Gulliver Productions Pty Ltd v Western Desert Lands Aboriginal Corporation

[2005] NNTTA 88

Reported at (2005) 196 FLR 52

NATIONAL NATIVE TITLE TRIBUNAL

Gulliver Productions Pty Ltd/ Western Desert Lands Aboriginal Corporation (Jamukurnu-Yapalikunu)/Darcy Hunter & Ors on behalf of Nyangumarta People/Karajarri Traditional Lands Association (Aboriginal Corporation/)Western Australia, [2005] NNTTA 88 (30 November 2005)

Application No:         WF05/1

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

- and -

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

Gulliver Productions Pty Ltd, Maneroo Oil Company Limited, Indigo Oil Pty Ltd, Kjirt Exploration Services Pty Ltd (grantee party/Applicant)

- and -

Western Desert Lands Aboriginal Corporation (Jamukurnu-Yapalikunu) (WC96/78) (Martu native title party)

and

Darcy Hunter & Ors on behalf of Nyangumarta People (WC98/65) (Nyangumarta native title party)

and

Karajarri Traditional Lands Association (Aboriginal Corporation) (WC00/2) (Karajarri native title party)

- and -

The State of Western Australia (Government party)

DECISION ON WHETHER THE TRIBUNAL HAS JURISDICTION TO CONDUCT AN INQUIRY

Tribunal:                   Hon C J Sumner, Deputy President

Place:    Perth
Date:     30 November 2005

Catchwords:              Native title – future act – application for a determination in relation to petroleum exploration permit – jurisdiction – whether Government and grantee parties have negotiated in good faith – whether obligation to negotiate in good faith different where the native title party is a prescribed body corporate (PBC) – whether giving of s 29 notice obliges Government party to fund good faith negotiations – no obligation on Government and grantee parties to fund the native title party’s participation – Commonwealth Government’s policy on funding PBCs – no requirement to make reasonable substantive offers – no obligation on Government party to negotiate about compensation – failure to compromise on one issue does not mean a lack of good faith negotiations – conduct to be judged from the negotiations overall – Government and grantee parties have negotiated in good faith.

Legislation:Native Title Act 1993 (Cth) ss 24MD, 26(1)(a), 29, 31(1)(b), 35, 36(2), 38, 39, 51(3), 203BB(1)(b), 203C, 240, 253

Petroleum Act 1967 (WA) ss 5, 17, 24A

Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth), Regulation 6, 8, 9

Cases:Brownley v Western Australia [1999] FCA 1139; (1999) 95 FCR 152

Mt Gingee Munjie v Victoria and Others [2003] NNTTA 125; (2003) 182 FLR 375

Placer (Granny Smith) Pty Ltd & Anor v Western Australia & Others [1999] NNTTA 361; (1999) 163 FLR 87

Risk v Williamson [1998] 640 FCA; (1998) 87 FCR 202

Rita Dempster & Ors (Southern Noongar)/Bayside Abalone Farm Pty Ltd & Anor/Western Australia, NNTT WF99/1, [1999] NNTA 235 (27 August 1999), Hon E M Franklyn QC

Strickland v Western Australia [1998] 868 FCA; (1998) 85 FCR 303

Walley v Western Australia [1996] FCA 490; (1996) 67 FCR 366

Walley v Western Australia [1999] FCA 3; (1999) 87 FCR 565

Western Australia v Thomas [1996] NNTTA 30; (1996) 133 FLR 124

Western Australia v Taylor [1996] NNTTA 34; (1996) 134 FLR 211

Western Australia/Marjorie May Strickland & Others, NNTT WF97/4, [1997] NNTTA 31 (10 December 1997) Hon C J Sumner

Western Australia v Dimer & Others [2000] NNTTA 290; (2000) 163 FLR 426

Western Australia/West Australian Petroleum Pty Ltd and Shell Development (Australia) Pty Ltd/ Leslie Hayes, Glenys Hayes, Judy Hayes, John Ard, Douglas Fazeldean, Valerie Ashburton, Laura Hicks and Albert Hayes on behalf of the Thalanyji People, NNTT WF00/7, [2001] NNTTA 18 (9 March 2001), Hon C J Sumner

Western Australia v Daniel [2002] NNTTA 230; (2002) 172 FLR 168

WMC Resources v Evans [1999] NNTTA 372; (1999) 163 FLR 333 at 339-341

Wongatha People/Gregory Wayne Down/Western Australia, NNTT WF04/9, [2004] NNTTA 106 (22 November 2004), Hon E M Franklyn QC

Hearing dates:  1 November 2005

Counsel for the Martu
native title party:  Mr Greg McIntyre, SC

Solicitors for the Martu              Mr Malcolm O’Dell, Ngaanyatjarra Land Council
native title party  Aboriginal Corporation

Ms Jasmine Campbell, Ngaanyatjarra Land Council           Aboriginal Corporation

Counsel for the Karajarri
native title party:  Ms Krysti Guest, Kimberley Land Council

Counsel for the Nyangumarta
native title party:  Ms Jane Carter, Pilbara Native Title Service

Representative of the
grantee party:  Mr Craig Marshall, Empire Oil and Gas NL

Counsel for the   Mr Barry King, State Solicitor’s Office
Government party:  Ms Emma Ganderton, State Solicitor’s Office

Representative of the

Government party:  Ms Maryie Platt, Department of Industry and Resources

REASONS FOR DECISION ON WHETHER THE TRIBUNAL HAS JURISDICTION TO CONDUCT AN INQUIRY

Background

1. On 6 February 2002, the State of Western Australia (‘the Government party’) gave notice under s 29 of the Native Title Act 1993 (Cth) (‘the Act’/‘NTA’) of a future act, namely the grant of petroleum exploration permit EP14/00-1 (‘the proposed permit’) under the Petroleum Act 1967 (WA) to Gulliver Productions Pty Ltd, Maneroo Oil Company Limited, Indigo Oil Pty Ltd and Kjirt Exploration Services Pty Ltd (‘the grantee party’). The proposed permit comprises an area of approximately 25,720 square kilometres within the Great Sandy Desert in the Shires of East Pilbara and Broome.

2. The native title parties in respect of these proceedings, and the extent to which they overlap the area of the proposed permit, are as follows.

• Western Desert Lands Aboriginal Corporation (Jamukurnu-Yapalikunu) (‘the WDLAC’).  Native Title Claim No. WC96/78 was registered from 26 June 1996 as the native title claim of the Martu People, who were determined by the Federal Court to hold native title on 27 September 2002.  The WDLAC is the registered native title body corporate, being the prescribed body corporate (‘PBC’) on the National Native Title Register, determined by the Court on 17 July 2003 to hold the native title rights and interests in trust for the common law holders.  The area of overlap with the proposed permit area is 33.61%.

• Darcy Hunter, Misha Peters, Wooda Davis, Ada Stewart, Winnie Coppin and Alma Gray on behalf of Nyangumarta People (Native Title Claim No. WC98/65 – registered from 29 September 1998) – 59.79% overlap.

• Karajarri Traditional Lands Association (Aboriginal Corporation) – a registered native title body corporate (Native Title Claim No. WC00/2 – registered from 13 June 1996 as the native title claim of the Karajarri People, and determined by the Federal Court to hold native title with a PBC on 12 February 2002 (‘Area A’) and 8 September 2004 (‘Area B’)) – 4.72% overlap.

1. On 3 May 2005, being a date more than six months after the s 29 notice was given, Gulliver Productions Pty Ltd on behalf of the grantee party made an application pursuant to s 35 of the Act for a future act determination under s 38. The application was made on the basis that the negotiation parties had executed a State Deed (i.e. an agreement of the kind mentioned in para 31(1)(b) of the Act signed by the Government party, grantee party and each of the native title parties)) with the Nyangumarta native title party, and had reached agreement with the Karajarri native title party in relation to the portion of the proposed permit which overlaps Area B (1.43%), but had not been able to reach agreement with the Karajarri native title party in relation to the portion of the proposed permit overlapping Area A (3.28%), nor with the Martu native title party, within 32 months of the Government party commencing negotiations with respect to the doing of the act.

Good faith negotiations – jurisdiction

1. The Tribunal must be satisfied as a pre-condition to considering the s 35 application and making a determination that the Government and parties have negotiated in good faith with the native title parties as required by s 31(1)(b) of the Act (s 36(2) NTA; Walley v Western Australia [1996] FCA 490; (1996) 67 FCR 366). The Martu native title party contended that the Government and grantee parties had not fulfilled its obligation to negotiate in good faith. No contention was made by the other native title parties on the issue and they have not participated in this aspect of the inquiry. In the balance of these reasons a reference to the native title party means the Martu native title party.

2. On 24 May 2005 I convened a preliminary conference during which the representative for the native title party, Mr Malcolm O’Dell, foreshadowed that his clients may wish to contend that the Government party and the grantee party did not fulfil their obligation to negotiate in good faith particularly based on the fact that the native title party were now holders of native title and that there was an obligation on the other parties to fund the determined Prescribed Body Corporate (i.e. the WDLAC) in future act negotiations.  Accordingly, I adjourned the preliminary conference to 4 August 2005 to enable Mr O’Dell to take instructions at a meeting of the WDLAC to be held in late July 2005.

3. At the adjourned preliminary conference of 4 August 2005, during which Mr O’Dell confirmed his client’s instructions to mount a jurisdictional challenge, I directed that parties provide contentions and evidence in relation to the good faith issue.

1. Following the filing of contentions and evidence, the native title party requested an oral hearing limited to making submissions on the evidence already provided.  This was said to be desirable because of the novel issues involved and the lack of direct legal authority on the process of negotiation in good faith with a registered native title body corporate (as opposed to registered claimants).  Although opposed by the other parties, I acceded to the native title party’s request.  Further contentions and evidence were lodged as a consequence of issues raised at the hearing.

Good faith negotiations – legal principles

1. Section 31 of the Act says:

   ‘31 Normal negotiation procedure

   (1)Unless the notice includes a statement that the Government party considers the act attracts the expedited procedure:

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

   (b)the negotiation parties must negotiate in good faith with the view to obtaining the agreement of each of the native title parties to:

   (i)     the doing of the act; or

   (ii)    the doing of the act subject to conditions to be complied with by any of the parties.

   Note:The native title parties are set out in paragraphs 29(2)(a) and (b) and section 30.  If they include a registered native title claimant, the agreement will bind all of the persons in the native title claim group concerned: see subsection 41(2).

   Negotiation in good faith

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

   Arbitral body to assist in negotiations

   (3)If any of the negotiation parties requests the arbitral body to do so, the arbitral body must mediate among the parties to assist in obtaining their agreement.’

2. Section 36(2) says:

   ‘Determination not to be made where failure to negotiate in good faith

   36(2)If any negotiation party satisfies the arbitral body that any other negotiation party (other than a native title party) did not negotiate in good faith as mentioned in paragraph 31(1)(b), the arbitral body must not make the determination on the application.

   Note: It would be possible for a further application to be made under section 35.’

3. The Tribunal has said that the practical effect of s 36(2) is to place an ‘evidential burden’ on the party alleging lack of good faith negotiations which would normally require it to produce evidence to support its allegations. The Tribunal is not required to adopt strict rules on burden of proof but any party alleging a lack of good faith negotiations must provide contentions and documents which specify in detail the matters it relies on. (Rita Dempster & Ors (Southern Noongar)/Bayside Abalone Farm Pty Ltd & Anor/Western Australia, NNTT WF99/1, [1999] NNTTA 235 (27 August 1999) Hon E M Franklyn QC (at pps 4, 21); Placer (Granny Smith) Pty Ltd & Anor v Western Australia & Others [1999] NNTTA 361; (1999) 163 FLR 87 (21 December 1999) (‘Placer’) (at [21]-[28]).)

4. In Placer The Tribunal summarised the obligation to negotiate in good faith as follows (at [30]):

   ‘On the assumption that it is normally the native title party that will assert that the other negotiation parties have not negotiated in good faith the position, in summary, is that the Tribunal must be satisfied that the Government and grantee parties have negotiated in good faith with the native title parties with a view to obtaining the agreement of the native title parties to the granting of the mining leases with or without conditions.  Negotiation involves ‘communicating, having discussions or conferring with a view to reaching an agreement’ (Western Australia v Taylor (1996) 134 FLR 211 at 219 [‘Njamal’].  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 [Njamal] 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 it 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 other parties have fulfilled their obligation and may impose a lesser standard on them.’

5. The following are the indicia set out in Western Australia v Taylor [1996] NNTTA 34; (1996) 134 FLR 211 (‘Njamal’) which provide a guide only and not a comprehensive check list (at 224-225):

1. unreasonable delay in initiating communications in the first instance;

2. failure to make proposals in the first place;

3. the unexplained failure to communicate with the other parties within a reasonable time;

4. failure to contact one or more of the other parties;

5. failure to follow up a lack of response from the other parties;

6. failure to attempt to organise a meeting between the native title and grantee parties;

7. failure to take reasonable steps to facilitate and engage in discussions between the parties;

8. failing to respond to reasonable requests for relevant information within a reasonable time;

9. stalling negotiations by unexplained delays in responding to correspondence or telephone calls;

10. unnecessary postponement of meetings;

11. sending negotiators without authority to do more than argue or listen;

12. refusing to agree on trivial matters eg a refusal to incorporate statutory provisions into an agreement;

13. shifting position just as agreement seems in sight;

14. adopting a rigid non-negotiable position;

15. failure to make counter proposals;

16. unilateral conduct which harms the negotiating process eg issuing inappropriate press releases;

17. refusal to sign a written agreement in respect of the negotiation process or otherwise; and

18. failure to do what a reasonable person would do in the circumstances.

1. In Western Australia v Dimer & Others [2000] NNTTA 290; (2000) 163 FLR 426 (Member Patricia Lane) the Tribunal endorsed the statement from Placer and the Njamal indicia and added (at 444-445, [101]-[104]):

   ‘If we look at those criteria in the light of the kinds of activity that might be undertaken in negotiation, they fall into a series of related, though not necessarily coextensive obligations. Those obligations appear to me to involve the following:

   · an obligation to communicate with other parties within a reasonable time and a reciprocal obligation to respond to communication received within a reasonable time, (Njamal (i),(iii),(iv),(v),(vii),(ix));

   · an obligation to make proposals to other parties with a view to achieving agreement and a reciprocal obligation on other parties to respond either by making counter-proposals or by way of comment or suggestion about the original proposal, (Njamal (ii)(xv));

   · an expectation that a party will make inquiry of other parties if there is insufficient information available to make an informed choice about how to proceed in negotiations and an obligation on those other parties to provide relevant information within a reasonable time, (Njamal (viii)); and

   · an obligation to seek from other parties appropriate commitments to the process of negotiation or in relation to the subject matter of negotiation and a reciprocal obligation to make either appropriate commitments to process, or appropriate concessions as the case may be, (Njamal (vi),(x),(xi),(xii),(xiii),(xiv),(xvii)).

   The final indicium in Njamal seems to express the overarching obligation imposed by s.31(1)(b) to act honestly and reasonably with a view to reaching an agreement on whether or not the act should go ahead.

   If the parties do not negotiate because they fail to communicate at all, it is impossible to conclude that they have negotiated in good faith. The requirement of “good faith” sets the standard for behaviour of the parties in carrying out the activities involved in negotiation. It may be that parties participate reluctantly in the process. However, the statute requires their participation, and the Tribunal must have regard to their conduct viewed as a whole.’

2. Member Lane also said:

• each party must act both honestly and reasonably with a view to reaching agreement about whether the act can proceed judged by what the parties say and do in the circumstances (at 441 [84], 445 [103]);

• all parties are required to adhere to the same standard of negotiating behaviour but what they do to satisfy the obligation must be judged by reference to the interests they seek to advance in negotiations, the behaviour of the other negotiation parties and the circumstances in which the negotiations take place (at 442 [86]); and

• the conduct of a party must be examined in the light of the actual circumstances in each case and it is unrealistic to apply a standard based on an artificial or hypothetical negotiation model (at 446 [107]).

1. It is accepted that negotiation in good faith does not mean the Government or grantee parties must capitulate or accept the other side’s position or that agreement must be reached (Njamal at 222-223; Strickland v Western Australia [1998] 868 FCA; (1998) 85 FCR 303 at 312; Western Australia v Dimer  at 441).

2. Further relevant factors are enunciated in Western Australia/Marjorie May Strickland and Others, NNTT WF97/4, [1997] NNTTA 31 (10 December 1997) Hon C J Sumner (at 7-21) which were subsequently considered and modified by the Federal Court in respect to whether there is an obligation on the Government party and grantee parties to make reasonable substantive offers or concessions and the use of the Preamble to hold that the Government party must make every reasonable effort to negotiate and reach agreement.

1. In Strickland (at 318-321) the Federal Court upheld a contention by the Government party that the Tribunal erred in law in finding (Strickland NNTT WF97/4 at 19-21) that the s 31(1)(b) obligation included an obligation on the Government party to make reasonable substantive offers (NOTE: the obligation to negotiate in good faith was only imposed on the Government party at that time, i.e. prior to the 1998 amendments to the Act). The Court said (RD Nicholson J at 321):

‘The reasoning of the Tribunal that negotiations in good faith require “reasonable substantive offers” requires, as submitted for the Government party, a further and unnecessary level of complexity and application to the interpretation of the words of s 31(1)(b). It is not necessary to have resort to any standard outside the words in the section itself. The question is whether the communications and other events as they have fallen out satisfy the legal standard of negotiating in good faith as required by s 31(1)(b).’

In Walley v Western Australia [1999] FCA 3; (1999) 87 FCR 565, Carr J at 577 [15] agreed with this reasoning with one slight reservation:

‘The slight reservation is that I think that if a Tribunal, as part of the overall assessment of whether the Government party has negotiated in good faith, finds it useful to consider whether any particular offer (or all offers for that matter) appears (or appear) to be reasonable, then it is open to the Tribunal to engage in that exercise.  But that is not to say that it will always be obliged to do so.  Much will depend on the circumstances of the particular matter.  The Tribunal will be engaged on a factual assessment of the Government party’s conduct and, in some cases, the reasonableness or unreasonableness of its proposals or offers may be relevant.  In other cases there may be a difference between making reasonable offers and being reasonable in negotiating in good faith.’

In Brownley v Western Australia [1999] FCA 1139; (1999) 95 FCR 152 (Lee J at [35]-[36]) agreed with the approach of Carr J in Walley when he said (at 165 [35]):

‘In the context of conduct as a whole, failure to advance reasonable proposals may be shown to be part of a pattern from which an inference may be drawn that a government has not engaged in a genuine attempt to negotiate.  Later in the reasons, dealing specifically with “substantive offers” made by the State, the Tribunal, (applying an understanding of the law it formed from reading the reasons of this Court in Strickland), stated that it was “not permitted to consider the reasonableness of offers unless they were so unreasonable or contemptuous of the process that [the State was] not acting honestly or genuinely with a view to achieving agreement”.  As stated by Carr J in Walley at 576-577, it is not correct to say that the Tribunal is “not permitted” to consider the reasonableness of offers made by government.  If consideration of all conduct relevant to determination of the question whether the State negotiated in good faith was restricted by such a misapprehension, an error of law may be shown to have occurred in the making of the decision sought to be reviewed.’

1. The native title party submitted (Native title party submissions dated 1 September 2005 – para 2) that the obligation to negotiate in good faith involves both reasonable procedural steps and making reasonable substantive offers.  For the reasons stated above this is not a correct statement of the current law as determined by the Federal Court.  The Tribunal now applies the law as enunciated in Walley (1999) and Brownley.  While both procedural and substantive aspects of the negotiations can be considered in deciding the good faith issue, there is no requirement that the Tribunal be satisfied that the Government or grantee party has made reasonable substantive offers or concessions to reach agreement.  However, the reasonableness or otherwise of such offers or concessions may be taken into account in an overall assessment of a party’s negotiating behaviour.

2. The native title party also submitted (Native title party submissions dated 1 September 2005 – para 2) that what is decisive in the obligation to negotiate in good faith is whether a party makes every reasonable effort to negotiate and reach agreement.  It cited Njamal (at 225) and other Tribunal cases based on Njamal for this proposition where the Tribunal had relied on the Preamble of the Act to find that the obligation involved the Government party (only at that time) making ‘every reasonable effort’ to negotiate and reach agreement with the native title parties (at 219-225).  In Strickland the Federal Court (at 321) disagreed with the Tribunal’s use of the Preamble in this way:

   ‘I add that the reference in the preamble to the NT Act which reads “[i]n future, acts that affect native title should only able to be validly done if, typically, they can also be done to freehold land and if, whenever appropriate, every reasonable effort has been made to secure the agreement of the native title holders through a special right to negotiate”, is no basis for reading down the express words of s 31(1)(b) itself: Attorney-General v Prince Ernest Augustus of Hanover [1957] AC 436 at 463; Wacando v Commonwealth (1981) 148 CLR 1 at 23 per Mason J.’

This approach was endorsed by Carr J in Walley (1999) (at 578-579 [16]) where he said that the reference in the Preamble to ‘every reasonable effort’ being made ‘to secure the agreement of the native title holders’ should not be ‘construed as requiring the Government party to make every reasonable effort to secure agreement, or indeed, as applying a higher obligation on the Government party than that which is imposed by s 31(1), that is, to negotiate in good faith. “Every reasonable effort” is an apt description of input from all parties involved (and the Tribunal) in the various processes provided for in Subdivision B of Division 3 of Part 2 of the Act’.

1. Of particular relevance to this case is that negotiations in good faith need only occur about matters related to the effect of the act on the registered native title rights and interests of the native title parties (s 31(2) NTA and see discussion below).

Contentions and evidence

1. The Tribunal has had regard to the following contentions and documentary evidence submitted by the parties and oral submissions made at the hearing on 1 November 2005.

2. The native title party has provided the following submissions supporting its contention that the Government and grantee parties did not negotiate in good faith regarding the doing of the act:

• Native title party submissions on section 35/future act determination application inquiry, dated 1 September 2005 and supporting documents:

  -    Affidavit of Sian Eireann Hanrahan, sworn on 31 August 2005, in support of file notes and correspondence dated between 8 July 2002 and 19 November 2004 in relation to communications between the grantee party and Ngaanyatjarra Council.

  -    File notes, emails, facsimiles and letters as above, appended to the affidavit.

  - 2002-2003 General Terms and Conditions for Grants made under Section 203C of the Native Title Act 1993

  -    2003-2004 General Terms and Conditions of Grants to Bodies recognised as Native Title Representative Bodies under the Native Title Act 1993

  -    2004-2005 General Terms and Conditions relating to Native Title Program Funding Agreements

  -    General Terms and Conditions for Funding Agreements Relating to Native Title – May 2005

• The Third Native Title Party’s Reply to the Government Party’s Statement of Contentions regarding Negotiations in Good Faith with the Third Native Title Party, dated 12 October 2005.

• The Third Native Title Party’s Reply to Statement of Defence against accusations made by the Ngaanyatjarra Council (Aboriginal Corporation) Native Title Unit representing the Western Desert Lands Aboriginal Corporation (Jamukurnu-Yapalikunu) WC96/78 on 1 September 2005, dated 12 October 2005.

  -    Affidavit of Jasmine Rajini Campbell, sworn on 12 October 2005, in support of documents appended to the Martu native title party’s replies to Government and grantee party submissions:

  -    Annexure “JRC1”, being a copy of the Western Desert Lands Aboriginal Corporation Rules

  -    Annexure “JRC2”, being a copy of a speech delivered by Attorney-General Philip Ruddock at the Native Title Conference in Adelaide on 4 June 2004

• Affidavit of Malcolm O’Dell pursuant to Directions made 1 November 2005, sworn 9 November 2005 and Annexures MOD1 – MOD13 including the following reports:

  -    MOD1:  Christos Mantziaris and David Martin, Guide to the design of native title corporations, National Native Title Tribunal.

  -    MOD4:  Ebsworth & Ebsworth, Research Project into the issue of Funding of Registered Native Title Bodies Corporate, ATSIC, October 2002.

1. The Government party’s submissions in relation to the good faith issue comprise the following documents:

• Government Party’s Statement of Contentions regarding Negotiation in Good Faith with the Third Native Title Party, and supporting documents, dated 29 September 2005:

  -    Affidavit of Maryie Elizabeth Platt, sworn on 28 September 2005 with Annexures “MEP1” to “MEP42”.

• Government Party’s further Statement of Contentions regarding Negotiation in Good Faith in response to the Third Native Title Party’s Reply of 12 October 2005, dated 14 October 2005.

• Government Party’s Submissions in response to the affidavit of Malcolm O’Dell sworn 9 November 2005.

1. The grantee party has provided a document in affidavit form but which does not appear to have been properly sworn of John Lloyd Craig Marshall, dated 29 September 2005, which comprises:

• Statement of Defence against accusations made by the Ngaanyatjarra Council (Aboriginal Corporation) Native Title Unit representing the Western Desert Lands Aboriginal Corporation (Jamukurnu-Yapalikunu) WC96/78 on 1 September 2005.

• Appended to Mr Marshall’s affidavit are the following documents:

  -    Legal References

  -    Summary of How to Negotiate in Good Faith as provided by the Government of Western Australia’s Department of Minerals and Petroleum Resources

  -    Supporting Evidence, G Folio 1-73

Issues to be decided

1. The contentions of the native title party raise the following issues.

• Have the Government and grantee parties generally negotiated in good faith with the native title party as required by s 31(1)(b) of the Act?

• In particular, are the Government and grantee parties obliged to negotiate about and provide funds to the native title party to enable the native title party to engage properly in the negotiations?

• Does the giving of the s 29 notice by the Government party, which triggers the right to negotiate process, mean that the Government party has an obligation to ensure that funds are available to the native title party to enable it to engage properly in the negotiations?

1. The native title party did not contend the Government party failed to negotiate in good faith because of any subjective lack of honesty or sincerity.  Rather, its case was based on an alleged failure to negotiate in a manner that was reasonable in the circumstances.

Good faith negotiations generally – Government party

1. The native title party contentions on this issue (Native title party’s submissions dated 1 September 2005 – paras 45 and 46) are that there is no evidence that the Government party:

• has engaged in any communication which could be characterised as negotiation; and

• contributed to the mediation conferences, made any other contact with the native title party or otherwise made any procedural, substantive or material contribution towards reaching an agreement.

1. This contention was modified during the course of the proceedings so as not to be seriously pursued at least in respect of negotiations up to the 17 July 2003, the date the WDLAC was determined as the PBC and became a registered native title body corporate.  Nevertheless, these reasons canvass issues relating to the negotiations generally to provide some context for the native title party’s principal contentions and because whether negotiations in good faith have occurred require examination of a party’s overall conduct in relation to the whole of the negotiations.

2. The Government party’s evidence is contained in the affidavit of Maryie Platt the Government party’s lead negotiator.  The negotiations were conducted on behalf of the native title party by legal officers employed by the Ngaanyatjarra Land Council Aboriginal Corporation (‘the Ngaanyatjarra Council’) including at various times Mr Steve Ryan, Ms Sian Hanrahan and Mr Malcolm O’Dell on behalf of the Martu claimants and after determination and registration of the PBC on behalf of the WDLAC.

3. The Government party effectively commenced the negotiations on 27 June 2002 some three weeks after the s 29 closing date of 6 June 2002 by sending a letter to the other parties.

4. In the case of the native title party the letter was sent to the Ngaanyatjarra Council which is the designated native title representative body (‘NTRB’) under the Act for the Martu claim and determination area.  The negotiations occurred while the Martu People were claimants of native title until 27 September 2002, between 27 September 2002 and 17 July 2003 when a determination of native title was made but no PBC determined and after 17 July 2003 when the WDLAC was determined to be the PBC.

5. The Tribunal is aware that the Government party’s letter of 27 June 2002 is consistent with the Government party’s normal practice in matters of this kind and emanates from the suggestions made by the Tribunal in the Njamal matter (at 249). The letter provided the following documentary information:

• a copy of the EP14/00-1 application form;

• a plan showing the area applied for;

• an outline of the proposed work programme, as applied for;

• a copy of the search of the Register of Aboriginal sites;

• an extract of section 39(1) of the NTA;

• a copy of Administration of Petroleum Titles in Western Australia and Offshore Areas (this publication outlines the legislative provisions relating to petroleum exploration and development in Western Australia and the relevant administrative processes involved);

• a topographical plan and description of vegetation in the permit application area.

• a copy of the Government party’s Negotiation Protocol the following parts of which were specifically referred to by Ms Platt as relevant to this matter

  Where meetings are organised (by other parties or where required by [the Government Party]) and parties wish for [the Government Party] to attend we will do so.  It may not be necessary for [the Government Party] to attend all meetings…

  Regular negotiation meetings/discussions continue between the parties as required.  [The Government Party] either attends as required or monitors.

• a guide to what constitutes negotiation in good faith; and

• the contact details for each of the parties.

1. The Government party’s letter of 27 June 2002 also:

• alerted parties to the fact that section 31(1)(b) of the NTA imposes an equal obligation on the Government party, the grantee party and the native title parties to negotiate in good faith;

• advised the parties that they may contact each other directly in order to advance the negotiations (although parties were requested to copy all correspondence to each of the other parties for their information) and that meetings may take place without all the parties being present if issues to be discussed concerned only some of the parties;

• encouraged the parties to actively pursue the negotiations;

• reminded parties that under section 31(1) of the NTA, any party may at any time request the Tribunal to mediate to assist in obtaining the agreement of the parties;

• offered parties the opportunity, at any stage of the negotiations, to make inquiries of the Government party, or to make suggestions as to how the Government party could assist in the negotiations.

• requested the grantee party to provide to the native title parties within 14 days by registered mail the company’s last annual report, advice as to whether Aboriginal heritage surveys within the title area are proposed or completed, and any company policies or information which may be relevant to the native title parties; and

• requested the native title parties to make submissions regarding the likely effect of the act on the respective native title rights and interests by 18 August 2002, with the submissions then forming the basis of the negotiations which would follow between the parties.  In making this request the Tribunal was fulfilling its obligation under s 31(1)(a) of the Act to give all native title parties an opportunity to make submissions to it regarding the act.

1. The letter of 27 June 2002 also provided a copy of four conditions that the Government party was willing to attach to the petroleum exploration permit, which it contends was the first proposal put on the table. These conditions are customarily offered by the Government party in negotiations about the grant of mineral and petroleum titles and deal with native title party rights of access; provision to the native title party of any notice under s 18 of the Aboriginal Heritage Act 1972 (WA) for permission to disturb a site and any proposal for exploration and production; and ensuring any assignee of the petroleum permit is bound by the conditions.

2. It is not necessary specifically to detail all the actions taken by the Government party in the negotiations which continued until December 2004 but I am satisfied that it generally acted reasonably and in accordance with the Njamal indicia.  Examples of action taken by the Government party are that it re-sent its letter of 27 June 2002 to the Ngaanyatjarra Council on request from them; on request provided the grantee party with a copy of the native title party’s submission made in response to the letter; discussed progress of negotiations with the grantee party on occasions; provided information on petroleum exploration in Western Australia to the Ngaanyatjarra Council; had prepared by the Government’s Land Claims Mapping Unit maps to assist in the negotiations – provided to all negotiation parties; on 30 June 2004 requested s 31(3) mediation assistance from the Tribunal; attended all five mediation conferences convened by the Tribunal; to enable the negotiations to continue between the grantee and the native title party encouraged the Karajarri native title party to hold off lodging a s 35 application for determination while there was progress in these negotiations; and arranged the drafting of a State Deed. It is also apparent from Ms Platt’s affidavit and other evidence that negotiations were occurring directly between the grantee and native title parties which the Government party did not attend and was not invited to attend; that there was correspondence between the other parties which was not copied to the Government party; and the Government party was not invited to a community meeting held on 17 November 2004 in Broome which was attended by the grantee party.

3. The negotiations which occurred were consistent with those conducted in relation to the grant of mining and petroleum titles in Western Australia where negotiations are concluded by a s 31 agreement which is signed by all negotiation parties (i.e. a State Deed) and lodged with the Tribunal and an Ancillary Agreement between the grantee and native title parties only which contain much greater detail of the agreements entered into between them relating to, for instance, heritage protection and compensation payments.  In many cases the details of these Ancillary Agreements are not made known to the Government party a practice which was followed in this case.  In Njamal the Tribunal anticipated that the factual context and particularly the nature of the future act would be important in determining whether the obligation to negotiate in good faith had been fulfilled.  The Tribunal said: 

   ‘In deciding on the reasonableness or otherwise of the Government party’s actions, the fact that the obligation is imposed on the Government party while much of the content of the negotiations and any agreement must involve the native title and grantee parties, may need to be taken into account.  Depending on the circumstances, it may be that the Government party has little that it is able to offer in resolution of the dispute.  This factor distinguishes the situation under the Act from the situation in contract or industrial relations law and may be relevant in deciding whether the Government party has negotiated in good faith in a particular situation.’ (at 225)

   …

   Will it be sufficient for the Government party to facilitate negotiations?  It has been possible to decide this case on the basis that the Government party did not actively attempt to facilitate discussions between the parties. It should not be thought that the facilitation of negotiations will necessarily be all that is required to fulfil the Government party obligation under s.31(1)(b) of the Act. In cases such as this where there is a proposal to grant a mining lease to enable further exploration, but not productive mining, such facilitation will be important but may not be sufficient to fulfil the obligation unless the parties make it clear that they do not want the Government party to be involved. In general I think that good faith negotiations also involve active participation in the negotiation process by the Government party. This could involve active promotion of an agreement around the sort of conditions which were imposed by the Tribunal in its determination in Koara [Re Koara People [1996] NNTTA 31; (1996) 132 FLR 73] where the conditions attempted to anticipate productive mining. In the situation of a mining lease which is to be used for exploration there may not be much that the Government party can offer. However, in addition to arranging for discussions and actively participating in them, the Government party could reasonably provide information and documentation relating to the tenements, pointing out any factors that might ultimately be relevant to the criteria in s.39 of the Act. It could, for instance, provide information about sites listed on the Register kept by the Aboriginal Affairs Department.

   There will be other circumstances where the Government party will be involved in discussions relating to an actual mining proposal. It is common knowledge that where there are large mining projects State Governments are often closely involved in negotiations with the mining companies, local government, local communities and environmental groups about a whole range of issues, including tax holidays and what infrastructure the Government will contribute to any project by way of roads, hospitals, schools, housing and the like. The obligation imposed by s.31(1)(b) means that in negotiating with various parties who have an interest in a mining project of this kind the Government party will also have to negotiate in good faith with any native title party where native title rights may be affected. Negotiation in good faith in that context may well mean more than just facilitating and actively participating in discussions. It may require the Government party to make proposals about things that it is prepared to do in order to achieve an agreement.’ (at 248)

1. Experience of negotiation in good faith since Njamal has confirmed this position.  The practice developed in each State/Territory influences the content of the negotiations with the Government party.  For example, in Victoria the Tribunal has had regard to the practice which developed in that State whereby the grantee and native title parties do not involve the Government party in negotiations until after an Ancillary Agreement had been signed (Mt Gingee Munjie v Victoria and Others [2003] NNTTA 125; (2003) 182 FLR 375 para [91]-[93]). At the other end of the scale in Western Australia v Daniel [2002] NNTTA 230; (2002) 172 FLR 168 the Government itself made very substantial offers including monetary compensation where the future act was the compulsory acquisition of native title rights and interests for the purpose of establishing a large industrial estate on the Burrup Peninsula. In the present matter the future act is an exploration permit only and the Government party has played a role in facilitating the negotiations, provided information in a timely manner but only made limited offers (i.e. to impose certain conditions on the grant of the petroleum exploration permit) which are standard in this type of case. Nevertheless it cannot be said to have acted inconsistently with the Njamal indicia.  This is a case where the nature of the future act, namely the grant of a petroleum exploration permit means that the Government party has made only very limited substantive offers towards settlement of the matter.  However, as pointed out above negotiations in good faith do not necessarily involve the making of reasonable substantive offers by Government party.  The Government party has done what it reasonably can to facilitate the negotiations in a procedural sense.  (NOTE:  The same finding was made in similar circumstances relating to the grant of mining leases in Western Australia v Dimer at 442 [86]-[89].)

2. The Government’s position in relation to compensation is also relevant to its negotiating position. It says that s 24A of the Petroleum Act imposes any obligation to pay compensation to native title holders on the grantee party, thus making payment of compensation by the Government party in this type of case outside the scope of the negotiations.

3. Mr McIntyre argued that this provision did not absolve the Government party of an obligation to participate in the negotiations and consider the issue of compensation.  He submitted that under the Act the primary obligation is imposed on a Government party which does the future act that affects native title to provide compensation and it is a matter between the Government and grantee parties if the Government party in turn imposes that obligation on the grantee party.

4. While no detailed argument was before the Tribunal on this issue I am of the view that by operation of the NTA and the Petroleum Act 1967, there is no obligation imposed on the Government party as part of good faith negotiations to negotiate about compensation. The relevant provisions of the Act are Part 2, Division 3, Subdivision M which deals with future acts which pass the freehold test and Part 2, Division 3, Subdivision P which deals with the right to negotiate. Subdivision P (s 26(1)(a)) applies the right to negotiate provisions to some future acts covered by Subdivision M including the grant of mining and petroleum tenements. Section 24MD sets out how future acts that pass the freehold test are to be treated. If the section applies to them, the future acts are valid, provided also the right to negotiate provisions of Subdivision P are complied with where required. In the case of a non-legislative act the freehold test applies if the future act could be done in relation to the land concerned if the native title holders instead held ordinary title to it (s 24MB(1)). The Act gives as an example the grant of a mining lease over land in relation to which there is native title when a mining lease would also be able to be granted over the land if the native title holders instead held ordinary title to it. Relevantly ordinary title includes freehold title (s 253). It is accepted that in Western Australia a petroleum exploration permit can be granted over freehold land under the Petroleum Act 1967 (s 5 - definition of ‘private land’ includes freehold).

5. Subsection 24MD(3) deals with future acts which pass the freehold test but do not involve compulsory acquisition of native title rights and interests which are dealt with by subsections 24MD(2) and 24MD(2A):

‘Non extinguishment and compensation

In the case of any future act to which this Subdivision applies that is not covered by subsection (2) or (2A):

(a)    the non-extinguishment principle applies to the act; and

(b)    if the following conditions are satisfied:

(i)    the similar compensable interest test is satisfied in relation to the act; and

(ii) the law mentioned in section 240 (which defines similar compensable interest test) does not provide for compensation to the native title holders for the act;

the native title holders are entitled to compensation for the act in accordance with Division 5.’

The grant of a petroleum exploration permit is an act which is not covered by ss 24MD(2) or (2A) and the non-extinguishment principle applies.

1. Section 240 of the Act defines the similar compensable interest test as being satisfied in relation to a future act (and past or intermediate period acts) if:

   ‘(a)     the native title concerned relates to an onshore place; and

   (b)the compensation would, apart from this Act, be payable under any law for the act on the assumption that the native title holders instead held ordinary title to any land or waters concerned and to the land adjoining, or surrounding, any waters concerned.’

2. In this case the grant is to be made over an onshore place. With respect to s 240(b) the question is whether compensation would be payable under the Petroleum Act to holders of ordinary (i.e. freehold) title over the land.  Compensation is payable under the Petroleum Act for the right to occupy private land (ss 17(1) & (2)) and if within a prescribed time (3 months from the date the licensee gives notice to the owner that he intends to commence operations on the private land (Petroleum Regulation Reg 2(a))) the parties are unable to agree on compensation then either party may apply to the Local Court for a determination of compensation (s 17(4)).  Compensation is paid to an owner or occupier for being deprived of the possession of the surface or any part of the surface of the private land, and for damage to the surface of the whole or any part thereof, and to any improvements thereon, which may arise from the carrying on of operations thereon or thereunder, and for the severance of such land from other land of the owner or occupier, and for rights of way and for all consequential damage (s 17(2)).  No compensation is payable for any gold, minerals or petroleum known or supposed to be on or under the land (s 17(3)).  The similar compensable interest test therefore applies to the grant of the proposed permit.

3. The next question under s 24MD(3) is whether the law mentioned in s 240 (i.e. the Petroleum Act) provides for compensation to the native title holders for the grant of a petroleum exploration permit.  There does not appear to be any specific provisions in the Petroleum Act which entitles native title holders to compensation for the grant of petroleum exploration permits under that Act. Section 17 deals with compensation to owners and occupiers of private land. Private land is defined relevantly as freehold land but does not include land the subject of a determination of native title. If this is the case then s 24MD(3)(b)(ii) is satisfied, making any entitlement for compensation to be determined in accordance with Division 5 (of Part 2) of the Act. Subsections 51(1) and 51(3) are the relevant provisions in Division 5. Subsection 51(1) says that subject to subsection (3) the entitlement to compensation is to be on just terms to compensate the native title holders for any loss, diminution, impairment or other effect of the act on their native title rights and interests. Subsection 51(3) deals with acts which are not the compulsory acquisition of native title rights and interests and says that if the similar compensable interest test is satisfied in relation to the act (as it is here) then in making a determination of compensation the court (or other body) must apply any principles or criteria for determining compensation set out in the law mentioned in s 240 (which defines the similar compensable interest test) (i.e. in this case, the Petroleum Act) (see similar discussion in Western Australia v Thomas [1996] NNTTA 30; (1996) 133 FLR 124 (at 189-196) in relation to the grant of a mining lease under the Mining Act 1978 (WA))

4. Section 24MD(4)(b) establishes who pays the compensation where the act is attributable to a State or Territory:

   ‘(b)if the act is attributable to a State or Territory:

   (i)if a law of the State or Territory provides that a person other than the Crown in any capacity is liable to pay the compensation—that person; or

   (ii)if not—the Crown in right of the State or Territory.’

The grant of the proposed permit is a future act attributable to the State of Western Australia.

1. Section 24A of the Petroleum Act relevantly provides:

   ‘24A. Liability for payment of compensation to native title holders

   (1)If compensation is payable to native title holders for or in respect of the grant of an authorization, the person liable to pay the compensation is -

   (a)    if an amount is to be paid and held in trust, the applicant for the grant of, or the holder of, the authorization at the time the amount is required to be paid; or

   (b)    otherwise, the applicant for the grant of, or the holder of, the authorization at the time a determination of compensation is made.

   …’

‘Authorisation’ includes a petroleum exploration permit and ‘native title holders’ has the same meaning as in the Native Title Act 1993 (Cth).

1. Section 24A of the Petroleum Act does not give a substantive right to compensation to native title holders nor does it refer only to compensation determined under the Petroleum Act. I consider that the reference to compensation in s 24A must refer to whatever compensation is payable to a native title holder irrespective of the legal basis for the obligation to pay compensation. In a case such as the present, compensation for the future act would be determined under Division 2, Part 5 of the Act (but according to principles applicable to ordinary title holders under the Petroleum Act) but that liability for payment of compensation has been transferred from the Government party to the grantee party by virtue of s 24A of the Petroleum Act.  In summary, whether compensation is payable to native title holders directly under the Petroleum Act or under Part 5 of the Act (which applies the same principles as under the Petroleum Act) the liability to pay has been shifted to the grantee party as permitted by s 24MD(4)(b) of the Act.

2. If this analysis is correct then the native title party in this case would have had no legal right to claim compensation from the Government party and there was no obligation as part of good faith negotiations for the Government party to negotiate about compensation (Risk v Williamson [1998] 640 FCA; (1998) 87 FCR 202 per O’Loughlin J at 224).

3. Even if this analysis is incorrect it is of no importance in this case because the native title party at no stage proposed that the Government party pay compensation.  Its statement of issues provided in response to the Government party’s s 31(1)(a) request mentioned compensation as one item about which information was required.  However, apart from belatedly informing the Government that offers of compensation from the grantee party were insufficient to cover the cost of negotiations and unacceptable (see below) the native title party did not make a request for compensation from the Government party and compensation was at all times a matter negotiated between the native title party and grantee party.  The general principles on negotiation in good faith refer to the making of proposals, communicating about them and holding discussions with a view to reaching agreement about them.  Negotiations do not occur in a vacuum, they must be about proposals.  An opportunity is provided for a native title party to make submissions about the doing of the act (s 31(1)(a)) which is an opportunity for it to put forward proposals for negotiation.  If a native title party makes no proposals on an issue to the Government or grantee parties it is difficult to see how after the event the other parties can be accused of not negotiating in good faith in relation to them.  In this case the negotiations proceeded in a normal way for petroleum and mining titles based on the practice developed in Western Australia where compensation is negotiated by the native title party and grantee party usually on a confidential basis between them and without the involvement of the Government party.

Good faith negotiations generally – grantee party

1. The negotiations were conducted on behalf of the grantee party by Dr Bevan Warris the Managing Director of Gulliver Productions until March 2004 when Mr Craig Marshall whose company Empire Oil had acquired Gulliver Productions took over the negotiations.

2. The negotiations began on 8 July 2002 when the grantee party provided information to the native title party in response to the request made by the Government party in its initiating letter of 27 June 2002.  On 6 August 2002 the native title party made its submission also in response to the request of the Government party in its letter of 27 June 2002.  The submission raised concerns about sites of particular significance to them, said there was a requirement for the grantee party to meet with them and wanted information about the potential impact of the exploration on sites and their community and social activities.  Information was sought about the proposed activities, equipment to be used, the numbers of personnel, likely camping and water access, travelling routes, rehabilitation and compensation.  On 28 April 2003, after some earlier discussion with native title party representatives, Dr Warris replied with details of the grantee’s proposed work program including after the first two years (which would be devoted to desktop investigations) the possibility of seismic and drilling operations.

3. The parties met on 6 May 2003 and on 7 May Dr Warris sent to the Ngaanyatjarra Council what was called a ‘community benefits’ clause and contained a formula for compensation based on 5% of the final cost of on ground exploration and duration of it.  Throughout the negotiations the grantee party’s negotiating position was that this offer of compensation was more in line with what would be paid to private land owners under the Petroleum Act although still in excess of it and that this was a compensation offer that had been similar and acceptable to the other two native title parties.

4. Following these initial negotiations there were exchanges of a Land Access Agreement and Heritage Protection Agreement on more than one occasion.  There was correspondence relating to a number of issues raised by the draft agreements and considerable discussions between the parties in relation to them.  The negotiations were assisted by five mediation meetings conducted by the Tribunal pursuant to a s 31(3) request made by the Government party on 30 June 2004.  After 15 March 2004 when Mr Marshall took over the negotiations there was concern expressed by the native title party that he had opened up issues that they regarded as having been resolved with Dr Warris but despite this the negotiations continued with a further exchange of agreements and discussions including about a dispute resolution clause and compensation.  By 4 August 2004 Mr Marshall communicated to the Ngaanyatjarra Council that he believed that the main issue was now compensation and that it would be helpful for the native title party to give some idea of its compensation claim.  The Ngaanyatjarra Council replied by saying that the issue of compensation required in depth discussion with the native title holders.

5. Following a mediation meeting on 9 August 2004 Mr Marshall confirmed that the grantee party had proposed to pay 5% of the defined on ground exploration costs, paid when there is on ground activity.  He again provided the grantee party’s work program over six years.  There was then a further exchange of a draft Land Access Agreement and reiteration by the Ngaanyatjarra Council that the native title holders wished to negotiate compensation directly with Mr Marshall.  Despite this, some instructions were obtained from the WDLAC governing committee on the grantee party’s offer.  On 15 September 2004 the Ngaanyatjarra Council wrote to Mr Marshall rejecting his offer of compensation which they assessed at $38,000 and proposing a $50,000 up-front payment (payable on execution of the agreement) and an annual payment of $10,000 or 3% of total on ground exploration expenditure divided by the number of days spent in on-ground exploration whichever is the greater.  Mr Marshall was invited to the next meeting of the WDLAC governing committee.  On 21 September 2004 Mr Marshall responded to the Ngaanyatjarra Council commenting on the ongoing discussions about the dispute resolution clause but indicating that he would not agree to an up-front payment of $50,000.  He made a counter offer based on 3% of on ground exploration costs or $10,000 whichever is the greater, payable when the grantee party conducts on ground exploration.  He said his offer ensured a minimum payment of $10,000 per year when the grantee party enters the land subject to the native title determination.  On 22 September 2004 the Ngaanyatjarra Council replied to Mr Marshall agreeing to all his proposed amendments except with a minor amendment to a dispute resolution clause and suggesting that compensation be discussed directly with the native title holders, the governing committee of which was to meet in November.  On 24 September 2004 Mr Marshall queried one aspect of the revised dispute resolution clause and indicated that with respect to compensation there was no point in discussions if front end payments were being requested by the native title party.  Mr Marshall made it clear that the payment of front end payments was not the policy of the grantee party.

6. On 28 September 2004 the Ngaanyatjarra Council wrote to Mr Marshall with a proposal relating to an independent botanist’s involvement in land rehabilitation which was still outstanding and a compromise on the dispute resolution clause.  With respect to compensation the Ngaanyatjarra Council commented that Mr Marshall had given no reasons for not agreeing to their up-front payment offer or any other up-front payment and said that the native title party sought such a payment to “defray costs of negotiating and complying with the agreement (for example, signing any State Deed and undertaking the prescribed ‘consultation’ with the ‘Common Law Holders)”.  This was the first time in the negotiation that payment of compensation or other monies was mentioned by the native title party as necessary to fund the negotiations.  I note in passing that the word ‘compensation’ was at this point being used in a broad sense and not confined just to compensation under the Act for the effect of the act on native title rights and interests (s 51 NTA). On 20 October 2004, Mr O’Dell advised the Tribunal that it appeared that the substantial issue for settlement was compensation assuming that the wording of the dispute resolution clause could be resolved which he thought was the case.  He also foreshadowed that there would be a challenge to the Tribunal’s jurisdiction if the issue of compensation could not be resolved.

1. On 17 November 2004 there was a meeting between the native title and grantee parties at Broome involving Mr Marshall and Mr Douglas Swift of the grantee party, Mr Malcolm O’Dell of Ngaanyatjarra Council and some 42 native title holders including the WDLAC Governing Committee.  It appears negotiations broke down on the issue of up-front payments.  On 19 November 2004 Mr O’Dell reported by email to the Tribunal that the meeting involved a full and frank discussion on the issue of compensation (said to be the last remaining issue to be agreed on) but that the governing committee of WDLAC considered the final offer of compensation to be substantially inadequate in that it did not even meet the costs of WDLAC’s compliance with the Native Title Act let alone compensate for the matters prescribed under the Mining Act (sic) and for loss/impairment of native title rights and interests.  He said that Mr Marshall made it clear that this offer was final and on that basis it would appear that the parties are deadlocked but offered to attend a further mediation meeting.  On 13 December 2004 the fifth and final s 31(3) NTA mediation conference was convened at which all parties were present.  This meeting reviewed the discussions which occurred at the Broome meeting and identified the outstanding issues relating to compensation.  Mr O’Dell affirmed that the compensation offer was inadequate and insufficient and did not even cover the legal costs.  The outcome of the meeting was that the parties were to reconsider options to progress the matter but were not able to do so.

2. The native title party’s contention in relation to this aspect of negotiations (Native title party’s submissions dated 1 September 2005 – paras 8-10) was that the issue of compensation was fundamental to any agreement and was the single most important issue in the negotiations.  They contend that the grantee party did not enter into any substantive or reasonable negotiations with the native title party on the issue of compensation and adopted a rigid pre-determined position showing no preparedness to shift position or compromise in order to achieve agreement.  In particular, the native title party says that the grantee party made only one offer of compensation initially on 7 May 2003 and maintained that offer throughout the negotiations during which it rejected counter offers made by the native title party.  The grantee party’s behaviour was unreasonable in applying a fixed policy to the computation of compensation and in failing to take any reasonable steps to reach a compromise, the native title party submitted.

3. It is not completely clear on the evidence whether the grantee party’s offer made on 7 May 2003 was in fact maintained throughout without change at least as to the likely amount of compensation that would result from the formula.  However, it does appear that the formula was changed from 5% of on ground exploration costs to 3% but with a minimum payment of $10,000 per annum guaranteed when the grantee party entered the land for exploration purposes.  It is not possible for the Tribunal to say (and neither is it necessary) whether one or other of the proposed formulae would have resulted in higher payments to the native title party.  The amount of actual payments would have depended on the variables involved.  What can be said is that there was negotiation - proposals, counter proposals, communication and discussion about this aspect of compensation.  I consider the grantee party made genuine attempts to reach agreement.

4. The question of up-front payments was also the subject of negotiations but on this issue the grantee party maintained a fixed position and was not prepared to compromise.  However, the failure to compromise on this issue has to be seen in the context of the negotiations as a whole.  The grantee party did not adopt an intransigent uncompromising approach to other aspects of the negotiations and agreement was reached on all or at least most other issues.  At the conclusion of the negotiations there was an almost completed draft Land Access Agreement dealing with issues common to this type of negotiation including a Heritage Protection Protocol, provision for the removal of infrastructure and environmental rehabilitation, acknowledgment by the grantee party of non-extinguishment of native title, information on obligations under the Agreement to be provided to the grantee party’s employees, dispute resolution, confidentiality and assignment.  It was also not a situation where no offer of compensation was made.  Further, the grantee party had a negotiating position in relation to it which was conveyed to the native title party (i.e. that compensation should be similar to that for private land holders).  Although at one stage it appeared that the grantee party would not attend a meeting with the native title holders if the demand for

   
   

   up-front payments was maintained Mr Marshall (and a colleague) did in fact attend the meeting in Broome on 17 November 2004 during which compensation was extensively discussed.

5. The making of the up-front payments proposal and for up-front payments to be used to defray costs of the negotiations was only made late in the negotiations.  In so far as ‘compensation’ was sought to fund the negotiations rather than for the impact of exploration on native title rights and interests the grantee party also had a position that it did not have an obligation as part of negotiations in good faith to fund negotiations for the native title party.  This issue is dealt with in more detail below.

6. On the negotiations generally I am satisfied that the grantee was aware of its obligation to negotiate in good faith having been provided with the Government party’s information about the process and that it conducted itself in a manner consistent with the principles referred to above including the Njamal indicia.  The fact that the native title party did not consider the offers of compensation to be reasonable or adequate is not fatal to the grantee party’s position.  In the end there was a genuine difference of opinion about the question of compensation but lack of agreement does not necessarily signify a failure to negotiate in good faith.

Funding of negotiations – Government party

1. The native title party’s contentions on this point are (Native title party’s submissions dated 1 September 2005 – paras 47-51):

   “47.The Government party is proposing to grant to the Grantee party a tenement affecting the land of the Native Title party.  The process leading to the grant and process following the grant of such a tenement create obligations for WDLAC, which it must carry out in accordance with its statutory obligations under the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth) – reg.6:

   (a)to manage the native title rights and interests of the common law holders of those rights and interests;

   (b)to hold money (including payments received as compensation or otherwise related to the native title rights and interests) in trust;

   (c)to invest or otherwise apply money held in trust as directed by the common law holders;

   (d)to consult with the common law holders in accordance with regulation 8:

   (e)to perform any other function relating to the native title rights and interests as directed by the common law holders.

   48.Compliance with Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth)- regulation 8 includes an obligation to consult with, and obtain the consent of, the common law holders in accordance with that regulation before making a native title decision (reg.8(2)). An agreement that gives effect to a native title decision of a prescribed body corporate has no effect if the body corporate does not comply with this regulation (reg. 8(7)).

   49.The Government party is aware (having been informed by public announcements by the Commonwealth Attorney-General and others) that the WDLAC (like all Prescribed Bodies Corporate in the nation) has no financial resources with which to carry out those onerous statutory responsibilities.

   50.The Government party is also aware or, after reasonable inquiry is capable of informing itself, that the Ngaanyatjarra Council is prohibited from expending Commonwealth grant funds to support or contribute to the opening costs of the WDLAC:  see General Terms and Conditions for Funding Agreements Relating to Native Title, clause 5.4(i).

   51.In those circumstances the Government party is not participating in negotiations in good faith in any reasonable sense, in a case such as this, where it is proposing that a tenement be granted by it without the negotiation process resulting in any contribution being made by any party, including itself, towards the cost of the PBC (WDLAC) carrying out the statutory responsibilities,-

   (a)which the proposal to make the grant and the consequential events following the grant compel it to perform; and

   (b)which the Government party knows it is not able to perform because it is not sufficiently resourced so to do.”

2. The native title party’s contentions on the funding of negotiations issue were also summarised in the Third Native Title Party Reply to the Government party’s Statement of Contentions dated 12 October 2005 – at para 7):

   ‘In relation to para 12-19 of the State’s Contentions, the Third Native Title Party puts in issue the application of the objective standard outlined in the authorities referred to in the State’s Contentions.  The Third Native Title Party contends that ‘reasonableness’ of bargaining attitude, procedural steps and the making of substantive offers are considerations to be taken into account when defining whether good faith negotiations have taken place. [Jeff Shaw QC MLC, 1996 ALLR (CCH) at 50, 124; Western Australia v Taylor (Njamal) people (1996) 134 FLR 211; [1996] NNTTA 34 (7 August 1996), p 10 and 14; Western Australia/Maduwongga People [1997] NNTTA 31 (10 December 1997)] The Third Native Title Party contends that where one party to a negotiation (the native title party) is unable to participate in negotiations due to a lack of resources and it is reasonably within the means of the other parties to facilitate that participation, but it fails to so facilitate the negotiations, then the parties who were able to facilitate the negotiations, but failed so to do, have objectively failed to negotiate in good faith. Where the Native Title Party has no capacity to participate in the bargaining process on anything approaching an equal basis with the other parties, being unable to carry out its statutory responsibilities due to lack of funding, the issuing of a section 29 notice by the State when it should know or ought to have known that the Native Title Party is not funded to carry outs its statutory responsibilities nor fulfil its procedural requirements and participate in fair and equal negotiations, means that the negotiations are consequently unreasonable and have not been conducted in good faith in an objective sense. The State’s knowledge of the Prescribed Body Corporate’s inability to carry out its statutory obligations, and consequent inability to negotiate in good faith, means that the State itself did not engage in good faith negotiations as it had knowledge or ought to have had prior knowledge of the Prescribed Body Corporate’s position.’

3. The native title party further contended (Third Native Title Party’s Reply dated 12 October 2005 – para 9) that it was not the active participation of the Government party in communications with the Ngaanyatjarra Council or the payment of compensation which was in issue. What was in issue in relation to the lack of funding contention is the necessity of a contribution of the Government and grantee parties either severally or jointly towards the facilitation of the process of negotiations with the WDLAC in order for negotiations to truly occur with that body. The Government party failed to make the necessary distinction between its activities in relation to the Ngaanyatjarra Council as a NTRB in acting for claimants and in relation to a post determination PBC when there are limitations imposed on NTRB’s capacity to assist the PBCs in future act negotiations. The process of negotiating in good faith was said to be ‘stalled at the outset’ where the Government party knew or ought to know that a native title party which is a PBC is unable to comply with its statutory obligations to reach a s 31(1)(b) agreement because of a lack of funding (Third Native Title Party’s Reply dated 12 October 2005 – para 20).

4. The contention relating to the s 29 notice was initially interpreted by the Government party (and the Tribunal) to be that the notice should not have been given where the Government party knew or ought reasonably to have known that a PBC did not have funds to engage in the right to negotiate process under the Act and that in so doing, the Government behaved unreasonably in relation to the negotiations. This contention was modified during the hearing when Mr McIntyre conceded that the issuing of the s 29 notice was not part of the negotiations. What the native title party says is that from 17 July 2003 when the PBC was determined the Government party should have recognised the consequences of issuing the s 29 notice namely that the native title party was forced into negotiating without adequate resources. To continue negotiations without funding them was unreasonable and not consistent with the obligation to negotiate in good faith.

5. Mr McIntyre conceded that the negotiations by the Government party and grantee party were satisfactory while the Ngaanyatjarra Council was able to assist in the process but not after the determination of the PBC on 17 July 2003 when funding was no longer available.

6. The Government party’s contentions in response to those of the native title party can be summarised as follows (Government Party’s Statement of Contentions dated 29 September 2005):

• The Government party denies that negotiation in good faith obligations extend to an obligation to contribute to the costs of the PBC carrying out its statutory responsibilities or to provide financial assistance to the PBC to conduct negotiations (paras [48]-[49]).

• Sections 203BB(1)(b) and 203C of the Act indicate Parliament intended that there be assistance in place for future act negotiations and no obligation on Government parties or grantee parties to contribute. Under section 203BB the functions of NTRBs include to ‘assist registered native title bodies corporate, native title holders and persons who may hold native title (including by representing them or facilitating their representation) in consultations, mediations, negotiations and proceedings relating to [among others] … future acts’ (s 203BB(1)(b)) and that they receive funds from the Aboriginal and Torres Strait Islanders Commission (‘ATSIC’) to enable them to perform their functions (s 203C NTA) (paras 50-51).

• Two Tribunal decisions have found the obligation to negotiate in good faith did not extend to providing financial assistance  to a native title party to conduct negotiations (Western Australia v Daniel [2002] NNTTA 230; (2002) 172 FLR 168; Mt Gingee Munjie v Victoria and Others(para 51).

• Although the Tribunal decisions in WA v Daniel and Mt Gingee involved registered native title claimants they should not be distinguished from PBCs holding native title as s 203BB(1)(b) of the Act does not make a distinction between persons who may hold native title and registered bodies corporate (para 52).

• PBCs and NTRBs as creatures of a Commonwealth statute are the responsibility of the Commonwealth to adequately fund to perform their functions (para 53).

• There is nothing in the word negotiation to suggest one party ought to fund another (para 54).

• The Tribunal in Daniel (at [146]-[152]) when considering the limitations on the negotiation in good faith obligation in s 31(2) of the Act to the effect of the future act on registered native title rights and interests said “this suggests that there is no obligation to negotiate about whether a native title party should be resourced by a government or grantee party to conduct negotiations” (para 55).

• Even if negotiate in good faith obligations extended to providing financial assistance to the PBC, the Tribunal should consider the governments party’s behaviour in its totality, and find it has negotiated in good faith (paras 21- 47, 56 and 58).

• This issue is a relatively unexplored area of the law and the fact that legal parameters are relatively unknown should be taken into account (para 57).

• One or more aspects may not be determinative of good faith negotiations and the Tribunal should not set an unrealistic standard as this would frustrate the objects of the Native Title Act (para 58).

• For these reasons the Government party submits it has acted honestly and reasonably in trying to reach agreement with the native title party (PBC) (para 59).

• The conduct of the native title party and grantee party in choosing to pursue bilateral negotiations rather than trilateral negotiations is an issue for the Tribunal to take into account when determining if the Government party acted in good faith (para 60).

• On the s 29 issue the Government party says that the giving of the s 29 notice is not part of the negotiations but even if it were the Government party could not reasonably have known that a determination of native title would necessarily be made during the course of the negotiations or that the PBC would not be funded. It asserts that Commonwealth Government Conditions for funding NTRBs mean funding would have been available to the native title party as registered claimants until 17 July 2003, to the PBC up until 14 September 2004 (the date of WDLAC’s first annual general meeting) and to the PBC if approval was sought (Government Party’s further Statement of Contentions dated 14 October 2005).

Commonwealth Government’s policy on funding PBCs

1. In support of it’s contentions that no funding is provided by the Commonwealth Government for the purpose of future act negotiations and arbitration or otherwise to support a PBC to carry out its statutory functions the native title party provided details of Commonwealth Government funding conditions back to 1 July 2002.  These were initially from ATSIC but are now administered by the Office of Indigenous Policy Coordination (‘OIPC’).  The Tribunal has also perused those applicable from 1 July 2001.  The General Terms and Conditions relating to Native Title Program Funding Agreement – 2004-2005 (with effect from 1 July 2004) (para 5.4) prohibit Representative Bodies (NTRBs) using funds:

   ‘(i)to expressly support native title claimant group structures such as reference/working/steering groups in relation to an area of land and waters where native title has already been determined to exist or otherwise support another person or body corporate for the purposes of enabling that person or body corporate to perform the functions of a representative Body under the Native Title Act;

   (j)to support or contribute to the operating costs of Prescribed Bodies Corporate or Registered Native Title Bodies Corporate or to assist such bodies corporate to meet their regulatory compliance obligations, unless we have given prior written approval.  For the avoidance of doubt, you may use the Funding to perform the functions of a Representative Body in respect of Registered Native Title Bodies Corporate and to expressly assist with the establishment, incorporation and registration of Prescribed Bodies Corporate up to and including the holding of the first annual general meeting of such bodies;’

The funding conditions for 2003-2004 (paras 6.2(j) and (k)), May 2005 (paras 5.4(h) and (i)) and 2001-2002 and 2002-2003 (para 4.4.5(i) in both cases) are to similar effect.

1. The native title party also relies on Commonwealth Government policy as expressed by Attorney-General Ruddock:

‘It is the states and territories that have primary responsibility for the day-to day management of the land.  And along with proponents of future acts, such as mining and industry groups, they benefit from the land.  With that in mind, the Australian Government believes it is appropriate that the states and territories and others should contribute to the costs of that development. And I include part of this to be the costs associated with establishing PBCS.’ (Speech of the Attorney-General Philip Ruddock at the Native Title Conference in Adelaide on 4 June 2004)

1. On the face of it, it could be argued (as the Government party does) that 2004-2005 Condition 5.4(j) does not prohibit funding for PBCs as contended in that funds may be used to perform the functions of a NTRB in respect of registered native title bodies corporate which includes providing assistance (s 203BB(1)(b)) in future act matters.  It also appears that approval for funding for some PBC functions can be applied for.  Following consideration of the meaning of para 5.4(j) at the hearing, at which the issue of whether the native title party had funds from other sources to finance the negotiations was also raised, Mr Malcom O’Dell, Senior Legal Officer at the Ngaanyatjarra Council submitted an affidavit clarifying the practical operation of the policy.

2. The first assertion made by Mr O’Dell is that while WDLAC had received funds from mining companies in relation to agreements about earlier future acts it could not use those funds for the purposes of negotiations in relation to subsequent future acts (including the present one) because of WDLAC’s status as a tax exempt charity.  Mr O’Dell’s opinion was that the WDLAC Rules of Incorporation established it as a charitable organisation and this had been recognised by the Australian Tax Office by granting income tax exempt status to it.  He says that advice from WDLAC’s auditor was that to retain the income tax exempt status, funds received by WDLAC for charitable purposes must be expended in accordance with a charitable object identified in the Rules.  It is Mr O’Dell’s evidence that the funds provided by the other mining companies to WDLAC were in furtherance of the charitable objectives of WDLAC and that the funds were not provided to facilitate the negotiation of further mining agreements with unrelated parties.  If the funds were used for these purposes then WDLAC’s income tax exempt status may be affected.

3. The Government party’s response to this evidence was that the WDLAC Rules (Rule 6) arguably include both charitable and non charitable purposes and to obtain tax exempt status as a charity it must be assumed that the Australian Taxation Office was of the opinion that the strictly non charitable purposes must further or be in aid of the native title party dominant charitable purpose or be incidental or ancillary to the dominant charitable purpose.  It asserts that if the moneys received from the mining companies were used to support the dominant charitable purpose (presumably for other negotiations to obtain monies that could be then applied specifically to the charitable purpose) then there would be no impediment to the use of the funds for the negotiation of agreements relating to subsequent and unrelated future acts.  In any event the Government party says there is no direct evidence that the monies obtained from the mining companies were limited so as only to be used in furtherance of the charitable objects of WDLAC. 

4. It is impossible for the Tribunal to resolve this situation on the basis of the evidence provided, nor is it necessary to do so in order to deal with the principal issue of whether the Government party has negotiated in good faith.  Had the issue been of critical importance I would have sought more evidence and submissions in relation to it.  What can be said is that WDLAC on advice from its Principal Legal Officer genuinely held the view that the mining company funds could not be used for the purposes of these negotiations.  I suggest for the future that this issue be clarified in relation to WDLAC and other PBCs so that the policy debate about the funding of PBCs which has been evident in these proceedings can proceed on a firmer footing.

5. I also observe from the financial information provided by Mr O’Dell that of the more than $1.5 million provided as ‘royalties’ from the mining companies a substantial proportion was distributed to members of the Martu common law holders and communities related to them.  Other expenditure was related to the normal operating expenses of WDLAC such as wages, motor vehicle and office expenses.  It is not an unreasonable expectation for native title holders to anticipate that funds obtained in return for permitting mining and exploration activity on their land would flow to them in the form of concrete benefits.  Even if the mining funds could legally have been used to fund the present negotiations as the Government party argues, it is difficult to criticise WDLAC for wanting to see as much of the mining funds as possible distributed to holders of native title in one form or another.

6. The WDLAC Governing Committee and other PBCs in this type of situation are faced with making a policy decision about the distribution of its income from earlier mining negotiations to support negotiations about subsequent and unrelated mining or exploration proposals.  If the new proposal is a large mining venture with the possibility of substantial ‘royalty’ payments to the native title party then funding negotiations to achieve maximum benefits may be justified.  On the other hand the future act proposed may be, as in this case, an exploration tenement with no certainty that economic production will follow.  There will also be cases where PBCs have no income from other than Government sources to finance negotiations about future acts.  This case highlights the unresolved policy differences about the funding of PBCs, which will need to be given consideration by Commonwealth and State/Territory Governments.

7. The other missing piece in the factual jigsaw in this case is the cost of the negotiations.  There is evidence that Mr O’Dell was of the view that the offer of ‘compensation’ made by the grantee party did not cover the cost of the negotiations but there has been no detail of the native title party’s cost of negotiations provided in evidence or apparent from the negotiations.  More significantly (as explained elsewhere) no specific proposal for payment of negotiation costs was put to the Government party during the negotiations and only to the grantee party at a very last stage by way of up-front payments of them.  It could be expected that if a Government were to consider funding PBCs for good faith future act negotiations in particular cases, it would wish to know whether or not a PBC had sufficient independent funds and details of the expected cost of negotiations.

8. Secondly, Mr O’Dell says that no Commonwealth Government funding has been provided to the Ngaanyatjarra Council or WDLAC specifically for these future act negotiations.  His evidence is that in the period 6 February 2002 (s 29 notice) to 27 September 2002 (native title determination) all funding by Ngaanyatjarra Council on matters associated with the Martu claim were directed to the completion of the consent determination of native title.  In the period from 27 September 2002 to 17 July 2003 (PBC determined) Ngaanyatjarra Council funding was directed to establishing WDLAC as the determined PBC.  He also said that negotiations during this period would not have been possible because of the Government party’s view that following a determination of native title future act matters must be dealt with by the determined and registered PBC.  In other words he says there is an enforced hiatus in negotiations when the Federal Court decides to make a determination and leave the PBC for determination subsequently.  This position is partially supported by Ms Platt who says that it is difficult to progress negotiations with a native title party following a determination until a PBC is in place as it is impossible to finalise the s 31 agreement (State Deed).  Despite this difficulty some negotiations did occur during this period, but on Mr O’Dell’s evidence were not specifically funded by the Commonwealth.  In the period 17 July 2003 to 14 September 2004 (date of WDLAC’s first annual general meeting) Mr O’Dell says the Ngaanyatjarra Council could fund the PBC through the use of OIPC funds as per clause 5.4(j) of the 2004/05 Commonwealth funding conditions.  Mr O’Dell says that although the Ngaanyatjarra Council had the authority to assist WDLAC during this period no additional funding was received for this purpose and hence Ngaanyatjarra Council was restricted and limited in the funding assistance it could provide for negotiation purposes or carrying out its statutory obligations.  During this time Ngaanyatjarra Council factored in some of the costs in assisting WDLAC into the Ngaanyatjarra Council’s overall budgeting costs for the undetermined Martu claim area.  After 14 September 2004, Mr O’Dell testifies that the Ngaanyatjarra Council was not permitted to use OIPC funds to assist WDLAC in fulfilling its functions or meeting its statutory obligations and this is in accordance with the OIPC funding guidelines.  During this period until the end of negotiations the Ngaanyatjarra Council provided assistance to WDLAC by again factoring in costs associated with those related to the undetermined Martu claim.

9. In response to this evidence the Government party reaffirmed its previous submission that the Native Title Act specifically provides for Commonwealth Government funding to be provided (s 203C) to enable an NTRB to carry out its functions under s 203BB(1)(b) and there is nothing in the legislation to suggest that funding for negotiation in relation to future acts was limited up to the period when the PBC holds its first annual general meeting. They also pointed to a document annexed to the O’Dell affidavit MOD8 which contains the Outcomes of a meeting of the Tribunal, Ngaanyatjarra Council, Government party (Office of Native Title), Registrar of Aboriginal Corporation, Chamber of Minerals and Energy and OIPC held on 20 August 2004 to discuss the problems with the funding of PBCs. The Outcomes record that OIPC representatives said that “NTRBs can use their funds to establish PBCs. They can also use their funds to perform their statutory functions in relation to the PBCs beyond the PBC’s establishment, which is sometimes overlooked”.

10. I am satisfied that the Native Title Act empowers the Commonwealth Government to fund NTRBs to disperse funds to PBCs to enable them to perform their statutory functions (including negotiations in relation to future acts) and that this power is not restricted in time.  The Commonwealth funding conditions also recognise (as confirmed by OIPC) that a PBC can be funded by a NTRB for the purpose of performing the PBCs statutory functions.  The obvious question to be asked is that if funding from the Commonwealth Government is provided for these purposes why did the Ngaanyatjarra Council not make application to OIPC for funding with some expectation of funds being provided.  I am satisfied on the evidence that, although Commonwealth funding can be provided to NTRBs for future act negotiations after the first annual general meeting of a PBC, as a matter of practice and policy no specific funding is provided for this purpose.  The practical application of the Commonwealth funding conditions means that no specific funds will be provided for these purposes but an NTRB is not prevented from using funds if it has any available to assist a PBC in this way.  This finding is backed up by the statement of Attorney General Ruddock on 4 June 2004 and the substantial documentary evidence provided by the native title party about the ongoing dispute between the Commonwealth and State and Territory Governments about the funding of PBCs.

11. Thirdly, Mr O’Dell says that Ngaanyatjarra Council wrote to WDLAC on 25 February 2005 offering to assist WDLAC on a cost recovery basis to carry out some of its functions and that the Ngaanyatjarra Council provides some services to WDLAC on a cost recovery basis, in accordance with the letter of 25 February 2005.

12. Fourthly, in relation to why the Ngaanyatjarra Council did not apply for funding from OIPC for these negotiations Mr O’Dell testified that the situation in Western Australia with respect to the funding of PBCs is that it was known that neither the Government party nor Commonwealth Government provides funds to assist them at least after the holding of their first Annual General Meeting.  The Commonwealth Government provides funds to the Ngaanyatjarra Council to assist claimants and the Government party has provided funds for a future act officer who Mr O’Dell says deals mainly with future acts arising from implementation of Regional Standard Heritage Agreements for mining exploration and prospecting.  Mr O’Dell says as a result of what the Ngaanyatjarra Council knew about the funding position it was apparent that any application for written approval pursuant to clause 5.4(j) of the OIPC funding conditions would be unsuccessful and that as a consequence no application was made by the Ngaanyatjarra Council for this purpose.  As stated above I am satisfied that the Commonwealth Government’s policy is not to provide funding to PBCs specifically for the purpose of future act negotiations and that it was understandable despite the terms of clause 5.4(j) of the funding conditions for the Ngaanyatjarra Council not to have applied for funds to support these negotiations

13. Fifthly, Mr O’Dell says that since at least 1999 the Government party has been aware of the general issues about the funding of PBCs and that the Government was specifically aware of funding issues in relation to the Martu claim since 1 February 2002, five days before it issued the s 29 notice for the grant of the proposed permit.

14. On the issue of its knowledge of the funding issues relating to PBCs the Government party admits that it is generally aware of the policy debate about the funding of PBCs to carry out their statutory functions and the dispute between the Commonwealth and State and Territory Governments about their funding.  The Government party has participated in numerous discussions about the consequences for the native title system if adequate funding is not provided.  However, the Government party argues that this evidence is irrelevant to whether negotiation in good faith occurred in relation to this particular future act.  It says that the first time the Government party was advised of funding difficulties in these future act negotiations is in an email from Mr O’Dell to the Tribunal of 20 October 2004 which was copied to the Government party.  There were subsequent references to the issue by Mr O’Dell in the negotiations up to and including the final mediation conference on 13 December 2004.  The Government party further says that despite these comments the Ngaanyatjarra Council continued to participate in the negotiations.  In other words the Government party says that the native title party failed to advise the Government party that it was no longer able to participate in the negotiations due to lack of resources and that now the issue of funding cannot be relied upon as a ground for a decision that the Government party has not negotiated in good faith.

15. I am satisfied that the Government party would have known that the Commonwealth Government did not provide funding to NTRBs or PBCs to assist PBCs in future act negotiations and that this was the case at least by the time the s 29 notice was given. However I also accept that negotiations under s 31 of the Act relate to the particular future act for which a s 29 notice has been given. I reiterate that a particular negotiation party should put on the table proposals about which the negotiations can occur. The native title party did not put on the table the issue relating to funding for negotiations until very late in the piece. If a native title party wants the question of the funding of negotiations to be an issue (and it can be considered as within the scope of good faith negotiations – see below) then it should put that forward as a specific proposal backed by information to show that without such funding it will not be able to properly negotiate about the doing of the future act.

16. At the hearing in support of his submission that no funds were available to properly conduct the negotiations Mr McIntyre said that WDLAC could not perform its onerous role of consulting with all the native title holders who comprise a group of hundreds of people located in several remote communities and the process of performing WDLAC’s statutory duties were therefore quite substantial, complex, time consuming and costly.  The Government party says that no evidence has been produced to support these submissions and that practical difficulties and cost of obtaining consent of native title holders could be overcome by ‘five person rule’ provided for in the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth) evidence of which was in the documentation provided by Mr O’Dell.

17. The obligations of a PBC under the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth) are accurately described above in the native title party’s submissions dated 1 September 2005 – para 47 and 48. There is an obligation (Regulation 8) to consult with and obtain the consent of the common law holders before making a ‘native title decision’ which includes a decision to do something which affects native title. Regulation 8(3) describes what must be done to ensure that the common law holders understand the purpose and nature of a proposed native title decision. Any consent must be given in accordance with the traditional decision making process of the common law holders or if one does not exist an alternative agreed decision making process. Regulation 9 sets out the ‘five person rule’ which permits five persons who are members of the PBC and common law holders whose native title rights and interests would be affected to sign a document certifying that the common law holders have been properly consulted and consent to the proposed decision or have done so in relation to a category of decisions of which the proposed decision is one.

18. While Mr McIntyre’s statement was made as part of his submission and not given as sworn evidence I do not discount it.  The Tribunal is aware from its considerable experience that obtaining proper decisions from native title claimants and holders can be a time consuming and expensive process, involving travel to remote communities.  Although there is no specific evidence relating to the extent of WDLAC’s task in fulfilling its obligations to consult about a native title decision except for the statement from Mr McIntyre, I am satisfied from other matters and my own experience that the consultation process with native title holders can involve substantial costs.  With respect to the Government party’s comments about the ‘five person rule’ I think they have misinterpreted its purpose.  The ‘five person rule’ is only an evidentiary aid.  The five persons must still be satisfied that the appropriate consultation and consent process has been properly carried out.  They cannot assert under the ‘five person rule’ that the consultation and consent has been properly followed if in fact it has not.

19. Once again the difficulty for the native title party on this issue is the same as in relation to its contentions about funding generally dealt with elsewhere in these reasons.  Even if the obligation to negotiate in good faith extends to negotiations about funding to carry out its statutory responsibilities there was no funding proposal put forward by the native title party until very late in the negotiations.  If a native title party wants funding to be covered by the negotiations, it is not unreasonable to expect a proposal for funding to be put forward with details of costs of the negotiations including the cost of complying with the Regulations.

Summary of findings with respect to funding for PBCs

1. My findings in relation to funding of PBCs to carry out their statutory functions in relation to future act mediation and arbitration can be summarised as follows.

• The Native Title Act permits NTRBs to provide assistance to both claimants and holders of native title (s 203BB(1)(b)) and they may apply for and be funded by the Commonwealth Government for this activity (s 203C). The Act in this respect makes no distinction between registered claimants and holders of native title (see also ss 29(2)(a) & 2(b) where both registered claimants and subsequently registered PBCs are native title parties for the purpose of s 29 notification). The different approaches to funding of registered claimants and holders of native title to conduct negotiations under s 31(1) of the Act are a matter of Commonwealth Government policy.

• Once a PBC has been determined it has statutory functions which it is obliged to perform by the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth) (Regs 6 and 8) which are accurately summarised in paras 47 and 48 of the Native title party submissions dated 1 September 2005.

• The statutory obligation under Regulation 8(2) to consult with and obtain the consent of the common law holders applies to a native title decision (Regulation 8(1)) which involves agreement to do any act which would affect the native title rights or interests of the common law holders.

• A decision to agree to the grant of a petroleum exploration permit is likely to lead to native title rights and interests being affected and this requires the consultation provided for in Regulation 8(2).

• The cost of performing a PBC’s statutory functions in relation to consultation and obtaining consent could be substantial in some cases.

• The Commonwealth Government does not make funds available to NTRBs specifically to enable them to be dispersed to PBCs for the purpose of conducting negotiations required by s 31 of the Act.

• While the Commonwealth Government funding conditions do not prohibit a NTRB dispersing funds to PBCs for the purpose of conducting s 31 negotiations, this will be of no practical utility if the only funds available from the Commonwealth Government have been provided for other purposes, which appears to be the case.

• A NTRB could provide assistance on a fee for service basis.  In this case the Ngaanyatjarra Council and lawyers employed by it have agreed to act for the WDLAC in future act negotiations on a limited basis.

• The Commonwealth and State/Territory Governments do not agree about responsibility for the funding of PBCs and no general funding provision is made by either of them to enable PBCs to carry out their statutory functions apart from the limited Commonwealth funding referred to above for assistance until the first annual general meeting.

• I am satisfied that at least since the beginning of 2002 the Government party would have been aware of the Commonwealth’s funding conditions and of the limitations placed by the Commonwealth on the use of funds for the activities of PBCs.

Does the obligation to negotiate in good faith extend to the Government funding the native title party?

1. In its previous consideration of this issue the Tribunal in Western Australia v Daniel said:

   ‘[146]    Contention:  State failed to ensure that the Wong-goo-tt-oo were adequately resourced which resulted in a fundamental inequality in bargaining position for the Wong-goo-tt-oo (paragraphs 107, 110, 111 & 114(2) of Wong-goo-tt-oo SC).  In addition, resourcing should have been on reasonable terms negotiated with the native title party. The first question to be considered is whether it is a requirement of negotiations in good faith for a Government or grantee party to provide funding and resources to a native title party. There are no judicial or Tribunal decisions on the issue and it could be argued that the obligation does not extend that far. Section 31(1) refers to negotiations, the definition of which is dealt with above. There is nothing in that definition to suggest that one of the parties which is obliged to negotiate in good faith should fund one of the others. The Act establishes native title representative bodies which have various functions, including to assist claimants in relation to future acts (s 203BB(1)(b)(ii)), and which receive funds from ATSIC to assist the claimants within their designated areas. This suggests that there are assistance arrangements in place for native title parties in future act negotiations and no obligation on Governments or grantees to contribute. Section 31(2) of the Act also says that the obligation does not extend beyond negotiation about the effect of the future act on registered native title rights and interests. This suggests that there is no obligation to negotiate about whether a native title party should be resourced by a Government or grantee party to conduct the negotiations. It would also be a difficult task for the Tribunal to determine when such funding was a requirement of good faith negotiations. For instance, there may be cases where a native title party is funded by a representative body under the Act and the grantee party is a small prospector with no external funding.

   [147]     A contrary argument is that the funding of native title parties by Government and grantee parties to conduct negotiations has become common place and reasonable contemporary behaviour now means that appropriate funding should be provided.  There may also be circumstances where a Government party had imposed tight and otherwise unrealistic deadlines which couldn’t be complied with if no funding assistance was provided.  It is not necessary to decide this issue for present purposes as the negotiations went well beyond the limits imposed by s 31(2).  Even if the obligation to fund exists in some cases, it is difficult to see how it would not have been fulfilled in this case.’

(See also Mt Gingee Munjie v Victoria and Others (at [86]) where this position was confirmed and Wongatha People/Gregory Wayne Down/Western Australia, NNTT WF04/9, [2004] NNTTA 106 (22 November 2004), Hon E M Franklyn QC where the Tribunal confirmed there is no obligation for a grantee party to pay for a heritage survey and the lack of such agreement is not of itself evidence of a lack of good faith.) Although the native title party has argued that these cases should be distinguished from the present one because they involve registered native title claimants and not determined native title holders where a PBC has been determined I still regard them as relevant authority. For the reasons given above I do not consider the Act makes a distinction between a registered native title claimant and registered native title body corporate in respect of the right to negotiate provisions (WMC Resources v Evans [1999] NNTTA 372; (1999) 163 FLR 333 at 339-341, [25]-[31]). It is possible that the content of negotiations in good faith may be different where there is a determined PBC. However, if there is no obligation on a Government party or grantee party to fund negotiations in good faith when dealing with a native title party who is a registered native title claimant I can see no reason for this to change simply by virtue of the native title party being a PBC.

1. Section 31(2) of the Act presents a considerable obstacle to the native title party’s contentions.  This section makes it clear a refusal to negotiate on the matters other than the effect of the future act on registered native title rights and interests does not mean failure to negotiate in good faith.  It was inserted in the Act by the 1998 amendments but judicial and Tribunal decisions prior to that date had already imposed limits on the scope of what is required to negotiate in good faith.  In Walley (1999) (per Carr J at 575-579 [12]-[17]) the Federal Court agreed with the Tribunal:

   ‘that when assessing whether a Government party has complied with its obligations under s 31(1)(b) to negotiate in good faith, its conduct should be judged in the context of matters related to or connected with the doing of the particular act in question. That does not preclude the Government party or the native title party negotiating on other matters, if they see fit.’ (at 577 [14])

2. In Brownley the Federal Court also said (per Lee J at 162 [24]) that the terms of s 39 (which sets out the criteria which the Tribunal must take into account in making an arbitral determination whether the act may or may not be done) indicate the scope of matters in respect of which negotiations may be conducted.

3. In Western Australia/West Australian Petroleum Pty Ltd and Shell Development (Australia) Pty Ltd/ Leslie Hayes, Glenys Hayes, Judy Hayes, John Ard, Douglas Fazeldean, Valerie Ashburton, Laura Hicks and Albert Hayes on behalf of the Thalanyji People, NNTT WF00/7, [2001] NNTTA 18 (9 March 2001), Hon C J Sumner at [18]-[19], the Tribunal specifically considered the new s 31(2) and held that it means that the scope of good faith negotiations is confined to the effect of the future act on the native title party’s registered native title rights and interests and other matters related to them in s 39(1)(a) of the Act. As far as the Tribunal can ascertain there is no authority to support the proposition that it is a necessary adjunct to the obligation to negotiate in good faith for funding to be provided by the Government or grantee parties to enable the negotiations to be carried out by the native title party.

4. Even if the Tribunal is wrong in its view of the proper scope of good faith negotiations the conduct of the negotiations in relation to funding does not indicate a lack of good faith by the Government party.  As already explained, concerns about funding were only raised by the native title party with the Government and grantee parties late in the negotiations.  The issue of up-front payments was only raised with the grantee party on 15 September 2004 and, as a payment necessary to fund the negotiations and other statutory responsibilities, on 28 September 2004.  The first advice that the Government party had that there might be difficulty with funding was on 20 October 2004 when the native title party in correspondence with the Tribunal revealed that the WDLAC and Ngaanyatjarra Council was unfunded to deal with future act matters.  The issue was also drawn to Ms Platt’s attention by Mr Marshall on 22 November 2004 following the Broome meeting but was not directly raised with the Government party until the last mediation meeting on 13 December 2004.  At no time was a specific proposal made by the native title party to the Government party to fund the negotiations. 

Should the negotiations have included consideration of funding the PBC for the performance of functions relating to the tenement post-grant.?

1. This contention is also rejected for similar reasons as those in relation to the funding of the negotiations generally. Even if it could be argued that good faith negotiations can encompass the funding of a PBC post-grant because s 39(1)(a)(iii) talks of the effect of the future act on the development of the social, cultural and economic structures of the native title party (one of which could be a PBC), no such proposal was developed or put to either the Government party or grantee party.

Funding of negotiations – grantee party

1. The native title party’s contentions on this point are as follows (Native title party’s submission dated 1 September 2005 – paras 11-13):

   “11.The Grantee party acted unreasonably in the negotiations in failing to -

   (a)take steps to inform itself of; or

   (b)take into account

   the unique circumstances of the WDLAC, in particular –

   (i)its statutory responsibilities pursuant to the Native Title Prescribed Body Corporate Regulations made under s 58 (c) and (d) of the NTA; and

   (ii)its lack of resources to perform those responsibilities.

   12.The Grantee party acted unreasonably in the negotiations in failing to distinguish the WDLAC from a native title claim group entitled to the assistance which a Native Title Representative Body is –

   (a)empowered to provide by the NTA s203BB(1)(b)(ii); and

   (b)funded to provide,

   pursuant to the NTA s 203C(2).

   Cp Western Australia v Daniel (2002) 172 FLR 168 at [146]; [NNTTA 230 (12 November 2002), p 46; Mt Ginger Munjie Resources Pty Ltd/Victoria/Thorpe, on behalf of the Gunai/Kurnai People, [2003] NNTTA 125 (22 December 2003).

   13.        The Grantee party acted unreasonably in the negotiations in failing to-

   (a)        take steps to inform itself of; or

   (b)        take into account

   the fact that the Ngaanyatjarra Council is prohibited from expending Commonwealth grant funds to support or contribute to the operating costs of the WDLAC:  see General Terms and Conditions for Funding Agreements Relating to Native Title, cl.5.4(i).

2. Apart from the issue of the responsibility of a Government party which the native title party says flows from the issue of a s 29 notice, the contentions about the good faith obligation of a grantee party including funding a native title party are of the same nature as those related to the Government party. The findings above are applicable in relation to the effect of s 31(2) of the Act and the failure of the native title party to make proposals on the issue until very late in negotiations.

The s 29 issue

1. I accept the Government party’s contention that the giving of a s 29 notice is not part of the negotiation process. Section 29 of the Act provides that a Government party must give public notice of future acts covered by the right to negotiate provisions. The notice must specifically be given to a native title party which includes any registered native title claimant. No distinction is drawn between claimants and holders of native title in this respect. The public notice also provides the opportunity for a native title claim to be lodged (within three months) and registered (within four months) and for the registered native title claimant to be a native title party. Where there are no existing claimants or holders of native title the public notice may or may not result in a claim being lodged. Further, the notice may assert that the expedited procedure applies to the grant which means that the normal negotiations under s 31 do not occur. The expedited procedure may be attracted if there is no objection to it or the Tribunal determines that the expedited procedure is attracted. The giving of the notice does not necessarily lead to good faith negotiations.

2. The Tribunal has never regarded the s 29 process part of the negotiations. Generally it has held that negotiations commence with the letter sent by the Government party pursuant to s 31(1)(a) requesting submissions (see for example Strickland NNTT WF97/4 at 23; Walley (1996) at p 381).

3. The discussion above about the effect of s 31(2) and the scope of good faith negotiations is also applicable in this context. It cannot be said that the giving of the s 29 notice is related to the effect of the act on the PBC’s registered native title rights and interests. The giving of the s 29 notice is a statutory process which the Government party undertakes to ensure the validity of its grant. There is no direct effect on the native title rights and interest by the giving of the notice. The effect (if any) on native title rights and interests arises from the grant and doing of the future act.

4. I also accept the Government party’s contention that even if the giving of the s 29 notice can be related to good faith negotiations, there was no unreasonable conduct on its part in the circumstances of this case. In particular at the time the s 29 notice was given the native title party was a registered native title claimant and it was not reasonable to expect the Government party to anticipate that an unfunded PBC might come into existence at some time in the future. Even if the determination of native title and the PBC could be anticipated, that is no grounds for the Government party to refrain from giving the s 29 notice (to do so would be severely disruptive to the processing of future acts in a timely manner).

Concluding comments

1. The evidence tendered in this matter has drawn attention to what is now a longstanding policy dispute between the Commonwealth and State and Territory Governments about how PBCs should be funded.  I am aware that the Tribunal (President, other members and staff) has participated in a number of meetings with interested parties and Commonwealth and State Government representatives and pointed out its concerns for the operation of native title processes if PBCs cannot properly carry out their statutory functions.  It does seem anomalous that government funding is available to NTRBs to support native title parties at the claimant stage but once native title is determined government funding in practice is no longer available to them.  It is not the Tribunal’s role to enter into the policy dispute but I am obliged to point out that how PBCs are to be funded needs to be given urgent attention by governments.  No doubt this will involve consideration of whether public funding should be made available and if so from what source and the capacity of particular PBCs to fund their own operations.

2. I am aware that the question of PBCs generally is the subject of consideration by the Commonwealth and State and Territory Governments.  One of the six practical reforms to deliver better outcomes in native title announced by Attorney-General Ruddock (News Release 7 September 2005) was an examination of current structures and processes of PBCs which was to include consultation with relevant stakeholders.  The communiqué from the Native Title Ministers’ Meeting of 16 September 2005 noted an agreement of Ministers for the Australian Government in consultation with State and Territory Governments and NTRBs to assess the structures and functions of PBCs and consider ways of improving their effectiveness.  A news release from Attorney-General Ruddock of 22 November 2005 “Community invited to help ‘fine-tune’ Native Title Act” notes on this issue that Commonwealth officers have met with interested stakeholders about PBCs and will continue to consult in December.  It is not clear whether the source of funding for PBCs is an issue being considered in these consultations but matters raised in this inquiry suggest that some resolution of the funding issue will be necessary to ensure the on-going effectiveness of PBCs and workability of the native title system.

Decision

1. The Government and grantee parties have negotiated in good faith with the native title party as required by s 31(1) of the Native Title Act 1993 (Cth) and the Tribunal has jurisdiction to conduct an inquiry and make a determination.

Hon C J Sumner
Deputy President
30 November 2005