Drake Coal Pty Ltd, Byerwen Coal Pty Ltd/Grace Smallwood & Ors (Birri People)/Queensland

[2012] NNTTA 9

NATIONAL NATIVE TITLE TRIBUNAL

Drake Coal Pty Ltd, Byerwen Coal Pty Ltd /Grace Smallwood & Ors (Birri People)/Queensland, [2012] NNTTA 9 (6 February 2012)

Application No:        QF11/5 & QF11/6

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

and

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

Drake Coal Pty Ltd   (first grantee party)
Byerwen Coal Pty Ltd  (second grantee party)

and

Grace Smallwood, Allan Fisher, Heather Tilberoo, Algon Walsh Jnr, Colin McLennan, David Miller, Frank Fisher & Anor on behalf of the Birri People  (native title party)

and

State of Queensland  (government party)

DECISION ON WHETHER THE TRIBUNAL HAS POWER TO CONDUCT AN INQUIRY

Tribunal:       John Sosso 

Place:             Brisbane
Date:              6 February 2012

Hearing Dates:                   18 October, 23 November and 19 December 2011

Representatives:                

Native title party:              Mr Michael Owens, Lawyer & Consultant

Grantee parties:                 Mr Darren Fooks, Clayton Utz Barristers & Solicitors

Government party:           Ms Sara Newrick, Department of Employment, Economic Development & Innovation

Catchwords:  Native title – future act – proposed grant of Mining Leases – future act determination applications – whether grantee parties have negotiated in good faith – failing to respond to reasonable requests – stalling negotiations – sending negotiators without authority to negotiate – refusing to agree on trivial matters -  adopting a  non-negotiable position – failure to make counter-proposals – failure to do what a reasonable person would do in the circumstances - grantee parties negotiated in good faith.

Legislation:    Native Title Act 1993 (Cth) – ss. 29, 30A, 31, 35, 36, 38, 39, 75, 109, 151

Mineral Resources Act 1989 (Qld)

Cases:Brownley v Western Australia (No 1) (1999) 95 FCR 152

Cameron v Hoolihan (2005) 196 FLR 37

FMG Pilbara Pty Ltd/Cheedy & Ors on behalf of the Yindjibarndi People/Western Australia WF08/31 [2009] NNTTA 38 (24 April 2009) Member O’Dea

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

Jax Coal Pty Ltd/Grace Smallwood & Ors (Birri People)/Queensland, [2011] NNTTA 46 (17 March 2011) Deputy President Sosso

Little v Western Australia [2001] FCA 1706

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

Ridgway v Wharton (1857) 6 H. L. Cas 238

Strategic Minerals Corporation NL/Allan Kynuna & Ors on behalf of the Woolgar Group/Queensland QF03/1 [2003] NNTTA 83 (9 July 2003) Deputy President Sumner

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

Walley v Western Australia (1999) 87 FCR 565

Western Australia v Daniel (2002) 172 FLR 168

Western Australia v Dimer (2000) 163 FLR 426

Western Australia v Taylor (1996) 134 FLR 211

White Mining (NSW) Pty Ltd, Austral-Asia Coal Holdings Pty Ltd & ICRA Ashton Pty Ltd/Scott Franks & Anor (Plains Clans of the Wonnarua People)/New South Wales [2011] NNTTA 72 (24 June 2011) Deputy President Sosso

REASONS FOR DECISION

1. On 6 October 2010 notice was given under s. 29(3) of the Native Title Act1993 (Cth) (“the Act”) of the proposed grant of Mining Leases ML 10349, ML 10350 and ML 10351 (“the proposed Drake tenements”) to Drake Coal Pty Ltd (“first grantee party”). For the purpose of s. 29(4), 6 October 2010 was specified as the notification day.

2. On 1 December 2010 notice was given under s. 29(3) of the Native Title Act1993 (Cth) (‘the Act’) of the proposed grant of Mining Leases ML 10355, ML 10356 and ML 10357 (“the proposed Byerwen tenements”) to Byerwen Coal Pty Ltd (“second grantee party”). For the purpose of s. 29(4), 1 December 2010 was specified as the notification day.

3. The notice for the first grantee party stated that the grant of the proposed tenements to Drake Coal Pty Ltd would authorise the holders to mine and carry out associated activities subject to the Mineral Resources Act 1989 (Qld), for a term not exceeding thirty (30) years, with the possibility of renewals for a term not exceeding thirty (30) years per lease. The proposed tenements were described as being located approximately 12 kilometres south of Collinsville within the local government area of Whitsunday Regional Council. The approximate areas of the proposed Drake tenements are:

   ML 10349         3993.834 hectares;

   ML 10350         4801.6105 hectares; and

   ML10351          447.3169 hectares.     

4. The notice for the second grantee party stated that the grant of the proposed Byerwen tenements would authorise the holders to mine and carry out associated activities subject to the Mineral Resources Act 1989 (Qld), for a term not exceeding fifty (50) years, with the possibility of renewals for a term not exceeding fifty (50) years. The proposed Byerwen tenements were described as being located approximately 30 kilometres west of Glenden within the local government area of Whitsunday Regional Council. The approximate areas of the tenements are:

   ML 10355         5356.62 hectares;

   ML 10356         2202.59 hectares; and

   ML 10357         1892.91 hectares.

5. All of the proposed tenements for the first and second grantee parties are wholly within the outer boundaries of the Birri People native title determination application QUD6244/98 which was entered on the Register of Native Title Claims on 2 April 1998.

6. There are a number of coal mining projects involving the QCoal Group (“QCoal”), including the Jax, Drake and Byerwen Projects.  QCoal consists of a group of companies of which QCoal Pty Ltd is the parent company. QCoal Pty Ltd wholly owns Drake Coal Pty Ltd and a wholly owned subsidiary of QCoal Pty Ltd is the major shareholder in Byerwen Coal Pty Ltd.  Mr. Christopher Ian Wallin is the sole director and shareholder of QCoal – see affidavit of Margarita Susanna Escartin, affirmed on 1 December 2011, at para 3.  These Projects as well as the Somona Mine Project, located a short distance from the Drake and Byerwen Projects, are the subject of extensive submissions by the native title party.

7. On 4 October 2011, Clayton Utz, the legal representative of the first and second grantee parties, lodged with the Tribunal pursuant to ss. 35 and 75 of the Act, two future act determination applications. The applications were made more than six months after the respective notification days – s. 35(1)(a).

8. On 10 October 2011 Deputy President Sumner appointed me as the Member to constitute the Tribunal for the purpose of conducting the future act determination application inquiries.

9. On 18 October 2011 I convened a Preliminary Conference during the course of which the native title party contended that both grantee parties had not negotiated in good faith.  There was no submission that the government party had failed to negotiate in good faith.

10. Subsection 31(1)(b) requires that the negotiation parties negotiate in good faith with a view to obtaining the agreement of the native title party to the doing of the future act or the doing of the future act subject to conditions to be complied with by any of the parties. The term “negotiation parties” is defined by s. 30A to include the government party, the native title party and the grantee party. Any negotiation party may, pursuant to ss. 35 and 75, apply to the Tribunal for a determination pursuant to s. 38 if at least six months has passed since the notification day and no agreement of the kind mentioned in s. 31(1)(b) has been made.

11. 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 a determination pursuant to s. 38 – s. 36(2). The implications of s. 36(2) were explained by the Full Federal Court in  FMG Pilbara Pty Ltd v Cox (2009) 175 FCR 141 (“Cox”) (at 143/[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 the exercise of the power only arises when the good faith point is 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.”

12. The representatives of each of the negotiation parties informed the Tribunal at the Preliminary Conference that neither a hearing “on country” nor a cross-examination of any persons was required for the purpose of determining whether there had been negotiations in good faith. Instead, each of the parties submitted that the Tribunal could proceed and make a determination “on the papers”. I determined, pursuant to s. 151(2), that it appeared that the issues for determination could be adequately determined in the absence of the parties based on the documents lodged with the Tribunal. In so doing I had regard to the following consideration of this provision by Nicholson J in Little v Western Australia [2001] FCA 1706 (at [55]):

    “The third particular is whether there was a denial of procedural fairness in the Tribunal deciding to determine the application on the papers without giving the Council a reasonable opportunity to make submissions on that issue. The power of the Tribunal to so determine arising as it does from s 151(2) of the Act is a power which arises in the Tribunal ‘without holding a hearing’. The patent intention of the power is that the Tribunal can decide to proceed on the papers if it is satisfied that the issues for determination can be adequately determined in the absence of the parties. There is no express qualification of this power. The power is not circumscribed by reference to the consent of the parties. If the Tribunal was correct that it should not hear further evidence, there was no reason for it not to be satisfied that the determination could be adequately dealt with in the absence of the parties. The clear legislative intent behind the power is that in those circumstances the Tribunal should be able to act on the papers. The qualification of s 142 by the provisions of s 151(2) makes this apparent.”

13. Directions were made on 18 October 2011 requiring the native title party on or before 15 November 2011 to provide to the Tribunal and each of the other parties a statement of contentions and supporting documentary evidence in relation to whether the grantee parties had negotiated in good faith. The government and grantee parties were required to provide their own contentions on the good faith challenge by 22 November 2011, and the native title party was to reply by 29 November 2011.

14. The Statement of Contentions and supporting documentary evidence of the native title party was not lodged with the Tribunal until 17 November 2011. 

15. On 18 November 2011 the legal representative of the grantee parties, Mr Darren Fooks, sought an extension of time, the reason for the extension being as follows: “... the Native Title Party’s Contentions in relation to Good Faith ... were delivered to our reception without covering letter, they took some time to get to me. ... if the Contentions had been received ... as expected, we would have been able to start preparation on the Contentions immediately ... .  ... the delay has pushed preparation of the Grantee Party’s reply into later next week ... .” Mr. Fooks requested that the Directions be amended by extending the time for compliance by the grantee and government parties by one week.

16. The government party also requested an extension of time due to the large volume of material filed by the native title party.

17. Mr. Owens, on behalf of the native title party, in an email to the Tribunal of 18 November 2011, opposed the extension of compliance dates by a week, but indicated he would consent to a two day extension.

18. A further hearing was convened on 23 November 2011. At that hearing Mr. Owens informed the Tribunal that the native title party wanted to lodge, in addition to the materials lodged on 17 November 2011, affidavit material about a meeting of the negotiation parties on 23 August 2011.  This request was not opposed by either the government or grantee parties.

19. Accordingly, Directions were amended to allow the native title party to file further Affidavit material in support of the good faith contentions by 30 November 2011, with government and grantee party contentions and supporting documentary evidence to be lodged on or before 7 December 2011.  The date for the native title party to provide a statement or documents in reply was amended to 14 December 2011.

20. In accordance with the amended Directions, the native title party lodged with the Tribunal on 30 November 2011 the following affidavits in support of its contentions on good faith:

    (a)    affidavit of Algon Walsh sworn on 30 November 2011;

    (b)   affidavit of Barry Fisher sworn on 30 November 2011;

    (c)    affidavit of Colin McLennan sworn on 30 November 2011;

    (d)   affidavit of David Miller sworn on 30 November 2011;

    (e)    affidavit of Davina Tilberoo sworn on 30 November 2011;

    (f)    affidavit of Frank Fisher sworn on 30 November 2011;

    (g)   affidavit of Michael John Owens sworn on 30 November 2011.

21. On 6 December 2011 the government party lodged with the Tribunal and provided to the other parties its Statement of Contentions and supporting documents. Included in the supporting documents was an affidavit of Michelle Eileen Fisher Lucas.

22. On 7 December 2011 the grantee parties lodged with the Tribunal their Statement of Contentions and supporting documents. Mr. Owens, on behalf of the native title party, emailed the Tribunal and the other parties on 14 December 2011 stating that, although the grantee parties’ materials were emailed to him on 7 and 8 December 2011, a hard copy version did not arrive until 12 December 2011. Unfortunately Mr. Owens’ computer “crashed” on 7 December 2011 and was not working until 11 December 2011. In addition he was hospitalised on 6 December 2011. Consequently he was unable to complete his Reply by 14 December 2011, and sought an extension of one week until 21 December 2011.  Whilst the government party consented to this extension the grantee parties did not, and accordingly, a Directions Hearing was convened on 19 December 2011.

23. Having heard from the parties, the Tribunal determined to further amend the Directions and extend the time for Mr. Owens to lodge his Reply to 23 December 2011. The Listings Hearing which was due to occur on 19 December 2011 was, with the agreement of the parties, dispensed with, and in lieu thereof, the new Direction 4 provided (after the submission of the native title party’s Reply): “The Tribunal will make a determination on the papers.”

24. On 23 December 2011 the native title party lodged with the Tribunal its Reply. Unfortunately Mr. Owens, while providing the Reply to the Tribunal and the government party, failed to provide it to the first and second grantee parties. This omission was drawn to the Tribunal’s attention by Mr. Fooks on 4 January 2012, and was cured by the Tribunal itself emailing the material to Mr. Fooks on that day.

Material before the Tribunal

1. The Tribunal has before it voluminous material. In particular, the native title and grantee parties have lodged lengthy Contentions and a variety of primary and secondary evidence in support.

2. The native title party has, as already explained, lodged in addition to its Statement of Contentions, a number of affidavits, a formal Reply and related documentary material. The basis upon which the native title party contends that the grantee party did not negotiate in good faith is set out in the Statement of Contentions lodged by Mr Owens and dated 15 November 2011.

3. In its Statement of Contentions the native title party sets out the legal principles governing right to negotiate inquiries as well as the background of the Birri People’s native title determination application. In particular it is stated (paras 4.1 and 5.2) that, since the filing of the application, the native title party has successfully negotiated seven Indigenous Land Use Agreements, seven mining lease agreements, seven Cultural Heritage Management Plans (“CHMP”) and 64 exploration agreements.  The relevance of this is the contention that the native title party (para 3.10(c)) “is well aware of what constitutes an ‘inferior offer’”.

4. The native title party also set out at length the history of negotiations with QCoal on previous projects.  In this regard the Statement of Contentions contains details of negotiations regarding the Somona Mine Project which commenced in approximately 2006.  The Somona Project was located entirely on freehold land and accordingly, the right to negotiate did not apply. However, a CHMP was successfully negotiated.  The major concern of the native title party was that, although there is a workforce of some 400 persons, only six Birri People have been trained and employed since 2007 (para 7.12). Further, of the $510,878 distributed by Somona Mine Management as part of the Collinsville 2020 Grants Program to various community organisations and individuals, only $18,500 was directed towards the Birri People (para 7.16).

5. The native title party also detailed its negotiations for the Jax Project in the period from 2009 – 2010.  Without detailing the various allegations made, the essence of the submission is that the Birri People were “duped and misled” in negotiations with QCoal in order to obtain a future act agreement, the completion of cultural heritage surveys and agreement on management recommendations.

6. The native title party contends (para 7.26) it was at a Jax Project meeting convened on 10 December 2009, that for the first time there was raised a concept that compensation for the impact on native title rights and interests by the doing of the future act should be calculated pursuant to a formula tied to freehold value of the land actually mined, reduced by 30 per cent to account for the possibility that there may only be non-exclusive rights and interests. Further the area of “disturbance” would move with the movement of the pit across the coal seam, thereby resulting in a formula which would equate with no increase in the area of the disturbance.

7. It was further contended (para 7.26) that representatives of QCoal stated at that meeting that they wished to apply this formula to not only the Jax Project but also to the Drake and Byerwen Projects.

8. The minutes of the 11 December 2009 Jax Project meeting (Annexure 2 to the affidavit of Ms. Escartin) disclose that Mr. Owens, on behalf of the native title party, put forward a counter-offer to QCoal. This counter-offer was made in the context of uncertainty on non-financial benefits (employment etc). Further, Mr. Owens stated (para 2) that the native title party was not in a position to properly assess QCoal’s offer, and “were in the position where they would have to pluck figures out of the air and this could cause grief down the track (e)ither way, as any response could be too  high or too low.”

9. The counter-offer contained two options. One was a “cash and grab” deal, and the other was referred to as a “journey deal – which involved relationship building.”  Mr Owens admitted that “because of the situation they were plucking figures out of the air”. The first option entailed a $750,000 upfront payment, $750,000 per annum for the life of the Project and transfer of land at the end of the Project. The second option involved a $250,000 cash payment on the grant of the tenement, $250,000 in equity and $250,000 per annum for the life of the Project and transfer of land at the end. Mr. Owens stated that the figures were negotiable and demonstrated a commitment by the Birri People to a long term arrangement with QCoal.  Mr. Owens also stated that it was the preference of the Birri People to take a “bigger picture approach” and they were looking for longer term benefits rather than short term gains.

10. QCoal gave its first response to this offer at the next meeting which was convened on 7 April 2010. The response was then set out formally and in more detail in a letter from Mr. Christopher Wallin, Managing Director of QCoal to Mr. Owens on 18 May 2010 (Annexure 4 to the affidavit of Ms. Escartin). Mr Wallin stated that QCoal was unable to understand the valuation methodology proposed by the native title party. Further, QCoal was unable to agree to any transfer of land at the end of the Jax Project as QCoal did not own the underlying tenure. Finally, as QCoal was not a publicly listed company it was unable to offer equity.  Mr. Owens had explained at at the 11 December 2009 meeting that the “equity” proposed was in the nature of fully paid shares in QCoal.

1. Mr. Wallin then stated that either of the Birri options were capable of acceptance by
   QCoal, and re-iterated QCoal’s preference for an upfront compensation payment and life of mine opportunities with respect to employment, heritage management and cultural awareness training. He then outlined a proposed settlement based on a methodology which comprised freehold valuation ($ per hectare), freehold equivalent (%) and disturbed area (hectare). The offer in dollar terms was $100,000, plus a voluntary CHMP and the development of training and employment/apprenticeship opportunities (a draft Memorandum of Understanding was attached to the letter).

2. The Jax Project negotiations were eventually resolved by means a consent determination pursuant to s. 38 – Jax Coal Pty Ltd/Grace Smallwood & Ors (Birri People)/Queensland, [2011] NNTTA 46. The terms of the agreement that were reached between QCoal and the Birri People are set out at [89] of the determination.

3. So far as the Drake and Byerwen Projects, the native title party contends that meetings were held with the grantee parties on  25 and 26 November 2010, 6 and 7 April, 23 June, 15 July  and 22 and 23 August 2011.  It is contended (para 7.54 and 7.55) that the only time that issues relevant to the right to negotiate were discussed were 26 November 2010 (substantially), 6 April 2011 (briefly), 7 April 2011 (substantially), 22 August 2011 (briefly) and 23 August 2011 (substantially). Representatives of the government party were present at the meetings convened on 7 April 2011 and 23 August 2011.  At the same time discussions were taking place with the grantee parties for the development of CHMP’s under the Aboriginal Cultural Heritage Act 2003 (Qld). It is contended (para 7.56) that both Projects required the carrying out of Environmental Impact Statements, which triggered the need for a CHMP. In short, the development of a CHMP was mandatory.

4. Annexure 8 to the affidavit of Ms. Escartin is a letter dated 26 October 2010 from Mr. Lloyd Jones, Manager Community Relations, QCoal Pty Ltd to Mr. Owens. The letter outlines QCoal’s desire to meet with the native title party to discuss the Drake Project and reach an agreement under the Right to Negotiate process.  Mr Lloyd stated that “QCoal is open to exploring various options with the Birri people, including a whole of claim Ancillary Agreement, to include the current QCoal projects, being Jax Coal and Drake Coal and any future projects; or agreements that are project based.”

5. Mr. Jones went on to state that “both options would incorporate employment and training opportunities and the ability of the Birri People to enter into business opportunities on a commercial basis.”  The letter concluded with confirmation by Mr. Jones that QCoal would pay attendance fees of $450 per day for the representatives of the Birri People, legal costs at the rate of $2,600 per day plus one day before and one day after the meeting and travel and accommodation costs.  This offer was repeated in a further letter from Mr. Jones to Mr. Owens dated 1 March 2011 (Annexure 13).

6. The minutes of the 26 November 2010 meeting (Annexure 10 to the affidavit of Ms. Escartin), which was the first held to discuss the Drake Project, disclose that Mr. Owens stated (para 6) that the focus of the Birri People was sustainable long term opportunities. He went on to outline (para 8) the Birri People’s aspiration for land at Collinsville to build a facility such as a motel and in a joint venture or other business relationship in businesses, such as transportable villages.  Mr. David Miller stated (para 11) that the Birri People wanted to set up an education fund for future generations. Mr. Jones responded (para 12) that he was happy to look at scholarships in the Right to Negotiate process. The minutes also disclose (para 15) that there were general discussions about partnering opportunities with banks and generally building commercial relationships to further the commercial aspirations of the Birri People.

7. On 1 April 2011 Mr. Jones wrote to Mr. Owens (Annexure 15) in relation to the Drake Project. In that letter Mr. Jones outlined the following compensation package for the grant of ML 10349, 10350 and 10351:

   ·   “$300,000 cash compensation payment paid as $50,000 on execution of the ancillary agreement and $250,000 on grant of the MLs;

   ·   An ongoing in kind commitment for the life of the Drake Project in the form of employment of two Birri people. Over the proposed life of the project this equates to an approximate in kind benefit of $6,000,000.00;

   ·   Opportunity to participate in business opportunities arising out of the Drake Project on commercial terms with opportunities to be notified to the Birri People as and when they arise; and

   ·   Implementation of a CHMP for the Drake Project to incorporate cultural heritage awareness training and clearance opportunities over the life of the mine.”

8. This package was incorporated in an Ancillary Agreement which was attached to the letter.

9. The next meeting was held on 6 – 7 April 2011. The Agenda for the two day meeting (Annexure 16 of the affidavit of Ms. Escartin) discloses that all of 6 April 2011 was allocated to negotiate the Drake Project CHMP. However, the minutes disclose that much of the 6 April 2011 was spent discussing the offer sent by Mr. Jones on 1 April 2011. Outlined below is an extract from the minutes; “MO” refers to Michael Owens and “LJ” to Lloyd Jones:

   “13 MO said the white elephant in the room needed to be talked about.   MO acknowledged that it was no [sic] LJ’s fault but that his employer had treated his clients like crap throughout the Jax process and intended to continue to treat his clients like crap.  MO said there was no goodwill in existence between his clients and LJ’s employer, although there was a little goodwill with LJ. MO went on to say that the relationship between the parties was caustic and had the ability to get more caustic.  LJ’s boss likes playing hardball games and has made all his money in Birri country.  MO stated that he (Chris Wallen) has screwed Birri on Jax and will screw Birri on Drake. MO asked why should Birri cooperate in any shape or form in the current circumstances.  He said he doubted Mr Wallin would cooperate in similar circumstances.  This left the suspicion quite openly as to whether this was a black and white issue about the colour of skin.”

10. There were detailed discussions on both 6 and 7 April 2011 concerning daily survey rates, attendance fees and fees for proxies and carers. Representatives of the government party attended the 7 April 2011 meeting after morning tea.  The Agenda for the second day focused on discussion of the Drake Project until afternoon tea and the Byerwen Project thereafter.

11. The minutes of the meeting disclose (paras 22 and 23) that Mr. Owens stated that the Birri People had never had a presentation on the Drake Project, and queried the tonnage/turnover of the mine and life of the mine. This query was followed up by QCoal on 7 April 2011, when Mr. Laif McLoughlin gave further information (para 45) on the Drake Project, including expected output, mine life, jobs expected to be created etc.

12. Mr. Owens also said that the Birri People wanted some assistance from experts to assess the impact of the Project on native title rights and interests, and to ascertain how QCoal had come to a settlement figure of $300,000. Assistance was also needed to carry out a comparative analysis of other comparable native title agreements. Mr. Owens also said (para 30) that the Birri People had recently rejected an offer from QGC for $6.5 million and “won’t blink at rejecting $300,000.”

13. Grahame White, on behalf of QCoal, stated (para 36) “that he heard all the Birri had to say and would take it all on board ... QCoal have the intention to sort things out and move forward ... he had not stepped out and analysed other agreements.”

14. Mr. Owens also stated (para 40) that the Birri People were driven by contracting and job opportunities and a discussion followed, including participation by government party representatives on this topic. When asked by Ms. Escartin (para 56) what support the Birri People were seeking for the Right to Negotiate process, Mr. Owens responded (para 57)

    (a)   A financial analyst to provide information on the profitability of the mine;

    (b)     A valuer to value the impact on native title rights and interests; and

    (c)   A consultant to provide a comparative analysis of similar agreements.

15. Ms. Escartin responded (para 58) by querying whether a 6 mtpa project could justify the use of such consultants, and queried how much they would cost. Mr. Owens responded by saying that he did not know what the cost of resourcing would be, but it was what the native title party was asking for.

16. On 9 June 2011 Mr. Jones wrote to Mr. Owens (Annexure 21 to the affidavit of Ms. Escartin) regarding a proposed benefits package for “the grant of the Byerwen Mining Leases”. It was stated in the letter that the Byerwen Project involved the development of a 10 Mtpa open-cut coal mine.The following benefits package was proposed by the second grantee party:

    ·   “$500,000 cash compensation payment paid as $50,000 on execution of the enclosed ancillary agreement and $450,000 on grant of the MLs;

    ·   An ongoing commitment for the life of the Byerwen Project in the form of employment of two Birri people;

    ·   One bursary to be offered per annum over the life of the mine to Birri candidates for either tertiary or TAFE study.  Scholarship will be $10,000 per annum for up to 4 years of study; and

    ·   Opportunity to participate in business opportunities arising out of the Byerwen Project on commercial terms with opportunities to be notified to the Birri People as and when they arise.”

17. This proposed package was also based on a draft Ancillary Agreement which was attached to the letter.

18. On 17 June 2011 Mr. Owens emailed Ms. Escartin with a proposed schedule of fees from Mr. John Sheehan and Mr. Murray Meaton. Both gentlemen provided a quote for the preparation of a report analysing the compensation offer put forward by the grantee parties. One of the outcomes of the 7 April 2011 meeting was that Mr. Owens was to provide the name and fees of the consultants the Birri People wished to engage.

19. The next meeting was held on 23 June 2011. The minutes of that meeting (Annexure 22 to the affidavit of Ms. Escartin) disclose that the entire proceedings of that day was taken up discussing the draft Drake Project CHMP.

20. The grantee parties and native title party again met on 15 July 2011. The Agenda circulated prior to the meeting envisaged that the bulk of the meeting would be taken up with a discussion of the proposed Drake Project and Byerwen Project CHMP’s, with only 45 minutes allocated for Right to Negotiate discussions after 3.15pm. In the event, the CHMP discussions finalised by late morning, and at 12.26pm Right to Negotiate discussions ensued.

21. The minutes of the meeting (Annexure 25 of the affidavit of Ms Escartin) disclose that Mr. Owens stated (para 30) that the offers on the table were “totally unacceptable”, and the native title party would refuse to accept $300,000 for the Drake Project and $500,000 for the Byerwen Project. The notes record as follows:

    “...  MO went on to say that it was not worth Birri’s time to talk about the deal.  MO said that the Birri wanted to bring advisers in to compare all agreements and negotiate a fairer deal.

    31.MO also said that Birri would not get screwed on what should be an appropriate level of compensation.”

22. In addition, Mr. Owens informed the meeting (para 33) that the Whitsunday Regional Council had agreed in principle to give to the Birri People 29 hectares of land in Collinsville which was zoned commercial and which had access to power, water and constructed roads. He went on to discuss a two staged motel development. In addition, Mr. Owens outlined the purchase of a cattle station by the Indigenous Land Council (para 34), negotiations with Arrow Energy (para 35) and the development of a quarry. The minutes then record Mr. Owens making the following statements with a response from Ms. Escartin:

    “40.    MO noted that for the Drake and Byerwen Birri would perhaps be happy with $4 – 5M.

    41. MO said that most other agreements did not have a lot of $ attached to them as they were trying to capture opportunities to generate intergenerational wealth.

    42. MO said the Birri were sick and tired of coming to meetings having to deal with ruthless and vulgar lawyers....

    45. ME asked what QCoal could offer to value add to the opportunities that Birri had on the table already.

    46. MO said that the Birri had not had anything happen over the past 8 years so with money the harsh reality would be $4-5million. Birri sick of fighting but were wanting to turnaround and lever up outcomes. The cash component would pay off a lot quicker – Birri not looking for handouts.

    47. ME asked, putting money aside, what Birri wanted.  MO stated that they would be interested in QCoal assisting with the motel and would need the cash to get underway with a buy back in the future.  The land is next to the High School in Collinsville he [sic] would be a Hotel/Motel style full services apartments.”

23. The minutes indicated that after this exchange the Drake Project CHMP was executed and the meeting closed at approximately 1.30 pm.

24. A further offer in relation to both Projects was put to the native title party at the meeting convened on 22 August 2011. The offer was written on a whiteboard and a copy is located at Annexure 30 of the affidavit of Ms. Escartin.  The offer was as follows:

    (a) $100,000 on the execution of the s. 31 deeds;

    (b)     Up to $50,000 towards the cost of seeking a land valuation for  an ILC property;

    (c)   $300,000 on the grant of the Drake tenements;

    (d)     $500,000 on the grant of the Byerwen tenements; and

    (e)   $40,000 per annum thereafter.

25. The final compensation offer was contained in a letter from Mr. Mark Geritz of Clayton Utz, the legal representative of the grantee parties, to Mr. Owens of 9 September 2011. This final offer was as follows:

    “1. In support of development of Birri businesses, our clients will make available after execution of the Ancillary Agreement and all relevant section 31 Deeds:

    (a)    up to a maximum of $50,000 for a land valuation; and

    (b)up to a maximum of $50,000 towards the cost of a business development plan to support one or more Birri People business initiatives.

    2.  In addition, our clients will pay:

    (a) $100,000 to the Birri within 14 days of execution of the Ancillary Agreement and all relevant section 31 Deeds.

    (b)     $300,000 to the Birri on grant of the last Mining Leases for the Drake Project: and

    (c)     $500,000 on the grant of the last Mining Leases for the Byerwen Project.

    3.  In addition, our clients will pay the Birri $40,000 per annum for the Term as a business development grant.”

26. It will be noted that the final compensation offer differs from the offer made on 22 August 2011 by the addition of an amount up to $50,000 for the cost of a business development plan.

27. Central to the allegations of bad faith by the native title party are what transpired at the meetings convened on 22 and 23 August 2011 and subsequent developments. Outlined below are relevant extracts from the Statement of Contentions of the native title party:

    “7.64    The final meetings occurred on 22 and 23 August 2011.

    7.65 Prior to the meeting there had been substantial tension as between the Native Title Party and the Grantee Party in reaching agreement over a budget for the meeting. Disagreement had had arisen over the Grantee Parties refusal to pay a higher amount to the Aboriginal Party to attend meetings.

    The Grantee Party[sic] were insisting on rates that were contained in old exploration agreements, in circumstances where the Drake CHMP was signed and the parties were

    about to sign the Byerwen CHMP and both agreements were identical as to higher rates to be paid to the Aboriginal Party for attendance at meetings.

    The Native Title Party interpreted this as being small minded and disingenuous.

    7.66 At the commencement of the meeting of 22 August 2011, that tension flowed over into the meeting. After the matter was resolved, the Native Title Party substantially completed negotiations about the Byerwen Coal Project CHMP and again progressed discussions about the Jax CHMA.

    7.67 Over lunch on 22 August 2011, the Native Title Parties [sic] had a lengthy discussion about what had transpired to date:

    (a) There had been no concluded RTN agreements about any of the Jax, Drake or Byerwen Projects,

    (b) There had still been no substantiative response to email of 5 July 2011,

    (c) The 6 month negotiation period under the NTA for Drake had expired on 7 April 2011and for Byerwen on 1 June 2011,

    (d) The obligation to act in good faith ceased at the end of the 6 month negotiation period,

    (e) There had been no real attempt by the Grantee Party to develop an agreement during the negotiation period or at all to date,

    (f) The Grantee Party was still talking about the same things at recent meetings as had been spoken about at the commencement of the Jax negotiations in October 2009 – we had all been going around in circles,

    (g)The Native Title Party could not have done anything more to encourage an agreement. Reference was made to the offers of an ILUA, a claim wide CHMP, informing the Grantee Party of other agreements and of being prepared to continue to negotiate the CHMP’s, to sign the Drake CHMP and to continue to meet to discuss the RTN Proposal outside of the 6 month negotiation period,

    (h) The Grantee Party had been deliberately wasting time and delaying matters until it was outside of the negotiation period and had the CHMP signed,

    (i)  Once the cultural heritage clearances were done on the Jax site and recommendations had been agreed to, QCoal then showed its true colours by using its formula to table an offer and when refused the Grantee Party had commenced a FADA. The Native Title Party expected the same to again happen here,

    (j) There was still no signed CHMA for the Jax Project, despite there being many promises and negotiations about the development of such a CHMA since October 2009. The Native Title Party noted that the Grantee Party had managed to move the Drake and Byerwen CHMP’s to the point of being signed, but the oldest promises now concerned an agreement the Grantee Party now needed the least – Jax Project CHMA – and it still remained unsigned.

    (k) They had already signed the Drake CHMP,

    (l) The consultation period under the Part 7 ACHA for Byerwen would expire on or about 3 September 2011. The Grantee Party would then be in a position to refer the matters to the Land Court on the basis of “a failure to agree” under s113 ACHA 2003.

    Since the Byerwen CHMP was essentially a document the Native Title Party agreed with, it would not be wise to allow that to happen, as they risked losing control of the outcome and/or Grantee Party could revert to its own agreement and seek recommendation by Land Court to Minister to register.

    (m) If they executed the Byerwen CHMP, they could at least lock away the terms and conditions contained in that CHMP,

    (n) The requirements of s39(1)(a)(iv) and (v) NTA would be satisfied by signing the CHMP. As such it would make it easier for the Grantee Party to do a FADA just like what had occurred in the Jax Project after the cultural heritage survey was done and survey recommendations were made and accepted,

    (o) The Grantee Party had everything it now wanted and would have no further need to waste its time with the Native Title Party,

    (p) The Native Title Party expected the Grantee Party to now revert to its usual tactics and to its formula,

    (q) The Drake offers of 1 April and Byerwen offer of 9 June would have been based on the QCoal formula,

    (r) Even if the Native Title Party refused to sign the CHMP, it would make no difference to the Grantee Party as he would proceed to the Land Court and the Tribunal,

    (s) Doubt was cast on whether the Grantee Party had ever at any time ever had any real or genuine intention of developing an agreement with the Native Title Party or whether the Grantee Party had simply gone through the motions to get the CHMP signed and had at the same time make [sic] it appear as though it had satisfied its obligation to act in good faith by sending junior people (who knew nothing, but were there to put up a softer image – Fiona McLoughlin and Laif McLoughlin, the daughter and son in law of Chris Wallin) to meet constantly and effectively pretend to negotiate,

    (t) The Grantee Party knew the Native Title Party did not have the resources to fight the Grantee Party,

    (u) The Native Title Party requested its solicitor to ensure the Government Party was present the following day as that was when the Native Title Party expected the Grantee Party to show its hand,

    (v) Agreed they were sick and tired of wasting their time meeting with the Grantee Party as they knew they would get nothing and there was every likelihood the Grantee Party would start another FADA over Drake and Byerwen,

    (w) Agreed to sign the CHMP to meet their obligation to their ancestors to protect            their country in accordance with their traditional laws and customs and to at least show they had tried to reach agreement and in doing so had acted in good faith throughout for the little it mattered to anyone except themselves.

    (x) Agreed they would think about it overnight.

    7.68 Following lunch and in the last half to three quarters of an hour of the meeting on 22 August 2011, the Grantee Party put a revised offer up on a white board.

    The Native Title Party was entirely unimpressed at the offer.

    The meeting was bought [sic] to an end by the solicitor for the Native Title Party after some initial comments were made and there were no further comments forthcoming from the Native Title Party.”

1. A large part of the native title party’s contentions related to what occurred at the meeting of 22 - 23 August 2011 and subsequent correspondence.  The grantee parties prepared a written summary of that meeting. Those notes, as well as the summaries of each of the meetings, were prepared by Ms. Margarita Escartin. Ms. Escartin has been working as a native title consultant to QCoal since June 2011.  The parties disagree on the accuracy of the meeting notes, but they at least provide a basis for understanding what transpired.

2. In summary the notes of the 23 August 2011 meeting disclose that, after a discussion about the area of a proposed “exclusion” and “buffer” zone, the representatives of the grantee parties then discussed the proposed settlement offer. Mr. Owens (para 20) indicated that the settlement offer was “missing a few things” and proceeded to identify employment and training, tendering opportunities and preferred tendering. Further, Mr. Owens asked on what basis the settlement offer had been developed. He was informed by Ms. Escartin that it was based on agreements in the area and the benchmark figure agreed for the southern tenements with the Jangga People.  Ms Escartin declined Mr. Owen’s request to disclose the agreement reached with the Jangga People. Mr Owens is recorded (para 25) as then stating that the native title party were having difficulties understanding the settlement figure and how it was calculated.

3. The notes also record that in response to further questioning by Mr. Owens, Ms. Escartin (para 34) said that the offer was based on the Birri People’s aspirations as expressed at previous meetings, QCoal’s understanding of other deals done in the area and the offer that had already been accepted by the Jangga People in relation to the Byerwen Project.  A discussion then ensued about a request by the native title party for funding to employ an expert to provide financial and economic advice in relation to the Projects. This request had been refused by the grantee parties.  It is recorded that Mr. Owens said that in summary (para 39):

   “a.   QCoal had not provided formulations of how it reached the amount offered;

   b.   QCoal stated it had used a benchmarks [sic] of formulas to the south but were not prepared to  tell the Birri what they were;

   c.   didn’t understand Birri’s rights and interests or what the Birri considered were impacts on their rights and interests;

   d.   didn’t answer the questions as to how the offers were calculated; and

   e.   refused to provide any form of assistance to rectify the bargaining position of the Birri.”

4. In the following exchange, Mr. Owens re-iterated that the native title party was not in a position to deal with the offer and assumed that employment and training would have formed part of the offer. He further contended (para 44) that the offer “didn’t meet minimum known established benchmarks.” Ms Escartin stated (para 46) that the value of the offer for compensation was not based on the value of the Project but on the impacts on the native title rights and interests claimed by the Birri People.  Mr. Owens claimed (para 47): “the offer was not based on the impacts on rights and interests ... the offer had been plucked from a dark place.” He went on to contend (para 54) that the cash component of the offer was nowhere near what the native title party would accept and that the entire offer was deficient.

5. Mr. Owens explained (para 62) that the settlement proposal was satisfactory to the native title party in terms of structure, but not in terms of cash value.  He confirmed (para 57) that “there was nothing wrong” with the proposed business development grant, the valuation for the ILC property and the contribution towards development of business plans.

6. The parties then proceeded to discuss the issue of employment opportunities and tendering arrangements.  The notes record the following conclusion to the meeting (ME is Margarita Escartin, MO is Michael Owens and LM is Laif McLoughlin):

   “79.ME highlighted that QCoal had specifically structured the combined offer to incorporate the Birri aspirations expressed at the last meeting with regards to business opportunities.  That was why the offer included funding for a business plan and also an annual amount for business development.

   80.ME highlighted that the offer was a cash offer specifically to address the Birri comments made previously that they have a number of initiatives but need funding to pursue them.  Rather than QCoal selecting which initiatives QCoal would support the offer had been structured to give the Birri control.

   81.ME highlighted that the offer on the table was a cash offer, only conditional on the grant of the mining leases and the Birri claim being in place whereas the other deals MO referred to all had many conditions for the Birri to meet.

   82.ME asked if there was anything else to say and that QCoal had taken on board everything the Birri had expressed.

   83.LM asked MO to explain what game he was playing as he did not think he was playing any games.

   84.MO asked LM a question and then made an expression like he was choking and then said something like, are you choking, have you got nothing to say.

   85.ME said that was enough and invited LM to leave the meeting.  ME thanked everyone for their attendance and ME & LM left the meeting.”

7. The above extract suggests that the meeting of 23 August 2011 ended abruptly and in a spirit of rancour. The native title party disputes this version of events (which will be dealt with later), but in any event, it is clear that the meeting of 23 August 2011 was marked by sharp exchanges, emotional outbursts and a degree of bad feeling.

8. Following that meeting a letter dated 9 September 2011 was sent to Mr. Owens by Mr. Mark Geritz of Clayton Utz. As previously mentioned, the letter contained the final compensation offer of the grantee parties. However, in addition it outlined a number of concerns of the grantee parties and made allegations about the behaviour of Mr. Owens at the 22-23 August 2011 meetings.  So far as is relevant the following allegations were made:

   “As a result of your aggressive behaviour and unfounded allegations made at the 22 and 23 August 2011 meetings, our client has indicated that it is unwilling to have representatives meet you without an agreement between the parties on acceptable behaviour.

   It is evident from your conduct during the 22 and 23 August 2011 meetings, that you were not at those meetings to further negotiations with our clients in relation to the offers that they had presented to your clients but merely aimed to use the meetings as a tactic to delay and obfuscate the right to negotiate process and most likely to lay the foundation for some argument that our clients had not been acting in good faith.

   It is also apparent that while you have constantly criticised the offers that have been made by our clients, you have never provided any alternative position of any substance.  To the contrary, you have simply consistently alleged that what was being offered was less than amounts that other companies were paying. At the last meeting you actually withdrew the only tangible guidance of a potential counter proposal that our clients thought that you had put to them.  In all the circumstances, it could properly be argued that you were asking our clients to negotiate with themselves by increasing their offers without any viable reason to do so apart from vague allegations associated with other negotiations allegedly held with your clients by other companies.

   We should point out that your behaviour is not, in our clients’ view, indicative of the attitude of your clients.  Outside of these negotiations, our respective clients have both worked together to maintain mutually beneficial relations.  This goodwill from both sides has resulted in the negotiation and execution of numerous agreements and the ongoing cultural heritage clearance work ....

   The 23 August 2011 meeting ended with our clients’ representatives calling a close to the meeting because of your behaviour on that day.  This is the first time that our clients have called a halt to a meeting, and our clients’ actions were a direct result of your behaviour.

   In this regard I am to instruct you that going forward I am the only contact with respect to the Right to Negotiate process for the Projects and you are to have no contact with any of our clients’ former representatives.  From a Workplace Health and Safety perspective, our clients must take abusive behaviour extremely seriously and cannot allow any of its representatives to be placed in such an unacceptable position in the future.”

9. The native title party, in its Statement of Contentions, denies the allegations about Mr Owens’ behaviour.  After outlining its version of what occurred, the native title party contends (para 7.76 (h) and (i)):

   “(h) In all of the circumstances, the Native Title Parties (sic) view the actions of the Grantee Parties and their solicitors Clayton Utz as being an attempt to intimidate Mr Owens and by association the Native Title Party and thereby seek to stop Mr Owens acting for the Native Title Party and/or intimidate the Native Title Party in future negotiations.

   (i) The actions of the Grantee Parties and their solicitors Clayton Utz also seem to be entirely directed at protecting the Grantee Party of allegations of bad faith stemming from the meeting of 23 August 2011.”

10. Mr. Owens, in his affidavit, denies that his behaviour at the 23 August 2011 meeting was aggressive and deposes (at para 35) that “the allegations as contained in the correspondence of 9 September 2011 about my behaviour are complete lies.”

11. In addition the affidavit of Mr. Frank Fisher deals at length with the meeting of 23 August 2011. Mr. Fisher deposes (paras 54 – 59) that the grantee parties meeting summary of 23 August 2011 is inaccurate and he confirms the version of events outlined in the native title party’s Statement of Contentions and in the affidavit of Mr. Owens. In particular, Mr. Fisher deposes that Mr. Owens was not aggressive, abusive, insulting or abrasive, did not use inappropriate language and did not ridicule, make fun of or seek to humiliate the grantee parties’ representatives.  In their affidavits, Algon Walsh, Barry Fisher, Colin McLennan, David Miller and Davina Tilberoo agree with, and confirm, the version of events of the 23 August 2011 meeting as recounted by Mr. Owens and Mr. Frank Fisher in their respective affidavits.

12. The Tribunal also has extensive submissions from the grantee parties.  At the outset of its Contentions the grantee parties summarise their position as follows:

    “1.7 In the absence of any judicial ruling on what constitutes ‘just terms’ compensation for the impact of native title rights and interests, the Grantee Party contends that it was reasonable to formulate the Offers with reference to a value.

    1.8 In the absence of any contribution from the Native Title Party about how its aspirations were to be articulated and captured in any agreement, or the provision of any response to offers and additional offers, the Grantee Party contends that it was in effect negotiating in a vacuum and the Offers, in those circumstances, were reasonable.

    1.9 The Grantee Party further contends, noting that it does not admit the uncorroborated Native Title Party Contentions, that at all times it was:

    (a) committed to reaching agreement;

    (b) was genuine in its attempt to reach agreement;

    (c) attempted to reach agreement by all reasonable means available to it; and

    (d) acting in good faith.”

13. The various detailed contentions of both the native title and grantee parties, as well as those of the government party, are set out in greater length later in the determination.

Legal principles

1. Section 31 provides that unless a s. 29 notice includes a statement that the government party considers that the future act attracts the expedited procedure:

   (a)    the government party must give the native title party an opportunity to make submissions to it regarding the act; and

   (b)   the negotiation parties must negotiate in good faith with a view to obtaining the agreement of the native title party to the doing of the act.

2. A minimum six month period after notification is prescribed before arbitration can be sought.  However, once the six month period has elapsed it is open to any of the negotiation parties to exercise their statutory right to seek a future act determination.  The negotiations do not need to have reached any particular “stage” before a party seeks arbitration.  This was explained by the Full Federal Court in Cox (at 145/[19]) as follows:

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

3. The Full Court also highlighted that the requirement of good faith negotiations is directed towards “the quality of a party’s conduct”, namely (145/[20]): “It is to be assessed by reference to what a party has done or failed to do in the course of negotiations and is directed to and is concerned with a party’s state of mind as manifested by its conduct in negotiations.”

4. Nonetheless, while negotiations are not required to have reached any particular stage before a future act determination is sought “it is not sufficient for good faith negotiations to merely ‘go through the motions’ with a closed mind or a rigid or predetermined position” – (146/[24]).

5. Accordingly, there is no obligation placed on the parties to have actually negotiated about the doing of the future act. The obligation is to negotiate in good faith with a view to obtaining an agreement on the doing of the future act. Member O’Dea in FMG Pilbara Pty Ltd/Cheedy/Western Australia [2009] NNTTA 38 pointed out (at [67]) that there is no obligation:

   “... to negotiate in any physical sense for a period of six months. What is required is that the parties negotiate in good faith with a view to obtaining an agreement with the native title party to the doing of the Act upon conditions and those negotiations are confined to matters related to the effect of the doing of the Act on the registered native title rights and interests of the native title party. The actual period of negotiation which would need to take place in order to establish that the parties had negotiated in good faith, is not necessarily related to the length of time spent negotiating. Rather it is the quality of the process that will be determinative of the question of whether the parties have engaged in the process in good faith.”

6. Nonetheless while it is not relevant to inquire as to what stage negotiations may have, or have not, reached, it is important to ascertain if negotiations have not advanced due to one of the parties engaging in misleading or duplicitous behaviour such that negotiations have stalled when the request for arbitration was made. In White Mining (NSW) Pty Ltd, Austral-Asia Coal Holdings Pty Ltd & ICRA Ashton Pty Ltd/Scott Franks & Anor (Plains Clans of the Wonnarua People)/New South Wales [2011] NNTTA 72, the Tribunal observed (at [33]):

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

7. The Full Court also held in Cox (at 148/[38]):

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

8. The most useful and succinct statement of what constitutes negotiating in good faith is provided by Deputy President Sumner in Placer (Granny Smith) v Western Australia (1999) 163 FLR 87 at 93-94. It should be noted that the references to the government party in the quotation below should be read (following the passage of the 1998 amendments to the Act), as applying to all negotiation parties:

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

9. Deputy President Sumner referred to the good faith negotiating indicia which were outlined in Western Australia v Taylor (1996) 134 FLR 211 at 219. These indicia were set out in full in the judgment of Nicholson J in Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303 at 312 – 313 with apparent approval. The indicia of failing to negotiate in good faith are as follows:

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

   (ii)     failure to make proposals in the first place;

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

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

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

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

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

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

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

   (x)     unnecessary postponement of meetings;

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

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

   (xiii)  shifting position just as agreement seems in sight;

   (xiv)  adopting a rigid non-negotiable position;

   (xv)   failure to make counter-proposals;

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

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

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

1. It is important to note that these indicia are only that.  They are simply a guide to assist the Tribunal when evaluating evidence about the negotiations.  When assessing whether a party has negotiated in good faith the Tribunal will consider all of the material before it and not make a decision mechanistically on the basis that a party has not met all of the indicia or even most of them. The correct approach was summed up by Member Lane in Western Australia v Dimer (2000) 163 FLR 426 (at 441) as follows:

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

2. Finally, when determining whether the parties have negotiated in good faith, a contextual evaluation is required.  The approach taken by one party is normally influenced by the approach taken by another.  For example, if a native title party refuses to negotiate, a lesser negotiating standard would normally be required of the government and grantee parties.  Similarly, if a grantee party is a small miner with few resources and limited capacity to make offers or give concessions, what would be regarded as negotiating in good faith could be different to that of a large mining company with the capacity to make substantial offers and concessions.  Likewise, the standard of negotiating will be influenced by the external environment.  Negotiation parties do not operate in a vacuum, and when evaluating conduct it is important to appreciate and factor in the broader environment.  It would be unrealistic to impose on parties altruistic or artificial standards of behaviour removed from the financial, regulatory and interpersonal reality that they face.

Good Faith Issues

1. The native title party raised a number of matters in its Contentions relating to the conduct of the grantee party which it submitted would result in a determination that the grantee party had not negotiated in good faith.  Each of these matters is dealt with below.

2. Before dealing with those matters, the grantee parties contended (para 4.11) that, while the Tribunal is not bound by the rules of evidence (s. 109(3)), to the extent that the native title party has not filed any affidavit evidence in support of the facts asserted in its contentions, they should be given very little weight.

3. Two points should be made about this contention. First, the native title party subsequently did lodge with the Tribunal and serve on the other parties, various affidavits. Second, even if the native title party had omitted to file affidavit material, nonetheless the Tribunal would have given appropriate weight to the contentions of the native title party, having regard to the totality of the material lodged. If, for example, the allegations of the native title party about what was said at the 22-23 August 2011 meetings were, in part, supported by the government party in affidavit material or contentions, then, the absence of affidavit material from the native title party would not have been significant. The Tribunal takes a commonsense approach to the material that is lodged, and does not mechanistically give little weight to contentions if they are not supported by affidavit material.  This is especially the case where some parties, particularly some native title parties and small miners, have few resources. Nonetheless, if serious allegations are made about the ethics and motives of a party, such allegations should be supported by affidavits or other documents. In the absence of such support, allegations of that type, when contested by another party who provides affidavit or other documentary material in support, will be given little weight.

4. Further, the grantee parties took issue (para 4.13) with the overall substance of the Contentions of the native title party, in that “they appear primarily concerned with justifying the conduct of the Native Title Party rather than establishing lack of good faith on the part of the Grantee Party.”

5. Overall the Contentions of the native title party do focus on the relevant issues of good faith, and are not overly focused on questions of either self-justification or vilification of persons associated with the grantee parties. Nonetheless there is, unfortunately, ample material before the Tribunal both from the native title party and the grantee parties which focus on personalities rather than substance and which are expressed in emotive and exaggerated language.  While it is clear that the negotiations undertaken were dynamic and robust, some of the material before the Tribunal from the grantee and native title parties is in the form of self-justification and contains aggressive and irrelevant material.

6. The grantee parties correctly contended (para 4.21) that prior dealings between the grantee and native title parties may be relevant to the issue of whether the parties have negotiated in good faith in relation to the current proposed future acts. The grantee parties contended that it would be artificial for the Tribunal to limit its inquiry to the negotiation period and not take into account previous matters, where such previous matters might explain what happened during the negotiation period.  However, those previous matters of themselves cannot be relied upon to establish, of themselves, a lack of good faith.

7. Consequently some of the previous dealings between the grantee and native title parties have been the subject of quite extensive submissions. These previous dealings provide the broader context for the negotiations that took place and, in particular, some of the concerns of the native title party. However, while relevant, previous negotiations are not of themselves determinative of the issue of good faith in relation to the negotiations being considered in these proceedings.  The primary focus of this inquiry is what occurred during the negotiation period and not what occurred prior to that time in relation to negotiations for different tenements, particularly where such negotiations fell outside the Right to Negotiate process.

8. In this regard I have not placed much weight on the material relating to the Sonoma Mine Project.  The grantee parties contend (para 4.28) that the Sonoma Mine is owned by an unincorporated joint venture of which QCoal Sonoma Pty Ltd only holds a minority interest (40.5%). Further, as previously noted, the negotiations for the Somona Project were in the context of freehold land where the right to negotiate did not apply.  Negotiations undertaken by a grantee party which has a materially different shareholding composition and in the context of a different legal regime, to some extent reduce its relevance to the subject matter of this inquiry.

9. One issue which was raised on numerous occasions by the native title party was that the meeting of 22 – 23 August 2011 occurred more than six months after the notification day.  In his affidavit, Mr Owens deposed as follows (para 17):

   “Over lunch on 22 August 2011, I had a lengthy discussion with the Native Title Parties [sic] about what had transpired in the negotiations to date.  Those discussions included the following:

   (a)There had been no concluded RTN agreements about any of the Jax, Drake or Byerwen Projects,

   (b)   There had still been no substantive response to email of 5 July 2011,

   (c)The 6 month negotiation period under the NTA for Drake had expired on 7 April 2011 and for Byerwen on 1 June 2011,

   (d)The obligation to act in good faith ceased at the end of the 6 month negotiation period.”

10. Mr. Frank Fisher deposed that he had been informed by Mr. Owens that the six month negotiation period under the Act had ended. His response to that information was as follows:

    “33. I was confused and angry with this, since I felt there had not really been any substantial negotiations about the grant of the mining lease; instead all of the substantial negotiations had been about the CHMP’s.

    34. This was discussed a number of times amongst the registered native title claimants.  Our solicitor also told us that the obligation to negotiate in good faith had expired at the end of the 6 month period.

    35. We all suspected that QCoal were not serious about reaching an agreement and that they would again refer the matter to the Tribunal.”

11. It would appear that the native title party may have misunderstood, in part, the statutory requirement to negotiate in good faith. There is no fixed six month negotiation period. All that the Act provides is that any of the negotiation parties can seek a determination pursuant to s. 38 if at least six months have elapsed since the notification day. Absent an application for arbitration by one of the parties, the obligation to negotiate in good faith remains in place after the six months have elapsed. In this matter, as the grantee parties had not lodged future act determination applications once the six month period for both Projects had elapsed, the statutory requirement to negotiate in good faith continued.

12. In fact the grantee parties did not seek arbitration until October 2011, a number of months outside of the six month period for each Project.

13. Further, s. 35(3) provides that even though an application for arbitration has been lodged “the negotiation parties may continue to negotiate with a view to obtaining an agreement of the kind mentioned in paragraph 31(1)(b)...” While the parties can continue to negotiate after arbitration has commenced, those negotiations fall outside the obligation to negotiate in good faith – Cameron v Hoolihan (2005) 196 FLR 37 at [38]/47.

14. The fact that Mr. Fisher, and, it would appear from their affidavits, the other Birri representatives, were “confused and angry” may have been in part due to a misunderstanding about the requirement to negotiate in good faith. Further, this appears to have had an impact on the Birri People’s approach to negotiations that occurred on 22 – 23 August 2011. I will deal later in this determination with the other issue raised by both Mr. Owens and Mr. Fisher about the stage of the negotiations at 22 – 23 August 2011.

Failing to respond to reasonable requests for relevant information within a reasonable time

[100]  The native title party contends (para 9.2(viii)) that the grantee parties did not act in good faith in that they did not respond to an email of 5 July 2011 sent by Mr. Owens to Ms. Escartin until 9 September 2011, and “only then in terms of the correspondence.”.

[101]  The email, which is Annexure 7 to the Statement of Contentions of the native title party, is two and a half pages in length and contains numerous questions about the Jax, Drake and Byerwen Projects. Some of the information requested included: the projected life of each mine, the type, quality and nature of coal deposit from each mine, size of the coal deposits, tonnage intended to be mined per annum, proposed cost to establish each mine, projected gross amount of sales for each mine, proposed employees for each mine and details of any contracting arrangements entered into in respect of each mine.  Other specific questions in relation to the Byerwen Project were outlined, including numerous questions relating to the proposal to provide a bursary to Birri candidates to undertake tertiary or TAFE studies in the sum of $10,000 per annum.

[102]  In its Statement of Contentions the native title party made the following statements about this email (at para 7.62):

“The Native Title Party was of the view that the formula previously used by QCoal (and ostensibly removed in the Jax mediation) was again being used to develop the offers for Drake and Byerwen.

The purpose of the email was to seek to ascertain whether that was the case and to investigate the substance of the various other respects of the Drake and Byerwen offers.”

[103]  It is uncontested that the alleged failure of the grantee parties to formally respond to this email was raised by Mr. Owens at the 23 August 2011 meeting (para 26 of the meeting notes).

[104]  In the 9 September 2011 letter of Mr. Geritz the following response was given:

“... apart from commercially sensitive and irrelevant material, our clients have instructed us that all relevant material has been provided (or reasons for not providing have been given) and in the attached table (Attachment A) our clients summarise the responses to your request.  In many cases the material has been provided a number of times.”

[105]  The grantee parties complain in their Statement of Contentions (para 4.62) that the table in Attachment A to the letter was omitted from the native title party’s Contentions, suggesting the failure to include Attachment A coupled with the native title party’s contention “is disingenuous at best and pure fabrication at worst.”

[106]  The initial problem that confronted the Tribunal was that the Ms. Escartin, although annexing a copy of the letter of 9 September 2011 to her affidavit, failed to include Attachment A of that letter.  The Tribunal was only provided with a copy of Attachment A on 26 January 2012 when this discrepancy was drawn to the attention of Mr. Fooks.

[107]  Having read the email of 5 July 2011 together with all of the other material lodged with the Tribunal, it is clear that much of the information requested by the native title party had been the subject of discussions with the grantee party. The fact that a negotiation party requests material does not impose an obligation on another negotiation party to provide everything that has been requested.  A request could include the provision of commercial in confidence documentation, irrelevant and extraneous materials as well impose logistic and other constraints which are inappropriate or unfair.

[108]  The key issue for the Tribunal is not whether a request for information by one party has not been responded to at all, or only partially, but whether a failure to respond or a partial (and delayed) response is indicative of a broader non-negotiable approach. In short, unless the information requested is central to the negotiations, the failure by the other party to substantively respond has fundamentally weakened the negotiations, and the failure to respond was unfair, then the delay in formally responding and the extent of the reply is not, of itself, an indication of bad faith negotiations.

[109]  In every case it is important to evaluate an aspect of the negotiations in the context of the overall negotiations, and not to isolate a particular event from the broader sweep of the negotiation environment within which it took place. In short, a contextual evaluation is required. What may seem at first as indicative of sub-optimal conduct may actually be appropriate and reasonable when viewed in the context of the behaviour of all of the parties and the nature of the negotiations as a whole.

[110]  In this matter, it is the case that detailed information was requested by the native title party. The request was not unreasonable.  The grantee parties did respond, and did in the various meetings discuss the issues underpinning the questions.

[111]   Further, having perused Attachment A to the letter of 9 September 2011, I am satisfied that the grantee parties did provide responses to the request for information contained in the email of 5 July 2011. It is clear from Attachment A, that the only questions not answered, were those involving “commercial in confidence” information, such as the proposed costs to establish each mine and the projected amount of net IBIT for each mine.

[112]  I find that the evidence before the Tribunal does not substantiate a contention that the response of the grantee parties to the request for information contained in the email of 5 July 2011 was indicative of the grantee parties stalling, refusing to disclose relevant information or failing to substantively engage with the native title party.

Stalling negotiations

[113]  The native title party contends (para 9.2(ix)) that the grantee parties did not negotiate in good faith because:

(a)   they deliberately stalled negotiations until after the six month negotiation period ended in order to avoid the obligation to negotiate in good faith;

(b) they deliberately stalled substantive negotiations about the doing of the future acts in the Drake and Byerwen Projects until after the execution of the cultural heritage agreements so as to bolster their position when they would have to make submissions about s. 39(1)(a)(v) in any arbitration.

[114]  In response to this submission (as well as to the contention that the grantee parties had failed to organise meetings), the grantee parties contended (para 4.61):“There is no evidence to support these allegations.  The Grantee Party has at all times acted promptly, been available to meet at the Native Title Party’s convenience and done its best to facilitate and pay for meetings and negotiations.”

[115]  In support of this response, the grantee parties referred to the affidavit of Ms. Escartin. At paragraph 10 of her affidavit she deposed as follows:

“I have been present at all the negotiation meetings with the Native Title Party as part of the Grantee Party’s negotiation team since 29 October 2009 to date.  I say that:

(a)  All meetings were convened at the convenience of the Native Title Party;

(b)Negotiation meetings were often delayed or occurred later than the Grantee Parties would have liked because the Native Title Party was unavailable;

(c)Agendas were provided to the Native Title Party before each of the meeting (sic) setting out what was to be discussed;

(d)The Grantee Parties organised, catered for and met the Native Title Party’s costs of attending each of the negotiation meetings including travelling costs and the costs of its legal representative Mr Owens.

[116]  The grantee parties also refer to the “Chronology of interactions with the Birri People” which is attached to the Statement of Contentions of the Grantee Party. The Chronology lists relevant contact between the grantee parties and the native title party between 2009 and 2011. There are cross-references to supporting documentation in the Annexures to the Contentions.

[117]  A fair reading of this material does not support the contention of the native title party that the grantee parties deliberately stalled negotiations in order to avoid the obligation to negotiate in good faith. Indeed, the material indicates that the grantee parties were diligent in organising meetings and engaging in appropriate follow-up activity.  The material before the Tribunal does not support the suggestion that the grantee parties were engaging in a deliberate strategy of avoiding their responsibility to negotiate in good faith in order to obtain an unfair advantage. In fact, the material leads to the opposite conclusion. The cumulative weight of the documents suggests that the grantee parties were proactive and responsible in their engagement with the native title party.

[118]  Indeed, as previously highlighted, the grantee parties through Clayton Utz wrote to Mr Owens on 9 September 2011 outlining a final revised offer.  The letter outlined a proposal for a further one day meeting, where the grantee parties would pay for the costs of the meeting and the Birri representatives would be paid $650 per day. The meeting was proposed for prior to 15 October 2011, and the grantee parties sought a formal response to their final offer, and, if relevant, a counter proposal.

[119]  I will deal with some of the language used in the letter of 9 September 2011 later, but for present purposes, the key matter to note is that the grantee parties, far from seeking to avoid negotiations with the native title party, actually proposed a final meeting to ascertain if a negotiated outcome was possible and invited a counter proposal.

[200] When evidence is placed before the Tribunal that a grantee party (or parties) is putting forward offers which are regarded by a government party as being the lowest for several years, and lower than much smaller projects, this necessarily and properly raises the issue of whether that party (or parties) is acting reasonably. The Act imposes an obligation to negotiate in good faith. One of the indicia of negotiating in good faith is acting reasonably. A reasonable grantee party seeking to negotiate in good faith would put to the native title party a reasonable offer. The reasonableness of the offer would depend on a number of factors, including the financial and logistic capacity of the grantee party, the potential size and revenue flow from the proposed mine and the views and aspirations of the native title party.

[201]  The Tribunal would only consider the fairness of a compensation package in two circumstances. First, if the offer of the grantee party is so manifestly and obviously unfair that any reasonable person would regard it as a “sham” or “unrealistic” offer. Second, if independent material is produced to the Tribunal which indicates that an offer is potentially unfair or unrealistic, such that the party put that proposal forward is not negotiating in good faith.

[202]  The email of Mr. Saunders has put the Tribunal on notice that the initial offers of the grantee parties were, arguably, not consistent with current marketplace negotiations.  This is material to the question of whether the grantee parties have acted fairly and were negotiating in good faith. It is not irrelevant, as contended by the grantee parties.

[203]  Nonetheless, there are two matters that need to be noted. First, as the grantee parties highlight, the offer Mr. Saunders referred to, was subsequently expanded by further proposals of the grantee parties. Second, although the offer Mr. Saunders commented on was less than other recent offers for comparable developments, he does not suggest that it was unrealistically low or was in the nature of a “sham” offer.

[204]  In this matter, the grantee parties have consistently indicated that they were prepared to further negotiate with the native title party. This preparedness has manifested itself in the grantee parties expanding on the original offer. In these circumstances, even though the original offer was not, ostensibly, what would have been expected from an entity such as QCoal, it was not a “sham” offer and it could not be said that the grantee parties were acted unfairly in putting it forward as a starting point of negotiations.

Grantee parties pretended to negotiate and lied

[205]  The native title party contends (para 9.2(xviii)) that the grantee parties:

(a)   lied about the existence and use of the formula;

(b)   pretended to negotiate when it had no intention of doing so; and

(c)   lied in the meeting of 23 August 2011 about the existence and use of the formula and its knowledge of other agreements.

[206]  These are serious allegations, but they are not substantiated in the material before the Tribunal. For example, the native title party contends (para 7.72) that the meeting notes of 23 August 2011 are inaccurate in that, inter alia, they fail to record that on at least three occasions Ms. Escartin denied that QCoal had used its previously disclosed formula to develop any part of its offers. In response, the grantee parties contend (para. 4.48) that the meeting notes are an accurate summary of what occurred at the meeting of 23 August 2011 and deny Mr. Owens’ version of events.  It is open in such circumstances for the Tribunal to make inferences based on the overall tenor of the negotiations and the approach that the parties took, based on the copious material before the Tribunal. The material before the Tribunal suggests that Ms. Escartin, in the lead up to the 22 – 23 August 2011 meeting, acted in an honest, open and professional manner.  The contention that she was evasive, aggressive and dishonest during the 22 – 23 August 2011 meeting is, therefore, inconsistent with the manner in which she approached all of the negotiations up to that point of time.   Consequently:

(a) the Tribunal is not satisfied that the grantee parties lied to the native title party about the existence and use of the formula;

(b)   the material does not suggest that the grantee parties were only pretending to negotiate, and, in effect, were engaging in sham negotiations;

(c)   the meeting notes of 23 August 2011 are a matter of contention, and I have formed a less than satisfactory view about some aspects of those notes. However, there is no credible material before me to find that the grantee parties’ negotiators lied at that meeting and, in fact, the material suggests that in a very difficult and emotional meeting, attempted to engage in a constructive and professional manner.

Status of the Negotiations

[207]  The native title party contends that prior to the meeting of 22 – 23 August 2011 there was only “a continuation of the ‘scoping type discussions’ that had taken place since October 2009” (Reply para 2.10). “Scoping type discussions” are described by the native title party as meetings where both parties seek to understand the needs and aspirations of each other.

[208]  The native title party contends (Reply para 2.10) that the first time that the native title party had an opportunity to discuss the grantee parties’ offer was on 23 August 2011.

[209]  The native title party further contends (Reply 2.44) that, at that meeting, Ms. Escartin did not seek to negotiate, was dogmatic and positional and merely put forward a predetermined position.

[210]  In his affidavit, Mr. Owens sets out at some length (para 27) the alleged errors and omissions in the minutes of the 23 August 2011 meeting as prepared by Ms. Escartin.

[211]  In short, the native title party contends that the only time it had an opportunity to engage with the grantee parties substantively about the matters central to the right to negotiate, was at the meeting of 22 - 23 August 2011. That meeting was aborted when the representatives of the grantee parties left the meeting, and following receipt of the letter of 9 September 2011 no further meetings were held.  In its Reply the native title party contended (2.10):

“The Native Title Party found that correspondence to be highly offensive and the Native Title Party were not prepared to meet under the conditions as proposed by the Grantee Party.

As a direct result, there were no further meetings prior to the Grantee Party seeking a FADA.”

[212]  A number of points need to be made about these contentions. The first is that the Full Federal Court in Cox held ([23]/146) that there is no “requirement for negotiations to have reached a certain stage.  The Act makes no reference to the parties reaching any particular stage in their negotiations.” In this instance, the fact that the negotiations were not, in a substantive sense, far advanced is not determinative of the question of whether there were good faith negotiations.

[213]  The second point is that the grantee parties did fund the native title party and their legal representative to attend meetings. In fact the legal representative was funded for a day’s preparation work before each meeting and a day’s post-meeting work. In these circumstances, it is difficult to comprehend the complaint of the native title party that discussions were not far advanced. The obligation to negotiate in good faith is not imposed on one party alone. The obligation to negotiate in good faith is imposed on all negotiation parties. The good faith indicia outlined previously apply to all parties.  If the discussions had not advanced very far, despite the number of meetings convened, one question which arises is what action, if any, the native title party took to advance the discussions.

[214]  The third point is that the grantee parties prepared draft agendas for each meeting. From the material before the Tribunal those agendas were not the subject of much, if any, input from the native title party.  For example, Attachment 24 to the affidavit of Ms. Escartin is an email she sent to Mr. Owens on 13 July 2011 for the 15 July meeting attaching a draft agenda. Her email reads: “In anticipation of the meeting on Friday, please find attached draft Agenda for your consideration.”  The Tribunal has not been provided with any material that would indicate that the native title party made any request to amend the draft agenda.  A reading of that draft agenda indicates that the bulk of discussions on 15 July 2011 were focused on the CHMPs, but item 8 was “Drake Project RTN”. Similarly Attachment 28 is an email of 19 August 2011 from Ms. Escartin to Mr. Owens outlining the draft agenda for the 22 – 23 August 2011 meeting in which she says: “I note that the agenda is in draft only and can be changed should parties wish to raise and discuss any other matters.” Again, it would appear, there were no suggested changes by the native title party. If the native title party was concerned that too much time was being expended on the development of CHMP’s and not enough on Right to Negotiate issues, there were ample opportunities provided to change or expand the focus of the discussions.

[215] The fourth point is that, commencing on 1 April 2011 and finalising on 9 September 2011, the grantee parties forwarded to the native title party various settlement offers. The first offer was the subject of discussions at the meeting on 7 April 2011. The meeting notes (Annexure 16 to Ms. Escartin’s affidavit) disclose that on the finalisation of the CHMP discussions at 10.30am, an extensive discussion on right to negotiate issues ensued, with DEEDI representatives present. That discussion did not conclude until 12.15pm. In short, there were opportunities for the native title party to negotiate with the grantee parties about issues central to the granting of the proposed tenements. The Act provides the statutory platform for parties to negotiate; it does not require how they do so, provided that they are acting in good faith.

[216]  The fifth point is that the grantee parties not only circulated draft settlement offers, but also encouraged the native title party to put forward matters so that the grantee parties could consider them. Instructive is a series of emails commencing with one from Ms. Escartin to Mr. Owens of 21 April 2011 (Annexure 18 to Ms. Escartin’s affidavit) in which she said, inter alia: “We also request you provide a list of the Birri People aspirations for consideration.” Ms. Escartin send a further email (Annexure 17) on 28 April 2011 to Mr. Owens in which she made the following request: “Would you also please advise when our clients may have availability for a further 2 day meeting on the Drake CHMP and RTN. We also look forward to receiving the additional information requested regarding resourcing and Birri aspirations at your earliest convenience.”  Having not received a list of aspirations, as requested, Ms. Escartin emailed (Annexure 19) Mr. Owens on 10 May 2011 again requesting the Birri People’s aspirations. The material before the Tribunal suggests that the grantee parties were diligent in attempting to progress both the cultural heritage and native title issues with the native title party. The above email exchange indicates that, far from avoiding good faith negotiations, the grantee parties were keen to advance them.

[217]  The sixth point is that the failure of the 22 - 23 August 2011 meeting was in part due to the actions of the native title party. As previously indicated, the native title party entered those discussions with a misunderstanding about the period of time that parties are required to negotiate in good faith.  Mr. Frank Fisher deposed (para 49) that at the end of the 22 August 2011 meeting when the grantee parties outlined a revised offer:

“I was so angry that I just stayed silent. In fact we were all like that. I just wanted to get out of there as I felt humiliated that I had wasted all of that time meeting with them and had allowed myself to think that an agreement was possible. I knew they were screwing us and it made me angry when they tried to make out what a great deal this was.”

[218]  Mr Owens deposed how the meeting of 22 August 2011 commenced (para 15):

“At the commencement of the meeting on 22 August 2011, the Native Title Party were so angry they could  not speak to the representatives of the Grantee Party and turned  their backs on them, which is the manner in which [the] native title party culturally show their contempt for people.”

[219]  It is clear that the representatives of the native title party entered the meeting of 22 – 23 August 2011 with a negative attitude towards the grantee parties, and this negativity and disappointment appears to have coloured the discussions. Again the material before the Tribunal suggests that Mr. Owens played a constructive role on those days, and intervened on a number of occasions to moderate the language and actions of his clients. Nonetheless, the clear impression from reading the material is that the meeting of 22 - 23 August 2011 ultimately aborted in part due to the aggressive tone of the proceedings, much of which emanated from the native title party.

[220]  In summary, the material discloses that the right to negotiations were not embryonic but had advanced some distance. If those negotiations were not as far advanced as the native title party had hoped, then this situation was not due to any sloth on behalf of the grantee parties to negotiate about native title issues. The grantee parties approached the negotiations in a proactive manner. There is no material before the Tribunal that would suggest that the grantee parties avoided discussing issues or engaged in any activity designed to stall the negotiations. In fact I have reached the opposite conclusion.  It was the grantee parties who initiated discussions, tabled proposals and sought information from the native title party.

[221]  As outlined previously, the Tribunal is not required to evaluate whether a negotiation party has negotiated in good faith by reference to the “stage” that the negotiations have reached or the reasonableness of the settlement offers made.  The Tribunal is required to evaluate good faith by reference to the quality of a party’s conduct. It is direct to evaluating actions or omissions and a party’s state of mind as manifested by it conduct in the negotiations.  From this perspective, the actions and behaviour of the grantee parties suggested a genuine desire to reach an accord with the native title party, albeit on terms that were commercially advantageous to the grantee parties.

Conclusion

[222] The requirement to negotiate in good faith imposed by s. 31 is aimed at ensuring that there is a fair process in place to encourage open and honest dialogue between the negotiation parties. The Act does not require that the Tribunal evaluate the reasonableness of each proposal or counter-proposal or that negotiation has reached any particular stage. Rather, the Tribunal is required to determine if there has been a genuine attempt by the negotiation parties to reach an agreement to allow the doing of the proposed future act, and that this been assessed by evaluating the action of the parties and not their subjective intentions – Brownley v Western Australia (No 1) (1999) 95 FCR 152 at 163 per Lee J.

[223]  The material before the Tribunal discloses that the grantee and native title parties have a history of difficult negotiations. The previous negotiations have resulted in outcomes that are less than satisfactory from the perspective of the native title party. Those previous negotiations coloured, to some extent, the negotiations the subject of this inquiry.  The negotiations for the Drake and Byerwen Projects were difficult and volatile.  The initial compensation offer of the grantee parties was, based on the material from the government party, less than would have been expected. This, no doubt, only deepened the suspicions and hardened the attitude of the native title party. Nonetheless, despite this background and the initial compensation offer, the grantee parties did positively engage with the native title party. The grantee parties made a succession of offers, organised the meetings and behaved, overall, in a professional, courteous and engaging manner. With the exception of the events of the meeting of 23 August 2011 and the subsequent letter of 9 September 2011, the actions and approach of the grantee parties were, from a right to negotiate perspective, exemplary.

[224]  The native title party raised its disappointment that the grantee parties refused to fund valuation, financial and accounting advice for the native title party. However, as the native title party notes in its Contentions (at para 7.76(j) Allegation 4): “The native title party does not assert that the Grantee Party has an obligation at law to provide such additional valuation, financial or accounting expertise to the Native Title Party.” The approach of the grantee parties was in this and other respects, commercial and objective.  The grantee parties were not required to negotiate in an altruistic manner, and it is clear that in these negotiations they approached the native title party with the aim of negotiating a commercial settlement.  The complaints of the native title party, based on its lengthy and successful history of negotiating with other mining companies, centre around its disappointment that the platform provided by the right to negotiate process was not used to develop a broader settlement.

[225]  In this matter I make the following findings:

(a)   the grantee parties attended, organised, provided catering and funded the native title party’s representatives’ attendance at meetings;

(b)     the grantee parties responded promptly and positively to requests from the native title party to increase attendance fees for representatives of the native title party;

(c)   the grantee parties acted promptly in initiating communications with the native title party and its legal representative;

(d)     the grantee parties responded to correspondence from the native title party, and, in particular, responded to the email of 5 July 2011;

(e)   the grantee parties provided a settlement offer for the consideration of the native title party in correspondence dated 1 April 2011 and followed up with a series of counter-offers culminating in a final offer set out in correspondence dated 9 September 2011;

(f)   the initial settlement offer by the grantee parties was less than would have been expected based on comparable mining projects in Queensland, but was not so unreasonable that it constituted a “sham” offer;

(g)     the grantee parties responded promptly to communications received from the native title party;

(h)     the grantee parties were represented at the negotiation meetings by persons who had the requisite authority to negotiate;

(i)   the grantee parties did not refuse to agree on trivial matters;

(j)   the grantee parties did not act dishonestly;

(k)     the grantee parties did not seek to mislead or deceive the native title party;

(l)   the grantee parties did not adopt a rigid negotiating position;

(m)   the grantee parties did not engage in “sham” or “dishonest” negotiations with no intention of reaching an accord with the native title party;

(n)     the grantee parties did not refuse to negotiate on any trivial or inconsequential issue;

(o)     the grantee parties did not engage in obstructive or unreasonable behaviour;

(p)     Mr. Owens did not engage in aggressive negotiating behaviour at the meeting of 23 August 2011;

(q)     the criticisms of Mr. Owens behaviour contained in the letter of 9 September 2011 were not supported by the account of the 23 August 2011 meeting in the affidavit of Ms. Lucas of the government party

(r)   the grantee parties correspondence of 9 September 2011 to Mr. Owens  had the effect of stalling negotiations, however Mr. Owens did not formally respond to that correspondence or attempt to further engage with the grantee parties;

(s)   the correspondence of 9 September 2011 constituted a lapse in good faith negotiations, but did not colour the overall professional and positive negotiations that the grantee parties engaged in;

(t)   the grantee parties did not attempt to postpone or delay meetings or other negotiations, indeed it was the prime mover in ensuring that the meetings took place as promptly as they did;

(u)     the grantee parties did not precipitately seek arbitration;

(v)     overall the grantee parties’ offers, negotiating position and behaviour were reasonable and professional.

Determination

[208] The first and second grantee party have fulfilled their obligation to negotiate in good faith as required by s. 31(1)(b) of the Native Title Act 1993 (Cth) and the Tribunal has power to conduct an inquiry and make a determination pursuant to s.38.

John Sosso

Deputy President