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

NATIONAL NATIVE TITLE TRIBUNAL

Magnesium Resources Pty Ltd; Anthony Warren Slater/Puutu Kunti Kurrama and Pinikura People; Puutu Kunti Kurrama and Pinikura People #2/Western Australia, [2010] NNTTA 211 (19 December 2010)

Application No: WF10/25

IN THE MATTER of the Native Title Act1993 (Cth)

- and -

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

Magnesium Resources Pty Ltd and Anthony Warren Slater (Applicant/grantee party)

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Angelina Cox and Others on behalf of the Puutu Kunti Kurrama and Pinikura People (WC01/5)
and
Angelina Cox and Others on behalf of the Puutu Kunti Kurrama and Pinikura People #2 (WC05/4) (native title parties)

- and -

State of Western Australia (Government party)

DECISION ON WHETHER THE TRIBUNAL HAS POWER TO CONDUCT AN INQUIRY

Tribunal: Hon C J Sumner, Deputy President

Place: Perth
Date: 19 December 2010

Catchwords: Native title – future acts - proposed mining tenements – right to negotiate - negotiating parties unable to reach agreement - power to conduct an inquiry and make a determination – whether grantee party has negotiated in good faith – obligation to negotiate in good faith does not include grantee party funding native title party – Communications between the parties in person are not a prerequisite to negotiate in good faith – native title party failed to negotiate in good faith – observations on the scope of negotiation in good faith and assistance policies of native title representative bodies – grantee party has negotiated in good faith.

Legislation:Native Title Act 1993 (Cth) ss 3, 29, 31, 33(1), 35, 36(2), 38, 39, 75, 150
Mining Act 1978 (WA)

Cases:Austmin Platinum Mines Pty Ltd and Weld Range Metals Limited/Western Australia/Ike Simpson and Others on behalf of Wajarri Yamatji, NNTT WF10/26, [2010] NNTTA 212 (19 December 2010), Hon C J Sumner
Brownley v Western Australia [1999] FCA 1139; (1999) 95 FCR 152
FMG Pilbara Pty Ltd v Cox [2009] FCAFC 49; (2009) 175 FCR 141
Gulliver Productions Pty Ltd and Others v Western Desert Lands Aboriginal Corporation and Others [2005] NNTTA 88; (2005) 196 FLR 52
McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354
Placer (Granny Smith) Pty Ltd and Another v Western Australia and Other [1999] NNTTA 361; (1999) 163 FLR 87
Rita Dempster & Ors on behalf of various Southern Noongar families/Bayside Abalone Farms Pty Ltd; WA Abalone Farming Pty Ltd/Western Australia, NNTT WF99/1; [1999] NNTTA 235 (27 August 1999), Hon E M Franklyn QC
Strickland v Western Australia [1998] FCA 868; (1998) 85 FCR 303
Walley v Western Australia [1996] FCA 409; (1996) 67 FCR 366
Ward & Ors v Western Australia [1996] FCA 1452; (1996) 69 FCR 208
Western Australia v Daniel [2002] NNTTA 230; (2002) 172 FLR 168
Western Australia v Taylor [1996] NNTTA 34; (1996) 134 FLR 211

Solicitor for the
grantee party:  Mr Ken Green, Green Legal
Solicitor for the                  Mr Ibrahim Kakay,
native title parties:             Yamatji Marlpa Aboriginal Corporation
Representative of the        Ms Carolyn Fennelle
native title parties:             Yamatji Marlpa Aboriginal Corporation
Solicitor for the
Government party:           Mr Brendyn Nelson, State Solicitor’s Office

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

Background

The State of Western Australia (Government party) gave the following notices of future acts under s 29 of the Native Title Act1993 (Cth) (the Act/NTA) being the grant of certain mining tenements (the proposed tenements) under the Mining Act1978 (WA).

On 14 January 2009 the grant of mining lease M08/455 to Magnesium Resources Pty Ltd over an area of 57.46 hectares located 112 kilometres southerly of Pannawonica in the Shire of Ashburton. The grant of a mining lease authorises the applicant to mine for minerals for a term of 21 years from notification of grant and a right of renewal for 21 years.
On 7 October 2009 the grant of miscellaneous licence L08/46 to Magnesium Resources Pty Ltd over an area of 38.33 hectares located 108 kilometres southerly of Pannawonica in the Shire of Ashburton. The purposes of the miscellaneous licence L08/46 are for ‘Road, Mine Site Accommodation Facility, Workshop and Storage Facility’ (both these tenements relate to the Mt Edith Rock Quarry).
On 20 May 2009 the grant of mining lease M08/456 to Anthony Warren Slater over an area of 74.24 hectares located 93 kilometres southerly of Pannawonica in the Shire of Ashburton (one of the tenements which forms part of the Duck Creek Sand and Shingle Operation).

The registered native title claimants and native title parties in these proceedings are:

Angelina Cox and Others on behalf of the Puutu Kunti Kurrama and Pinikura People (WC01/5) registered from 29 November 2001 and Angelina Cox and Others on behalf of the Puutu Kunti Kurrama and Pinikura People #2 (WC05/4) registered from 15 August 2006 in relation to M08/456 and L08/46; and
Angelina Cox and Others on behalf of the Puutu Kunti Kurrama and Pinikura People #2 (WC05/4) registered from 15 August 2006 in relation to M08/455.

In these proceedings both native title parties were represented by solicitors (principally Mr Ibrahim Kakay) employed by Yamatji Marlpa Aboriginal Corporation (YMAC) the recognised native title representative body under the Act in relation to the areas of these claims (and its service arm, the Pilbara Native Title Service (PNTS)). Unless the context otherwise requires, a reference in these reasons to the native title party or PKKP includes both registered native title claimants.
On 8 September 2010, being a date more than six months after the s 29 notices were given, the grantee party made an application pursuant to ss 35 and 75 of the Act for a future act determination under s 38. The application is made on the basis that the negotiation parties (Government party, grantee party and native title party) have not reached an agreement of the kind mentioned in s 31(1)(b) of the Act as to the doing of the future act.
On 22 September 2010, the Tribunal made directions for the conduct of an inquiry into the application, including directions for contentions and evidence to be provided in relation to the native title party’s contention that the grantee party had not negotiated in good faith as required by s 31(1)(b) of the Act. No such contention was made in relation to the Government party. With the consent of the parties I considered it appropriate to decide the matter on the papers.

Obligation to negotiate in good faith

The obligation to negotiate in good faith is contained in s 31 of the Act:
‘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.’
I adopt relevant legal principles from Gulliver Productions Pty Ltd and Ors v Western Desert Lands Aboriginal Corporation and Others [2005] NNTTA 88; (2005) 196 FLR 52 (Gulliver) at 55-60 [8]-[20] unless in conflict with the Full Federal Court decision in FMG Pilbara Pty Ltd v Cox [2009] FCAFC 49; (2009) 175 FCR 141 (Cox).
The main findings of the Full Court in Cox (Spender, Sundberg and McKerracher JJ) were as follows:

●There is no requirement in s 31(1)(b) for negotiations to have reached a certain stage before an application for a future act determination can be made to the arbitral body.
●The Tribunal’s interpretation that this was required put ‘a gloss on the statutory provisions’ and placed ‘a fetter on a negotiation party’s entitlement to make an application under s 35 in order to obtain an arbitral determination’. (at [23])
●There could only have been a conclusion of lack of good faith within the meaning of s 31(1)(b) in this case if the fact that the negotiations had not passed an ‘embryonic’ stage was because of some ‘breach of or absence of good faith such as deliberate delay, sharp practice, misleading negotiating or other unsatisfactory or unconscionable conduct’. (at [27])
●Paragraph 31(1)(b) requires no more that that the grantee party negotiate in good faith ‘during the six month period with a view to reaching the ... agreement’ with the native title parties that the future act may be done, with or without conditions to be complied with by any of the parties. (at [28]).
●Whole of claim or project negotiations are appropriate but to require that the grantee party ‘revert to negotiate specifically’ about the future act in question before applying to the Tribunal for a future act determination if those negotiations are unsuccessful is to ‘impose an additional requirement’ which is not found in s 31(1)(b). (at [37])
●Section 39 provides some guidance ‘as to the matters ... that may reasonably be expected to form part of the negotiations but the Act does not prescribe the ‘manner in which they are dealt with ... apart from a good faith obligation with a view to obtaining agreement’ (at [35]) referring to Lee J in Brownley v Western Australia (1999) 95 FCR 152 at [24], [25].
●Providing what is ‘discussed and proposed’ is ‘conducted in good faith’ and ‘with a view to obtaining agreement about the doing of the future act, then the requirement under s 31(1)(b) will be satisfied’. (at [37])
●To negotiate in good faith for six months or more in order to reach an indigenous land use agreement, where those negotiations encompass the future act in question, ‘can only be conduct within the requirements of s 31(1)(b)’ (at [42])

Elements of the Cox decision are consistent with the findings of Nicholson J in Strickland v Western Australia [1998] FCA 868; (1998) 85 FCR 303 at 322 that:

●the obligation under s 31(1)(b) cannot be interpreted as an obligation to continue negotiations until some particular point negotiations has been reached;
●the consequence of the statutory right to lodge an application under s 35 is that the act of lodgement cannot be relied upon to establish bad faith in the negotiating process.

At the heart of the issues arising from these decisions is what it means in s 31(1)(b) when it says that the parties must:
[N]egotiate in good faith with a view to obtaining the agreement of each of the native title parties to ... the doing of the act ... or ... the doing of the act subject to conditions to be complied with by any of the parties (emphasis added).

The Full Court’s decision is that there is no requirement to negotiate specifically about the particular future act if the proposal to do that act is embraced in wider negotiations (even in a minor or general way), provided the relevant party acts in good faith (as that term has come to be understood under the Act) in those negotiations during the requisite six-month period.

Good faith negotiations mean that there must be negotiations, i.e. conduct which involves communicating, having discussions or conferring with a view to obtaining the agreement of native title parties to the doing of the act or doing of the act subject to conditions to be complied with by any of the parties. The negotiations must be looked at overall but the Tribunal has developed certain indicia set out in Western Australia v Taylor [1996] NNTTA 34; (1996) 134 FLR 211 (the Njamal indicia) to assist in determining whether negotiations in good faith have occurred. The negotiations must involve genuine attempts to reach agreement which are not so unreasonable in the circumstances of a particular case as to call into question whether a party is sincere or genuine in its desire to reach agreement. In Brownley v Western Australia [1999] FCA 1139; (1999) 95 FCR 152 (Brownley) the obligation was described by the Federal Court (per Lee J at 162 [24]) as:
‘The intention of Parliament is that a Government party engage in negotiation with a native title claimant with an open mind, willingness to listen, and willingness to compromise, to reach an agreement under which the native title claimant will agree to Government doing the act it proposes. As was acknowledged by the Tribunal, the terms of s 39 of the Act indicate the scope of matters in respect of which negotiations may be conducted. Section 39 alerts a Government party to the various interests in respect of which a native title claimant may seek to reach accord with Government for the doing of a proposed act in a manner that respects those interests.’
The obligation to negotiate in good faith is now imposed on all negotiation parties not just the Government party.
Once it is established that there have been negotiations between the parties with a view to obtaining the native title party’s agreement to the doing of the future act, the Federal Court has said that lack of good faith in the negotiations would be demonstrated by behaviour which involves:

‘a breach of or absence of good faith such as deliberate delay, sharp practice, misleading negotiating or other unsatisfactory or unconscionable conduct’ (Cox at 146 [27]); or
a failure to act honestly and with no ulterior motive or purpose (Brownley at 162 [23]) or purporting to engage in negotiation but which in truth is conduct that serves an ulterior and undisclosed purpose antithetical to the making of agreement with the native title party. ‘Delay, obfuscation, intransigence, and pettifogerry would be indicia of such conduct’ (Brownley at 163 [25]).

Project summary

The proposed tenements are part of the Onslow Tenement Project which consists of 13 tenements within five project areas promoted by Onslow Resources Ltd (Onslow):

the Ashburton River Sand and Shingle Operation;
the Onslow Dune Sand Operation Project Areas, both of which are located approximately 20 kilometres south-west of Onslow;
the Barradale Rock Quarry located approximately 45 kilometres west-southwest of Nanutarra Roadhouse;
the Duck Creek Sand and Shingle Operation (M08/456 is one of three tenements comprising this project); and
the Mt Edith Rock Quarry (which comprises M08/455 and L08/46), both located approximately 60 kilometres west of the Nanutarra Roadhouse.

Onslow has made application itself for some of these thirteen tenements but in respect of the proposed tenements M08/455, L08/46 and M08/456 (and some other tenements) has agreed to purchase them from the grantee party who applied for the tenements and is accordingly the beneficial owner of them. In these reasons reference to the grantee party is a reference to Onslow acting on behalf of the grantee parties identified in the s 29 notices or to the grantee party nominated in the s 29 notice as appropriate.

Summary of negotiations

On 29 October 2009, in accordance with its usual practice the Government party (Mr Dave Thompson of the Department of Mines and Petroleum (DMP)) sent a letter to the grantee party (Magnesium Resources Pty Ltd), copied to YMAC, in relation to M08/455. In addition to providing the standard information from the Government party in relation to the grant of the mining lease, the letter requested the grantee party to provide to the native title party certain information about the grantee party and about the proposal to mine on M08/455 for the purpose of enabling the native title party to make a submission of the kind referred to in s 31(1)(a) of the Act.
On 14 December 2009, the grantee party (Magnesium Resources Pty Ltd) provided to the native title party information about the company and its proposal to utilise M08/455 to develop a quarry to mine and process dolomite which would be used to supply Main Roads WA, Local Government and other regional developers with basic raw materials for road building and general construction purposes. Miscellaneous licence L08/46 would be used to connect the proposed quarry by road to the Nanutarra Wittenoom Road.
On 17 December 2009, YMAC forwarded a letter to DMP, copy to the grantee party enclosing submissions as contemplated by s 31(1)(a) of the NTA in relation to M08/455.
On 22 January 2010, DMP sent a letter to the grantee party, copied to the native title party, in similar terms to the letter of 29 October 2009 but in relation to L08/46. YMAC responded to this letter on 16 March 2010 and provided a s 31(1)(a) submission to the Government and grantee parties.
No initiating letter was sent by the Government party in relation to M08/456 and as a consequence the native title party did not make a s 31(1)(a) submission. The grantee party provided information in relation to it as set out below.

Negotiations between 5 and 8 January 2010

Between 5 and 8 January 2010, Green Legal (Mr Ken Green, the solicitor acting for the grantee party) attempted to negotiate an agreement with YMAC in relation to M08/455 and L08/46. Mr Green conveyed the grantee party’s wish to expedite the finalisation of the agreement due to an opportunity to supply rock aggregate in connection with the Gorgon gas project which the grantee party preferred to supply from the proposed quarry on M08/455. The proposal was made on 5 January 2010 by correspondence and Green Legal made it clear that this opportunity was only available until 14 January 2010. The grantee party offered to meet with the PKKP People and offered to fund the meeting on a cost recovery basis up to a cap of $5,000 unless otherwise agreed. Green Legal proposed a meeting for 11 January 2010. Not surprisingly, on 8 January 2010 YMAC advised the grantee party that its clients could not proceed on the basis proposed by Green Legal as the suggested process of the meeting date and funding was unrealistic given, among other things, the very short time period involved.

Negotiations about a Project Area Agreement (PAA)

On 13 May 2010, Green Legal sent a letter to YMAC enclosing a proposed Project Area Agreement (PAA) covering all 13 of the Onslow Tenement Project tenements, including those the subject of the current proceedings. The letter invited PKKP to propose amendments to the PAA if it was not acceptable, including by identifying the manner in which the agreement was inadequate and to propose how their concerns might be addressed.
The draft PAA was a comprehensive document covering some of the issues which are customarily dealt with in mining agreements of this kind but modified to take into account the nature of the mining proposed (e.g. see the information provided in the grantee party’s letter of 14 December 2009 to quarry on M08/455 (Mt Edith Rock Quarry) and the proposal in relation to M08/456 (Duck Creek Sand and Shingle Operation) to mine sand and shingle provided by the grantee party on 13 July 2010) and the grantee party and Green Legal’s letter of 5 July 2010 saying that its client was a small company with limited resources. Topics covered by the draft PAA included compensation which was to be provided by way of royalty type payments based on the value of minerals mined from any of the tenements in the Project. In addition, there was provision for the conduct of Aboriginal Cultural Heritage surveys using various methodologies, the development by Onslow of cross cultural awareness programs for Onslow’s employees and the use of reasonable endeavours to ensure that its contactors and agents did the same, and an agreement to certain environmental protection requirements.

Between 14 June 2010 and 20 August 2010 there is correspondence between Green Legal and YMAC principally dealing with YMAC’s proposal for the grantee party to meet directly with the PKKP Working Group and its request for the grantee party to pay the costs of that meeting.
On 14 June 2010, YMAC responded to Green Legal’s letter of 13 May 2010 by suggesting that the grantee party fund a PKKP Working Group meeting and undertake to pay for an economic assessment of the project. On confirmation of the grantee party’s agreement to its proposal, YMAC said it would give the required 21 days notice of the meeting and organise the meeting.
On 2 July 2010, Green Legal wrote to YMAC noting that no substantive reply to his letter of 13 May 2010 had been received. The offer to travel to and attend a meeting was accepted and the grantee party was happy to meet any direct (i.e. out of pocket) expenses of holding the meeting.
On 2 July 2010, YMAC replied setting out a proposal to meet in either Onslow or Karratha in the week of 19 July 2010 and for Onslow to fund the costs of the meeting. YMAC pointing out that the PKKP Working Group comprised 12 persons and was the body responsible for conducting the negotiations. The letter said that the reason no substantive reply had been received to the proposal of 13 May 2010 was ‘because of the failure of your clients to consult and commence negotiations’ with the native title party as required by the NTA.
On 5 July 2010, Green Legal responded to YMAC and among other things reiterated its preparedness to meet face to face with the PKKP Working Group and meet any direct (i.e. ‘out of pocket’ expenses) for it. The grantee party accepted the offer to meet on 21 July 2010 at Karratha and requested a budget estimate. The email letter pointed out that Onslow was a small company with limited resources and again expressed disappointment that no substantive response had been received to the agreement proposal of 13 May 2010.
On 6 July 2010, YMAC replied reiterating its view that negotiations do not commence until there has been a face to face meeting and that this was the reason for requesting the meeting. Although, without specific instructions, YMAC outlined some initial concerns about the agreement namely that there was no upfront ‘signature payment’ for the claimants upon signing the agreement; the agreement did not have any provision for the employment of traditional owners on the project; there is no Lease payment to the claimants; and the agreement is for all minerals (except uranium). YMAC said these issues would need to be discussed with the claimants at the start of negotiations.
On 6 July 2010, YMAC sent to Green Legal an estimate of costs for the one day meeting totalling $40,943.43. The estimate was made up of the following elements:

Attendees Travel, Accommodation and Sitting Fees Allowance ($19,904.40). This amount was further identified as for travelling costs for the claimants from various locations (the furthest away of which was Eneaba which included a 2,500 kilometre round trip and was charged at $1,875 - based on 0.75 cents per kilometre, driver only), meals and accommodation at Australian Tax Office rates and $500.00 per day sitting fees.
Travel Allowance, Airfares, Taxi fare and Car Hire for four YMAC staff (including Mr Kakay) ($5,003.35).
Catering and Venue Hire ($2,050.00).
‘Staff Time’ charged at the daily rates of Legal Officer $1,110.00, Paralegal $500, Community Liaison Officer $500.00, Admin Person $390.00 and including Meeting Preparation time for the Legal Officer estimated at a total of $1,200 and for the Community Liaison Officer estimated at a total of $360.00 ($4,060).
Administration On-Cost charge of 20 per cent to YMAC of $6,203.55.
GST of $3,722.13.

On 6 July 2010, Green Legal responded stating that the estimated costs were ‘grossly excessive’, reaffirming that the grantee party was only willing to pay ‘out of pocket’ expenses and confirming that the grantee party was prepared to meet as suggested and contribute a maximum of $3,000 to the cost of the meeting. Green Legal also sought suggestions on how the negotiations could proceed in the absence of the proposed meeting by teleconference or for the PKKP Working Group to provide a detailed response to the 13 May 2010 proposal. Green Legal also responded to YMAC’s concerns about the agreement by indicating a willingness to trade off the proposed royalty payments for some of the other payments suggested by YMAC. The response said that given the nature of the grantee party’s operation and likely number of employees there were unlikely to be many (if any) employment opportunities for the native title party.
On 9 July 2010, YMAC responded and, among other things, asserted that ‘Mr Green’s clients were not prepared to meet with the native title party and has given no intention to do so.’ I observe that this is not an accurate statement of the state of negotiations as the grantee party had agreed to a meeting, the dispute was about the level of funding it would provide to it. YMAC said it would cease reviewing the draft PAA until the grantee party agreed to meet face to face with the native title party and pay the costs associated with the meeting and undertake to pay the legal costs for reviewing the agreement. YMAC reiterated that sending emails and letters to them does not constitute consultation or negotiation with the native title party. YMAC referred to concerns about cultural sites in the relevant areas and invited Green Legal to itemise the unacceptable aspect of the budget bearing in mind that the grantee party would only be billed for ‘actual expenses’ incurred.
On 13 July 2010, Green Legal provided to YMAC and Department of Mines and Petroleum (DMP) a CD-ROM which contained:
a full copy of the ‘Mining Proposal for the Duck Creek Sand and Shingle Project on M08/456, M08/468 and L08/44’ dated May 2010 which included a ‘Habitat Assessment for Vertebrate Fauna at Proposed Mining Areas on M08/456, M08/468 and L08/44’ Duck Creek Sand and Shingle Project’ dated April 2010; and
a ‘Flora and Vegetation Survey for the Onslow Tenement Project’ which covered all five areas of the Onslow Tenement Project (including the proposed tenements) and was dated March 2010.
The letter from Green Legal of 13 July 2010 said that the documents were provided in an endeavour to keep YMAC’s clients informed of Onslow’s proposed work in relation to the Duck Creek Sand and Shingle Project and invited the native title party to raise any questions arising from the mining proposal. The letter also included some information from Onslow about a search conducted of the Department of Indigenous Affairs Aboriginal Heritage Inquiry System to identify any sites in the Duck Creek Sand and Shingle Project Area.
Even though the Mining Proposal was only confined to the Duck Creek Sand and Shingle Project tenements (including M08/456), the Flora and Vegetation Survey was for the entire Onslow Tenement Project and provided useful information about the grantee party’s intentions. The provision of this information to the native title party is consistent with the obligation to negotiate in good faith.
There was then some further email correspondence leading up to the Tribunal’s mediation meeting on 2 September 2010 but the parties’ positions did not change.
On 11 August 2010, YMAC advised Green Legal by email that at a meeting in Onslow on 30 July 2010 the PKKP Claim Group instructed PNTS to inform Onslow that it must meet with the Working Group to commence negotiations. YMAC asserted (again incorrectly) that Onslow had refused to meet with the PKKP Working Group and in the light of this requested them to pay for independent economic and financial advice on the financial offer and for counsel to review the draft PAA. If agreed in principle YMAC said it would obtain estimates of the cost.
On 20 August 2010, Green Legal responded and among other things said Onslow may be prepared to assist in the cost of an economist and legal counsel’s services but queried whether this was still to be in addition to the costs of the one day meeting and why these costs could not be met by YMAC or the native title party. Mr Green sought evidence of any legitimate and justifiable financial need.
On 27 July 2010, because of its concerns that negotiations may have broken down or stalled the Government party referred the matter to the Tribunal for mediation assistance pursuant to s 31(3) of the Act. On 2 September 2010 a mediation meeting was convened by Tribunal Member Dan O’Dea between representatives of all negotiation parties but was terminated on the basis that no agreement could be reached. The parties outlined their respective positions. YMAC reiterated that there was a high degree of cost in organising a meeting of the claimants which YMAC was not able to meet in full and which led to the proposal for the grantee party to cover the costs. It said that the reluctance of the grantee party to provide the meeting costs and thereby meet with the native title party goes to the question of whether it has negotiated in good faith. YMAC proposed that the grantee party review each itemised cost individually and provide reasoning for each item as to why that cost was not acceptable and negotiate about it. YMAC have expressed concerns over particular burial sites, initiation grounds and other sites and the grantee party have not addressed cultural heritage protection adequately in their proposed agreement. Mr Kakay asserted that the parties ‘cannot use the statute as an engine of fraud’ and that the native title party was concerned that the grant of the tenements will interfere with native title rights and interests.
The grantee party reiterated its offer to contribute towards the cost of a one day meeting to cover 100 per cent of out of pocket expenses capped at $3,000. The grantee party was prepared to meet on country if a substantial outcome such as endorsement of a negotiated agreement would result. Mr Green again complained about the failure of the native title party to provide comments or feedback on the PAA which contained 30 pages of cultural heritage provisions. The grantee party said it would lodge a s 35 future act determination application but was prepared to participate in a s 150 conference if requested by the native title party.

Contentions of the native title party

In summary, the native title party contended that the grantee party’s conduct:

was an attempt to use the statute (the NTA) as an engine of fraud in that its actions were coercive and unconscionable and placed the native title party at a special disadvantage.
did not make a reasonable effort to engage with the native title party and conduct open negotiations.
adopted a rigid and non negotiable position by simply forwarding a copy of the PAA and refusing to engage in discussions about the impact of its proposed activities on the exercise of the native title party’s registered rights and interests.
was unreasonable in the circumstances as the grantee party did not act with a view to reaching agreement.

The native title parties’ reply to the grantee party’s contentions emphasised the non-negotiable nature of the grantee party’s position in refusing to meet with the PKKP Working Group and provide resources for such a meeting or negotiate about them.
The Tribunal accepts the native title parties contention about the importance of the right to negotiate regime as an element of the protection of native title which is one of the objects of the Act (s 3 NTA) and the beneficial nature of these rights which should not be narrowly construed (Cox at [18]).
The native title party also said that the Tribunal needs to guard against imposing an onus on a native title party that is not prescribed by the NTA and which runs counter to its overarching objectives. It should not be the case that a grantee party, once it has negotiated in good faith, should be presumptively entitled to the approval of a future act unless the native title party produces evidence to persuade the Tribunal otherwise. The Tribunal has dealt with whether there is an onus of proof on a native title party or any other party in inquiries under the right to negotiate provisions (i.e. expedited procedure objection and future act determination application inquiries) and confirms that the Act does not impose an onus of proof on any party but adopts a commonsense approach to evidence as explained in Ward & Ors v Western Australia [1996] FCA 1452; (1996) 69 FCR 208 at 215-218 citing McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354 (per Woodward J at 356-357, 358). The commonsense approach to evidence is not the same as applying an evidential onus of proof. Whether a determination is made that a future act may be done or not done is governed by the evidence before the Tribunal, from whatever source including the Tribunal’s own inquiries, about the factors set out in s 39(1) and (2) of the Act. There is no presumption either way.
However, in the context of negotiation in good faith the Tribunal has held that while s 36(2) of the Act (which was inserted by the 1998 amendments) does not impose a strict onus of proof on a native title party it does mean that the native title party has an evidential onus to produce information with a view to satisfying the Tribunal that negotiation in good faith has not occurred on the part of either the Government or grantee parties (Rita Dempster & Ors on behalf of various Southern Noongar families/Bayside Abalone Farms Pty Ltd; WA Abalone Farming Pty Ltd/Western Australia, NNTT WF99/1; [1999] NNTTA 235 (27 August 1999), Hon E M Franklyn QC; Placer (Granny Smith) Pty Ltd and Another v Western Australia and Other [1999] NNTTA 361; (1999) 163 FLR 87 at 91-93, [21]-[28]). It was following the insertion of s 36(2) in the Act that the Tribunal’s directions were changed to require the native title party to identify in the first instance the allegation of lack of good faith on the part of the other parties.

Unconscionable conduct/adopting a rigid non-negotiable position – negotiations in January 2010

The contention of unconscionable conduct or adopting a rigid non-negotiable position relates in part to the negotiations (or attempted negotiations) which occurred between 5 and 8 January 2010 about the commercial opportunity that arose for the grantee party for the dolomite quarry involving M08/455 and L08/46 (Mt Edith Rock Quarry) to go ahead. The native title party says that the conduct of the grantee party placed the native title party at a special disadvantage by imposing an ultimatum to agree to terms and conditions within a timeframe which could not be met and that it also, in these negotiations, adopted a rigid non-negotiable position from the outset.
Had this been the extent of the negotiations about these two tenements, then I would agree with the native title party’s contentions. The attempted negotiations which occurred in this period did not amount to negotiation in good faith and a future act determination application made in relation to M08/455 and L08/46 following these attempted negotiations would have been dismissed. Effectively there had not been any negotiations because of the timeframe within which an agreement was sought.
However, I can infer that the grantee party accepted this to be the case. Having failed to secure a quick agreement with the native title party in relation to M08/455 and L08/46 which would be to its commercial advantage the grantee party then pursued negotiations in relation to them as part of the PAA. Although, in January 2010 the grantee party said that any future commercial terms which it might be prepared to agree to for the grant of M08/455 and L08/46 were likely to be significantly less than the grantee party was prepared to offer at that time, this is not necessarily indicative of bad faith. Having seen the possibility of exploiting a commercial advantage the grantee party gave the native title party the opportunity to enter into a more beneficial agreement based on the special commercial opportunity. I cannot draw any adverse inference about the grantee’s behaviour from the January 2010 attempt to reach agreement. My view of these negotiations is that they are essentially neutral on the question of whether the grantee party has negotiated in good faith overall.

Adopting a rigid non-negotiable position/unreasonable behaviour – Project Area Agreement

The native title party contends in relation to the PAA which was tabled by the grantee party on 13 May 2010 that the grantee party continued (what the native title party says it started in relation to the January 2010 negotiations) to adopt a rigid non-negotiable approach to negotiations (Njamal indicium) which was not meaningful or productive with a view to reaching agreement with the native title party.
The native title party also says that the grantee party’s conduct was unreasonable (Njamal indicium) in refusing to meet with them to commence negotiations at a meeting scheduled for 21 July 2010 (and which had to be cancelled), by refusing to pay the costs of the meeting and by refusing to provide reasons apart from saying that the estimate for the meeting cost was ‘grossly excessive’ notwithstanding that the budget was an estimate. The native title party says that the grantee party’s behaviour from January 2010 illustrates a failure to negotiate or bargain from the outset of negotiations and that this pattern was maintained and ‘so unreasonable that the grantee party could not be said to be sincere or genuine in its desire to reach agreement’. The grantee party did not alter its position on initiating negotiations for the PAA, which was a complex agreement, or to provide resources for the negotiations about it, the native title party said.

Commencement of negotiations

During the negotiations the native title party asserted that the negotiations between the grantee party and native title party could not be commenced until there was a face to face meeting between the parties. The grantee party disputed this and considered that YMAC’s statements to this effect during the negotiations were incorrect at law and in fact amounted to the native title party not negotiating in good faith. In my view, the assertions made in the correspondence by YMAC about when negotiations in good faith can be said to commence is not accurate as a matter of law. Further, to insist that negotiations can only commence by a direct face to face meeting and refuse to take any steps in the negotiations until this happens exhibits an intransigence that is indicative of a failure to negotiate in good faith. A native title party is perfectly entitled to request a face to face meeting to commence negotiations but should not refuse to negotiate or instruct their solicitors to decline to commence discussions or start to explore and identify issues in relation to an agreement already proposed by the grantee party unless such a meeting is held or make the holding of such a meeting a precondition to negotiations.
In Walley v Western Australia [1996] FCA 409; (1996) 67 FCR 366 (20 June 1996) the Federal Court had this to say about when negotiations in good faith could be taken to start. At that time the obligation was only imposed on the Government party but the statement is now equally applicable to a grantee party.
‘The Macquarie Dictionary (2 ed.) (at p.1192) has the following entry in respect to “negotiate”:
“1. to treat with another or others, as in the preparation of a treaty, or in preliminaries to a business deal.
2. to arrange for or bring about by discussion and settlement of terms...”
Obviously, negotiating usually includes bilateral communication. To the extent that negotiation in good faith required communication from the native title parties and the grantee parties to the government party, then one can accept that its existence did not depend entirely on the Government party. However, in my view negotiation may come into existence before there is any response to the initial approach of a negotiator. In other words, a communication from a Government party to a native title party and a grantee party setting out proposals for obtaining the agreement of the native title party to the doing of the act or the doing of the act upon conditions, would mark the beginning of negotiation in good faith. If there were responses, then the timing and nature of the responses (including their reasonableness in the circumstances) and the manner in which the government party dealt with such responses would determine whether the Government party had continued to negotiate in good faith. If there were no responses then perhaps the extent to which the Government party followed up its initial approach might be relevant.’

Although the point was not specifically argued, the Full Federal Court accepted in Cox (at [2]) that negotiations could be said to start when a draft Land Access Agreement was forwarded by a grantee party to a native title party
In the present case it could be argued that negotiations in relation to M08/455 and L08/46 by the Government party commenced in a formal sense when it provided its standard initiating letter (respectively on 29 October 2009 and 22 January 2010) and by the grantee party on 14 December 2009 when it provided the native title party with information about the company and its proposal for M08/455 and L08/46. The submissions provided pursuant to s 31(1)(a) by the native title party on 17 December 2009 and 22 January 2010 could also be seen as part of the negotiations as were the aborted negotiations in January 2010. However, for present purposes, while I note that the provision of information by the grantee party in conformity with the Government party’s standard procedures is indicative of negotiation in good faith, I accept that the negotiations effectively began on 13 May 2010 with the provision by the grantee party to the native title party of the PAA. The PAA was a comprehensive document covering a number of topics which are customarily found in agreements for the grant of mining leases including payments in the nature of a royalty. The grantee party makes the point that the mining leases were to be utilised for quarrying and were not for a substantial iron ore or gold mine.
When the negotiations actually commence in a particular case will depend on the circumstances but I reject the native title party’s argument that negotiations could only commence by a face to face meeting. It would be an entirely artificial position to say that negotiations could not commence unless there are direct communications and meetings between the parties themselves rather than their advisors and legal representatives. Where legal representatives have been appointed to act for a party it is legitimate to regard discussions or communications between them as part of the negotiations. The importance of this contact between representatives to the question of deciding whether negotiation in good faith has occurred will depend on the circumstances of particular cases. The fact that the negotiations proceeded only between the legal representatives for the grantee party and native title party by correspondence does not mean that they were not part of the mandated negotiations in good faith.
The reasons that the negotiations did not in a substantive sense get very far was because they foundered on a dispute between the parties, to which the correspondence was largely directed, about whether the grantee party should pay the expenses of the PKKP Working Group and YMAC to meet personally with Onslow’s representatives.

Whether obligation on Government or grantee party to fund negotiations

The second stance which the native title party took during the negotiations is that there is an obligation on a grantee party as part of good faith negotiations to provide funds to enable the native tile party to negotiate, in this case to pay for a face to face meeting and the cost of reviewing the PAA by legal counsel and an economist.
It is well established by the Tribunal’s decisions that there is no requirement for a Government or grantee party, in order to fulfil the obligation to negotiate in good faith, to provide funding to the native title party for the negotiations. The issue was comprehensively dealt with in Gulliver (at [62]-[97]) (and see the earlier cases cited therein). It is a matter of some surprise to the Tribunal that the native title party’s contentions, although referring to Gulliver, contained no reference to what is a crucial authority to the argument about funding negotiations that it advanced in these proceedings. When appearing before or making written submissions to a Court or Tribunal legal practitioners have an obligation to acknowledge the existence of authorities which do not support their arguments and attempt to deal with them.

As pointed out in Gulliver (at [91]) s 31(2) of the Act presents a considerable obstacle to the native title party’s contentions in that a refusal to negotiate on matters other than the effect of the future act on native title rights and interests does not mean a failure to negotiate in good faith. In my view, the Act is clear that there is no good faith obligation on a Government or grantee party to provide funds to assist a native title party with negotiations and consequentially neither is there an obligation to negotiate about the extent of such funding. The terms of s 31(2) would need to be stretched well beyond their ordinary meaning to say that negotiation in good faith about the effect of a future act on native title rights and interests necessarily imports an obligation to provide funding to a native title party to pursue the negotiations.
However, even if the obligation includes negotiating about the funding of a native title party’s participation in negotiations and something about which negotiation in good faith should occur, there is no absolute obligation on a Government or grantee party to agree to provide the funding. A Government or grantee party would be required to give due consideration to a proposal from a native title party, communicate and have discussions about it but without being under any obligation to agree. In the negotiations in the present case the issue of funding was raised by the native title party, considered and responded to by the grantee party (albeit in a way that the native title party did not find adequate) with a counter offer of payment for out of pocket expenses up to a maximum of $3,000 on the basis that the grantee party was a small company and the proposed cost was prohibitive. The grantee party provided a reason for not wishing to pay the native title party’s assessment of the cost of $40,943.43 for a one day meeting namely that it was a small company and that the amount claimed was excessive. The grantee party also left open the possibility of providing funds for an economic assessment of the Project and legal fees. If, contrary to existing authority, the obligation to negotiate in good faith about the effect of the future act on registered native title rights and interests as a matter of law encompasses negotiating about a grantee party providing resources to assist the native title party then it was discharged by the grantee party in this case.
It is also not clear just what was meant by ‘out of pocket’ expenses offered by the grantee party or by YMAC’s assertion that the grantee would only be billed for ‘actual expenses incurred’. Presumably out of pocket expenses means the direct costs paid by YMAC i.e. the cost of travel, meeting room hire and catering but not YMAC’s staff time or claimant sitting fees.
There is also some ambiguity in what YMAC means by ‘actual expenses incurred’. This could be interpreted to mean only out of pocket expenses as the salaries and the time of staff of YMAC are not actual costs which it incurs. I understand YMAC receives funding from the Commonwealth Government to employ them. However my understanding of YMAC’s position is that the phrase ‘actual expenses’ includes charging for the time of their employees but only for the actual time that they spend on the negotiations or the actual expenditure, for instance on hall hire and catering.
No attempts were made to clarify this issue during the negotiations although it may be that the parties were fully aware of what was being proposed. It is unfortunate that the parties’ representatives did not make some attempts personally to discuss the different positions with a view to clarifying the extent to which they were apart.
Both sides were fixed in their positions. After the initial counter offer the grantee party was not prepared to shift position. The native title party was also intransigent and insistent that the costs of the meeting should be paid by the grantee party. Although YMAC invited the grantee party to discuss the cost estimate later in the negotiations (at the mediation meeting on 2 September 2010) their basic position was that no work would be done on the PAA by YMAC’s lawyers and no negotiations would commence until there was funding for it. The degree of intransigence on the part of the native title party on this issue is demonstrated by the fact that a PKKP Working Group meeting was held during the negotiations (on 30 July 2010) which I can infer Onslow’s representatives would have attended if invited but that no attempt was made to do this or to make any attempts to get any instructions on the details of the PAA. No doubt YMAC would say that it had other business to transact on 30 July 2010 but given the substantial cost of Working Group meetings revealed in the evidence and the fact that a grantee party has no good faith obligation to fund separate meetings and in this case said it could not afford to pay YMAC’s proposed costs it would have been prudent to try to meet with the grantee party at already scheduled meetings even if they were organised to transact other business.
A native title party is at liberty to put any proposal it wishes to a grantee party including that it provide funding to a native title party for legal or expert assistance or for the cost of holding meetings. The Tribunal acknowledged in Gulliver (at [90] citing Western Australia v Daniel [2002] NNTTA 230; (2002) 172 FLR 168 at [146]-[147]) that it has become common practice, at least by large mining companies, for support of this kind to be provided. The native title party submitted that it had become ‘best practice’ in future act negotiations around the country. However a clear distinction needs to be made between the freedom which parties have to negotiate about anything they wish in order to try to reach agreement and what is required by the NTA to satisfy the obligation to negotiate in good faith. The negotiations in good faith which are obligatory do not go beyond negotiations about the effect of the future act on the registered native title rights and interests (and the Tribunal has said other matters related to them contained in s 39 of the Act). In my view, it follows from the terms of the NTA that if a native title party insists that a grantee party fund negotiations and insists that it negotiate about the funding and makes this a precondition to entering into negotiations then it would not be acting in good faith as it would be insisting on the grantee party doing something which under the Act it is under no obligation to do.

General discussion and conclusion

I have dealt with the principal issues raised by the native title party. The evidence clearly establishes that the grantee party was prepared to attend a meeting of the PKKP Working Group on country. It also made proposals for meeting with the Working Group by phone or video which were not taken up. What the grantee party was not prepared to do was fund the meeting to the extent requested by the native title party although it made an offer of some funding. For the reasons given I find there is no substance in the native title party’s contention that the grantee party failed in its obligation to negotiate in good faith on these grounds. I now turn to whether there was any other conduct by the grantee party inimical to negotiation in good faith.
By placing the PAA on the table it is self-evident that the grantee party was prepared to negotiate about the specific tenements the subject of these proceedings and at various times the grantee party invited the native title party to provide their point of view and submissions in relation to them. The fact there was very little negotiation about the substance of the PAA is because of the stalemate which existed about funding of the face to face meeting and other aspects of the negotiations.
In general it cannot be said that the grantee party adopted a rigid non-negotiable position in relation to the PAA. In particular, it indicated that it was prepared to receive submissions in relation to it. When the native title party pointed out that the PAA did not contain provision for signature or upfront payments the grantee party replied. The grantee party acknowledged the possibility of including such payments but pointed out that this could require an adjustment to the royalty rate. An explanation was given for this position.
The fact that the negotiations did not reach the stage of discussing in any depth the substantive proposals from the grantee party does not matter. The negotiations which were carried by the grantee party with the native title party were with a view to obtaining the agreement of the native title party to the doing of the future act. The Federal Court in Cox (at [18]-[30]) has made it clear that there is no requirement that negotiations reach a certain stage. It is regrettable that, apart from the substantive proposals contained in the PAA, the negotiations did not get beyond procedural issues but it cannot be said (consistently with the Federal Court’s approach in Cox) that there were no negotiations which had as their objective obtaining the agreement of the native title party to the grant of the proposed tenements all of which were the subject of the PAA.
The fact that the three proposed tenements were included in a broader agreement cannot on its own mean that there was not the required negotiation about them. Again Cox (at [31]-[37]) is authority for the proposition that the negotiations do not have to be about the specific circumstances of a particular future act but whether the negotiations were directed towards obtaining the agreement of the native title party to it and that it is permissible to include negotiations about particular future acts in a broader area agreement that also involves other mining tenements.
I am faced with a situation where there were negotiations albeit of a desultory nature and (with the exception of the substantive proposal made by the grantee party) essentially about matters of procedure. However, in order for there to be a finding of the kind contended for by the native party there must be evidence of the grantee party behaving in a way identified by the Federal Court or Tribunal as being indicative of bad faith, i.e. the sort of improper behaviour referred to above in para [10]. There is no basis for such a finding on the facts established in this matter.
The negotiations which occurred between 13 May 2010 and 2 September 2010 were conducted exclusively by email and correspondence between the parties’ representatives – Green Legal and YMAC. In my view it is regrettable that the representatives could not manage to meet personally during this period to try to iron out the differences between them in a commonsense and normal way. The fact that the representatives were not prepared to do this suggests that the negotiations were being conducted in a somewhat formulaic and standard way. In this case both representatives adopted this approach so it is not possible to draw an adverse conclusion about one or other of them from this behaviour. In other cases it could suggest that a party was just going through the motions, rather than genuinely negotiating, and lead to a possible finding of failure to negotiate in good faith. In this case, despite its rather formal approach to negotiations the grantee party put on the table a substantial agreement which sufficiently evinced a desire to reach agreement with the native title party and that it did negotiate in good faith.

General comment on issues relating to the funding of future act negotiations

While not part of my reasons for decision the following comments are made because of certain issues of a policy nature which arise from the evidence. They are made for the consideration of Federal (Department of Family, Housing, Community Services and Indigenous Affairs (FaHCSIA)) and State Governments, YMAC, other native title representative bodies and solicitors employed by them who represent native title parties.
Where a native title party (after advice of their solicitors who may be employed by a native title representative body) takes a stance that they will not engage in negotiations unless funding for them is provided by a grantee the potential exists for an outcome which is not in their interests. It is possible to envisage a scenario where a grantee refuses to fund negotiations to the extent requested by a native title party or at all; a native title party declines to engage in good faith negotiations; the grantee party makes a future act determination application; the Tribunal finds that the grantee party has negotiated in good faith potentially taking into account that the native title party has not done so; and the Tribunal determines that the future act may be done on terms considerably less beneficial to a native title party than could have been negotiated. This outcome is quite possible as the Tribunal cannot make a determination for payments in the nature of royalties (s 33(1) NTA).
The dilemma raised by this scenario (which I imagine is not uncommon) comes about because the scope of the obligation to negotiate in good faith and in particular s 31(1) and (2) of the NTA does not encompass negotiating about a Government or grantee party providing funds to the native title party for the purposes of the negotiations. On the other hand, there are limitations on the funding provided by FaHCSIA for future act negotiations (as demonstrated by the evidence in Austmin Platinum Mines Pty Ltd and Weld Range Metals Limited/Western Australia/Ike Simpson and Others on behalf of Wajarri Yamatji, NNTT WF10/26, [2010] NNTTA 212 (19 December 2010). If a native title party is not funded for the negotiations from their own resources (in many cases they will not have this capacity), by Governments or by approaches to mining companies then they are potentially placed at a disadvantage in the negotiations.
The above scenario may also raise issues for solicitors employed by representative bodies when they are representing native title parties. When representing native title party clients (as opposed to giving advice to a representative body itself) solicitors have a primary obligation to their clients not to their employer. If proposals are made for a grantee party to fund negotiations and the cost of meetings, including the costs identified in this matter, then the solicitor acting for the native title party would need to obtain specific instructions to this effect which emanate from the native title parties themselves after they had been being fully informed of the potential consequences. While there is no evidence to suggest that this did not happen in this case I respectfully suggest that lawyers in this situation may need to be alert to the possibility of a conflict between the duty they have to act in the best interest of their client (i.e. the native title party) and the policy of their employer on cost recovery.
Native title parties and their representatives may also need to take a more flexible approach to organising meetings to deal with future act matters than was exhibited in this case. In an environment of limited resources representative bodies may need to consider ways to progress negotiations which minimise costs. I note that a more flexible approach was taken on WF10/26. As I have already said, YMAC could have considered taking the grantee party’s proposals in the PAA to the PKKP Working Group as there is evidence of them meeting on 30 July 2010. While presumably meeting about other matters, consideration could have been given to extending the meeting given the substantial costs involved in organising it. The grantee party would have attended. Even if the grantee party did not attend, the native title parties’ lawyer could have attempted to obtain instructions from his clients based on a grantee party’s proposed PAA. In this case YMAC had sufficient details of the various projects and particularly their location to at least attempt to obtain some instructions from their clients. If it was unclear about what was proposed it could have sought clarification from the grantee party. YMAC did not seek to do this as the native title parties’ instructions were that their solicitor would not work on the PAA until the grantee party had agreed to provide funding for the negotiations and attend a face to face meeting.

The issues raised in these proceedings should be referred to the appropriate funding authorities for further consideration. There are questions which need examination about a representative body being place in a situation where, because of funding limitations, it is not able to act for native title parties in future act negotiations or not be able adequately to do so unless they receive costs of the nature identified here from a mining company.

Decision

The grantee party has negotiated in good faith with the native title parties as required by s 31 of the Act and the Tribunal has power to conduct an inquiry and make a determination.

C J Sumner
Deputy President
19 December 2010