Northern Land Council v Commonwealth

[1987] HCA 52

HIGH COURT OF AUSTRALIA

Mason C.J., Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ.

NORTHERN LAND COUNCIL v. COMMONWEALTH OF AUSTRALIA and ANOTHER

21 October 1987

Decision

MASON C.J., WILSON, BRENNAN, DEANE, DAWSON, TOOHEY AND GAUDRON JJ. The nature of these proceedings and the circumstances in which they arose were described briefly in the judgment of this Court in Northern Land Council v. The Commonwealth ("the N.L.C. Case") (1986) 161 CLR 1. Since 11 August 1978 certain land in the Northern Territory known as "the Ranger land" has been "Aboriginal land" as that expression is defined by s.3(1) of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act"). The land has been held by the Kakadu Aboriginal Land Trust, which is a Land Trust established under the Land Rights Act, as proprietor in fee simple, subject to the provisions of that Act.

2. On 9 January 1979, pursuant to s.41 of the Atomic Energy Act 1953 (Cth) ("the Atomic Energy Act"), the Minister granted to Peko-Wallsend Operations Ltd., Electrolytic Zinc Company of Australasia Ltd. and the Australian Atomic Energy Commission an authority to carry on mining operations on behalf of the Commonwealth in the Ranger Project Area, being part of the Ranger land. On 12 September 1980 the joint venturers assigned their interests in the authority to the second defendant, Energy Resources of Australia Ltd. ("E.R.A."), the Minister giving his consent to the assignment pursuant to s.41B of the Atomic Energy Act. Since 12 September 1980 E.R.A. has mined the Ranger uranium deposit in the Ranger Project Area.

3. Section 5 of the Atomic Energy Amendment Act (No. 2) (1980) (Cth) amended s.41 of the Atomic Energy Act by including s.41(2AA). The effect of this provision was that operations carried on in respect of the Ranger uranium deposit should be deemed to be carried on on behalf of the Commonwealth and to be authorized by the s.41 authority.

4. On 3 November 1978 the plaintiff and the Commonwealth entered into an agreement under seal pursuant to s.44(2) of the Land Rights Act. That sub-section imposes a restriction on the application of s.41 of the Atomic Energy Act to the Ranger Project Area. The effect of s.41(1) of the Land Rights Act is that the Atomic Energy Act does not apply in relation to Aboriginal land so as "to authorize the entry or remaining of a person on the land or the doing of any act by a person on the land" unless the Governor-General has by proclamation declared either that the Minister and the Land Council for the area have consented to the application of that Act in relation to entry on that land or that the national interest requires the application of that Act in relation to entry on that land. However, s.41(2) of the Land Rights Act specifically provides that s.41(1) of that Act does not apply to the Ranger Project Area once it becomes Aboriginal land.

5. The effect of s.44(2) of the Land Rights Act is that, notwithstanding s.41(2) of that Act, s.41 of the Atomic Energy Act, in its application to the Ranger land, is not to be taken:

"... to authorize the entry or remaining of a person on that land or the doing of any act by a person on that land unless the Commonwealth has entered into an agreement under seal with the Land Council for the payment to the Land Council by the Commonwealth of an amount or amounts specified in, or calculated in accordance with, the agreement and the acceptance by the Commonwealth of such other terms and conditions as are provided for in the agreement."

By the agreement dated 3 November 1978 the Commonwealth became bound to make certain payments to the plaintiff and accepted certain other terms and conditions.

6. The plaintiff commenced proceedings in the original jurisdiction of this Court, seeking relief in respect of the s.44(2) agreement, a declaration that s.5 of the Atomic Energy Amendment Act (No. 2) was invalid, injunctions restraining E.R.A. from entering on or remaining on the Ranger land or doing any act thereon and consequential relief. By its statement of claim the plaintiff pleaded a case for relief in relation to the agreement which was expressed to be based on breach of fiduciary duty, duress, undue influence and unconscionable conduct on the part of the Commonwealth. Early in 1986 the defendants moved to strike out the statement of claim. However, these applications ultimately led to the stated case which was the subject of the decision in the N.L.C. Case. The Court answered the questions asked as follows (at pp 8-9):

"(1) Is s.5 of the Atomic Energy Amendment Act (No. 2) 1980 a valid exercise of the legislative power of the Parliament of the Commonwealth?

Answer: Yes.

(2) If (1) is answered yes, whether s.41 of the Atomic Energy Act 1953 as amended by s.5 of the Atomic Energy Amendment Act (No. 2) authorizes the second defendant to carry on operations on the Ranger Project Area even if the agreement entered into as alleged in par.32 of the statement of claim is -

(a) void, (b) invalid, (c) voidable.

Answer: (a) No. (b) Unnecessary to answer. (c) Yes."

7. Following delivery of judgment in the N.L.C. Case, with a view to circumventing the need to determine the applications to strike out the statement of claim and the possibility of a lengthy trial on issues of fact presented by the statement of claim, on 18 June 1986 Gibbs C.J. stated another case (stated case no. 2). The questions asked were:

(1) Whether on the facts alleged in the statement of claim the agreement referred to in par.32 of the statement of claim is void or voidable?

(2) If the answer to question 1 is voidable, does the statement of claim disclose a cause of action against the second defendant?

(3) Do the facts alleged in the statement of claim disclose a cause of action for breach of fiduciary duty against the first defendant?

The s.44(2) agreement was the agreement referred to in par.32 of the statement of claim. Answers favourable to E.R.A. would have resulted in a dismissal of the action against it.

8. When stated case no. 2 came on for hearing in October 1986 Mr Sher Q.C. for the plaintiff indicated that the plaintiff desired to make certain amendments to the statement of claim. The proposed amendments sought to introduce, in support of the claim that the Commonwealth was subject to a fiduciary duty, an allegation of an antecedent native title to the Ranger land recognized by the common law. This allegation, it was conceded, was contrary to the decision in Milirrpum v. Nabalco Pty. Ltd. (1971) 17 FLR 141 and would require this Court to consider whether that decision was correct. However, Mr Sher stated that he did not propose that the stated case should be argued on the footing that the matter raised by the proposed amendments should come within the ambit of the questions presented by the stated case. Instead, if the necessity arose, the matter should be dealt with at some later stage, probably at the trial because Mr Sher's view at that time was that the resolution of the matter raised by the proposed amendments would involve complicated factual issues. The Commonwealth opposed a hearing of the stated case on the ground that the proposed amendment, if made, would have the effect of introducing new matter into the stated case or, alternatively, require its determination on an assumption which would prejudice the finality of the answers given to the questions in the stated case, the case having been stated on the assumption that it might result in finality. In the result the Court adjourned the stated case so that it could be reformulated in some suitable way.

9. Following a hearing before Mason J. in December 1986 the statement of claim and the stated case were amended ("amended stated case no. 2"). The principal amendments to the statement related to allegations concerning the title to the Ranger land and the circumstances giving rise to the existence of a fiduciary duty. The new paragraphs relating to title are pars.4A-4D (inclusive). The relevant paragraphs, along with par.4, are as follows:

"4. The Ranger land is 'Aboriginal land' within the meaning of the Land Rights Act.

4A. Prior to title to the Ranger land being vested in the Land Trust, the 'relevant Aboriginals' within the meaning of sub-section 11(2) of the Land Rights Act ('the group') were, by Aboriginal tradition, and not otherwise entitled to the use or occupation of such land ('antecedent native title').

4B. Prior to title to the Ranger land being vested in the Land Trust, the group was a local descent group of Aboriginals who had common spiritual affiliations to a site on the land, being affiliations that placed the group under a primary spiritual responsibility for that site and for the land and were entitled by Aboriginal tradition

(a) to forage as of right over that land (b) to enter upon the land; and (c) to use or occupy the land.

Upon the title to the Ranger land being vested in the Land Trust, the group became entitled

(a) to enter upon the land; and (b) to use or occupy the land

to the extent that that entry, occupation or use was in accordance with Aboriginal tradition governing the rights of that group with respect to that land, whether or not those rights were qualified as to place, time, circumstances, purpose, permission or any other factor; but not so as to interfere with the use or enjoyment of an estate or interest in the land held by a person not being a Land Trust or an Aboriginal Council or other incorporated association of Aboriginals within the meaning of the Land Rights Act.

4C. Neither the matters in 4A nor the matters in 4B were extinguished by the Land Rights Act.

4D. Further and alternatively, the radical antecedent native title and the rights attaching thereto were enforceable by the group against all other persons subject to the overriding rights of the Crown."

10. Paragraph 35 of the statement of claim, which sets out the circumstances giving rise to the existence of a fiduciary relationship, was the subject of extensive amendment. The opening sub-paragraphs, introduced by amendment, set out facts which correspond with the amendments as to title which we have set out above. These sub-paragraphs are as follows:

"(a) the fact that the Ranger land became Aboriginal land within the meaning of the Land Rights Act which Act created rights for the benefit of the group;

(b) the fact that the Land Rights Act recognised and gave effect to the antecedent native title referred to in paragraph 4A hereof;

(c) further, and alternatively, the fact that the Land Rights Act recognised and gave effect to the rights referred to in paragraph 4B hereof;

(d) further, and alternatively, the fact that the radical antecedent native title and the rights were enforceable by the group against all other persons subject to the overriding rights of the Crown;

...

(f) prior to 11 August 1978 and during the negotiations for the section 44 agreement the Commonwealth recognised the antecedent native title of the group. Further, the Commonwealth had resolved and acted upon the assumption that a grant of the Ranger land would be made to a Land Trust pursuant to the Land Rights Act ..."

The succeeding sub-paragraphs set out particular circumstances designed to attract the existence of a fiduciary relationship or identify provisions of the Land Rights Act or the Atomic Energy Act which are said to be relevant to the existence of such a relationship. References to s.44, especially to s.44(2), of the Land Rights Act play a prominent part in par.35: particularly sub-pars (e), (f), (j), (k), (l), (q) and (t).

11. In its particulars of sub-par.35(f), the plaintiff refers to the contents of par.29 of the amended statement of claim which is in these terms:

"Further, during the course of the negotiations, and up to and including 3 November 1978 the Commonwealth stated to the NLC that it would ensure that mining operations on the Ranger land would not operate to the disadvantage of Aborigines, that the NLC and Aborigines should trust the Commonwealth government, that the Commonwealth would ensure that the proposed agreement was fair to the NLC and to Aborigines and that it was in the Aborigines best interests to agree to the terms and conditions of the draft agreement referred to in paragraph 30 hereof."

12. Amended stated case no. 2 states the following questions:

"(1) Whether on the facts alleged in the amended statement of claim save for paragraph 4D and sub-paragraph 35(d), the agreement referred to in paragraph 32 of the statement of claim is void or voidable?

(2) If the answer to question 1 is voidable, does the amended statement of claim save for paragraph 4D and sub-paragraph 35(d) disclose a cause of action against the second defendant?

(3) Do the facts alleged in the amended statement of claim, save for paragraph 4D and sub-paragraph 35(d), disclose a cause of action for breach of fiduciary duty against the first defendant?"

The questions asked in amended stated case no. 2 are, subject to the express exclusion of par.4D and sub-par.35(d) of the amended statement of claim, in the same terms as the questions asked in stated case no. 2. However, the content of the questions is altered by reason of the amendments made to the statement of claim.

13. When amended stated case no. 2 came on for hearing before us the plaintiff sought to defer the determination of question (1) until the trial, a course which was opposed, initially at any rate, by both defendants. In the course of the hearing the plaintiff also sought to have the stated case further amended by excluding the qualifications relating to par.4D and sub-par.35(d) of the amended statement of claim. This course was also opposed by the Commonwealth, though not by E.R.A. which naturally wishes to have its position in the litigation determined as quickly as possible. The plaintiff's request that the case be further amended in this way, contrary to the position which it had taken earlier, evidently reflected some concern that it might be at a disadvantage if its primary submission on the construction of the Land Rights Act - which we shall examine shortly - were to be determined independently of, and in isolation from, the allegation of an antecedent native title to the land at common law.

14. The plaintiff's primary submission is that as a matter of abstract statutory construction the Commonwealth came under a fiduciary duty to the plaintiff or to the Aboriginal people interested in the Ranger land when the Commonwealth entered into negotiations for an agreement under s.44(2) of that Act. The short answer to this submission is that there is nothing in the bare terms of s.44(2) which suggests that the Commonwealth has any duty to a Land Council with which it negotiates for an agreement under s.44(2). To the contrary, s.44(2) considered in isolation suggests that the Commonwealth makes an agreement under s.44(2) having regard to its own interests as payer of moneys, the interests of the Land Council being the interests of a payee. The agreement to be negotiated must provide, in accordance with s.44(2), for the payment to the Land Council of an amount or amounts by the Commonwealth. The agreement must also evidence, in accordance with that sub-section, "the acceptance by the Commonwealth of" the other terms and conditions for which the agreement provides. The interests, for all that appears in s.44(2), may well be adverse to each other.

15. This conclusion is reinforced by s.46(1) of the Land Rights Act which, in the event of the Land Council being unwilling to negotiate with respect to the terms and conditions of such an agreement or the Land Council and the Commonwealth being unable to agree on such terms and conditions, authorizes the Minister to appoint an arbitrator to determine the terms and conditions of the agreement. Where the arbitrator has made such a determination and the Commonwealth is willing to enter into the agreement, the Land Council is bound to do so (s.46(2)). And where the Minister is satisfied that the Land Council has refused, or is unwilling, to enter into the agreement in accordance with s.46(2), he may enter into the agreement in the name of, and on behalf of, the Land Council (s.46(3)).

16. Accordingly, we reject the plaintiff's submission that, as a matter of statutory construction, s.44(2) of the Land Rights Act considered in isolation imposes a fiduciary duty on the Commonwealth or attracts such a duty when the Commonwealth enters into negotiations with the Land Council for an agreement under s.44(2). However, that view does not resolve the real issues in the case. Those issues depend or may depend on the resolution of questions of fact.

17. If the Commonwealth carries on negotiations with an intending miner and with a Land Council with a view to the conclusion of an agreement which would result, and which is intended by all parties to result, in the miner undertaking the actual burden of the payments, terms and conditions to be accepted under the s.44(2) agreement so that the Commonwealth would be the conduit for the benefits to be provided by the miners and received by the Aboriginals interested in the relevant land, the Commonwealth may come under a fiduciary duty in its negotiations with the Land Council. That depends on issues of fact and, perhaps, on the nature of the interests of the Aboriginals (whether statutory or common law interests) in the land the subject of the negotiations: see Moorgate Tobacco Co. Ltd. v. Philip Morris Ltd. (No. 2) (1984) 156 CLR 414, at p 436. It has often been pointed out that the categories of fiduciary relationship are not closed. See, for example, Hospital Products Ltd. v. United States Surgical Corporation (1984) 156 CLR 41, at pp 68, 96; Guerin v. The Queen (1984) 13 DLR(4th) 321, at p 341. Whether the nature of the relationship at common law between an identified group of Aboriginal people and the unalienated Crown lands which they have used and occupied historically and still use and occupy is such as to found a fiduciary relationship or a trust of some kind is a question of fundamental importance which has not been argued on the present stated case. Likewise, the question whether other allegations in the amended statement of claim might give rise to a fiduciary relationship should not be determined in the abstract but should be determined in the light of the facts found at the trial.

18. The amended statement is unduly discursive and argumentative in that it pleads both fact and law. It involves an element of obscurity in that the precise import of pars.4A and 4D and the relationship between them is not clear. And some of the allegations contained in par.35, which are relied upon to sustain the existence of a fiduciary duty, may be relevant to the claim for relief based on unconscionable conduct or undue influence. It is arguable that, if the allegations of fact which the amended statement of claim contains are made out, they suffice to create a situation of such influence on the part of the Commonwealth and such disadvantage on the part of the plaintiff as to give rise to a presumption of unconscientious dealing or unconscionable conduct on the part of the Commonwealth in negotiating, and procuring the assent of the plaintiff to, the agreement. In saying this we do not express any view about the plaintiff's prospects of establishing the matters of fact alleged in the amended statement of claim. In concluding that the statement of claim pleads an arguable cause of action we must necessarily assume that these matters will be established.

19. One question argued in stated case no. 1 was whether the making of an agreement which was voidable, as distinct from void, would satisfy the requirement in s.44(2) of the Land Rights Act that the Commonwealth "has entered into an agreement". The answer was that it would. The effect of a subsequent avoidance of such a voidable agreement was not argued and the reasons for judgment of the Court should not be read as if they were intended to answer such a question.

20. On the hearing of the present stated case E.R.A. argued that even if the plaintiff was to succeed in establishing that the s.44(2) agreement was voidable and has been avoided, the authority, granted in accordance with s.41(1) of the Atomic Energy Act to carry on operations on the land, is not affected by the avoidance. E.R.A. submitted that on its true construction s.44(2) merely restricts the operation of s.41 of the Atomic Energy Act in authorizing the entry and remaining of a person on land and the doing of any act on that land if the Commonwealth has not "entered" into a s.44(2) agreement. According to the argument, if the Commonwealth has entered into an agreement and that agreement, being voidable, is subsequently avoided, the only condition necessary for an unqualified and continuing operation of s.41 of the Atomic Energy Act is nevertheless satisfied. E.R.A. relied on the use of the words "has entered into an agreement", which look to the actual making of an agreement, in preference to other expressions which contemplate the continuing operation of a valid agreement.

21. E.R.A. also pointed to the enormity of the consequences to a uranium miner whose expenditure of millions of dollars might be frustrated at any time by the avoidance or termination for any other reason of a s.44(2) agreement to which the miner is not a party. To the extent (if any) that avoidance of a contract voidable in equity depends for its efficacy upon subsequent decree of a court, those consequences may be relevant as to whether any and what decree should be made. However, the possibility of such consequences does not, in our view, control the meaning and effect of s.44(2). The plain purpose of s.44(2) is to provide some compensation to the Aboriginals interested in the land for the mining operations that are to be undertaken on the land without their consent. It would make nonsense of that purpose if the mining could continue in the absence of a binding agreement between the Land Council and the Commonwealth. It must be remembered that the general scheme of the Act is that no mining interest may be granted in respect of Aboriginal land unless the Minister and the relevant Land Council consent (s.40(1)). The Land Council may require payment by the applicant for a mining interest as a condition of its consent (s.43(1)). While the Ranger Project Area is excluded from the operation of these provisions, s.44 provides a complementary scheme for compensation for entry on to that land.

22. Furthermore, the requirement that there be an element of continuity in the agreement finds some expression in the fact that, absent an agreement, the authority granted under the Atomic Energy Act "shall not be taken to authorize the entry or remaining of a person on that land or the doing of any act by a person on that land" (emphasis added). The necessary implication to be derived from these words is that the authority to commence and to continue operations on the land is dependent on there being in force the agreement contemplated by s.44(2) of the Land Rights Act.

23. The consequences which, according to E.R.A., would flow from such a construction rest on a mistaken view of the operation of the Land Rights Act. That Act does not interfere with the Commonwealth's legal obligations to the miner. To enable the mining operations to continue the Commonwealth must assume responsibility for ensuring that an agreement between it and the Land Council remains current. If that agreement is avoided then it is for the Commonwealth to bring into existence another agreement in its place, if necessary by resort to the provisions of s.46. Ultimately, the Act ensures that the Land Council cannot thwart the Commonwealth reaching this objective. If the mining operations were to be suspended or discontinued by reason of the operation of s.44(2) then the miner would have to look to a remedy in breach of contract against the Commonwealth.

24. It follows from what we have already said that it is not possible to resolve finally the questions of law presented by amended stated case no. 2 in advance of a trial. The further amendment of the stated case so as to bring par.4D and sub-par.35(d) of the amended statement of claim within its purview would not alter this position. Accordingly, we do not propose to answer the questions asked in the amended stated case and consider that the action should proceed to trial in the light of the conclusions which we have expressed on the matters debated before us.

25. We order that the action be remitted to another court and order that the costs of the amended stated case be costs in the action. The matter will be listed before a Justice to finalize the terms of the remitter.

Orders

Order that the action be remitted to such other court and upon such terms as may be determined by a Justice.

Costs of the amended case stated (no.2) to be cost in the action.