have undertaken five negotiations and all of those negotiations have commenced with a Negotiation Protocol or some form of agreement which outlined the requirements for a negotiation process to be undertaken and the funding for implementation of that process. … Without such a document there can be no good faith negotiation, as such a framework ensures a fair and reasonable platform is established which then allows all parties to negotiate on a ‘level playing field’.

   Mr Teitzel also noted what he described as the Grantee party’s ‘unilateral decision’ taken after the Lithgow meeting not to sign a Negotiation Protocol ‘having previously requested minimal changes’ to that document at the Lithgow meeting. He then criticised the difference between the positions at the negotiation meeting and the letter of 26 August 2011, and stated that it was not possible to conduct good faith negotiations with a party that has ‘demonstrably failed to conduct even preliminary negotiations in good faith’. He also stated that, despite the Grantee party’s alleged failure to show the ‘reciprocal and necessary good faith to allow these negotiations to proceed’, his client was prepared to ‘immediately negotiate in good faith’ with the Grantee party, and remained ‘willing and able to negotiate when [the Grantee party] demonstrates practical evidence of its asserted “good faith” ’.

   Mr Teitzel concluded by writing:

   Unless we receive a written agreement which deals with the issues raised herein and outlines a funded process to allow negotiations to proceed on a genuine and bona fide basis, we will within seven days of the date of this letter, refer this matter for mediation by the NNTT pursuant to s 31(3) of the NTA.

   (j)On 15 September 2011, Mr Teitzel sent an email to Just Outcomes noting that he had not received a response to his letter of 7 September 2011, and foreshadowing that on 16 September 2011 he would contact the Tribunal to seek the appointment of a mediator pursuant to s 31(3) of the Act in relation to this matter.

   (k)On 15 September 2011, by email, Just Outcomes sent to Mr Teitzel its letter in reply dated 14 September 2011. The letter stated that the Grantee party maintained, among other things, that at all times it had acted and would continue to act in good faith and that a good faith process under s 31 of the Act could take place in the absence of a negotiation protocol with the Second native title party. The Grantee party did not wish to engage in what it considered to be ‘unnecessary and protracted correspondence from one legal representative over matters which do not advance substantive negotiations’. However, in the interests of ‘refocussing the negotiations’ on the Second native title party’s interests and aspirations, the Grantee party was prepared to agree to some of the matters raised in Mr Teitzel’s letter of 7 September 2011. In particular, Just Outcomes provided an amended negotiation protocol which the Grantee party was prepared to sign. Consistently with its view that a good faith negotiation process could take place in the absence of such a protocol, the Grantee party was ‘not prepared to engage in further correspondence regarding the content of this Protocol’ and requested that it be signed by the Second native title party and returned within seven days. Just Outcomes then noted four particular matters in relation to the attached protocol concerning what the Grantee party would or would not do, including that it was not prepared to waive or delay its right to apply for an arbitrated determination in this matter from 24 September 2011. Just Outcomes wrote:

   We trust that our client’s compromise regarding the negotiation Protocol, and the increased funding offer for your legal fees, has resolved your client’s concerns, and can permit the parties to refocus on the substantive negotiations.

   (l)In an email to Just Outcomes dated 16 September 2011, Mr Teitzel noted, among other things, that the Grantee party was not prepared to negotiate further in relation to the content of the amended negotiation protocol. He also confirmed that the Second native title party wished to ‘positively engage in good faith negotiations’. He provided, for the first time, Attachment B to the draft Negotiation Protocol, which was an estimate of costs for the Second native title party.

   (m)On 20 September 2011, Just Outcomes sent a letter to Mr Teitzel clarifying and confirming that the Grantee party was not prepared to negotiate further only in relation to the increased level of funding offered by the Grantee party in that letter and the terms of the negotiation protocol which it had offered to sign. However, the Grantee party would continue to participate in good faith negotiations in terms of the matters to which this right to negotiate process applies (i.e. the effect of the grant of the proposed tenements on any registered native title rights and interests). It would provide a proposed negotiation timetable and a draft proposal/offer to form the basis of an Ancillary Deed to all three native title parties that week.

   (n)On 4 October 2011, Mr Teitzel sent a letter to Just Outcomes confirming that Annexure B to the draft Negotiation Protocol had not been provided to Just Outcomes or the Grantee party prior to 16 September 2011. The explanation offered was that, at the meeting in Lithgow on 24 August 2011, Mr Hanrahan had indicated that there might be ‘one or two changes’ to the draft Negotiation Protocol prepared by Mr Teitzel and he was awaiting ‘those changes’ before providing the draft Annexure B.

1. Conclusions: As is clear from the evidence referred to above, both parties approached the first negotiation meeting with an expressed desire to establish a negotiation protocol or at least an agreed approach to the negotiations. Before and at that meeting, the Second native title party provided two written versions of the draft Negotiation Protocol, to which the Grantee party responded in detail on 26 August 2011. From that point, the parties’ positions in relation to some form of negotiation protocol diverged. Although the Grantee party expressed agreement with ‘many’ of the ‘individual matters’ or ‘principles’ contained in the draft Negotiation Protocol, it did not specify which of them it agreed with. The Grantee party’s response was framed by reference to the fact that it was involved in separate negotiations with three native title groups. It expressed a preference for an ‘overall process’ that could be adopted by all three native title parties, rather than sign a document with one group (and potentially have to enter similar or identical arrangements with the other native title parties). In that context, the Grantee party anticipated that considerable time might be spent finalizing such a document. Its focus was on conducting and concluding a negotiation process and using the time to reach a mutually acceptable ancillary agreement.

2. The Second native title party appeared to take a more rigid position on this issue, stating on 26 August 2011 that it would be ‘unable to proceed further’ until the Negotiation Protocol was signed by the Grantee party. Although the Second native title party appeared to resile from, or at least modify, that position on 7 September 2011 (by saying it was prepared to ‘immediately negotiate in good faith’ with the Grantee party), that shift was conditional upon receipt of a written agreement that dealt with specific issues and outlined a funded process. The Grantee party responded in its letter dated 14 September 2011 by shifting its position and providing an amended negotiation protocol which it was prepared to sign. Consistently with its view that a negotiation process could take place in good faith in the absence of such a protocol, it was not prepared to engage in further correspondence in relation to the content of the amended negotiation protocol.

3. The potential for some resolution of this issue as a result of that letter was not realised. The Second native title party highlights two aspect of the letter and the attached revised negotiation protocol:

   (a)the Grantee party’s non-negotiable position in relation to the revised negotiation protocol, and

   (b)had the Second native title party signed the protocol it would have been in ‘breach’ of the protocol if negotiations were not concluded by 24 September 2011, i.e. within 10 days of the letter.

For the latter reason (and the fact that the protocol had ‘not been negotiated’), the Second native title party described the Grantee party’s offer to enter into a negotiation protocol as a ‘sham’. The Second native title party also takes issue with the revised version of the Negotiation Protocol because it would have ‘forced’ the Second native title party into tripartite negotiations rather than negotiating as an individual party as required by s 31(1)(b) of the Act.

1. It is apparent that, even if a negotiation protocol acceptable to the Second native title party had been agreed, the fact of that document would not have been conclusive evidence that good faith negotiations occurred between the parties. Indeed, the draft Negotiation Protocol that Mr Teitzel sent to Mr Hanrahan on 19 August 2011 concluded in clause 32.

   For the avoidance of doubt, neither this protocol nor the fact that the Negotiations are being conducted, are conclusive proof of a party having negotiated in good faith.

2. Although it might be useful in some circumstances for negotiation parties to have a written negotiation protocol which they have agreed, such a document is not mandatory for negotiations under s 31 of the Act. So much is conceded by the Second native title party. The separate experiences of other negotiations involving the Second native title party and the Grantee party respectively have indicated, on the one hand, that a negotiation protocol can assist but, on the other hand, substantive negotiations can proceed without one. Experience might also suggest that devoting too much time and resources to negotiating such a protocol might divert attention from relevant substantive matters, and that the prospect of negotiating an agreement under s 31 within the negotiation period might be put at risk (see Cox at [28]).

3. In these negotiations, the parties commenced with an approach which might have led to an agreed framework for the negotiations. That aspect of the negotiations broke down over disagreement about the content and form of a written document. In the face of the Second native title party’s stance in relation to its Negotiation Protocol, the Grantee party modified its position by agreeing to proceed with a modified Negotiation Protocol. The fact that agreement was not reached in relation that document does not demonstrate that the Grantee party was not negotiating in good faith with the Second native title party. The correspondence indicates otherwise.

4. On that basis, I am not satisfied that the Grantee party did not negotiate in good faith as mentioned in s 31(1)(b) of the Act.

Failure of the Grantee party to appropriately fund negotiation and meet reasonable costs of the Second native title party

1. Contentions: The Second native title party contends that:

   (a)it informed the Grantee party at the initial meeting on 24 August 2011 that it had no resources to undertake meaningful negotiations in this matter

   (b)as a result, the Second native title party provided the Grantee party with draft Negotiation Protocols on 18 and 24 August 2011, which included a detailed costing document, ‘so as to allow for a reasonable and just negotiating process to be followed by both parties’.

   (c)it is ‘generally accepted good practice’ in the mining industry for proponents to fund the negotiation processes ‘fairly’ and in accordance with certain ‘principles’ (apparently including that the traditional owners should have available to them advice and representation of a similar quality as the mining company)

   (d)the Grantee party has refused to provide any funding to date other than for limited claimant and legal costs in the sum of $2,000 for the initial meeting

   (e)in order to cover all the anticipated costs of the Second native title party (as detailed in Annexure B to the draft Negotiation Protocol provided by the Second native title party), the Grantee party increased its offer to $9,000, an amount which, the Second native title party submits, is a ‘fraction’ of the costs set out in Annexure B (which it submits were not unreasonable and were in accordance with the costs recorded in White Mining at [27])

   (f)as a consequence of the ‘attitude and actions’ of the Grantee party in respect of negotiating funding, the goal of a ‘level playing field’ was ‘unattainable’.  Indeed, the Second native title party describes the offer made by the Grantee party of financial assistance as ‘derisory’ and contends that, as a consequence, a ‘negotiation level playing field is unachievable’.

2. In reply to the Second native title party, the Grantee party contends that:

   (a)there is no requirement for a Government or grantee party to provide funding to the native title party for the negotiations as an indicator of good faith, and

   (b)where a native title party makes funding of negotiations, including negotiations of the funding sought, a precondition to entering into future act negotiations, it would not be acting in good faith. Such a requirement seeks to insist that the grantee party do something which under the Act it has no obligation to do (citing GulliverProductions at [62]–[97], Magnesium Resources Pty Ltd; Anthony Warren Slater/Puutu Kunti Kurrama and Pinikura People; Puutu Kunti Kurrama and Pinikura People #2/Western  Australia [2010] NNTTA 211 (Magnesium Resources) at [65]).

3. The Grantee party also contends that the fact that the Second native title party was not satisfied with the Grantee party’s initial refusal to pay sitting fees, or to pay the substantive level of funding requested for the Second native title party and its lawyers or other experts, is not indicative of the Grantee party’s lack of good faith. Indeed, the Grantee party points to the fact that it modified its position in relation to the Second native title party (although it was not compelled to do so) in an effort to obtain agreement about the grant of the tenements by:

   (a)agreeing to enter into a modified version of the Negotiation Protocol (by letter dated 14 September 2011)

   (b)increasing its offer of legal funding to the representative of the Second native title party from $2,000 to $9,000 (by letter dated 14 September 2011)

   (c)changing its ‘previously steadfast position’ regarding non-payment of sitting fees by offering to pay sitting fees to three representatives of all three native title parties (by letter dated 19 July 2012).

It contends further that no response to its funding offer was received and that the Second native title party cannot ‘have it both ways’ by acting in a way which has precluded the development of negotiations and then by claiming that the Grantee party has failed to negotiate in good faith, e.g. by failing to respond to the Grantee party’s counter offer to sign a negotiation protocol and by failing to respond to the Grantee party’s request for a face-to-face meeting even when the Grantee party had altered its position and offered to pay sitting fees.

1. In reply to those contentions, the Second native title party submits that it did not insist on funding as a pre-condition to negotiations. Rather, the Second native title party submits, it continued to attempt to advance the future act negotiations by seeking Tribunal mediation and participated in that mediation without any funding. Furthermore, the Second native title party submits that there was no modification of the Grantee party’s position prior to the commencement of these proceedings and that:

   (a)The Second native title party did not insist on the signing of a Negotiation Protocol as a precondition to negotiations, and participated in a mediation session without one. The modified version of the Negotiation Protocol offered by the Grantee Party was unacceptable to the Second native title party.

   (b)The increase in the payment for legal fees is ‘illusory’ as the $9,000 included GST and disbursements for all travel and accommodation, and was insufficient to cover professional attendances and associated disbursements from the initial meeting to the time when the offer of $9,000 was made.

   (c)No change was made to the Grantee party’s position before it unilaterally terminated the mediation.

2. In relation to the apparent willingness of the Grantee party to pay sitting fees, the Second native title party submits that the proposed meeting of 7 August 2012 with the offer to pay sitting fees to three representatives of all three native title parties is an attempt by the Grantee party to ‘have it both ways’. In this submission, the Grantee party unilaterally terminated mediation with the Second native title party and did not commence negotiations in good faith since that termination. To invite representatives of the Second native title party to a meeting to finalise an Ancillary Deed which has not been negotiated with the Second native title party as required by s 31(1)(b) of the Act could only be construed as ‘duplicitous’.

3. Consideration: The contentions have to be assessed in light of the evidence of what transpired between the parties before the future act determination was made on 6 June 2012 and previous decisions of the Tribunal about the applicable law. The evidence includes correspondence between representatives of the parties and draft negotiation protocols. It is not necessary to consider offers made by the Grantee party after it made the future act determination application.

4. On 19 August 2011, Mr Teitzel wrote to Mr Hanrahan and referred to previous communications concerning attempts to convene ‘an initial meeting’ of the parties on 24 August 2011. Attached to the letter was a draft Negotiation Protocol, which was provided on the basis that the Second native title party reserved its rights to amend the document because they had not been able to provide ‘final’ instructions at that time. The letter and attachment were sent by email to Mr Hanrahan.

5. The draft Negotiation Protocol provides for the Grantee party to pay the ‘reasonable costs and expenses incurred’ by the Second native title party ‘in relation to’ the conduct of the negotiations and attendances at the authorisation, introductory negotiation and community meetings (clause 24). It specified that the Grantee party would pay:

   (a)the Negotiation Committee members’ attendance fees, travel allowances and disbursement costs (as estimated in Annexure B to the Negotiation Protocol)

   (b)the costs of the Second native title party’s legal advisers

   (c)the Second native title party’s costs for a teleconference with representatives from the NSW Department of Resource and Energy to inform all parties of their rights and roles in the ‘right to negotiate’ process under the Act, which teleconference was to be held on a date to be confirmed in September 2011 (estimated at $3,500)

   (d)the Second native title party’s costs (to a maximum of $10,000) for their community meeting to consider a draft ancillary agreement and to authorise the entering into of that agreement and the related government deed pursuant to s 31 of the Act

   (e)the costs of the proposed field survey

   (f)the costs of the Second native title party’s financial adviser (to a maximum of $8,000) for the preparation of a report for the Second native title party, and (to a maximum of $5,000) for attending the community meeting referred to in (d) above (clause 24), and

   (g)some other costs incurred by the Second native title party to the date of execution of the Negotiation Protocol (clause 26).

The draft Negotiation Protocol set out how costs would be recorded in fortnightly tax invoices and paid by the Grantee party or, in some specified instances, would be paid by the Grantee party in advance of the funds being required by the Second native title party (clause 25). Annexure B to the draft Negotiation Protocol (referred to in it) was not provided on 19 August 2011. Indeed the evidence shows that it was not provided to the Grantee party’s representative until 16 September 2011 (see [80] (e) and (f) below).

1. Before summarising the documents concerning the costs of  the proposed future act negotiations, it is worth noting separate correspondence concerning the costs of the proposed field survey (referred to in the draft Negotiation Protocol). Following the meeting in Lithgow on 24 August 2011, Mr Teitzel wrote to Mr Hanrahan on 25 August 2011 advising that the WDM claimants were prepared to conduct a field survey on EL7515 for the Grantee party on ‘proposed conditions’. Those conditions included that the Grantee party agreed to pay the costs set out in Attachment A to the letter which came to a total of $3,830 (comprising fees, travel expenses and administration costs). Payment was to be made into Teitzel & Partners Legal Practice Trust Account prior to the commencement of the field survey, i.e. on or before 31 August 2011.

2. On 19 August 2011, Mr Hanrahan sent an email to Mr Teitzel confirming that he and Dr Follington would be available to meet with Mr Teitzel and representatives of the WDM claim group on 24 August 2011. Mr Hanrahan advised that, in ‘keeping with arrangements with’ other registered native title claim groups, the Grantee party was prepared to meet the following costs of Mr Teitzel and his clients:

   (a)venue hire and catering for the meeting

   (b)mileage for those members who wished to travel to the meeting in their vehicle at ATO rates

   (c)accommodation and subsistence at the applicable ATO rates.

(There was evidence that a substantially similar offer was made to the Third native title party in a letter to their legal representative, Mr Blackshield, on 16 August 2011.)

1. Mr Hanrahan acknowledged receipt of the document that details the Second native title party’s ‘preferences concerning a formal negotiation protocol between the respective parties’. He stated that the Grantee party would ‘respond in detail’ to the document, but reiterated advice that the response would not be available before the meeting on 24 August 2011. He suggested that the meeting be used to discuss and where possible agree to an overall timetable and ‘approach to a good faith negotiation process’ between the Second native title party and the Grantee party.

2. Following provision to the Grantee party of the second version of the draft Negotiation Protocol, there was correspondence between representatives of the Grantee party and the Second native title party respectively in relation to the costs issue. In their letter to Mr Teitzel dated 26 August 2011, Just Outcomes addressed a range of issues about the conduct of negotiations with the Second native title party and the other native title parties. Its overall approach to these multi-party negotiations conditioned its response to the two draft Negotiation Protocols provided by the Second native title party. For immediate purposes it is relevant to note that, in that letter, the Grantee party agreed to meet the following costs of the Second native title party:

   (a)mileage for the Negotiation Committee members who wish to travel to negotiation meetings in their vehicle (to be calculated at ATO rates)

   (b)accommodation and subsistence for the negotiation meetings (to be calculated at applicable ATO rates)

   (c)venue hire and reasonable catering costs where necessary and with prior approval

   (d)funding to assist with the conduct of one community meeting to consider a draft ancillary agreement and to authorise the Second native title party’s commitment to that agreement (with prior approval from the Grantee party and subject to provision of an overall budget to the Grantee party before the meeting), and

   (e)up to $2,000 to ‘assist with’ the costs for each native title party’s legal representative.

The Grantee party also stated that it did not agree to pay attendance or sitting fees.

1. The subsequent exchange of correspondence between legal representatives in relation to the costs issue can be summarised as follows.

   (a)On 26 August 2011, Mt Teitzel sent an email to the Grantee party’s representatives expressing disagreement ‘with almost all of the contents’ of their letter of 26 August 2011 and stating: ‘We will be unable to proceed further with this matter until the Negotiation Protocol as provided to your client and as discussed on 24. 8.11 is executed and returned to this office’. (The broader contents and significance of the draft Negotiation Protocol are considered earlier in these reasons. For immediate purposes, however, the focus is on the costs issues.)

   (b)On 31 August 2011, Just Outcomes wrote in reply to Mr Teitzel’s email stating that (for reasons set out in the letter) the Grantee party would not be formally negotiating or entering into a negotiation protocol with any of the three native title parties, and asking for written confirmation that the final statement in the email (quoted above) constituted a refusal by the Second native title party to negotiate with the Grantee party.

   (c)In a letter dated 7 September 2011 to Just Outcomes, Mr Teitzel accepted that there is a no statutory requirement to enter into a negotiation protocol, but stated that ‘in every negotiation we have conducted on behalf of the native title claimants, there has been an agreed funded basis for proceeding’. He referred to other negotiations which involved an agreement about (among other things) the funding for implementing the process. He continued:

   Without such a document there can be no good faith negotiation, as such a framework ensures a fair and reasonable platform is established which then allows all parties to negotiate on a “level playing field”. Without such an agreed funding process, one party may be held hostage by the power of another party and this would adversely affect the quality of that party’s conduct.

   Later in the letter, with direct reference to the type and quantum of costs in respect of which the Grantee party should at least negotiate, Mr Teitzel wrote:

   We also note Coalpac’s unilateral decisions on funding the negotiations and its refusal to negotiate as to which costs and the quantum of those costs that it will or will not pay in the proposed negotiations. Of course these decisions are entirely unacceptable as unilateral decisions are not a demonstration of negotiating in good faith. We also note the contemptuous offer in relation to legal and claimant funding and the fact that Coalpac has denied funding for other expert advisers. We note that Mr Hanrahan was involved in the recent case of White Mining (NSW) Pty Ltd, Austral-Asia Coal Holdings Pty Ltd & ICRA Ashton Pty Ltd  – (2011) – NNTTA 72 (April 2011) and we draw yours client’s attention to the costs paid by the Grantee Party in that case (para 27). Given Mr Hanrahan’s involvement in that case we are surprised by the inconsistency between the funding in that case and the offensive financial proposals contained at para 6 of your letter.

   He concluded the letter by stating that, unless he received a written agreement dealing with the issues raised in the letter and outlining ‘a funded process to allow negotiations to proceed on a genuine and bona fide basis’, his firm would, within seven days of the date of the letter, refer the matter for mediation by the Tribunal pursuant to s 31(3) of the Act (an approach that he reiterated in an email to the Grantee party’s representatives on 15 September 2011).

   (d)In a letter to Mr Teitzel dated 14 September 2011, and sent as an attachment to an email on 15 September 2011, Just Outcomes provided an amended negotiation protocol which the Grantee party was prepared to sign. As noted in the letter, the Grantee party was not prepared to fund external financial advisers or other consultants or to provide an ‘open budget’ for the Second native title party’s legal fees. The Grantee party was prepared to provide funding to the Second native title party for its legal fees to a maximum of $9,000 (exclusive of GST). The letter continued:

   This amount is fixed, inclusive of all legal fees and disbursements, and includes any invoices provided to Coalpac for legal fees and disbursements to date. Please note that our client requires detailed, narrated invoices (as also provided by this office) rather than lump sum bills.

   The letter advised that, whilst it was open to the Second native title party to request mediation assistance from the Tribunal pursuant to s 31(3) of the Act, the Grantee party’s position in relation to the funding arrangements ‘will not change’.

   For completeness, I note that clauses 22 and 23 of the amended negotiation protocol enclosed with the letter stated that the Grantee party agreed to meet the following costs of the Second native title party in relation to the negotiation process:

   ·        mileage at the ATO rates for the Negotiation Committee members who wish to travel to negotiation meetings in their vehicle

   ·        accommodation and subsistence for the Negotiation Committee at the applicable ATO rates for their attendance at negotiation meetings

   ·        venue hire and reasonable catering costs where necessary and with prior approval

   ·        funding to assist with the conduct of one Community Meeting to consider a draft ancillary agreement and to authorise the Second native title party’s commitment to that agreement, with prior approval from Coalpac and subject to provision of an overall budget to Coalpac prior to the meeting

   ·        the costs of legal advisers will be paid by Coalpac capped to a total one-off amount of $9,000 (exclusive of GST but inclusive of all disbursements)

   and that the Grantee party would not pay the costs of internal meetings and the processes of the Second native title party.

   (e)Mr Teitzel replied by email on 16 September 2011. He expressed the view that the only ‘advance’ made by the Grantee party in the correspondence was to offer an increase in legal fees from $2,000 to $9,000 (including disbursements). That sum, he asserted, did not even cover costs incurred to date. Mr Teitzel took issue with a statement in the letter dated 14 September 2011 which ‘intimates’ that the Second native title party ‘sought open ended funding’. He described the statement as ‘misleading and incorrect’. He then referred to ‘our previously drafted but superseded estimate of costs titled Attachment B (attached)’. As noted earlier, this was the first occasion on which Attachment B was provided to the Grantee party. Mr Teitzel stated that this estimate of costs ‘allows for the native title parties to negotiate on a “level playing field” with your client company and not be subject to a “David and Goliath” situation’.

   Annexure B to the draft Negotiation Protocol sets out the Second native title party’s estimate of costs (excluding GST) for the negotiation under five headings: Negotiation Team’s meeting costs (total $22,545), legal expenses (total of $67,650), financial adviser (total $13,500), community meeting ($10,000), and additional costs for such things as meeting venue hire and catering; the drafting, negotiating, reviewing, finalising and executing of a field survey agreement; field survey costs; and costs of claim authorisation meeting and registration of the claim ($17,045).

   (f)The Grantee party’s response to Annexure B was provided in a letter from Just Outcomes to Mr Teitzel dated 20 September 2011. The letter stated that the Grantee party’s representatives had not seen or discussed Annexure B previously, and responded to its key components. In summary:

   · the costs estimate was for the Grantee party to pay more than $120,000 (excluding GST) for items that did not appear to include any s 31(3) Tribunal mediation (as proposed by the Second native title party) nor any Tribunal arbitration process (should one occur)

   ·        the Grantee party rejected the proposed budget, on the basis that ‘it is a small mining company and consequently these fees are well beyond its reach’ and that it considered the fees to be ‘highly excessive for any right to negotiate matter’, especially as the Grantee party was required to negotiate with three native title parties and had offered ‘legal funding and disbursements/meeting costs etc’ to all three groups

   ·        the Grantee party confirmed the funding offer made in its letter of 14 September 2011.

   The Grantee party also responded to the comparison drawn by Mr Teitzel between its offer of costs and the level of funding offered by another grantee party in the unrelated White Mining case, and invited him to consider the ‘existing and substantial case law’ in relation to the funding offer and the content of the proposed Negotiation Protocol. The letter also stated that the Grantee party had responded ‘promptly and diligently’ to Mr Teitzel in relation to both those issues, and had ‘changed’ its position by making ‘significant concessions’ in favour of the Second native title party. It also stated that the Second native title party’s current stance regarding funding and the wording/existence of the Negotiation Protocol was ‘not supported by current authority’, and that the basis and content for seeking mediation assistance from the Tribunal was ‘flawed’, given that they were not matters about which the Grantee party was required to negotiate under s 31 of the Act.

   (g)In his letter of reply to Just Outcomes dated 4 October 2011, Mr Teitzel confirmed that Annexure B had not been provided to the Grantee party or its representatives prior to 16 September 2011 (the reason proffered being that he was awaiting any changes to the draft Negotiation Protocol as foreshadowed by Mr Hanrahan at the meeting in Lithgow on 24 August 2011). Mr Teitzel noted the Grantee party’s claim that the Second native title party’s costings were ‘excessive’ for a right to negotiate process. He advised that, in a negotiation for an extension of another coalmine in NSW that he had conducted in 2010 under the right to negotiate process, the costs incurred were ‘slightly higher’ than the costs contained in the draft Negotiation Protocol. Those costs were found to be ‘acceptable’ to another mining company with a total increased capacity of less than one million tons. Mr Teitzel took issue with what he described as a ‘total rejection’ of his client’s proposed costings based on grossing up figures (rather than an examination of the actual attendance requirements) and a claim that the total sum is ‘unreasonable’. Mr Teitzel also took issue with the Grantee party’s claim that it is a ‘small’ mining company. He referred to the amount of the current turnover of the company and its expectation that MLAs 392 and 393 would increase coal production from 1.6 million tonnes to 3.5 million tonnes, most of which would be exported and would result in ‘gross turnover in excess of one third of a billion dollars’. He concluded by referring to the ‘contemptuous and patronising’ funding offer made by the Grantee party, which he contrasted with the funding arrangements in the White Mining case.

   (h)In an email on 12 October 2011, Mr Teitzel advised the Grantee party’s representatives that he had sought the appointment of a Tribunal mediator (as evidenced by a letter from him to the Tribunal dated 12 October 2011 and copied to Mr Hanrahan and Ms Denisenko) and that he proposed to undertake the issue of legal proceedings for ‘the recovery of our outstanding legal fees and disbursements in this matter’.

   (i)In an email in response to Mr Teitzel on 13 October 2011, Mr Hanrahan confirmed that a detailed response would be provided ‘shortly’ to Mr Teitzel’s correspondence of 4 October 2011. In light of the advice that Mr Teitzel intended to issue legal proceedings ‘in regard to the 26 August 2011 invoice’ he responded as follows:

   Although our client is under absolutely no obligation to meet the legal fees of any registered claim group we confirm that two separate offers were made to assist your clients, the WDM, with their legal fees.

   Both those offers were rejected by Teitzel and Partners.

   With respect to the tax invoice dated 26 August 2011 (in the amount of $5,844.82) for costs incurred for the Lithgow meeting on 24 August 2011, the Grantee party was willing to pay a smaller amount ($4,344.82) in full settlement, being the total of Mr Teitzel’s fees and accommodation and meals plus mileage allowance for his clients, venue hire and catering costs (on receipt of details of the Solicitors Trust Account and a copy of a signed costs agreement between Teitzel and Partners and the WDM claim group).

   Mr Hanrahan reiterated statements in correspondence to Mr Teitzel on 19 and 26 August 2011 that the Grantee party was not prepared to pay sitting fees to claim group members. ‘This position is consistent with all negotiations our client has undertaken in the past and will remain so for the future’.

   (j)In a letter to Just Outcomes dated 8 November 2011 in reply to their letter dated 27 October 2011 (which was not in evidence), Mr Teitzel stated that the assertion about the provision of $9,000 was ‘totally inconsistent’ with the facts expressed to the Grantee party’s representatives at their negotiation meeting on 27 October 2011. He reiterated his advice on that occasion that the Second native title party ‘has no funds’ and that (in responding to the Grantee party’s correspondence, arranging a survey of EL7515, attending on the negotiation meeting and dealing with the outcomes of that meeting) the Second native title party had already incurred costs exceeding $9,000. Thus, that sum was ‘far from “adequate” ’ (as, apparently, Ms Denisenko had stated in the letter).

1. On 7 September 2011, Mr Teitzel wrote to Just Outcomes in response to their letter of 26 August 2011. He noted that confidentiality was to be maintained by the Grantee party in respect of negotiations with the Second native title party, but stated that this was inconsistent with the earlier statements in the same letter concerning transparency of the negotiations. He continued:

   As discussed at the Lithgow meeting, there could be one agreement for all parties to execute for each of EL7515 and MLAs 392 & 393, however that does not mean that any details of each party’s negotiations and the outcomes from those negotiations need to be provided to the other relevant registered native title parties. There cannot be “common information” if confidentiality is to be maintained by Coalpac.

2. In the letter in reply dated 14 September 2011, Just Outcomes wrote:

   1.   We are instructed that Coalpac has adopted the same approach in these negotiations for each of the three native title parties involved in this matter. None of the parties except the WDM (and your office) has contended that Coalpac’s conduct to date has lacked good faith.

   2.   Coalpac remains committed to the good faith process, and its goal is to reach a substantive but realistic outcome with the native title parties via one ancillary agreement. Coalpac does not wish to engage in what it considers to be unnecessary and protracted correspondence from one legal representative over matters which do not advance the substantive negotiations.

   Enclosed with that letter was an amended negotiation protocol, referred to earlier in these reasons, which the Grantee party was prepared to sign. Clause 12 of that document, under the heading ‘Confidentiality’ stated:

   Coalpac agrees to maintain confidentiality as required by the NTA in its WDM specific dealings, whilst noting that the requirements of reaching one agreement with three native title parties in relation to the proposed grant of the Mining Tenements will require convergence of “common” information at a later date in the negotiations (e.g. when a proposed ancillary agreement is sent to all three native title parties).

3. On 26 September 2011, Mr Hanrahan wrote to Mr Teitzel (and representatives of the other native title parties) stating that, as a result of recent mediation meetings, there appeared to be a ‘common thread’ of that which the separate registered native title claim groups may wish to have included in an ancillary deed. Attached to the letter was a suggested timetable for the parties to continue to negotiate in good faith and conclude the process in a mutually acceptable timeframe. The letter concluded with a request for the Second native title party’s response to the offer and their comments regarding the timetable for future negotiations.

4. On 13 March 2012, Mr Hanrahan sent a draft Ancillary Deed to the First and Third native title parties. The draft Deed indicates what the Grantee party was prepared to do in relation to the benefits referred to in the letter of 26 September 2011 (see paragraph 257(d) earlier in these reasons).

5. According to Mr Hanrahan, the Grantee party’s approach to these negotiations was to:

   (a)conduct negotiations with the three native title parties which were identical in content (in terms of benefits being offered to the native title parties, correspondence distributed regarding the Ancillary Deed, etc), and

   (b)wherever possible, schedule consecutive meetings with the native title parties covering the same agenda from the Grantee party’s perspective, but in separate venues in recognition of their inter-indigenous issues, and

   (c)preserve the confidentiality of the information supplied at various separate meetings to every extent possible, whilst recognising that there would be a degree of commonality within a multi-party negotiation which necessitates the sharing of certain information (eg, the provision of the draft Ancillary Deed to all native title parties); and

   (d)having taken into account all the aspirations and preferences of the three native title parties, prepare and offer one single Ancillary Deed for consideration by all native title parties, which reflected as far as possible, the reasonable requests of each group.

6. Mr Hanrahan described the basis for this approach as follows:

   Coalpac’s rationale for this was well-intentioned and based on its long history of past dealings with these groups. Put simply, there is considerable animosity and suspicion between the various groups. Coalpac believed that if it were to try to negotiate 3 separate Ancillary Deeds, each group would be suspicious and mistrustful as to what benefits and compensation each group was receiving, making agreement extremely difficult if not impossible. Coalpac’s decision to negotiate a single Ancillary Deed, which was discussed with the NNTT prior to implementation, was to permit transparency for all Native Title Parties, avoid additional fracturing of inter-indigenous relationships between the groups, and maximise its chances of reaching an agreement in already difficult circumstances. I believe that this approach was, ‘best practice’ in terms of Coalpac’s good faith obligations under the NTA.

7. Mr Hanrahan’s references to the Grantee party’s history of past dealings with these groups and the nature of the relationships between the various groups can be illustrated by reference to Deputy President Sumner’s preliminary decisions relating to negotiation in good faith and representation of the native title party in Coalpac Pty Ltd/State of New South Wales/North Eastern Wiradjuri People of the Bathurst, Lithgow, Mudgee area, [2009] NNTTA 133, and his future act determination in Coalpac Pty Ltd/State of New South Wales/North Eastern Wiradjuri People of the Bathurst, Lithgow, Mudgee area, [2009] NNTTA 137.

8. The Second native title party’s concerns in relation to Mr Hanrahan’s statement that the Grantee party’s decision to negotiate a single ancillary deed ‘was discussed with the NNTT prior to implementation’ were addressed by Mr Hanrahan at a directions hearing on 24 August 2012 and in his affidavit sworn on 31 August 2012. Consequently, they need to be considered further.

9. The Second native title party disputes the statement by Mr Hanrahan that the Grantee party’s approach constituted ‘best practice’ in terms of its good faith obligation under the Act. Rather, the Second native title party contends, this is not in compliance with the Act and not supportable in fact.

10. In dealing with the contentions in relation to the single ancillary agreement issue it is necessary to consider again the terms of s 31(1)(b) of the Act. That paragraph requires the negotiation parties to negotiate in good faith with a view to obtaining ‘the agreement’ of ‘each of the native title parties’ to the doing of the proposed future act. It contemplates that there might be more than one native title party to the negotiations. Other sections of the Act prescribe the circumstances in which different persons or bodies are identified as, or might become, ‘native title parties’ and hence ‘negotiation parties’ for right to negotiate negotiations (see ss 29, 30, 30A).

11. Although a grantee party must negotiate in good faith with a view to obtaining ‘the agreement’ of each of the native title parties, the Act does not prescribe the form of that agreement. The words of s 31(1)(b) could encompass one agreement with each of the native title parties, or a separate agreement with each native title party. Separate agreements might be similar or different in content. Different agreements might be appropriate where, for example, each native title party has registered native title rights and interests that are different in some material respect(s) from the registered native title rights and interests of the other native title party or parties. Hence the future act might have different effects on the parties’ registered native title rights and interests, and consequently the basis on which agreement is reached and the terms of that agreement might vary from native title party to native title party.

12. The Act encourages negotiation parties to reach agreement and provides some guidance as to what the negotiations may include or take into account. It is for the parties to agree as to what they will accept and, in particular, on what basis each native title party will agree to the doing of the future act.

13. It is clear from the documentary evidence that, at least from 1 August 2011, the Grantee party indicated clearly its intention:

    (a)   to enter one ancillary agreement with the three groups, and

    (b)   to negotiate with each group separately in order to reach that outcome.

14. In his letter to each native title party on 1 August 2011, Mr Hanrahan asked each party for an overview of what they may wish to have contained in the ancillary agreement. At the meeting in Lithgow on 24 August 2011, Mr Hanrahan informed the participants that it was the Grantee party’s ‘preference’ to negotiate a single ancillary agreement with the Second and Third native title parties in relation to MLAs 392 and 393 and a separate agreement with all three native title parties for the area covered by EL 7517. It can be inferred from clause 4 of the draft Negotiation Protocol provided by the Second native title party that the Second native title party not only acknowledged but expected that there would be one ancillary agreement between the State, the Grantee party, the Second native title party and any other native title party. However, the Second native title party intended that the draft Negotiation Protocol would apply only to them and the Grantee party. The letter from Just Outcomes to Mr Teitzel on 26 August 2011 referred to the negotiations involving three native title parties and described the implications of that for the way in which the negotiations would proceed and, in particular, why the Grantee party wanted to agree to an overall process that could be adopted by all three native title parties rather than sign a document with one particular claim group. In his reply dated 7 September 2011, Mr Teitzel seemed to accept that there could be one agreement for all parties to execute, but expressed concerns about the confidentiality of separate negotiations between the Grantee party and each native title party. In a letter to Mr Teitzel dated 14 September 2011, Just Outcomes referred to the Grantee party’s ‘goal’ of reaching a substantive but realistic outcome with the native title parties ‘via one ancillary agreement’.

15. The negotiation timetable enclosed with the letters from Mr Hanrahan to each of the native title parties dated 26 September 2011 contemplated a series of separate meetings with each of the native title parties in which each native title party could respond to the Grantee party’s offer and the Grantee party could respond to their counter offers. Such a process allowed for the possibility that different views and aspirations would be expressed by the native title parties and for there being some accommodation of those views and aspirations in a single ancillary deed. In this case, there appears to have been a ‘common thread’ of what at least two of the three native title parties wanted included in an ancillary deed and which the Grantee party was willing to provide. There was no legislative barrier to the Grantee party pursuing the ‘goal’, or having a ‘preference’ for one ancillary agreement only. Indeed, it reached that goal with two of the three native title parties.

16. The Second native title party also criticises the Grantee party’s approach to the Second native title party’s request that their negotiations with the Grantee party be conducted on a confidential basis. The evidence shows that the Grantee party was willing to proceed on a confidential basis with the Second native title party, at least to the point at which a draft agreement was prepared. In the circumstances of this case, that approach does not demonstrate that the Grantee party was not acting in good faith in relation to its negotiations with the Second native title party.

17. When considering the contentions and evidence on this issue it has to be remembered that, as a Full Federal Court stated in Cox (at [38]):

    The Act does not dictate the content and manner of negotiations by compelling parties to negotiate in a particular way or over specified matters. Providing what was discussed and proposed was conducted in good faith and was with a view to obtaining agreement about the doing of the future act, then the requirement under s 31(1)(b) will be satisfied.

18. Conclusion: Having regard to the evidence in relation to how and why the Grantee party sought to negotiate a single ancillary agreement with the three native title parties, and the way the Grantee party approached separate negotiations with each of the native title parties, I am not satisfied that the Grantee party did not negotiate in good faith as mentioned in s 31(1)(b).

The picture overall

1. So far, these reasons have considered contentions made by the Second native title party in relation to specific issues, together with the Grantee party’s contentions in reply and the relevant documentary evidence. Conclusions have been set out in relation to those issues. However, it is appropriate to look at the overall conduct of the Grantee party in order to ascertain whether the Second native title party has satisfied the Tribunal that the Grantee party did not negotiate in good faith as mentioned in s 31(1)(b) (see s 36(2)).

2. As noted early in these reasons (at [41]), when considering the contentions of the parties in relation to the good faith issue, the Tribunal needs to bear in mind:

   (a)the obligation on the negotiation parties to negotiate in good faith with a view to obtaining the agreement of each of the native title parties to the grant of the proposed tenement or the grant subject to conditions to be complied with by any of the parties (s 31(1)(b))

   (b)that if any of the negotiation parties refuses or fails to negotiate as mentioned in s 31(1)(b) about matters unrelated to the effect of the act on the registered native title rights and interests of the native title parties, this does not mean that the negotiation party has not negotiated in good faith for the purposes of s 31(1)(b) (s 31(2))

   (c)the need to consider the behaviour of each party as a whole and in context (e.g. by reference to the approach taken by, and the conduct and actions of, one or more of the other parties), to assess the party’s state of mind as manifested by its conduct in negotiations, and to assess the quality of the party’s conduct by reference to what it has done or failed to do

   (d)that the Act does not require the Tribunal to evaluate the reasonableness of each proposal or counter-proposal or that negotiations have reached any particular stage, and

   (e)that it is for the negotiation party that asserts that another negotiation party did not negotiate in good faith as mentioned in s 31(1)(b) to satisfy the Tribunal of that.

3. The Second native title party quotes the following passage from the Full Federal Court’s judgement in Cox (at [20]):

   It has been repeatedly recognised that the requirement for good faith is directed to the quality of a party’s conduct. It is to be assessed by reference to what a party has done or failed to do in the course of negotiations and is directed to and is concerned with a party’s state of mind as manifested by its conduct in the negotiations.

The Second native title party then contends that all of the matters referred to in its written submission are relevant to assessing the quality of the Grantee party’s conduct. It submits that, in view of all the instances to which it refers, the Grantee party has not acted reasonably or in good faith and the quality of the Grantee party’s conduct is not consistent with a finding that it has complied with s 31(1)(b) of the Act.

1. The Grantee party does not take issue with the legal principles to be applied. Indeed, it submits that the requirement for good faith is directed to the quality of a party’s conduct and there is no prescribed content and manner for negotiations under s 31(1)(b) other than that the negotiations must be in good faith. It is to be assessed by reference to what a party has done or failed to do in the course of negotiations and is directed to and is concerned with a party’s state of mind as manifested by its conduct in the negotiations (see, for example, Brownley v Western Australia (No 1) [1999] FCA 1139; (1999) 95 FCR 152 at [24]–[25] per Lee J, Strickland 85 FCR 303 at 309–320 and Western Australia/Thomas on behalf of the Walgen People/Anaconda Nickel Ltd [1998] NNTTA 8 at [7]–[18] at [20]). The Act does not dictate the content and manner of negotiations by compelling parties to negotiate in a particular way or over specified matters. Thus, the Grantee party submits, providing what was discussed and proposed was conducted in good faith and was with a view to obtaining agreement about the doing of the future act, then the requirement under s 31(1)(b) will be satisfied (see Cox at [38]).

2. In this case, the Grantee party proceeded in a clearly articulated way with a view to obtaining agreement of each and all of the native title parties about the doing of the future acts. Although it held firm positions on some issues, it demonstrated a willingness to adapt or vary its approach on some matters in an attempt to secure the agreement of the Second native title party. The Grantee party conducted itself appropriately within the framework for negotiations set out in the Act as interpreted by the Tribunal and the Federal Court, particularly by a Full Federal Court in Cox.

3. The Grantee party’s approach was influenced at key stages of the negotiation process by the conduct and actions of the Second native title party, including the Second native title party’s stance in relation to whether there should be a negotiation protocol and what such a protocol should contain. Communications on that issue (including about the funding by the Grantee party of the Second native title party’s costs) and the ambiguity of the Second native title party’s position about whether it would continue to negotiate in the absence of a protocol in the form that it prepared, limited the prospects and impeded the pace of negotiations about substantive issues. Nonetheless, the Grantee party put an offer to the native title parties, including the Second native title party, and invited responses to that offer, about nine months in advance of making a future act determination application to the Tribunal.

4. Having considered each of the issues raised by the Second native title party in light of the evidence and by reference to the applicable law, I have concluded that the Second native title party has not satisfied me that the Grantee party did not negotiate in good faith as mentioned in s 31(1)(b) of the Act.

5. Given that conclusion, I intend to proceed as indicated at the directions hearing on 12 November 2012 and in Coalpac Pty Ltd/State of New South Wales/Gundungurra Tribal Council Aboriginal Corporation #6 (NC97/7), Wiray-dyuraa Maying-gu (NC11/3), Warrabinga-Wiradjuri People (NC11/4)/State of New South Wales ([2012] NNTTA 117 at [46]), to make that determination on the papers by reference to the contentions and evidence before the Tribunal, despite the current absence of contentions and evidence from the Second native title party in accordance with Direction 6.

Reasons for not holding a hearing in relation to the future act determination application

1. As noted at [20] to [22] of these reasons, the Tribunal received and considered submissions about whether there should be a hearing in relation to the good faith issue. The Second native title party contended that a hearing ‘on country’ (in Lithgow) was required. The remaining parties were of the view that a decision on the good faith issue could be made on the papers.

1. Subsection 151(1) of the Act provides that, for the purposes of an inquiry, the Tribunal ‘may’ hold hearings. Subsection 151(2) of the Act provides that the Tribunal ‘may’ make a determination in relation to a right to negotiate application by considering documents or other material lodged with or provided to the Tribunal without holding a hearing. However, the Tribunal ‘must’ hold a hearing if it appears to the Tribunal that the issues for determination cannot be adequately determined in the absence of the parties.

2. The Second native title party submitted that the issues to be dealt with at such a hearing would be:

   (a)cultural survey and heritage issues – the Second native title party submitted that, as a result of being unable to participate in a survey of the mining tenements, it was not able to advise the Grantee party on the impact of the proposed open cut mining on its native title rights and interests or specifically advise the Grantee party of areas and sites of significance. Also, the Grantee party had not been able to demonstrate that it complied with the DECCW Guidelines requiring it to utilise the services of Aboriginal people who are culturally qualified in relation to the area of the mining tenements, and had excluded the relevant Aboriginal community from decisions. There was also said to be an issue about the Grantee party’s offer to ‘consult’ about the impact of mining on the Second native title party’s culture and heritage.

   (b)failure of the Grantee party to consult or negotiate in good faith with the Second native title party – with evidence proposed to be given by the Second native title party on the preliminary and generic nature of the Lithgow meeting, and the incorrect and inaccurate content of the minutes of the meeting prepared by Mr Hanrahan

   (c)the inequality of the negotiation position of the two parties – with evidence proposed to be given on that point and in relation to the Grantee party’s allegations that funds sought by the Second native title party were unreasonable

   (d)breach of s 31(1)(b) of the Act – with evidence proposed to be given that, at the Lithgow meeting, the Grantee party agreed to undertake good faith negotiations with the Second native title party on an individual and confidential basis; a position from which, it was submitted, the Grantee party resiled immediately afterwards

   (e)the letter from Mr Hanrahan to Mr Teitzel dated 26 September 2011

   (f)the Grantee party’s threat of action under s 35 of the Act

   (g)other issues raised in the Second native title party’s contentions and the Grantee party’s reply and affidavits – with the Second native title party wanting to cross-examine Mr Hanrahan and Ms Denisenko in relation to their affidavits, and possibly Dr Follington, as to their credibility.

3. The Grantee party submitted, in essence, that a hearing in relation to the good faith issue was not necessary and that it was appropriate to conduct the inquiry ‘on the papers’. All the issues that the Second native title party requested to be dealt with had either been the subject of submissions or were not matters which were proper for the Tribunal’s consideration in relation to the good faith issue.

4. Having considered the submissions of the Second native title party and the affidavits and other material provided to the Tribunal for the purpose of deciding the good faith issue, I decided that I could decide that issue without holding a hearing by considering the documents lodged with or provided to the Tribunal.

5. Put briefly, it is apparent from the evidence quoted or referred to in these reasons for decision that the Grantee party’s negotiation position on key issues was clearly articulated in writing before and after the Lithgow meeting on 24 August 2011. Although the Second native title party took issue with aspects of the draft minutes of that meeting, and did not provide corrections or additions to those minutes, there was enough other documentary material for conclusions to be reached by the Tribunal with confidence in relation to the contentions made by the Second native title party. Accordingly, it is likely that little (if anything) would have been gained by traversing the same material at a hearing or by cross-examining deponents as to the contents of their affidavits or in relation to their credibility. The cost and delay that would have been occasioned by a hearing would have outweighed any benefit in relation to the resolution of the good faith issue.

Conclusion

1. For the reasons set out above I am not satisfied that the Grantee party did not negotiate in good faith as mentioned in s 31(1)(b) of the Act. Consequently, the Tribunal has power to exercise its jurisdiction in relation to the future act determination application made by the Grantee party on 6 June 2012.

Graeme Neate

President

Attachment A