David Trow and Trojon Enterprises Pty Ltd v Aaron Banderson & Another on behalf of the Wagiman People and Another
[2021] NNTTA 68
•12 November 2021
NATIONAL NATIVE TITLE TRIBUNAL
David Trow and Trojon Enterprises Pty Ltd v Aaron Banderson & Another on behalf of the Wagiman People and Another [2021] NNTTA 68 (12 November 2021)
Application No: | DF2021/0001 |
IN THE MATTER of the Native Title Act 1993 (Cth)
- and -
IN THE MATTER of an inquiry into a future act determination application
Aaron Banderson & Another on behalf of the Wagiman People (DC2019/005)
(native title party)
- and -
David Trow and Trojon Enterprises Pty Ltd
(grantee party)
- and -
Northern Territory Government
(Government party)
DECISION ON WHETHER THE TRIBUNAL HAS POWER TO CONDUCT AN INQUIRY
| Tribunal: | Ms Helen Shurven | ||||
| Place: | Melbourne | ||||
| Date: | 12 November 2021 | ||||
| Catchwords: | Native title – future act – application for a determination in relation to a mining lease – power to make determination – whether grantee party has negotiated in good faith – grantee party has not negotiated in good faith – Tribunal does not have power to proceed with future act determination inquiry | ||||
Legislation: | Native Title Act 1993 (Cth) ss 29, 30, 30A, 31, 33, 35, 36, 38, 51, 148 Mining Management Act 2001 (NT) ss 35, 36, 40 Mineral Titles Act 2010 (NT) ss 40, 43, 44, 45, 74, 123 | ||||
Cases: | Adani Mining Pty Ltd/Jessie Diver & Ors on behalf of the Wangan and Jagalingou People/State of Queensland[2013] NNTTA 30 (Adani Mining v Diver) Atlas Iron Pty Ltd and Another v Nyamal Aboriginal Corporation [2020] NNTTA 75 (Atlas Iron v Nyamal) Charles, on behalf of Mount Jowlaenga Polygon # 2 v Sheffield Resources Limited [2017] FCAFC 218; (2017) 257 FCR 29 (Charles v Sheffield Resources) FMG Pilbara Pty Ltd v Cox [2009] FCAFC 49; (2009) 175 FCR 141 (FMG Pilbara v Cox) Kevin Peter Walley on behalf of the Ngoonooru Wadjari People v Western Australia & Ors[1999] FCA 3; (1999) 87 FCR 56 (Walley v WA) Muccan Minerals Pty Ltd and Another v Taylor and Others on behalf of Njamal [2014] NNTTA 74 (Muccan Minerals v Njamal) Steven Mark Binder & Another v Marjorie May Strickland & Others on behalf of Maduwongga [2020] NNTTA 28 (Binder v Maduwongga) Sunstate Sands Bundaberg Pty Ltd and Another v First Nations Bailai, Gurang, Gooreng Gooreng, Taribelang Bunda People Aboriginal Corporation RNTBC [2021] NNTTA 44 (Sunstate Sands v First Nations) Western Australia v Dimer [2000] NNTTA 290; (2000) 163 FLR 426 Western Australia v Taylor (1996) 134 FLR 211; [1996] NNTTA 34 | ||||
| Representatives of the native title party: | Elena Zola, Lawyer, Northern Land Council Tim Ognenis, Lawyer, Northern Land Council | ||||
| Representative of the grantee party: | Mandy Thorneycroft, Senior Lawyer, WardKeller | ||||
| Representatives of the Government party: | Denise Turnbull, Director Mineral Titles, Department of Industry Tourism and Trade Jennifer Laurence, Director Legal Services, Department of Industry Tourism and Trade | ||||
REASONS FOR DETERMINATION
Background
On 31 July 2019, the Government of the Northern Territory (the Territory) notified under s 29 of the Native Title Act 1993 (Cth) (the Act) that it intended to do the future act of granting mining lease ML 32105. According to the s 29 notice, the lease comprises an area of just under 3.7 square kilometres, located near Pine Creek in the Northern Territory of Australia.
During this inquiry, the Territory confirmed the original application for ML 32105 was made on 14 March 2019 by Bevan (Yogi) James Griesbach and Trojon Enterprises Pty Ltd, with each holding a 50 per cent interest in the mineral title, if granted. Mr Dave Trow (the sole director of Trojon Enterprises Pty Ltd) was nominated for the purposes of all correspondence relating to the application.
On 21 August 2019, under section 123(1) and (2) of the Mineral Titles Act 2010 (NT) (MTA), Bevan (Yogi) Griesbach applied to transfer to David Trow his 50 per cent interest in the mineral title, if granted. The instrument of transfer was approved and registered by the Director Mineral Titles, as delegate of the Minister, on 27 August 2019 and in accordance with section 123(3) of the MTA. The approved Transfer Assessment noted that Mr Trow is the sole director of Trojon Enterprises Pty Ltd. For convenience in this decision, I will refer to Mr Trow and Trojon Enterprises Pty Ltd as the ‘grantee party’ (also referred to in party materials as the ‘GP’).
Any person who, four months after the notification day, is a native title party (a registered native title claimant or a body corporate) in relation to any of the land or waters that will be affected by a future act, has a procedural right to negotiate with respect to the grant of the future act (see s 30(1)(a) and s 31 of the Act). The Wagiman People (DC2019/005) are the native title party (NTP) in this inquiry because they claim native title rights and interests over the lease area. The MTA (s 74(2)) provides that the responsible Minister may only grant a mineral title if satisfied all procedures under the Native Title Act relevant to the future act have been complied with.
Under the Native Title Act (s31(1)(b)), the ‘negotiation parties’ must negotiate in good faith with the native title party with a view to obtaining their agreement to the doing of the future act. The ‘negotiation parties’ with respect to the grant of the lease in this inquiry are the Territory, the grantee party and the Wagiman People (s 30A of the Act). Under s 35 of the Act, any negotiation party may apply to the arbitral body for a determination under s 38 of the Act if there is no such agreement, provided at least six months have passed since the s 29 notification date.
The future act determination application
On 17 August 2021, the National Native Title Tribunal (the Tribunal) accepted an application from the grantee party for a future act determination in relation to the mining lease (see ss 35 and 38 of the Act). I was appointed by the Tribunal President to conduct the inquiry and make the s 38 future act determination in relation to the application. The application was amended on 25 August 2021 so that it aligned with the annexures provided in the original application, and as the amendments were not substantive, no further acceptance process was required.
The period of good faith negotiation does not cease when a future act determination application is made (see Charles v Sheffield Resources at [59]). The grantee party and the Wagiman People continued to negotiate after the future act determination was made.
Tribunal power to make a determination
If any negotiation party satisfies the Tribunal that any other negotiation party (other than the native title party) did not negotiate in good faith, the Tribunal must not make the s 38 future act determination (see s 36(2) of the Act). The implication of s 36(2) was explained by the Full Federal Court in FMG Pilbara v 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.
The Wagiman People allege the grantee party failed to negotiate in good faith. Therefore, before I can proceed to make a determination about the grant of the future act, I must be satisfied the grantee party negotiated in good faith with a view to obtaining the agreement of the Wagiman People (as required by s 31(1)(b)).
The Wagiman People made no such allegation against the Territory. The Territory indicated it would not, therefore, be making any submissions in this good faith inquiry, but reserved its right to do so.
The obligation to negotiate in good faith
The obligation to negotiate in good faith is set out in s 31 of the Act:
s 31 Normal negotiation procedure
(1)Unless the notice includes a statement that the Government party considers the 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 the view to obtaining the agreement of each of the native title parties to:
(i) the doing of the act; or
(ii) the doing of the act subject to conditions to be complied with by any of the parties.
(2) If any of the negotiation parties refuses or fails to negotiate as mentioned in paragraph (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 the paragraph.
Legal Principles for assessing negotiation in good faith
I set out the legal principles for assessing negotiation in good faith (as outlined in s 31 of the Act), in my decision Atlas Iron v Nyamal (at [15]-[20]). I adopt those paragraphs and reasoning for the purposes of this inquiry.
The Territory regulatory regime
The initial term of the lease is 10 years from the date of grant, and it may be renewed more than once for a term the Minister considers appropriate (s 43 of the MTA). The specific rights of the holder of a mineral lease and conditions that a holder of a mineral lease must comply with are set out in the MTA (see ss 40, 44 and 45).
The MTA operates alongside the Mining Management Act 2001 (NT) (MMA). Before mining or substantial disturbance relating to exploration work commences in the Northern Territory, the operator of a mining site must apply for an authorisation to carry out such activities under the MMA (s 35). The authorisation application must be accompanied by a Mining Management Plan (MMP) relating to the activities (s 36 of the MMA). Where the activities do not involve substantial disturbance of the site, an authorisation is not required.
The MMA (s 35) defines substantial disturbance as any of the following activities, individually or in combination:
· land clearing
· earthworks such as cutting, filling, excavating, or trenching
· above-ground works such as building access tracks and roads, buildings, bridges, railways, pipelines, telephone and power lines, conveyors and airstrips
· underground works such as digging tunnels and wells or laying pipelines, conduits and cables
· water works such as building dams, impoundments, canals, drainage works, or the alteration of river or creek banks, water courses and shore lines
· extraction of resources from the surface of the land, underground, riverbeds or undersea mining and quarrying
· stockpiling of materials such as ore, overburden, waste materials and by-products
· exploration works involving seismic lines, drill pads, drill holes - including vacuum, auger and RAB [rotary air blasting], grids, tracks, costeans and camp establishment
· active remote sensing and seismic techniques in water
· drilling and blasting
· any activity that is likely to have a significant impact on plants or animals.
The MMA (s 40) sets out what must be in a MMP, including:
· a description of proposed mining activities
· plans of current and proposed mine workings and infrastructure
· details of environmental management systems
· a plan and costing of closure activities, and
· other information or plans required by the department.
To apply for a mining authorisation, a MMP must be developed and submitted to the Territory for assessment. A mining authorisation will only be issued when a mining management plan has been approved by the relevant Territory department.
The grantee’s future act determination application noted it had developed a draft MMP, dated August 2020 (at their annexure 9), and provided a copy of same to the Wagiman People. Following the preliminary conference for this inquiry, the Territory confirmed:
the MMP has not been submitted to the Minister for assessment. I am instructed that, in the normal course, an MMP is not submitted for assessment for the purposes of an application for an authorisation under the MMA unless and until a mineral title to which the MMP relates, is granted.
The Pandanus Creek Project
The future act determination application, and the grantee party contentions, outline that the proposed activities involve a seasonally based small scale alluvial gold mining operation, which is referred to as the Pandanus Creek Project. The grantee party estimates the operation will be conducted during the dry season, on a casual basis by two people, 2-3 days a week.
The scope of the operation, summarised in the future act determination application (at 10) is that:
alluvial gravels will be mined using a 30-tonne excavator or loader (or both) up to a depth of approximately one and a half metres. A simple static grizzly will be utilised for gravity separation of alluvial material, the screened product loaded onto trucks and transported off site via Grove Hill Road to an alluvial processing plant at Red Hill on ML29933 (in which the Applicant holds a 20% interest) situated approximately 5 kilometres to the north of ML(A)32105.
It is proposed that rehabilitation will be done progressively.
The grantee contentions (at 9) outlines that the Pandanus Creek Project:
does not involve drilling or the construction of any other mining infrastructure such as mine pits or processing facilities, wash plant, water management infrastructure, overburden heaps/waste rock dumps, tailings storage facilities or any non-processing infrastructure such as power generation, accommodation, messing facilities, site office, haul roads or airstrip.
The grantee’s future act determination application explains that as:
the Applicant does not expect to engage in mining on ML32105 of a significant scale it is not in a position to make concessions or offers that may otherwise be available to proponents of larger mining projects and is unable to agree to the terms currently proposed by the [native title party].
The grantee contentions (at 10) outline that:
Historical exploratory activity has been undertaken at the Project site which indicates mineral resources exist, however the mineral reserve is unproven and the amount of resource that can be extracted in a financially and commercially feasible manner is unknown.
The grantee contentions (at 8) outline that:
The grant of ML32105 will permit the Grantee Party to conduct small-scale alluvial gold mining activities within the title area, the details of which are set out in the Draft Mining Management Plan [MMP] at Annexure 9 and the Small-Scale Mining Proposal (SSMP) at Annexure 13 of the Future Act Determination Application (FADA) made by the Grantee Partee on 6 August 2021 in relation to these proceedings.
The inquiry process
A preliminary conference was held by the Tribunal on 9 September 2021, after notifying parties of the future act determination application. I issued directions for the conduct of the inquiry, and the grantee party provided contentions and information for me to consider, with the Wagiman People also providing contentions, as well as a reply to the grantee party material.
The grantee’s future act determination application annexed a total of 23 documents, including mapping and a chronology of events. The Wagiman People noted in their contentions (at 8) that:
the NTP generally accepts the chronology outlined at Annexure 21 to the FADA but only to the extent that it is an indicator of the exchanges and by whom. The NTP does not accept the various submissions made in that document nor does it accept that the various summaries of the communications are accurate reflections of those communications.
All parties indicated they were content for me to determine the matter on the papers, and I saw no reason to hold a hearing.
The allegations of lack of good faith negotiations
At [11]-[12] above, I refer to the principles I adopted in determining this inquiry. This includes the principles outlined in Western Australia v Taylor, where the Tribunal provided a series of indicia of conduct to be taken into consideration when assessing good faith, which was endorsed by the Federal Court in Walley v WA (at [9]) and has been consistently referred to in Tribunal decisions.
The good faith indicia as a whole focuses on conduct which is ‘unreasonable’, ‘unexplained’ or ‘unnecessary’. I must look at the overall conduct of the grantee in all of the circumstances (see Western Australia v Dimer at [85] and Adani Mining v Diver at [34]). As the grantee contentions note (at 14), it is not my role to make a decision mechanistically, and the good faith indicia are a guide only. I must make my decision in the context of the inquiry, and the materials and information which are before me.
The Wagiman People contentions (at 15) allege the:
GP ignored requests for or unreasonably refused to provide relevant financial information, including estimated revenue and costs in relation to the proposed project and past revenue and costs of the GP’s similar nearby operations. The GP otherwise failed to reasonably explain its claims that the NTP’s various proposals are unaffordable and commercially unviable. The NTP contends that the GP’s overall conduct demonstrates:
a. a failure to respond to reasonable requests for relevant information, and a failure to provide relevant information;
b. a failure to do what a reasonable person would do in the circumstances; and
c. the adoption of a rigid or non-negotiable position.
The Wagiman People contentions (at 10-12) outline that negotiations commenced on 30 July 2019, with the Northern Land Council sending a letter to the grantee party requesting information in relation to the project. I note the Wagiman People native title claim was placed on the Register in November 2019, and in June 2020 a letter was sent from the Northern Land Council, representing the Wagiman People, to the grantee, requesting information in relation to the project. In August 2020, the grantee party provided their draft mining management plan (MMP) to the Wagiman People. On 27 September 2020, the Wagiman People provided a draft Mining and Infrastructure Deed to the grantee party which contained terms and conditions for the basis of negotiations between the grantee and the Wagiman People, and those parties met on 19 October 2020. That appears to be the only meeting, and those parties continued to negotiate through written correspondence. On 11 November 2020, the grantee wrote to the Wagiman People representative, outlining that:
In view of the fact that the proposed alluvial mining operation will be on a very small scale and part time nature, we would like to offer the Native Title Claimants for the area a one-off payment of $6000.
However, we understand that as this represents the only opportunity for the Native Title Claimants can negotiate an agreement for this Mineral Lease, we would be happy to discuss the potential of having a Deed in place which would be triggered if any significant changes were to occur in the future.
The grantee party, broadly speaking, asserted that the terms of the Mining and Infrastructure Deed should only apply during ‘windfall’ years, as the operation was expected to be a small scale mining enterprise. The grantee asserted that Small Scale Mining Provisions which they had drafted should apply at all other times (through a Small Scale Mining Deed).
The grantee party provided the Wagiman People with a revised Mining and Infrastructure Deed on 2 March 2021 (at Annexure 14 to their materials), which states at F of the Recitals that ‘The parties intend to execute the Small Scale Mining Deed simultaneously with this Deed’. On 2 March 2021, the grantee also provided the Wagiman People with a Small Scale Mining Proposal, which set out the mining project, and outlined that:
The Applicant further advises that it does not have resources available to fund additional commercial terms proposed by the NLC [Northern Land Council], including:
oroyalty payments;
orental payments;
oadministration payments;
osecurity payments under the agreement;
ocosts in respect of sacred sites clearances;
olegal costs of native title parties in negotiating an agreement; or
oliaison committee meetings and site visits by the NLC or native title parties.
It appears it was contemplated between these parties that both the Mining and Infrastructure Deed and the Small Scale Mining Deed would form a contractual agreement between the grantee and the Wagiman People, which would not amend the terms of the mineral lease or affect the rights the grantee party could exercise upon grant. The Wagiman people amended their initial Mining and Infrastructure Deed, and engaged in negotiations with the grantee about the Small Scale Mining Provisions. Ultimately, these parties did not reach agreement on either of the Deeds.
There are three broad allegations which the Wagiman People outline in their contentions that the grantee party has not negotiated in good faith – they are:
·maintaining the proposed project will be small scale and being unable to meet the commercial terms in the proposed draft agreement, but providing no information in support (at 16-20)
·no engagement in providing information regarding the grantee’s stated inability meet the terms of the revised agreement put forward by the Wagiman People on 7 May 2021 (at 21-23)
·no financial or other information being provided to enable the Wagiman People to assess the project in context of the grantee party outlining that he was unable to meet the terms of the proposed draft agreement (at 24-25), stating at (24):
For example, the NTP had no basis on which to assess the effective claim that where revenue in a particular year was anywhere up to $500,000, a combined rental and royalty payment of up to $11,000 was not affordable and rendered the project uneconomic. Or to take another example, that proposed liaison committee meetings or security provisions unaffordable and rendered the project uneconomic.
The exchanges between the grantee and the Wagiman People culminated on the day the future act determination application was lodged by the grantee party, where the grantee representative wrote to the Wagiman People, outlining that:
the financial benefit native title parties may gain from the proposed small scale alluvial mining activities as a result of negotiations contemplated by section 33 of the NTA [Native Title Act] is unrelated to the effect of the proposed future act on registered native title rights and interests. As such my client does not consider it necessary or appropriate to provide its financial information to the [native title party].
This response was reiterated in the grantee contentions (at 16), with the grantee there outlining:
the Grantee Party considers its financial information to be of a sensitive commercial nature and unrelated to the effect of the act on native title rights and interests. The Grantee Party gave due consideration to the Native Title Party's request for financial information however ultimately found such requests to be irrelevant and unreasonable.
I note this response from the grantee appears to refer to two separate aspects of the right to negotiate process, and melds them into one – in the right to negotiate, parties must negotiate in good faith, which usually includes exchanging information and draft agreement terms. As I noted in Sunstate Sands v First Nations (at [48]) a grantee does not need to lay bare its finances, but it does need to engage and provide information regarding the other party’s proposals and concerns.
Under the Small Scale Mining Provisions and the Small Scale Mining Deed, the grantee party proposed a mechanism whereby certain provisions of the draft agreement would not operate until a certain threshold was reached. The threshold proposed by the grantee was where the gross value of saleable mineral commodities produced and sold or removed from the mining lease in a financial year was equal to $500,000 or less. Anything above this threshold, which would be a ‘windfall year’, would enliven the dormant provisions.
While the Wagiman People did not initially agree to the inclusion of such a mechanism, on 27 August 2021 they wrote to the grantee, outlining they were prepared to accept, among other things, a monetary trigger point of $150,000, rather than $500,000. Their contentions outline (at 35-38) their further draft agreement suggesting a trigger point of $150,000 was ‘informed by the figures’ in the draft MMP and work proposal, including revenue and extraction-based triggers. The 27 August letter from the Wagiman People states that:
We note that the effect of our clients’ proposed revenue trigger when considering commercial provisions such as rental and royalty payments is that where your clients earn $200,000 in a financial year, an amount of approximately $5,000 would be payable to native title holders.
The letter goes on to state that in the ‘absence of further detail and information as previously requested, our clients are unable to make an informed assessment of higher trigger amounts’. The correspondence again requested further detail from the grantee, should the updated draft terms be unacceptable.
The grantee responded on 9 September 2021, noting that ‘its preference is to retain the $500,000 trigger point.’ The Wagiman People contentions (at 38) outline that:
No reasons for this preference are provided, other than to point to the Territory’s legislative scheme as to when royalties are payable. However, the Territory’s royalty threshold is a matter for the Territory and has no relevance to when royalties may be payable under an agreement with the NTP… The GP made no attempt to explain why, having regard to the particular circumstances of the project, royalty-based payments cannot be afforded or are commercially unviable below the GP’s preferred revenue trigger.
The Wagiman People contentions go on to outline that ‘this response fails to acknowledge the array of other clauses which are said to be unaffordable or commercially unviable in those circumstances, and explain why that is the case’.
In the grantee’s 9 September response, in relation to the Wagiman People request for financial information, the grantee stated it had ‘considered your request for financial information in relation to its current and proposed activities and has determined not to provide this information’. There is no explanation as to why.
In essence, the draft agreement exchanged between the grantee and the Wagiman People was subject to amendments on the part of the Wagiman People, in response to comments from the grantee party that the project would be small scale – the main sticking point appeared to be that the Wagiman People suggested a trigger point of $150,000 for payment from the grantee, accepting the grantee party argument the project was small scale. The grantee maintained their position that the trigger point should be $500,000, and did not provide any information as to why they maintained that position, apart from their original information that the project would be small scale.
Consideration of good faith
The grantee party contentions explain (at 17) that it’s ‘willingness to consider financial compensation was an act of goodwill on its behalf’ (emphasis added), which I understand to be referring to native title holders being entitled to compensation for activities which diminish or damage their native title rights and interests (s 51 of the Act). This appears to be in response to the Wagiman People assertion in their contentions (at 32), that they were of the understanding they were negotiating a full and final package – that is commercial terms (as envisaged by s 33 of the Act) together with compensation as envisaged under s 51 of the Act.
Good faith negotiations are not a matter of one party bestowing ‘goodwill’ on another party. Negotiations are where parties outline what is important to them, exchange information as far as possible on those things and anything else that they believe to be relevant, and make decisions how each will proceed in the context of that information.
The grantee party outlined on a number of occasions that they had determined ‘not to provide’ information to the Wagiman People. The reasons given for this position included (as outlined in the grantee party’s contentions at 16) that the:
financial information to be of a sensitive commercial nature and unrelated to the effect of the act on native title rights and interests. The Grantee Party gave due consideration to the Native Title Party's request for financial information however ultimately found such requests to be irrelevant and unreasonable.
The grantee refer to Member Cooley’s decision in Binder v Maduwongga, where a small scale miner was negotiating with a native title party. In that matter, Member Cooley determined that the future act of granting the proposed tenement could proceed, however, the facts of the matter were different to the present matter.
In Binder v Maduwongga, the native title party in effect stepped away from the negotiating table. In the present matter, the native title party remained engaged in the negotiation process, changing their position in view of information provided by the grantee party (for example, in terms of accepting the principle of the Small Scale Mining Provisions and the notion of a trigger point). The grantee, however, maintained their position, apart from increasing a payment from $6,000 to $10,000 – according to the Small Scale Mining Deed (clause 5.2) that ‘Upfront Payment is in full and final satisfaction of any Compensation Entitlement for which the Small Scale Miner is or becomes liable under this deed’.
As the Wagiman People note in their email dated 7 May 2021 to the grantee party, the agreement on the grantee party’s terms would in effect mean the native title party would:
for the duration of MLA 32105 including any extensions receive a total of $6,000 [later increased to $10,000], notwithstanding in our view the significant disturbance to the land. This proposition is unlikely to be acceptable to our client, including because such terms are well below the market standard in our view. We note also that production will effectively commence upon the grant of the MLA, and in our view it is standard commercial practice for royalties to be payable during production. Should your client maintain that it lacks the resources to fund the various commercial terms (in relation to which we have proposed significant concessions), so that our client can make a proper assessment we would request that your client provide relevant financial documentation as to its position and in relation to the proposed project. That will enable the negotiation of a payment structure fair to both parties as well as one that can be reasonably administered.
The grantee did not provide the native title party with information as sought, nor explain whether or not such information could be provided. There is nothing in the grantee materials to suggest the information does not exist – rather, it appears the grantee was not minded to provide it as part of the negotiation process. I do note the grantee does have a Registered Tax Agent and Accountant, as outlined in material provided by the grantee to the Territory for the original application for the mining lease (provided by the Territory to the Tribunal and all parties for the purpose of this inquiry on 9 September 2021). A statement provided by that Registered Tax Agent and Accountant dated 8 April 2019, outlined they had been the ‘accountant and financial advisor’ for Mr Trow from 1996 and for Trojon Enterprises since 1998. The statement certified:
that David Trow and the company are persons of substance and well resourced with the financial capacity to successfully and competently develop and operate the mining tenements currently under the company's control. Currently, their combined net realisable assets are in excess of $5,000,000…we are able to confirm and verify that they are in a quite sound financial position.
If the information, or some of the information, requested by the Wagiman People was available, and yet commercial and sensitive, there are mechanisms which can be used for parties to exchange such on a confidential basis. The information sought was reiterated in the Wagiman People letter to the grantee of 16 July 2021, in the following terms:
details of estimated profit based on projected average extractions per year, estimated market value and estimated costs etc. We note the information contained in the draft mining management plan and summary document is generally limited to estimates concerning extraction. A response detailing Trojon’s estimated profit will, among other things, enable our client to make an informed assessment of your clients’ offer.
The grantee contentions (at 22-23) outline that when the Wagiman People moved away from the terms in the original Mining and Infrastructure Deed in response to the grantee’s assertion of being a small scale operation, the Wagiman People then did not accept the small scale commercial terms as being in ‘full and final satisfaction of any compensation payments’, thereby exposing the grantee to ‘unacceptable commercial risk’. This is on the basis that the three way deed between the Territory, the grantee and the native title party requires the grantee to indemnify the Territory against any compensation claim against the Territory arising from the grant of the lease (as outlined by the grantee in their email to the native title party dated 5 August 2021).
The grantee states they had ‘a genuine desire to reach an agreement’ (at 25). However, the grantee would not provide financial information in order for the native title party to assess the grantee party’s consistently held trigger point position of $500,000. In effect, the grantee maintained they were a small scale miner, and a trigger point of $500,000 was appropriate in comparison with the native title party trigger point of $150,000. The Wagiman People proposed trigger point amount of $150,000 was calculated on the basis of the limited information provided by the grantee party. There was little opportunity for the Wagiman People to revisit the trigger point proposed by the grantee party, as no further financial information was provided.
Conclusion
Good faith focuses on an assessment of whether conduct is ‘unreasonable’, ‘unexplained’ or ‘unnecessary’, and good faith negotiations require a party to actively participate – that includes making proposals and providing information.
As noted in Muccan Minerals v Njamal (at [94]), a grantee must negotiate in good faith with the native title party in relation to the doing of the relevant act. The act in this inquiry related to mining, and even under the terms of small scale mining as proposed by the grantee, the grantee party is (under their proposed Mining Management Plan and the terms of the grant of such a lease from the Territory) able to undertake activities on the lease which the Wagiman People assert will have a disturbing effect. While the proposed effect on native title rights and interests is something which I must examine in the consideration of s 39 of the Native Title Act, which I can only do if the good faith threshold is met, it does give context to parties’ commercial negotiations.
The extent to which a grantee party actively participates and provides information in a timely manner, or gives clear reasons as to why information could not be provided, is important for a native title party to be able to participate in the negotiations. In my view, the grantee party’s refusal to provide further information about the viability of the proposed terms of agreement, including the $500,000 trigger point, or addressing why the proposed $150,000 trigger point was not viable, did show a lack of good faith.
Determination
I am not satisfied David Trow and Trojon Enterprises Pty Ltd negotiated in good faith as required by s 31(1)(b) of the Act. I do not have the power to proceed to make a determination on the future act determination application brought in respect of ML 32105. I dismiss the future act determination under s 148(a).
Helen Shurven
Member
12 November 2021
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