Darcy Hunter and Others on behalf of the Nyangumarta People (98/65); Frank Sebastian, Joseph Roe & Others on behalf of the Rubibi People (99/23); John Dudu Nangkiriny & Others on behalf of the Karajarri People...

Case •

[2003] NNTTA 70

•

1 May 2003

NATIONAL NATIVE TITLE TRIBUNAL

Darcy Hunter and Others on behalf of the Nyangumarta People (98/65); Frank Sebastian, Joseph Roe & Others on behalf of the Rubibi People (99/23); John Dudu Nangkiriny & Others on behalf of the Karajarri People (WC00/2)/Gulliver Productions Pty Ltd; Indigo Oil Pty Ltd; Maneroo Oil Company Limited/Western Australia, [2003] NNTTA 70 (1 May 2003]

Application No:         WF02/04

IN THE MATTER of the Native Title Act 1993 (Cth)

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IN THE MATTER of an inquiry into a Future Act Determination Application

Darcy Hunter and Others on behalf of the Nyangumarta People (98/65); Frank Sebastian, Joseph Roe & Others on behalf of the Rubibi People (99/23); John Dudu Nangkiriny & Others on behalf of the Karajarri People (WC00/2); (Native Title Parties)

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Gulliver Productions Pty Ltd; Indigo Oil Pty Ltd; Maneroo Oil Company Limited (Grantee Party)

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The State of Western Australia (Government Party)

FUTURE ACT DETERMINATION

Tribunal:Deputy President The Hon EM Franklyn QC

Place:Perth

Date:2 May 2003

Catchwords:     Native Title – Future Act – preliminary issue going to jurisdiction – Whether Grantees have negotiated in good faith – no obligation to capitulate or agree – conduct to be judged from negotiations overall – determination a question of fact – Grantees have negotiated in good faith and with each native title party.

REASONS FOR FUTURE ACT DETERMINATION – WHETHER GRANTEES HAVE NEGOTIATED IN GOOD FAITH

  1. On 25 August 1999 the State of Western Australia (“the State”) gave notice under section 29(2) of the Native Title Act (“the Act”) that it may grant an exploration permit for petroleum to Indigo Oil Pty Ltd, Maneroo Oil Company Ltd and Gulliver Productions Pty Ltd (“the Grantees”) for permit area being identified as 2/98-9, the specified notification date being 25 August 1999. The Nyangumarta People who were registered under the Act as native title claimants of land included in the permit area on 29 September 1999 and the Rubibi People and the Karajarri People were similarly registered on 24 September 1999 and 25 April 2000 respectively. Those Peoples are jointly hereafter referred to as the “Native Title Parties”. The respective native title interests in the permit area were notified to the Grantees by the then Department of Minerals and Energy on behalf of the State on 7 June 2000. The Nyangumarta People have since had a consent determination of native title over part of the land the subject of their claim.

  2. On 19 April 2002 the Grantees lodged an application (amended on 6 May 2002) under section 35 of the Act for a future act determination alleging inability to reach agreement with the Native Title Parties despite negotiation seeking agreement over a period from 11 July 2000 to 5 March 2002 which included mediation at the Grantees’ request. The application was accepted by the Tribunal on 7 May 2002.

  3. I was appointed the Member to conduct the section 35 inquiry.

  4. On 16 May 2002, the Grantees requested a section 150 conference to resolve the issues between them and the Native Title Parties.

  5. At a preliminary s35 conference held on 4 June 2002 at which all parties were represented, (the Nyangumarta by the Yamatji Land and Sea Council (“YLSC”) through the Pilbara Native Title Service (“PNTS”) and the Rubibi and Karajarri by the Kimberley Land Council (“KLC”)) the Grantees confirmed their request for a section 150 conference. The issue between the parties was a proposal by each of the Native Title Parties that the Grantees pay a monetary sum based on the on-ground cost of exploration on the area the subject of the permit application.

  6. The section 35 Application lodged by the Grantees on 19 April 2002 states that the first time such payments were mentioned was on 21 November 2001 when the KLC, via letter, requested annual payments of 4% of exploration expenditure as a condition to be included in the native title agreement with the Karajarri and Rubibi People. This is said to have followed mediation with the Nyangumarta People in the course of which, on 5 October 2001, the Grantees had signed a heritage agreement produced by PNTS which made no menton of such a payment. On 20 November 2001 PNTS advised that it wished the Grantees to offer a percentage of exploration expenditure and that the agreement signed was not acceptable to the Nyangumarta. The Grantees advised both the KLC and PNTS that it would not agree to such payments.

  7. The section 35 inquiry was adjourned to 8 July 2002 in anticipation that the s 150 conference would be conducted by a Tribunal Member not yet appointed. On 2 July 2002 the Grantees advised that further negotiation would take place and requested an adjournment of the proposed s35 hearing of 8 July 2002. This was consented to by the other parties. The Tribunal was advised that a section 150 meeting of the Grantees with the Nyangumarta People was scheduled for 18 July 2002 and further meetings with the other Native Title Parties for mid-August. The section 35 conference was adjourned to 26 July 2002.

  8. On 26 July 2002 all parties were again represented. The Grantees’ representative advised that he had met with representatives of the Nyangumarta People at South Hedland with “positive results” and the representative of the other Native Title Parties (the KLC) advised that a section 150 meeting had been arranged with the Grantees for 20, 22 and 23 August. The section 35 conference was adjourned to 26 August to await the outcome of the s150 conference meeting.

  9. On 7 August 2002, in response to a letter from PNTS dated 25 July 2002, which raised (inter alia) the issue of payment to the Nyangumarta of an annual sum of 6% of on-ground exploration costs, the Grantees, by letter, advised PNTS that they would proceed under s35 of the Act as they could not raise the risk capital for the payment sought and that it would be impossible to raise risk funds for their exploration.

  10. Also by letter dated 7 August 2002, the Grantees advised the Kimberley Land Council representing the Rubibi and Karajarri People that negotiations with the Nyangumarta People had broken down, the main reason being that the Grantees could not agree with payments for exploration, the letter goes on to say:

    “Application 2/98-9 is for a petroleum exploration permit which is a very high risk project.  Payments for exploration would increase costs, increase the risks and would make it impossible for the Grantee Parties to raise risk funds for their petroleum exploration programs.

    If the Kimberley Land Council, Karajarri and Rubibi Peoples insist on payments for exploration, then the Grantee Parties would be of the view that our negotiating positions are too far apart to continue meaningful discussions to reach agreement on a native title agreement.  The Grantee Parties would then proceed to the section 35 determination in respect of your claims.

    In light of the above are there still reasons for visiting with the Karajarri and Rubibi People on 22-24 August.  Please advise.”

  11. By letter dated 14 August 2002 the Kimberley Land Council wrote to the Grantees stating that “a key protocol adopted by the KLC in relation to significant future acts is that the proponent meet with the traditional owners and explain their position”.  The letter went on to express the opinion that “whilst it may be true that our client’s negotiating positions will remain too far apart to continue meaningful discussions I cannot say that conclusively without you meeting with the traditional owners”.  The letter expressed the opinion that the visits in August should proceed, nominating 22 and 23 August 2002 to meet the two native title groups.

  12. By letter dated 19 August 2002 the Grantees advised the Kimberley Land Council that the dates of 22 and 23 August were no longer suitable and that the Grantees saw no purpose in the trip to Broome, the parties being so far apart in their respective negotiating positions. The letter stated that the Grantees understood that the Karajarri People and the Nyangumarta People had been offered payments for exploration (by parties other than the Grantees) and had this expectation from the Grantees. The letter repeated the reasons for not agreeing to payment for exploration set out in the Grantees’ letter of 7 August 2002 and advised that the Grantees would proceed with the section 35 determination.

  13. On 29 August 2002 directions were made by me in respect of the issue of negotiation in good faith. On 2 October 2002 the Nyangumarta People lodged contentions that the Grantees had not negotiated in good faith as required by section 31(1)(b) of the Act, the same being supported by affidavits of Marnie Jane Parkinson, a solicitor in the employ of the Pilbara Native Title Service (“PNTS”) and Adrian John Murphy, a mining future act officer also employed by PNTS, and by supporting documentation.

  14. On 6 October 2002 the other Native Title Parties, through the KLC, lodged contentions and supporting documentation containing generally the same allegation.  On 24 October 2002 the Grantees lodged their statement of contentions and supporting materials and on 22 November 2002 the KLC, on behalf of the Karajarri and Rubibi Peoples, lodged a statement in reply to the Grantees’ contentions.

  15. I accept as correct statements of objective fact contained in the contentions of the respective parties and the Grantees’ s35 application to the extent that they are credible, relevant, not disputed or contradicted and not factually challenged by any other party. The determination of the “good faith” issue is essentially one to be made on the facts.

  16. Sections 31(1)(b) and 35 of the Act confer on any negotiation party who has negotiated in good faith with a view to obtaining the agreement of each of the Native Title Parties to the doing of the relevant future act or the doing of it subject to conditions, the right to seek and obtain an arbitral determination under section 38 if at least six months have passed since the notification day (in this case 25 August 1999) and no such agreement has been made in relation to the act.

Nyangumarta People’s case and comments and findings thereon

  1. Ms Parkinson’s evidence

[17.1]In her affidavit Ms Parkinson identifies herself as the solicitor having the carriage and responsibility for the Nyangumarta native title application and says that she works collaboratively with Mr Murphy (he being the mining and future act officer of PNTS for the Pilbara in relation to future act negotiations).  She receives her instructions from the Nyangumarta Working Group, one of those instructions being to routinely lodge objections on behalf of the native title claimant group to the inclusion of any tenement in the expedited procedure within the Nyangumarta claim area.

[17.2]She says that on or about 27 April 2001 she passed on those instructions to Mr Murphy and on or about 20 December 2001 became aware that he had provided the Grantees with a copy of the standard document entitled “Contract for Services in Relation to Exploration”, (which she describes as the “Standard Expedited Procedure Agreement”).  She says that she informed him that the instructions given to him did not apply to exploration tenements which did not include a statement that the expedited procedure was attracted and the offer to the Grantees to settle the matter on the basis of the standard expedited procedure agreement should be withdrawn.  On the evidence I accept this was subsequent to the Grantees’ signature (said to be on 5 October 2001) and delivery to PNTS of a heritage agreement negotiated by the Grantees with Mr Murphy of PNTS and provided by it to the Grantees and subsequent, also, to the Tribunal being advised at a mediation meeting on 8 October 2001 that agreement with the Nyangumarta had been achieved.  She says that she informed Mr Murphy that the Nyangumarta had negotiated agreements (with other Grantees) for the grant of petroleum exploration tenements which included financial compensation calculated as a percentage of exploration expenditure, employment and training obligations and heritage protection and that it was likely that the Nyangumarta would want to negotiate an agreement with the Grantees which included similar matters.

[17.3]She further testifies that on 18 July 2002 she attended a Nyangumarta Working Group meeting in South Hedland at which Dr Warris, representing the Grantees, was present, he providing background information on the company and its proposed work programme for the tenement.  In the absence of Dr Warris she took instructions from the Working Group as to what they wanted out of an agreement with the Grantees and presented “some of the results” of that discussion to Dr Warris, which included financial compensation.  She testifies that Dr Warris said he would consult with his partners and give a written response.  In a letter dated 25 July 2002 addressed to Dr Warris “confirming the requests made at the meeting on 18 July”, she states that the agreement should address matters including, but not limited to, a number of listed matters, one of which is “a payment in respect of each financial year during the life of the permits based on 6% of the on-ground exploration costs incurred during each year of each permit”.  The letter concludes by stating that the proposals in her letter are similar to those recently agreed between the Nyangumarta People and two other petroleum and exploration companies.

[17.4]She testifies in the final paragraph of her affidavit that on 7 August 2002 she received a faxed correspondence from Dr Warris stating that the Grantees intended to proceed to a section 35 determination. Dr Warris’ letter is produced with her affidavit and deals with the various matters raised in her letter. It is as follows:

“Dear Ms Parkinson,

Re: Applications 2/98-9 and 14/00-1

Thank you for your letter of 25 July 2002.  The Grantee Parties have reviewed the offer and we have the following comments:

(i)You ask for 6% of on-ground exploration costs.  This is greater than the original asking rate of 4% and is hardly a compromise.  As I stated at our meeting in South Hedland on 18th July, the Grantee Parties are private companies and cannot pay 6% of exploration costs.  It would be impossible for us to raise risk funds for our exploration program.

(ii)As I stated at our meeting  in South Hedland on 18th July, the Grantee Parties will leave roads and bores for the community during our exploration program.  However, this will be based on our exploration results and cannot be at the request of the community.

(iii)The Grantee Parties are not large companies and cannot provide employment and job training for the community.  As I stated at our meeting in South Hedland on 18th July, the Grantee Parties believe that such programs can be instigated when petroleum has been found and the Grantee Parties are applying for a production licence.

(iv)As I stated at our meeting in South Hedland on 18th July, the Grantee Parties cannot agree to this.  We are prepared to carry out the heritage surveys to clear the areas of our exploration programs but due to the cost of such surveys, we cannot extend them for the benefit of the community.  Again, this would be better addressed at the production phase.

(v)The Grantee Parties are agreeable to the establishment of a Liaison Committee to discuss our programs.  This committee would meet prior to our programmes to prepare for the heritage surveys.

(vi)Access to audited financial records will not be necessary as the Grantee Parties do not agree to (i).

The Grantee Parties are of the view that our negotiating positions are too far apart to continue meaningful discussions to reach agreement on a Native Title Agreement.

We will now proceed to the Section 35 determination in respect of your claim.

Yours faithfully,

Bevan J Warris
Managing Director”

  1. Mr Murphy’s evidence

[18.1]   Mr Murphy, in his affidavit, describes himself as the mining and future act officer for the Pilbara region employed by the PNTS.  He lists some of his responsibilities, including “negotiation with tenement applicants”.  He states that he has been informed by Ms Parkinson that on, 24 April 2001, she received instructions to routinely lodge objections in the case of the proposed grant of tenements under the expedited procedure process.  He testifies that he was aware that the section 29 notice issued on 25 August 1999 in the present matter did not include a statement that the State considered the expedited procedure to be attracted.  He refers to a letter dated 25 September 2000 written by a PNTS legal officer Southalan in reply to a letter from the Department of Mineral and Petroleum Resources (“DMPR”) requesting further information as to the likely activities that would take place on the tenement land.  Southalan’s letter is addressed to the DMPR and refers not only to material received from that department but to further material provided by Gulliver Productions under cover of a letter dated 8 September 2000 and to a further letter from Gulliver Productions dated 10 July 2000 stating the Grantees’ intention to carry out heritage surveys during the first two years after the permit is granted.

[18.2] Mr Murphy refers to events of his personal knowledge between 14 September 2001 and August 2002 relating to negotiations, making no reference to any such events outside that period. However his affidavit makes clear that over that period there were “mediation conferences” between him representing the Nyangumarta People and Dr Warris representing the Grantees, as a result of which he provided Dr Warris with a copy of the standard expedited procedure agreement entitled “Contract for Services in Relation to Exploration”. He testifies that on 8 October 2001 he attended a mediation conference with the Grantees at which he and the Grantees informed the Tribunal that they were each of the belief that agreement had been reached on the basis of that standard agreement. I accept the statement in the s35 application that the mediation was requested by the DMPR at the request of the Grantees and that mediation meetings were held on 13 September 2001, 8 October 2001, 30 November 2001, 25 February 2002 and 5 March 2002.

[18.3]   Correspondence attached to his affidavit reveals that on 8 November 2001 he informed the Grantees by email that the agreement previously executed and forwarded by them did not include the native title claimant details and consequently he required a new document which he enclosed for execution and return.  His email contains the comment that, on receipt of this document, he expects that the DMPR would forward the necessary State deeds for the grant of the exploration titles.  It is not in dispute that such “new document” was executed by the Grantees.

[18.4]   He testifies that on or about 20 December 2001 Ms Parkinson informed him that he had made a mistake in sending a copy of the standard agreement to Dr Warris and that the standard instructions did not apply to exploration permit 2/98-9.  He was further informed by Ms Parkinson that the Nyangumarta claim group had successfully negotiated an agreement with other proposed grantees for the grant of petroleum exploration permits which included financial compensation, employment training obligations and heritage protection and that Ms Parkinson was of the view “it was likely” that the claim group would seek to negotiate an agreement with the Grantees on similar terms.  He does not testify to being told the offer to settle on the basis of the Standard Expedited Procedure Agreement should be withdrawn.

[18.5] He further testifies that on 24 December 2001 he was informed by an officer of the DMPR that a State Deed executed by the Grantees pursuant to s31 of the Act had been received by that department with a request that it arrange for it to be executed by the Native Title Parties and registered.

[18.6]   He next testifies that on 20 December 2001 at 10.06pm he emailed Dr Warris and “explained his mistake”, advising that the group had entered into agreements with other proponents whereby they received a percentage of exploration expenditure.  A copy of that email is annexed to his affidavit.  It does not refer to a “mistake”, but rather to a new issue.  I set it out hereunder:

“Good morning Bevan,

I apologise for the late notice of this as an issue however I have been asked to bring it to your attention following discussion of the claimant groups position in relation to petroleum exploration permits.

The group has recently entered into agreements with other proponents wherein they receive a % of exploration expenditure on those tenements granted pursuant to the right to negotiate.  The group has requested that other proponents consider providing a similar offer for their consideration in similar negotiations.

Again, I apologise for raising this matter at a stage where it appeared agreement had been reached however the execution of the “standard” agreement is at all times subject to the claimant group finding the terms acceptable.  Given the long distance and infrequent nature of meetings to discuss matters I was operating on the assumption that the group would find our standard agreement acceptable.  If you could provide your views on this matter so that it can be taken back to the next working group meeting  expected to occur in February it would be appreciated.

In the meantime have happy and safe Christmas/ New Year

Regards

Adrian Murphy”

[18.7]   He testifies that on 21 December 2001 at 7.31am he received an email in response from Dr Warris stating that the payments he had intimated might be sought by the group were “out of the question”.  A copy of that email is also produced.  I set out its contents hereunder:

“Hi Adrian,

You are right – there have been some agreements with such payments. These are in the South Australian Cooper Basin but are for conjunctive agreements through to production.

The KLC has also asked for such payments for the Rubibi and Karajarri.  I have told them that such payments for a pure exploration permit are out of the question.  Oil exploration in onshore Western Australia is very high risk as demonstrated by the lack of producing fields in comparison to the offshore.  Such payments would seriously raise the risk profile of the venture.  Under the terms of our permit, the State Government only gets payments when we have achieved success and apply for a production licence.

For your comfort, I can assure you that Gulliver would not enter into agreements that differed substantially between the three claimant groups.  That, in my opinion, would only cause trouble in future and would not be in our interest.

Cheers for now and have a Merry Xmas and Happy New Year

Bevan Warris.”

[18.8] On 24 January 2002 Mr Murphy invited Dr Warris to attend the next Nyangumarta Working Group to be held in March at 80 Mile Caravan Park to discuss the grant of the exploration licence. He then refers to a mediation conference convened on 25 February 2002 at which he says he again explained his mistake and informed Dr Warris that the claim group requested a meeting with him to negotiate the terms of the agreement. He refers also to a further mediation conference on 5 March 2002 attended also by Dr Warris and the KLC representing the Karajarri and Rubibi People, when Dr Warris advised those present that, after discussion with his partners, they had decided to proceed with a section 35 application and wished to terminate the mediation, stating that the Grantees could not agree to financial compensation at the exploration stage. The affidavit reveals that a request for a section 150 conference was later received by the Tribunal from the Grantees and that on 24 June 2002 Mr Murphy attended a “mediation conference” before Member Sumner at which Dr Warris indicated he would obtain instructions from his partners about attending a meeting with the Native Title Parties.

[18.9] He further testifies that on 28 June 2002 at a mediation conference he advised that the next Nyangumarta meeting would be on 18 July 2002 and that Dr Warris agreed to request a further adjournment of the section 35 inquiry to allow that meeting to take place. Both he and Dr Warris attended that meeting at which, he says, Dr Warris provided background information on the company and the nature of the proposed work for the tenement. He says that in the absence of Dr Warris, Ms Parkinson took instructions from the group as to “what they wanted out of the agreement and subsequently he and Ms Parkinson presented “some of the results” to Dr Warris which included a number of matters which he specifies, one of which was financial compensation. Dr Warris advised that he needed to discuss the matters with his partners before responding. Mr Murphy says that on 26 July 2002 he attended a section 150 conference with Dr Warris before Member Sumner at which Dr Warris confirmed receiving correspondence from the PNTS outlining the Nyangumarta claimants’ request (presumably Ms Parkinson’s letter of 25 July 2002) and said he would reply after consultation with his partners, that conference being adjourned to 29 August 2002. The documents provided include a copy of that letter of 25 July 2002 which (inter alia) sets out the “basis for such an agreement”, which, it says, should address:

“v.benefits to the Nyangumarta People in consideration for the Grantee Party’s access to the exploration permits, the Nyangumarta People’s impairment of their right to access, use, and enjoy of the land and to make decisions about the land and/or the extinguishment of native title; including:

·a payment in respect of each financial year during the life of the permits based on 6% of the on-ground exploration costs incurred during each year of each permit.  The payment will be calculated and payable within 30 days of the anniversary date of the permit commencing the year after the grant of the title;

·the provision of community benefits such as reasonably requested by the Nyangumarta People including but not limited to the construction of roads and sink bores;

·the development and implementation of an employment and job training programme for Nyangumarta People related to the activities conducted by the company;

·proper consideration of other reasonable requests for assistance by the Nyangumarta people, including but not limited to assistance in enabling the claimants to undertake and engage in cultural business;

·the establishment of a Liaison Committee to discuss the company’s activities and endeavours; and

·access to audited financial records government correspondence insofar as it relates to verifying the conduct and cost of “on-ground exploration”.”

[18.10] He testifies that on 7 August 2002 PNTS received a faxed copy of correspondence from Dr Warris that the Grantees intended to proceed to a section 35 determination, stating that 6% of the ground exploration costs was “hardly a compromise” and “the negotiating positions are too far apart”.

  1. In my opinion there is no evidence to lead to the conclusion that the Grantees did not negotiate in good faith with the Nyangumarta People through their representative Mr Murphy before making a section 35 application on 19 April 2002. The negotiations on the basis of the standard expedited procedure agreement were initiated by Mr Murphy, the future acts officer with responsibility for negotiations for those people. That negotiations in respect of that document were in good faith was clearly accepted by Mr Murphy as evidenced by his advice to the Tribunal on 8 October 2001 that he believed agreement had been reached on the basis of that document. There is no evidence to suggest that to that stage, or indeed until after the Grantees had executed that document (see Mr Murphy’s email of 8 November 2001), they had any reason to believe that Mr Murphy was in error insofar as his instructions were concerned and in negotiating with them on the basis of that agreement. Even Mr Murphy’s email of 20 December 2001 to Dr Warris did not suggest he was acting without instructions in the negotiations to that date but rather raises the question of payment of the percentage of exploration expenditure as a new issue. The reason given by the Grantees for the refusal to agree that “new issue” cannot, in my opinion, be said to be unreasonable or to demonstrate a lack of good faith. The fact that Dr Warris attended the Working Group meeting in South Hedland on 18 July 2002 subsequent to the issue of the section 35 application provides further evidence of the good faith of the Grantees and it was clearly the result of the new claims for financial payments considered by the Grantees as economically risky and unwise, not the subject of any prior successful negotiations, that precipitated the decision to carry on with the section 35 application. I am satisfied that the Grantee’s maintenance of its position as demonstrated by Dr Warris’ response on behalf of the Grantees to the proposals put by Ms Parkinson and Mr Murphy on 18 July 2002 following the meeting on that date with the Nyangumarta People and as set out in Ms Parkinson’s letter of 25 July 2002 was also reasonable and understandable and in no way demonstrated a lack of good faith on the part of the Grantees. It was a decision based on economic grounds relating to the costs and risks of exploration for oil. That a negotiating party will not compromise on a particular point does not lead to a conclusion of lack of good faith. The Grantees request of mediation and a s150 conference, after being advised of the “new issue” and their participation in the mediation and s150 conference all provide strong corroborative evidence of good faith in attempts to achieve a s31 Agreement.

  2. It is not necessary to detail the Grantees’ allegations in reply to the PNTS submissions.  They are not relevantly in conflict with but provide more detail than the submission and material provided by PNTS which fail to make out a case of failure to negotiate in good faith.

The Rubibi and Karajarri People’s case

  1. The allegations of fact in the KLC contentions of 6 October 2002 and supporting material are summarised as follows:

[21.1]   That by letter dated 31 January 2000 to the grantees the KLC advised that their clients sought meetings with the grantees to discuss the proposed issue of the tenements and advised them of “the then recently concluded Explorer’s Memorandum of Understanding and Model Exploration Agreement”.  The contentions state that it “subsequently” forwarded to them a copy of “that standard form agreement” and say it received no “written response”.  The contentions subsequently refer to that agreement as “the Model Agreement” but do not enclose a copy of it or of the letter of 31 January 2002.  However a copy of those two documents was provided with the KLC contentions of 22 November 2002, the agreement being there referred to as “the Model Heritage Agreement” and stated to have been sent on 31 January 2000.

[21.2]   That by letter dated 1 August 2000 “one of the grantees” enquired, without reference to the letter of 31 January 2000, whether the Model Agreement could be used to facilitate the grant of the tenements.  It is not in dispute that the enquiry was from Dr Warris of Gulliver Productions Pty Ltd, who conducted negotiations for the Grantees.

[21.3]   That by letter dated 5 September 2000, in response to a request from the State, the Grantees provided the KLC with “some very limited information concerned with intrusive work” and Aboriginal heritage surveys.  A copy of that letter was produced with the contentions.  In it Dr Warris acknowledges that the Grantees were requested to provide the “attached information” and concludes “Please let me know if you require further information”.  It further states that no intrusive work will be carried out until the third permit year and that it is intended to carry out the heritage surveys in the second year after grant of the permit and before any intrusive activity such as seismic surveys or drilling.  The information provided included a statement of the primary and secondary work to be performed over six (6) years together with cost estimates.

[21.4]   That by letter dated 10 August 2001 the grantees requested mediation, the Tribunal being advised of that request by letter from the State dated 21 August 2001.  Those two (2) letters are produced with the contentions.  The grantees letter of 10 August 2001 alleges that they had received no response from the Native Title Parties to the letter and information sent on 5 September 2000, that they had contacted the KLC on 11 July 2000, and had received from Peter Hwang of the KLC copies of the KLC Model Native Title and Heritage Protection Agreement and, on 1 August 2000, had asked the KLC if their application could be facilitated by using that agreement.  The letter alleges that no reply was received from the KLC and that on 12 December 2000 the grantees representative met with Peter Hwang to discuss the agreement and was told by him that the KLC was very busy and would get to the comments of the grantees on the agreement in due course.  The Grantees’ letter says that “to facilitate a native title agreement” the grantees requested mediation.  I accept the statements of fact in the letter of 10 August 2001.

[21.5]   With the contentions is an email dated 4 October 2001 from Peter Hwang to Ian Irving of the KLC containing a copy of a letter from Dr Warris dated 3 October 2001 which enclosed a draft native title agreement, ask for comments thereon, and advised that he (Dr Warris) would like to negotiate the bulk of the agreement with the KLC before travelling to Broome to meet with the Native Title Parties.

[21.6]   The contentions state that mediation meetings were held on 13 September, 8 October, 30 November 2001 and on 25 February and 5 March 2002.  It is not in dispute that the mediation was requested by the Grantees.  It is alleged that at those meetings the KLC continued to request the grantees to attend meetings with the KLC respondents.  It further says that on 8 October 2000 the grantees agreed to attend such meetings “with details to be finalised between the parties” and that steps were taken by the KLC to arrange meetings in late November 2001.

[21.7]   By letter to the KLC dated 18 October 2001 provided with the contentions, Dr Warris, “further to the meeting of 8 October”, sought confirmation that the KLC had received his comments on the Model Heritage Agreement, advised that he had received no comments from Peter Hwang and, on the commencement of mediation, had sent Peter Hwang his own draft as an alternative possibility.  The letter advised that the grantees were “happy to go” with the Standard Agreement and assumed that Peter Hwang did not agree with the Grantees’ amendments which dealt mainly with timing, “given the wet season and the short operating window”.

[21.8]   Also with the contentions is a letter dated 21 October 2001 from Mr Irving to Dr Warris which comments that, at the mediation meeting of 8 October 2001, the 21 November was put forward as a possible date for meeting with the Native Title Parties but that as “Mr Reisner of Kimberley Oil” (not one of the Grantees) also wanted to attend the meeting it would be organised for 28 November 2002.

[21.9]   On 5 November 2001 Mr Irving of the KLC wrote to Dr Warris advising that he had received a copy of “your draft heritage agreement” from Peter Hwang but proposed that the parties continue with the KLC model agreement as Dr Warris had already provided comments thereon.  The letter agreed with some of Dr Warris’s written comments on that agreement and made comments as to others.

[21.10]  A letter to the KLC from Dr Warris dated 2 November 2001 produced with the contentions confirms that the Grantees “are happy” to continue with the Model Agreement and, in response to Mr Irving’s comments, agree with most of the same.  It says “I think that we are now close to agreement and need only sort out the timing concerns in clauses 15, 19, 21 and 25”.  It invites a response from the KLC.  In a further letter of the same date to Ms Guest of the KLC, Dr Warris asked for confirmation that she had his comments on the Model Agreement and advised that he had received Mr Irving’s comments and needed hers, stating that once the Model Agreement was finalised the meetings with the Karajarri and Rubibi could be co-ordinated.

[21.11]  By letter dated 21 November 2001 to the Grantees produced with its contentions, the KLC advised that it believed the “timing” issues could be resolved and that it had arranged a meeting with the Rubibi People on 28 November 2001 at Broome.  Its letter, inter alia, stated that the People were interested in hearing what the company would provide by way of “benefits” and advised of recent agreements with other companies wishing to explore in the Kimberley which provided for an annual payment of 4% of the minimum annual expenditure for the tenement, over and above other benefits, stating that the People wished to negotiate similar agreements with the Grantees.

[21.12]  That by letter dated 22 November 2001 the grantees advised they were unable to attend meetings on 28 November and that payments of compensation were “unacceptable”.  That letter is produced.  It speaks of attempts to arrange consecutive meetings with the respective Native Title Parties, but that its calls to Ms Guest were not returned and advises that, because of other meetings, the Grantees cannot visit Broome on 28 November.  It points out that the Model Agreement sent to it by the KLC made no reference to payments for exploration, which it said, are normally for mining or production.  It states that such payments would increase costs and the exploration risks and are unacceptable to the Grantees.  It speaks of the provision and availability of the benefits of water bores and employment which will result from its exploration activities.

[21.13]  That by letter dated 22 February 2002 to the grantees the KLC asked for an indication of the time estimated to be spent on on-ground exploration, to which it says that there was no response.  That letter is included with the contentions.  It apologises for the delay in replying to the Grantees’ letter of 22 November 2001.  It refers to other agreements negotiated by the KLC providing for annual payments to the traditional owners and states that “any agreement with Gulliver” (representing the grantees) "that did not include provision for a percentage payment of some kind would not be acceptable to the traditional owners”.  In respect of employment opportunities it requests information as to the amount of time proposed to be spent on the ground on exploration activities.  Also attached to the contentions are the notes of a mediation meeting held on 25 February 2002, the outcome of which was that Dr Warris would confer with and take instructions from his partners whether to proceed with or terminate the mediation and proceed to inquiry.  The mediation was adjourned to 5 March 2002 on which date it was terminated.

[21.14]  The contentions refer to the grantees seeking “mediation” under s150 of the Native Title Act, stating that mediation meetings were held on 24 and 28 June and 26 July 2002 at which the KLC pressed for face to face meetings between the grantees and the Native Title Parties as groups. It is not stated in the contentions but other papers before the Tribunal reveal that, following the lodging on 19 April 2002 of the s35 application by the grantees, the first Preliminary Conference for the s35 enquiry was listed for 1 June 2002 but that on 16 May 2002 the grantees requested a s150 conference. The notes of the first Preliminary Conference reveal that the main issue to be dealt with by the s150 conference was that of the claimed percentage payments raised after substantial agreement on documents provided by the Native Title Parties which had made no provision for any such payment.

[21.15]  The KLC’s contentions of 6 October 2003 are then concerned with the s150 conference, notes of which were provided.  Those notes reveal that the KLC attended, by telephone, the first conference of 24 June 2002 at which it was agreed that Dr Warris would confer with his partners and advise if they would agree to a meeting with each native title group in person.  It appears from the notes that the KLC was not represented at the conferences held on 28 June 2002 and 26 July 2002.  The notes of the meeting of 28 June reveal that Dr Warris agreed to liaise with Ms Guest of the KLC and Ms Parkinson of PNTS as to arrangements for proposed meetings with the Native Title Parties.  The notes of 26 July 2002 reveal that Dr Warris had met with the Nyangumarta and was scheduled to meet with the Karajarri people on 20 August 2002.  The contentions allege that arrangements were made by the KLC for meetings to be held with the Karajarri and Rubibi People on or about 22-24 August 2002.

[21.16] The contentions next refer to a letter of 7 August 2002 sent by the grantees to the KLC advising of “certain matters” and asking whether there were still reasons for visiting with the Karajarri and Rubibi people “in the light of those matters”. The letter is included with the papers and reveals that the Grantees thereby advise the KLC that negotiations with PNTS had broken down, that the grantees could not agree to payments for exploration and are proceeding with the s35 process as regards the Nyangumarta people. The letter states petroleum exploration to be a “very high risk project and the payments would increase costs and the risks and make it impossible to raise risk funds”. It states that if the Karajarri and Rubibi people insisted on payments for exploration the grantees would proceed with a s35 determination in respect of their claims as the negotiating positions were too far apart. It enquired whether, “In the light of the above are there still reasons” for meeting with people on 22 and 24 August 2002. That letter is reproduced in full in paragraph 17.4 hereof.

[21.17]  By letter of 14 August 2002 the KLC spoke of a “key protocol adopted by the KLC”, said to be have been stated at previous mediation sessions and said to be also culturally appropriate, that “the proponent meet with the traditional owners”.  The letter accepted that the negotiating positions of the parties might remain too far apart but stated that could not be conclusively stated without a meeting with the people.  It advised that the KLC believed that the meeting should proceed and suggested meetings on 22 and 23 August.

[21.18] The contentions allege that by letter dated 19 August 2002 the Grantees refused to attend the meetings arranged for that week as they saw no purpose in the trip to Brome and wished to proceed with the s35 determination.

  1. The further contentions of the KLC dated 22 November 2002 were almost entirely concerned with the expression “community benefits” referred to in the Model Agreement, a copy of which is produced therewith.  They refer in particular to paragraph 3(a)(iii) of that agreement pursuant to which the “explorer” agrees to provide “community benefits” to the traditional owners.  They contend that this justifies the claim for the payments of an annual sum based on a percentage of minimum annual expenditure on exploration, alleging the expression “community benefits” to include benefits other than employment or similar economic opportunities.  Those contentions ignore the definition of “community benefits” as provided in that Model Agreement on which they rely.  That definition is as follows, “Community Benefits means benefits of a non-monetary kind for the use and the benefit of the traditional owners’ community”

The Grantees’ case in respect of the Rubibi and Karajarri contentions

  1. Having been notified by the State through the DMPR of the Native Title Parties affected by the proposed grant, the Grantees, on 10 July 2000, sent the DMPR financial and other information requested by it, to be forwarded onto the Native Title Parties.  On 11 July 2000 they contacted the KLC in relation to negotiations concerning another matter and received from the KLC a copy of its Model Native Title and Heritage Protection Agreement.  On 16 July DMPR advised the Grantees and the Native Title Parties that it had that day sent them “the initial negotiation letter”.  On 1 August 2000, the Grantees wrote to the KLC requesting that the Model Agreements forwarded by the KLC be used to facilitate the negotiations.  No reply was received to that request.

  2. On 16 August 2000 the Grantees were advised by the DMPR that the three Native Title Parties had requested certain information.  This information was sent during September 2000.  On 16 October 2000 the Grantees wrote to the KLC confirming receipt of its Model Native Title and Heritage Agreement (the Model Agreement) and attaching thereto their comments thereon.  Their letter advised that “as discussed last week” the Grantees would like to use that agreement to finalise their application on permit application 2/98-9.  The letter asked the KLC to contact Dr Warris on his mobile telephone to discuss the issues and referred to his letters to the Karajarri and Rubibi People dated 5 and 7 September 2000 respectively.  No copies of those letters were produced by the Grantees but that of 5 September 2000 to the KLC as referred to in 21.3 hereof.

  3. On 12 September 2000 Dr Warris met with Peter Hwang of LKC for the Rubibi and Karajarri People to discuss the Model Agreement and operational amendments.  He was told by Mr Hwang that the KLC had 4000 claims to process and that it would take considerable time before comments could be considered in respect of the agreement.

  4. In a letter dated 7 June 2001 to the KLC Dr Warris referred to “recent telephone conversations”, advised that he would be overseas until 9 July and requested that negotiations in respect of the proposed exploration permit area be progressed.

  5. By letter dated 10 August 2001, the Grantees wrote to the DMPR advising that on 5 September 2000 they had sent information requested by the DMPR to the three Native Title Parties but had received no response, either verbal or in writing; that they had been in contact with the KLC on 11 July 2000 and copies of the Model Agreement were sent to them by Peter Hwang; that they had asked the KLC on 1 August 2000 if the present application could be facilitated by using the Model Agreement but had received no reply; that on 12 December 2000 Dr Warris had a meeting with Mr Hwang of the KLC to discuss the agreement and was told by Mr Hwang that the KLC was very busy with over 4000 native title claims and they would get to the Grantees’ comments on the agreement in due course.  The Grantees requested that, to facilitate the native title agreement in respect of the present application, the DMPR commence mediation in respect of the application.

  6. By letter dated 18 October 2001 to the KLC, marked for the attention of Ian Irving and Kristi Guest, both legal officers of KLC, which letter referred to a meeting with the Tribunal on 8 October 2001, the Grantees sought confirmation that the KLC had their comments on the Heritage agreement, advised that they had no comments thereon from Peter Hwang, and that when the matter went to mediation they had sent to Mr Hwang their own draft heritage agreement as an alternative.  The letter commented that the Grantees are “quite happy” to go with the Model Agreement but assumed that Peter Hwang could not agree with their proposed amendments which “mostly” had to do with timing “given the wet season and short operating window”.

  7. By letter dated 21 October 2001 Mr Irving acknowledged receipt of the Grantees’ comments in respect of the Model Agreement.  The letter commented that at the mediation meeting on 8 October 2001, the 21 October 2001 was advanced as a possible date for a meeting between the Grantees and the Rubibi claimants.  It stated that Mr Reisner of Kimberley Oil (not one of the Grantees) would attend this meeting but would prefer it to take place on 28 November and that the KLC would organise the meeting for that date to discuss their proposed exploration.

  8. By letter dated 5 November 2001 Mr Irving advised that he had received a copy of the Grantees’ draft Heritage Agreement through Peter Hwang and that as the Grantees were happy with, and had already provided comments on, the Model Agreement suggested that the negotiation proceed on the basis of the latter.  The letter contained the KLC’s comments on those earlier forwarded by the Grantees in respect of the Model Agreement.  By letter dated 12 November to the KLC, for the attention of Mr Irving, the Grantees generally accepted Mr Irving’s comments and repeated that they were happy to proceed on the basis of the Model Agreement and further, that they thought the parties were now close to agreement and need only sort out the “timing concerns” in clauses 15, 19, 21 and 25, suggesting that these may be capable of being sorted out over the telephone.  On the same date, by separate letter, the Grantees asked Kristi Guest whether she had the Grantees’ comments on the Model Agreement, advised that they had Mr Irving’s comments, and requested her comments so that the native title agreement could be finalised.  The letter says that once the Model Agreement was finalised the parties could co-ordinate a visit to Broome to meet the Karajarri and Rubibi People.

  9. By letter dated 21 November 2001 to Dr Warris, Mr Irving advised that a meeting had been arranged for 28 November at Broome and that he had received a message that Dr Warris had been under the impression that no meeting had been arranged.  Mr Irving referred to his earlier letter of 21 October 2001 (referred to above in paragraph 21.8) in which he advised he was changing the date from 21 November to 28 November.  The letter expressed the view that issues surrounding the timing of various matters under the Model Agreement could be resolved and stated that at the meeting the Native Title Parties would be interested to hear what exploration activity was planned and what the Grantees would provide by way of “benefits”.  It pointed out that recent agreements between the native title claimants and oil companies wishing to undertake exploration work in the Kimberley provided for the annual payment to the claimants of a sum equal to 4% of the minimum annual expenditure on the tenement, this being over and above other specific project based benefits such as sinking bores and employment opportunities.  The letter said the claimants would like to negotiate similar agreements with the Grantees.

  10. By letter dated 22 November 2001 Dr Warris advised that following receipt of Mr Irving’s letter of 21 November he had contacted Mr Irving in an attempt to arrange consecutive meetings between the Rubibi and Karajarri People as he could not afford the time to make two separate trips to Broome; that he had tried to contact Kirsti Guest but his calls were not returned, and asked that consecutive meetings be arranged.  The letter stated that because of a number of important meetings he was required to attend the following week, he would be unable to visit Broome on 28 November.  The letter also pointed out that under the Model Agreement there was no reference to any payments for exploration and that such payments were normally made for mining or production, that an exploration permit is a very high risk permit and that the payment suggested on 21 November would increase costs, increase risks and would not be acceptable to the applicants.  The letter contained proposals in respect of the suggested benefits of water bores and employment.

  11. By letter dated 22 February 2002 to Dr Warris the KLC apologised for the delay in replying to his letter of 22 November 2001 and referred to “community benefits” being included in an ancillary agreement complimenting the Model Agreement, repeated that the traditional owners in the areas the Grantees sought to explore had negotiated or “are negotiating” agreements to provide for annual payments and that any agreement with the Grantees “that did not include provision for a percentage payment of some kind would be unacceptable to the traditional owners”.  The letter commented on employment opportunities during the exploration phase and requested advice as to the amount of time that would be spent conducting on-ground exploration.  I draw attention again to the definition of “Community Benefits” ion the Model Agreement which excludes therefrom benefits of a monetary kind.  There is no evidence from any party of any “ancillary” agreement as referred to by Mr Irving or of its proposed terms.

  12. As previously stated a s35 determination was lodged by the Grantees on 19 April 2002 and, on the same date, a s150 conference was applied for by them. Conferences under s150 were held on 24 June 2002, 28 June 2002 and 18 July 2002. By letter dated 7 August 2002 to the KLC for the attention of Kristi Guest (referred to in paragraph [10] hereof), Dr Warris stated he had been trying to contact her to advise her that negotiations with the PNTS and the Nyangumarta People had broken down and repeated that the Grantee Parties could not agree with payments of compensation, pointing out that the present application is for a petroleum permit, this being a very high risk project and payments for exploration would increase costs, increase the risk and make it impossible for the Grantees to raise risk funds for their petroleum exploration. The letter went on to state that if the KLC, Karajarri and Rubibi People insisted on payments for exploration the Grantee Parties were of the view that the negotiating positions were too far apart to continue meaningful discussions to reach agreement and would proceed with the s35 determination. The letter concluded with the statement “In the light of the above are there still reasons for visiting the Karajarri and Rubibi People on 22 and 24 August. Please advise.”.

  13. By letter dated 14 August 2002 Ms Guest advised Dr Warris in terms of the letter referred to in paragraph 21.17 hereof. This letter was acknowledged by Dr Warris by facsimile on 19 August 2002 advising that those dates were no longer suitable to him and that the Grantees could see no purpose for the trip to Broome, pointing out that, as stated in his letter of 7 August, the Grantee Parties “cannot agree with payments for exploration. Application 2/98-9 is for a petroleum exploration permit which is a very high risk project. Payments for exploration would increase costs, increase the risks and make it impossible for the Grantee Parties to raise risk funds for their petroleum exploration programmes”. The letter stated that the Grantees would proceed with the s35 determination.

Conclusions as to contentions of the Rubibi and Karajarri People

  1. In my opinion the evidence as a whole does not lead to the conclusion that the Grantees have refused or failed to negotiate in good faith with either the Rubibi or Karajarri People. The evidence is clear that, from the outset, the Grantees have sought to achieve agreement on the basis of the KLC’s Model Agreement. Having obtained a copy of that agreement, they made comments thereon which were forwarded to the KLC which, apparently because of its workload, made no reply. The Grantees next drafted and forwarded to the KLC for its consideration their own draft agreement together with comments, to which again there was no response until the Grantees, on 10 August 2001, sought mediation. The negotiations which followed resulted in them accepting generally the KLC Model Agreement (which the KLC preferred) with the issues remaining being accepted, by both the Grantees and the KLC, as being likely to be resolved. Good faith was also demonstrated by their application for a s150 conference subsequent to the breakdown of negotiations. The evidence reveals clearly the Grantees’ willingness to negotiate and achieve a s31(1)(b) agreement, preferably on the basis of the KLC’s Model Agreement and that the KLC was in accord with them until in November 2000, the KLC raised the new issue of percentage monetary payments. This resulted in a “stand off”, the Grantees refusing to agree to the same for the reasons given by them and the native title parties refusing to enter into any agreement unless it included a provision for such payments. The failure to agree on that issue does not lead to a conclusion of failure on the part of the Grantees to negotiate in good faith. The course of the negotiations was considerably delayed by the KLC from the outset and no inference of lack of good faith on the part of the Grantees can be drawn from the time that lapsed between the s29 notice and the s35 application. The evidence does not provide support for the Native Title Parties’ contention that the Grantees failed and refused to meet with them. The evidence reveals that until the final breakdown of negotiations, such meetings were envisaged and accepted by the Grantees. Whether or not face-to-face meetings are necessarily culturally appropriate must, in my opinion, depend on the circumstances of the case and the nature of the meetings. It is the circumstances of the present case are that the native title parties adopted a positive view, at a very late stage in the negotiations, that unless there was an agreement for an annual percentage payment, there would be no s31 agreement. That is made clear by the KLC’s letter of 22 February 2002. Accepting the Grantees’ position as to such a payment, it was quite reasonable for them not to meet personally with the native title parties. There was no longer any point in a meeting. It is clear that until the new issue arose the KLC was quite happy to negotiate on the basis of the Model Agreement with the Grantees without the necessity of a face-to-face meeting on every aspect.

Determination

The Tribunal is satisfied on the evidence not only that the evidence does not reveal the Grantees not to have negotiated in good faith but positively reveals that they did negotiate in good faith. The Tribunal is satisfied that it has jurisdiction to determine the s35 application.

The Hon EM Franklyn QC
Deputy President

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