Western Australia v Dimer - [2000] NNTTA 290

Reported at (2000) 163 FLR 426

NATIONAL NATIVE TITLE TRIBUNAL

Western Australia/Arthur Dimer, Ollan Dimer, John Walter Graham, Sonny Graham, Katie Ray, Maureen Young, Georgina Schultz, Mabel Wilson, Jack Schultz, Betty Bullen, Graeme Pellew (Ngadju People, WC95/17); Cyril Barnes, Merle Forrest, Mercy O’Loughlin, Stevie Sinclair, Judy Slater, Elvis Stokes & Victor Willis (Central East Goldfields People, WC99/30)/Equs Limited, [2000] NNTTA 290 (9 August 2000)

Application No: WF99/10

IN THE MATTER of the Native Title Act 1993

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IN THE MATTER of a Future Act Determination Application

State of Western Australia

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Arthur Dimer, Ollan Dimer, John Walter Graham, Sonny Graham, Katie Ray, Maureen Young, Georgina Schultz, Mabel Wilson, Jack Schultz, Betty Bullen, Graeme Pellew (Ngadju People, WC95/17)

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Cyril Barnes, Merle Forrest, Mercy O’Loughlin, Stevie Sinclair, Judy Slater, Elvis Stokes & Victor Willis (Central East Goldfields People, WC99/30)

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Equs Limited

DECISION ON WHETHER THE TRIBUNAL HAS JURISDICTION TO CONDUCT AN INQUIRY

Tribunal:Ms P.M. Lane, Member
Place:Sydney
Date:9 August 2000
Catchwords: Native title – future acts - application for a determination in relation to mining leases – jurisdiction – whether notice given under s.29 – standard for negotiating in good faith – whether government party under lesser obligation to negotiate in good faith after amendment of the Native Title Act 1993 – relevance of matters occurring after future act determination application lodged.
Legislation:Native Title Act 1993 (Cth) ss.29, 30, 31, 33, 35, 36, 39, 66, 155, 190, 202, 203BB.
Cases:Dempster & Ors/Western Australia/Bayside Abalone – Anor NNTT WF 99/1 Hon E M Franklyn QC 27 August 1999
WMC Resources Ltd v. Lane (1997) 73 FCR 366; 143 ALR 200
Hayes v Northern Territory [1999] FCA 1248
Bropho v Western Australia (2000) 169 ALR 365

Western Australia v Taylor (1996) 134 FLR 211 (“Njamal”)
Western Australia/Strickland (Maduwongga) & Ors/Plutonic NNTT WF98/9, Hon CJ Sumner, 30 October 1998
Dempster & Ors/Western Australia/Bayside Abalone
NNTT WF99/1 Hon E M Franklyn QC 27 August 1999
Placer (Granny Smith) & Anor/Western Australia/Harrington-Smith & Ors
NNTT WF 99/5, Hon C J Sumner, 21 December 1999
Western Australia/Strickland (Maduwongga) & Ors
NNTT WF97/4 Hon C.J. Sumner 10 December 1997
Brownley v. State of Western Australia (1999) 95 FCR 152
RMG Services Pty Ltd v. The Barngala Families & Ors
[1999] SAERDC 37 (29 June 1999
Evans/Western Australia/Anaconda Nickel
NNTT WF98/267 Hon CJ Sumner 15 July 1999
Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303
Western Australia/Thomas (Waljen)/Anaconda Nickel Ltd
NNTT WF98/7 Hon CJ Sumner, 4 September 1998

Introduction- the future acts & native title parties

On 21 December 1999 Equs Ltd (the grantee party) applied under s.35 of the Native Title Act 1993 (the Act) for a future act determination in respect of two applications for mining leases under s. 49 of the Mining Act 1978 (W.A.).

The future acts are described in the application as being the grant of mining leases M28/171 and M28/208. M28/171 is located in the Shire of Kalgoorlie Boulder, 86 kms easterly of Kambalda East. It comprises 997.02 hectares. It lies within the area of the Ngadju People’s native title application WC 95/17.

The Ngadju People are native title parties in respect of this future act because their application was registered under the Act prior to amendment (the ‘old Act’) on 8 September 1995. Although no party referred to this at the hearing, it appears from information available to the Tribunal that this application was combined with other applications at some time during 1999 and the combined application was found to comply with s.190A of the Act as amended by the Native Title Amendment Act 1998 (the ‘new Act’) on 3 March 1999. However, the Registrar’s decision to register the combined claim was set aside by Carr J (State of Western Australia v Native Title Registrar [1999] FCA 1592, 16 November 1999). It appears that the original application WC95/17 remains on the Register, and thus the Ngadju people have retained the right to negotiate in relation to this application.

As the future act determination application was lodged after the commencement of the provisions of the new Act on 30 September 1998, the new Act applies to this application (Table A, Items 2 and 4) (Dempster & Ors/Western Australia/Bayside Abalone – Anor NNTT WF 99/1 Hon E M Franklyn QC 27 August 1999).

M28/208 is also located in the Shire of Kalgoorlie Boulder, 86 km easterly of Kambalda East. It comprises 980.56 hectares. It lies within the area covered by native title application WC99/30 by the Central East Goldfields People (the combined application). This application comprises 11 applications combined by order of the Federal Court on 4 October 1999. Originally 5 applications covered the area of M28/208. They were:

WC96/19 (Karonie People # 4 application lodged on 1 March 1996);
WC96/81 (Tjeraridjal People application lodged on 27 June 1996);
WC97/53 (Judabi People application lodged on 8 July 1997);
WC98/3 (Warta Dika application lodged on 27 January 1998);
WC98/15 (Wongatha Yoongara application lodged on 16 March 1998).

Each of these was registered under the old Act.

The combined application was found to comply with the requirements of s.190A of the new Act on 4 October 1999. Accordingly, the Central East Goldfields People are native title parties in relation to M28/208. Both mining leases are in the same approximate area, and although there are two different native title parties, all parties have proceeded on the basis that both tenements would be dealt with together. The Goldfields Land Council (GLC), the native title representative body for the area, is the representative of both native title parties.

The future act determination application states that the negotiation parties have not been able to reach agreement on the doing of the act within six months of the Western Australian Government giving notice of its intention to do the act. The application also states that the native title parties have agreed to the lodgement of this application. The latter statement is contested by the native title parties. Section 31(1)(b) of the Act requires the negotiation parties to negotiate in good faith about the doing of the future act with or without conditions. In Walley v. Western Australia (1996) 67 FCR 336; 137 ALR 561, Carr J held that negotiation in good faith was a jurisdictional condition for a future act determination application.

Both native title parties have alleged that neither the government party nor the grantee party have negotiated in good faith with respect to the doing of the acts, and seek to have the application dismissed. The hearing on the question of negotiation in good faith was held in Perth on 10 March 2000, and further at a teleconference on 29 March 2000. Mr T. Creewel appeared for the government party, Mr P. Tolcon and Mr R. Trott appeared for the native title parties, and Ms M.E. Gaunt appeared for the grantee party.

On the application of the native title parties I made an order under s.155 of the Act that the contents of one document (described as the ‘compensation letter’ which is document 36 in the grantee party’s bundle being a letter dated 13 December 1999 from Mr Neil Bell to Mr Ken Green) not be disclosed by any of the parties on the basis of its commercial confidentiality.

The evidence of the grantee party is the affidavit of Kenneth John Green of 7 March 2000, and of Annaliese Walster of 7 March 2000. The government party has provided a statement of contentions, and relies on another affidavit of Annaliese Walster also of 7 March 2000. The Government party also seeks to rely on the affidavit of Gregory Victor Abbott of 16 March 2000 in respect of the issue of the notice under s.29 in respect of M28/171. The native title party’s evidence is an affidavit of Neil Bell sworn 10 March 2000. There was no objection to any of the affidavit material and no cross-examination, although both grantee party and native title parties each contest certain aspects of the evidence of the other.

The s. 29 Notices

On 25 May 1997 the grantee party (then named Border Gold Limited) applied for M28/171. On 21 July 1998 Border Gold Limited applied for M28/208. Border Gold changed its name to Equs Limited in November 1999. The government party published newspaper advertisements on 10 December 1997 (M28/171) and 10 March 1999 (M28/208) to notify the public under s.29 of the Act that it proposed to grant the tenements.

In respect of M28/208 it is not disputed that the Government party notified the persons listed in s.29(2) by letter on or about 2 March 1999. In respect of M28/171, however, the government party stated at the hearing on 10 March that it was not then in a position to provide evidence that it had complied with s.29(2)(c). Although a letter had been sent to the representative of the registered native title party, (at the time of the notice this was Corser & Corser) there was no record of a letter to the native title representative body.

As the notice was given prior to the amendments to the Native Title Act, compliance must be judged by reference to the old Act requirements, although for practical purposes the requirements under the new Act are the same.

Section 29(2) of the old Act required the government party to give notice to any registered native title body corporate (s.29(2)(a)), any registered native title claimant (s.29(2)(b)), and any representative Aboriginal/Torres Strait Islander body in relation to any of the land or waters that will be affected by the act (s.29(2)(c)), and the grantee party (s.29(2)(d)), and the arbitral body (s.29(2)(e)), in relation to the act. The government party was also required to notify the public in the determined way of its intention to do the act (s.29(3)).

The evidence concerning service of the s.29 notice in respect of M28/171 is found in the affidavit of Annaliese Walster filed by the government party. She deposes to carrying out a search of information in the file of the Department of Minerals and Energy (DME) which revealed that the area of M28/171 was within the Ngadju application. Her affidavit annexes a copy of a letter dated 17 December 1997 addressed to the Ngadju People, enclosing a copy advertisement and a location plan of the tenement application. Ms Walster does not depose to notice being sent to the GLC as the native title representative body for the area, as required by s.29(2)(c).

Mr Creewel made submissions on behalf of the government party at the hearing on 10 March in relation to its apparent failure to serve the s.29 notice on the GLC. He submitted that ultimately, the GLC became aware of the s.29 notice and the proposed future act, and the details that went with the notice. It participated fully in representing native title parties in negotiations over the tenement application. He says that the obligation to notify is linked to the functions of the representative body set out in s.202 of the Act. One of those functions (s.202(4)(c)) is to assist individuals or groups who are native title parties in relation to future acts. (Section 202(4) of the new Act introduced some additional functions but is relevantly in the same terms as the old Act.) Section 202 was repealed on 1 July 2000, and the provisions of s.203BB of the new Act provisions which became operative then set out the new representation and assistance functions for representative bodies.

Mr Creewel submitted that s.29 is a code in that it comprehensively sets out the way in which potential negotiation parties are to be informed of the proposal to do the act. He said that s.29(3) was intended to notify persons, who had not lodged applications, about the proposed act so that if their native title rights would be affected they could lodge an application for native title which, if lodged and registered within the periods set by s.30, would confer on them the status of native title party. In this context, Mr Creewel said that the purpose of the notification requirement in s.29(2)(c) was to enable the representative body to exercise such representation or assistance functions as might be requested by the registered native title claimants.

Mr Creewel sought to distinguish WMC Resources Ltd v. Lane (1997) 73 FCR 366; 143 ALR 200 in which RD Nicholson J held that compliance with the requirements of s.66 of the old Act (concerning notification of native title applications by the Native Title Registrar) was mandatory in respect of the persons specifically mentioned in s.66(2). Mr Creewel argued that the purpose for giving notice to specified individuals under s.66(2) is to enable them to have the opportunity to participate in negotiations about the recognition of native title, whereas the purpose of notice under s.29(2)(b)(ii) is to enable the representative body to act in a representative capacity. Notice to non-registered claimants or common-law holders of native title is not intended to be given through notice to the representative body but through s.29(3).

Further, Mr Creewel submitted that the GLC had actual notice at the latest by 12 April 1999 when the government party sent what Mr Creewel described as the ‘first protocol letter’ to commence negotiations. He submitted that GLC represented both native title parties during the course of negotiations. No prejudice had resulted and the purpose of s.29 had been achieved.

Mr Creewel also relied on Order 78 r43 of the Federal Court Rules, s.51 of the Federal Court Act 1976 (Cth) and s.306 of the Bankruptcy Act 1966 (Cth). The latter two sections provide broadly that formal defects in proceedings will not invalidate those proceedings unless substantial injustice has been caused which cannot be remedied by an order of the Court. Order78 r43(1) provides that in relation to native title matters if notification is required then “the notice must be: (a) in a form determined by the Commonwealth Minister; or (b) any other form that the Court considers appropriate”. I do not consider that these provisions assist in deciding what is required to comply with s.29.

The Act itself provides the mechanism for activating the right to negotiate: it is the giving of notice. It seems to me that, consistently with WMC v. Lane, the Act requires that the government party give notice to each of the persons specified in s.29.

I do not accept the State’s contention that s.29 is not a mandatory provision in respect of the notice requirements under the Future Act regime. The purpose of s.29 is not just to permit the representative body to represent native title parties, but also to enable the representative body to provide them with information about the areas over which acts affecting native title are proposed (see the definitions of “act” and “act affecting native title” in ss.226 and 227 respectively). If the representative body notified potential claimants they may, if so minded, have instructed the representative body to lodge a claim or facilitate the lodgement of claim under s.202(4)(a) of the old Act in response to that notice (see now s.203BB(2)). It is important that notice be given to all interested parties as set out in s.29 to enable the parties to put in place instructions for negotiation. The failure to give timely notice to a representative body may lead to a situation where native title claimants are not able to assert the right to negotiate.

I note that in Hayes v Northern Territory [1999] FCA 1248 para [3] Justice Olney was prepared to make orders concerning the notification of other potential parties where notice had not been given by the Native Title Registrar in accordance with the statutory requirements of s.66. Although this appears to support the Government proposition that failure to comply with the s.29 notice requirements is capable of being cured by appropriate orders, it must be remembered that notification under s.66 is in aid of the Court’s powers to ensure that appropriate parties appear before it (see Bropho v Westerm Australia (2000) 169 ALR 365 at 376, paras 32, 33). I further note that in s.66(5) the Registrar has the power to dispense with notice as required by s.66(3) when, in his view, it would be reasonable to do so. Neither of these considerations is capable of applying in relation to notice under s.29.

The fact that different policy considerations apply to the interpretation of a failure to comply with s.29, does not detract from the relevance of the conclusion in WMC v Lane, that the purpose of s.66 of the old Act was “designed to bring natural justice to persons whose interests may be affected” (at FCR 375). When one turns to s.29, there is no discretionary dispensation of the Government party from notifying in accordance with the section, and there is no capacity to make orders, whether by the Tribunal or the Federal Court, to ameliorate the consequences of non-compliance.

In Western Australia/Strickland (Maduwongga) & Ors/Plutonic NNTT WF98/9, 30 October 1998, the Tribunal constituted by Deputy President Sumner concluded that although notice was mandatory, the sufficiency of the notice in a particular case would need to be considered in the light of the particular provision. Notice to a representative body is important because the consequences of non-compliance could be to deny a right to negotiate to non-registered claimants, or potential applicants who had not yet lodged a claim (at p.13). Although the Tribunal ought not to take an unduly technical approach, if the government party is unable to provide any evidence of compliance with s.29(2)(c), in my view the notice is defective and notice to the representative body after the close of the notification period could not cure it.

At the conclusion of Mr Creewel’s submissions he sought leave to withdraw, as the remaining issues concerned only the grantee party and native title party. I gave leave. At the conclusion of the hearing I indicated that, as the argument and the facts then stood, it was highly unlikely that the government party had satisfied me that notice had been given notice in accordance with s.29(2)(c). At the time it did not appear to me that it was an appropriate matter for further evidence or submissions in the light of what had been put.

Subsequently I formed the view that it would be appropriate to accord the parties an opportunity to make submissions on the consequences of this failure to give notice, a matter that the government party had not had an opportunity to address. On 17 March I wrote to the parties to convene a hearing by teleconference at which I requested submissions on whether any further evidence ought to be received, and the consequences of failure to satisfy s.29. The first matter was added because on 16 March the government party wrote to the Tribunal seeking to put further evidence concerning the sending of the notice. At a teleconference on 29 March, the government party sought to rely on an affidavit of Gregory Victor Abbott of 16 March 2000.

The government party had not indicated at the hearing that it wished any opportunity to give further evidence on the matter. The impression I formed at the 10 March hearing was that it could not. After hearing the parties on 29 March, I indicated that I would receive and have regard to Mr Abbott’s affidavit. Although the native title parties opposed this, it would not be just or fair to decline to receive relevant evidence of compliance with a necessary step in the proceedings. There is no prejudice to any party in doing so.

The parties also made written submissions about the effect of non-compliance with s.29. However, it is not necessary to deal with those submissions because I am satisfied on the evidence of Mr Abbott that the s.29 notice was given to the representative body.

Mr Abbott deposes to the existence of a system for identifying the native title claims that fall within the area of the proposed tenement, for batching the notices in respect of the tenements for which notice is to be given, and for despatching those documents to the recipients specified in s.29 by certified mail. In the case of M28/171, that system was followed through the creation of a ‘legend sheet’ verified on 23 December 1997 by Mr Abbott. He deposes to sending the records office at DME a request for documents relating to M28/171 to be sent to the Director of the GLC. The request annexed to his affidavit is dated 17 December 1997. The number of the Registered Post customer receipt is noted on the top right hand corner. Mr Abbott says, however, that no copies of the documents sent could be located, and in this respect the system fell down. But he has given enough evidence to satisfy me that it was more likely than not that the notice and accompanying documents were sent to the GLC on 17 December 1997. Even though there were no copy documents on file, it does not seem to be probable that an empty envelope was sent and I am satisfied from the verified legend sheet that a notice in respect of M28/171 was sent to the GLC on or about 17 December 1997. The native title parties have not put anything that would lead me not to accept Mr Abbott’s evidence.

I now turn to the facts of the negotiation.

M28/171
I noted above that the government party advertised its intention to grant this tenement in the West Australian newspaper on 10 December 1997, and on 17 December 1997 in the Koori Mail. Nothing further appears to have occurred until 2 October 1998 when Huston Partners, the representative of the grantee party (then named Border Gold NL) wrote to the Department of Minerals and Energy requesting that negotiation commence under s.31 of the Native Title Act. The letter confirmed that Border Gold NL wished to expedite negotiations. On 12 April 1999, the General Manager Land Access Unit, Mr WM Carr, wrote what Mr Creewel described as the “first negotiation protocol letter” to the native title party and the grantee party. This enclosed copies of the tenement applications, a Departmental ‘tengraph’ plan of the tenement, a topographical plan of the tenement, a copy of the search of the register of Aboriginal Sites, and an extract from s.39(1) of the Act.

The government party requested the grantee party to provide certain information to the native title party within fourteen days by registered mail. They were:

An outline of the proposed work program for the tenement area;
Advice as to whether Aboriginal heritage surveys within the tenement area were proposed or had been completed;
Any company policies or information which might be relevant to Aboriginal native title claimants;
A map of the project area.

The letter stated that the government party would provide the latest copy of the grantee party’s annual report to the native title party in respect of the tenement. It also enclosed a proposal by the government party, attaching a copy of the proposed conditions and endorsements for the tenement and a summary of the approvals and responsibilities required before activity could commence on tenements. The native title parties were requested to make submissions regarding the grant to the Land Access Unit no later than 3 May 1999.

On 28 April 1999, Mr Green responded to the letter of 12 April by sending certain information to the GLC as a response to the government party’s request. The letter included the information that Border Gold NL “intends lodging a notice of intent with State Mining engineer and thereafter moving to a mining phase as quickly as possible”. It also indicated that no Aboriginal heritage surveys within the area had been completed nor were any proposed, however, it described a commitment by Border Gold to comply with relevant legislation including the Aboriginal Heritage Act 1972 (WA). It stated that “internal ethnographic field inspections” of tenements surrounding M28/171 had been conducted by WMC Resources Ltd, a manager of those tenements, with a representative of the Ngadju People, and that no sites of significance or importance were identified during that inspection. The letter also stated that Border Gold NL did not possess any policies or information it believed might be relevant to Aboriginal native title claimants. A map of the proposed tenement was enclosed.

The information provided also included the annual report for the grantee party for 1998. There is no indication whether this was the same annual report as had been provided by the government party. In that report, M28/171 is identified by reference to a map headed “Karonie Project Regional Summary”. M28/171 is identified as “French Kiss ML”. French Kiss is referred to in several places in the report, for example, at paragraph 2.1 it is stated that exploration during 1998/99 would comprise limited testing of ‘advanced targets’. French Kiss and another tenement were described there as areas where “there is potential to increase the currently defined mineable reserves at exploration cost”. The tenements were to undergo ‘final feasibility assessment for mining’ in the light of data obtained in a trial mining venture nearby. Under the heading ‘mining studies’, the report stated that “an assessment of the French Kiss south deposit was carried out to determine how much of the upper part of the resource can be mined by open cut. Resource optimisation studies and open pit design resulted in a mineable figure of 191,000 tonnes at 5.08 gpt Au down to 70 metres. This would yield 26,840 oz. at an operating cost of $272 oz. and a cash surplus of $6.1 million at a gold price of $A500/oz”.

The report went on to consider the potential for underground mining by decline below the pit and made further predictions about the cost of extraction. It concluded that on the basis set out previously $835,000 profit could be made at a gold price of $A500 per ounce. It contained the statement that the “current preliminary mining reserves at Harry’s Hill and French Kiss were capable of economic exploitation by conventional mining and processing….”. The general conclusion capable of being drawn from the report is that an identified gold resource existed on M28/171 which, subject to final feasibility studies, was capable of being mined profitably.

On 1 June 1999 Mr John Brinkman from DME wrote to the GLC, noting that the submission referred to in the letter of 12 April 1999 had not been received and requesting that any submission be provided to all parties as a matter of urgency by the close of business on 15 June 1999. It went on to state that if no response was received by that date the matter would be referred to the Tribunal for mediation.

On 30 June 1999, the grantee party announced to the Australian Stock Exchange that there had been a change in its office bearers.

On 5 July 1999, Mr Green wrote to the Tribunal noting that the native title parties had failed to respond to correspondence from the government party and the grantee party and requested the Tribunal to mediate pursuant to s.31(3) of the Act. On 7 July 1999, Mr Green received a telephone call from Mr Neil Bell of the Goldfields Land Council. Mr Green’s note of the conversation indicates that a discussion took place about the workload of the GLC, the procedures that the GLC would use to deal with the future act negotiation, and specifically negotiations relating to M28/171 and the other proposed tenement M28/208. Mr Green records that he indicated that Border Gold NL was not seeking to have these tenements granted in the shortest amount of time and accordingly had elected to refer the matter to mediation (as opposed to immediately lodging a s.35 application). The substance of this conversation is not contested by Mr Bell. The native title parties’ contentions state that Mr Green said he ‘may put in a s.35 application’.

On 3 August 1999, the DME wrote to the grantee party requesting advice on whether any progress had been made in relation to either tenement. This prompted a letter from Mr Green to the Tribunal referring to the earlier request and asking whether mediation assistance could be provided. The Tribunal responded on the same day indicating that it had scheduled the first mediation meeting in relation to M28/171 on 18 August 1999. From that point, negotiations concerning M28/171 and M28/208 proceeded together.

M28/208

The government party advertised its intention to grant mining lease M28/208 in the Aboriginal Independent newspaper of 3-16 March 1999 and in the West Australian of 10 March 1999. As this was a notification under the new Act, a notification day of 10 March 1999 was nominated as the commencement of the three month period within which persons would be able to lodge native title claims to become native title parties.

That period ended on 10 June 1999. On that date, the area covered by M28/208 was subject to the five native title claims referred to earlier:

Karonie People #4 (WC96/19)
Tjeraridjal People (WC96/81)
Judabi People (WC97/53)
Warta Dika People (WC98/3)
Wongatha Yoongarra applicants (WC98/15)

Notice was given under s.29(2)(b)(i) of the new Act to each of these parties, and no further claimant applications were received. On 6 May 1999, the government party sent out to the native title parties and to the grantee party its “first negotiation protocol letter” in the same terms as that relating to M28/171. The letter requested the native title parties to provide submissions to the government party by 24 June 1999. The grantee party was requested to provide information to the native title parties in the same terms as with M28/171. The government party did not in this letter refer to any annual report for the grantee party

It appears that the “first negotiation protocol letter”, was sent to each of the five native title parties. There was some discussion between the government party and one of the native title parties (the Judabi People WC97/53) about their representation.

On 26 May 1999, the grantee party sent a letter to each of the five native title parties in relation to the tenement. It is in similar terms to the letter sent to the Ngadju People in relation to M28/171, in that it indicated that Border Gold intended to lodge a notice of intent and thereafter move to mining as quickly as possible, that no Aboriginal heritage surveys had been completed nor were any proposed. The same information concerning ethnographic field inspections was provided along with information that Border Gold did not possess any policies or information which it believed may be relevant to Aboriginal native title claimants. A map of the area was enclosed. The letter does not expressly indicate that a copy of the annual report was enclosed with that information but it appears from Mr Green’s affidavit that a copy of the 1998 annual report was sent to each of the native title parties.

In that annual report, M28/208 may be identified as the “Karonie extended” tenement by reference to a map headed “Karonie project regional summary”. The legend indicates that gold deposits exist on the tenement, however, there is very little information to be gleaned from the annual report concerning the nature of the proposed operations at that tenement. There is no other separate mention of “Karonie extended”. There is considerably less information than is provided with respect to M28/171 (French Kiss). From a perusal of the map of the area contained with the government party’s information, it appears that a mine described as “Atreides” was located on the tenement. There is scant information on Atreides also, save that in a table headed ‘Karonie Resource Summary’ Atriedes is referred to, apparently possessing ‘indicated’ and ‘inferred’ gold reserves.

On 1 July 1999, the grantee party was advised that the Judabi People were no longer represented. On 7 July the telephone conversation to which I have already referred between Mr Bell and Mr Green took place.

On 3 August 1999 Mr Brinkman of DME wrote to the GLC in similar terms as with respect to M28/171, noting that no submissions had been received in relation to M28/208, and requesting that submissions be provided to all parties as a matter of urgency by 17 August 1999. The letter also indicated that if no response had been received, the matter would be referred to the Tribunal for mediation. It appears that copies went to all native title parties.

On 9 August 1999, Mr Green wrote to the Tribunal requesting the Tribunal to mediate under s.31(3) of the Act, noting that Border Gold NL had not received any communication from or on behalf of any of the native title parties in relation to the matter. This was incorrect in the light of Mr Bell’s telephone conversation with Mr Green on 7 July 1999 but nothing turns on it. The Tribunal responded on 10 August with a note to each of the parties to the effect that a first mediation meeting was scheduled for Wednesday 18 August 1999.

On 13 August the GLC wrote several letters in nearly identical terms to the Managing Director of Border Gold Limited apparently on behalf of each native title party it represented. Each letter stated that “the native title parties do not wish to prevent the grant of the lease and subsequent mining on the tenement. However, they wish to be fairly compensated for the effect that the mining activities will have on their native title rights and interests”. The letter concluded with a note that the representative, Mr Bell, “would look forward to your advice in respect of these negotiations based on a full description of the activities you intend to carry out on the tenement and the financial structure of those activities”. Mr Bell says in his affidavit that these were standard form letters to request more specific information about the project.

It appears that the representative for the Judabi People contacted the grantee party on 11 August 1999 to advise that GLC would also be representing them in relation to the negotiations. The GLC sent copies of the letters it had sent to the Managing Director of Border Gold to Mr Green on 17 August 1999.

The Mediation

On 18 August 1999, the Tribunal convened the first “pre-mediation conference”. Mr Green’s note of that conference indicates that Mr Bell gave some explanation of why the native title parties had not responded to the government party’s request for submissions about the effect of the proposed acts on native title rights and interests. Mr Bell undertook to respond to those letters in a formal way. It appears that no such response was provided, although Mr Bell relied on the limited nature of information provided by the grantee party to justify the failure to respond.

Also according to Mr Green’s note, Mr Bell gave a list of issues that would be raised in the negotiations, including environmental aspects, site protection, compensation, and employment. Mr Bell also stated that the native title parties requested more detailed information about the minerals and the methods of production than had been sought by the government party.

The Tribunal sent out a letter to the parties which indicated that the next “pre-mediation conference” would be scheduled on 8 September 1999 by which time the GLC would formally reply to the government party’s requests for submissions, with copies to all parties. The mediation would proceed in respect of both M28/171 and M28/208.

At the second pre-mediation conference, Mr Bell advised that no submissions had been provided to the government party by any of the native title parties in relation to the effect of the proposed acts on their native title rights and interests. Mr Bell indicated that in his view this was because the information supplied by the grantee party in their letters of 28 April 1999 and 26 May 1999 was insufficient to permit him to take instructions. Mr Green says that he “raised a very strong objection to the conduct of the native title party”. Mr Bell says in his affidavit that after the first pre-mediation conference, he had studied the files and that had led him to the conclusion that the statements by the grantee party were insufficient to advise the native title parties because they gave no effective description of the work to be done.

Ms Walster, in her affidavit filed by the grantee party, deposes to her attendance at the conference on 8 September. She describes the grantee party and the native parties’ representative as having a “heated exchange” over the adequacy of the information provided by the grantee party. The mediation was adjourned to 29 September before a Deputy President of the Tribunal.

On 23 September 1999, Mr Bell wrote to Mr Green expressing concern about the proposed work outline in respect of M28/171, requesting a fuller description of the proposed work on the tenement, requesting the native title parties be briefed on site in respect of the proposed work, noting that Mr Green had not referred to the telephone conversation of 7 July in correspondence to the Tribunal, and advising that the native title party “will provide documentation of draft heads of agreement, ancillary to the state deed of grant when [he] had instructions in relation to it”. Mr Bell also wrote to the government party indicating that the grantee party’s letter of 28 April 1999 (in relation to M28/171) did not satisfy the government party’s information requirements. Mr Bell sent a letter to both the grantee party and government party in almost identical terms in relation to M28/208.

On 24 September 1999, the five native title applications relating to tenement M28/208 were combined by order of the Federal Court, with six others, into the current Central East Goldfields Peoples’ claim. This combined application was registered as a result of consideration by the Registrar under 190A of the Act on 4 October 1999.

On 29 September 1999 the Tribunal convened a mediation conference chaired by a Deputy President. Mr Green’s affidavit describes his explanation of the position of the grantee party at that time. Briefly, he says that the grantee party had been a junior dedicated gold exploration company which had identified an economic gold reserve on both the tenements. The state of gold and financial markets currently prevented the grantee party from raising further capital for exploration or development, and no work was currently proposed for the tenements but that because of the identified economic gold reserve such work would be likely to take place in the future. The grantee party needed to find a joint venture partner as a means of securing further capital. It had persuaded the government party to give priority in negotiation to those tenements because unless the tenements were granted and mining commenced the grantee party would likely face a financial crisis. The management of the grantee party had changed, however, and the company was now more focused on “internet ventures” than mining ventures and that the statement in the grantee party’s letters of 28 April 1999 and 26 May 1999 was bullish but reflected the intent of the management of the grantee party at the time.

Ms Walster’s recollection of this conference, however, is that most of the matters deposed to by Mr Green were raised by Mr Green in the course of the heated exchange at the conference on 8 September. She does not have any recollection of Mr Green raising the issue of financial structures or joint ventures at all. Her note indicates that there was discussion at the meeting of the combination of the Central Eastern Goldfields claim in the Federal Court. Her note records that Mr Bell advised that the GLC was working on a “deferred production agreement” that had provision for further exploration. She notes Mr Green’s statement that the “worst case scenario” for the grantee party would be to have conditions akin to those imposed by the Tribunal. He also requested that negotiations with the claimants should focus on conditions previously imposed. Mr Bell undertook to provide a “heads of agreement” to the grantee party by 15 October 1999. She states that the adequacy of the information provided by the grantee party to native title parties was not raised then, nor in subsequent mediation conferences.

Mr Bell deposes that he substantially disputes the version of events at that conference deposed to by Mr Green. However, although he says that there was substantial discussion about the effect of the grantee party’s proposals on native title rights and interests, and that there was no clarity on this issue, he does not give any account of his version of the meeting, or include any further details of it.

By letter of 1 October 1999, the Tribunal set out its understanding of the outcomes of the meeting, including Mr Bell’s undertaking to provide a “heads of agreement” by 15 October, and a request by Mr Green that conditions in the Tribunal’s determinations to date be taken into account. It records an offer by Ms Walster to provide advice to Mr Bell about the operation of various statutes in relation to the tenements. The mediation was adjourned to 22 October 1999.

On 14 October 1999, Mr Bell wrote to Mr Green setting out “the major heads of compensation” for the native title parties. These comprised two pages with short descriptions of various issues including monetary compensation, preferential employment and contracting opportunities, heritage protection surveys, environmental protection regime, establishment of a liaison committee involving representatives of both native title and grantee parties. It noted further issues to be included in an ancillary agreement including assignment of the tenement; dispute resolution; non-disclosure; and payment of native title parties’ expenses.

On 22 October 1999, the adjourned mediation resumed. At this conference there was some debate about whether Mr Bell had fulfilled his undertaking to provide a ‘heads of agreement’ to Mr Green and to other parties. Mr Green’s evidence is that this attracted criticism from the Deputy President. Mr Bell disputes this: he says that he complied with his undertakings and was not criticised. According to Mr Green, the discussion progressed from questions of compliance or non-compliance to issues such as the difficulty in quantifying compensation, the type of environmental protection regime the native title parties envisaged, and questions about the native title parties’ costs of the negotiation. The discussion during that conference appears to revolve around the possibility of Mr Bell providing to the grantee party a “deferred production agreement” and Mr Green’s request that the draft agreement take into account conditions imposed by the Tribunal in previous determinations under s.35 of the Act. Mr Green says that he requested Mr Bell to provide the draft agreement in electronic form and that he advise on the quantum of compensation sought by the native title parties in relation to the grant of the tenements.

On 25 October 1999, the Tribunal wrote to the negotiation parties recording its understanding of the conclusions reached at the conference. These were that Mr Bell undertook to provide a “draft deferred production agreement” by 25 October 1999; that Mr Bell seek instructions in respect of a “cap” on compensation and to telephone Mr Green in relation to that. The mediation was adjourned until 5 November 1999. A copy of the government party’s standard conditions and endorsements, and extra conditions, that had been included in the government party’s “first negotiation protocol document” was also attached.

On 26 October 1999, Mr Bell gave the grantee party a draft deferred production agreement. He records his intention to obtain instructions in respect of capping compensation and undertook to telephone Mr Green to discuss the issue “later in the week”. Mr Green complained about the absence of the agreement in electronic form the next day, but apparently it was subsequently provided. On 11 November 1999, Mr Bell wrote to Mr Green advising that he had been unable to seek instructions on capping compensation but that the Land Council was “seeking specialist financial advice” and would inform Mr Green at their earliest convenience.

On 12 November 1999, the mediation resumed. Mr Green’s affidavit records Mr Bell’s advice at the conference that the GLC was seeking specialist financial advice on compensation, and that he wished to obtain that advice before obtaining instructions but that no financial specialist had been instructed and that to obtain the advice would probably take four weeks including the time to obtain instructions. According to Mr Green, other matters were discussed, which included the distinction between compensation being paid by the grantee party in lieu of compensation under the Act or in addition to it.

Mr Green also says that he explained why the ‘draft deferred production agreement’ was unacceptable to the grantee party. The following reasons were given:

there was an economic gold resource on M28/171,
that the grantee party had sought to negotiate with the native title parties for “an extended period” and had “deferred consideration of lodging an application under s.35 of the NTA”,
the Tribunal would be likely to make a determination on the grant of the tenements if a s.35 application was lodged,
one clause of the deferred production agreement was not acceptable to the grantee party because it required a further good faith negotiation before the grantee party commenced mining on matters which the grantee party considered were far wider than those required by the Native Title Act.

Mr Green says he indicated that the grantee party was incurring costs in participating in negotiations, but was interested to receive advice from the native title parties about the amount of compensation for the future acts on the alternative bases that they (a) waived their right to compensation under the Act or (b) preserved that right. He also says that he received no indication from Mr Bell that the native title parties expected the grantee party to provide further comments.

Mr Green says that at no time during that mediation conference did Mr Bell raise an objection to the grantee party’s assertion that it may proceed to lodge an application under s.35, or raise any concerns about the good faith negotiation of the grantee party. Mr Bell does not contradict that account.

On 17 November 1999, the Tribunal sent the parties a minute of the meeting recording its understanding of the agreed outcomes:

That Mr Bell was to use his best endeavours to get specialist advice on a lump sum for total compensation, or an agreed sum now but final compensation to be determined once the application had been finalised in the Federal Court, and the question whether a lump sum or a dollar per ounce sum would be considered.
The Deputy President’s suggestion that the grantee party may need to know what had been taken into account in the brief and the qualifications of the expert.
Mr Green to seek instructions in respect of lodgement of a s.35 application, and Ms Walster offered her assistance to the parties.

The mediation was adjourned until 20 December 1999.

On 1 December 1999, the grantee party provided a copy of the 1999 annual report for Border Gold Limited to Mr Bell. This indicated that Border’s “final feasibility studies and possible mining of the Karonie Harry’s Hill, French Kiss and Tank deposits have been temporarily deferred”. There is an extensive discussion of an e-commerce review which records “Border’s exciting entry into Internet based electronic trading businesses”. In relation to the tenements under consideration in this proceeding the annual report indicates that the “resources at French Kiss were reappraised using as steep a wall angle as possible”. This approach resulted in a re-evaluation of the mining reserve. On a gold price of $500 per ounce it was estimated that it would yield an operating surplus of $5,909,500.00 with the underground mining reserve remaining unchanged. It appears from the map of the “Karonie Project regional summary” that the “Karonie extended” tenement (M28/208) had been renamed “Tank ML” but this was not described in any degree of detail in the report.

On 13 December 1999, Mr Bell wrote to Mr Green advising of an upper limit of compensation monies and indicated an amount for the capping of compensation. It is not clear whether this was on one or other of the bases that had been discussed at the previous mediation conference. This is the letter subject to a confidentiality order under s.155. There was no further communication between the parties in relation to this issue.

On 20 December 1999 a further mediation meeting took place. Mr Green says that the offer of capped compensation was discussed and rejected by the grantee party. He says that it was not of a quantum readily acceptable to the grantee party. The Tribunal’s note records that mediation terminated with the consent of all parties. On 21 December the grantee party lodged the application under s.35.

Issues and contentions

The first issue is whether notice was properly given under s.29 of the Act in respect of M28/171. For the reasons given above, I conclude that such notice was properly given.

The main issue is whether the parties have negotiated in good faith as required by s.31(1)(b). The native title parties have alleged that neither the government party nor grantee party have done so. The government party says that it has negotiated in good faith. The grantee party also says that it has negotiated in good faith, and further says that the native title parties have not.

Under the new Act the Tribunal does not have jurisdiction if the grantee or government parties have not negotiated in good faith, but it is not prevented from making a determination where the native title party has not negotiated in good faith (s.36(2)).

The Tribunal has previously decided that s.36(2) imposes an ‘evidential burden’ on a party who seeks to establish a lack of good faith. (Dempster & Ors/Western Australia/Bayside Abalone – Anor NNTT WF 99/1 Hon E M Franklyn QC 27 August 1999). In Placer (Granny Smith) & Anor/Western Australia/Harrington-Smith & Ors (NNTT WF 99/5, Hon C J Sumner, 21 December 1999) Deputy President Sumner considered that the principles applicable to the duty to negotiate in good faith under the old Act are still relevant to the question of whether a party to a future act application under the new Act has done so.

Negotiation in good faith – government party

The native title parties allege that the government party has not negotiated in good faith, in that it failed to monitor the information provided by the grantee party and, if it was inadequate (as the native title party alleges), to have followed it up. The government party says in response that under the new Act, it has no greater obligation to negotiate in good faith than any other party, and that it was under no obligation to take steps to send out the ‘first negotiation protocol letter’ much less take active steps to monitor compliance to the extent argued for by the native title party. Mr Creewel also submitted that on the facts, the government party did participate in mediation as effectively as it was able to on this issue, as the grantee and native title parties dealt with it between themselves and there was nothing more that the government party could do.

The grantee party supports the government party’s submissions, and says that the government party did monitor compliance by noting the absence of a response to the ‘first negotiation protocol letter’ and providing a further time within which to make submissions.

Two issues arise. One is the nature of the government party’s obligation to negotiate in good faith now that all parties are subject to that obligation. The second is whether what the government party has done is sufficient to discharge the duty.

I have mentioned earlier the conclusion of Deputy President Sumner that the formulation of the content of the requirement to negotiate in good faith under the old Act remains relevant to negotiations under the new Act. I agree with that conclusion. In Placer (Granny Smith) & Anor/Western Australia/Harrington-Smith Deputy President Sumner said that:

‘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 discussion 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 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.’

What I conclude from that passage is that each party must act both honestly and reasonably with a view to reaching the agreement about whether the act can proceed – whether subject to conditions or not. Whether negotiating behaviour is honest and reasonable must be judged by what the parties say and do in the circumstances. This does not mean that parties are required to capitulate so as to reach agreement or otherwise act contrary to their interests.

In determining whether parties have negotiated in good faith, the criteria developed in Njamal will be relevant. But these criteria do not constitute a checklist or series of conditions. It is not necessary that parties engage in all of the activities described there in order to negotiate in good faith. Likewise, failure to do one or more of the things described in the criteria will not require the Tribunal to find that the parties have not negotiated in good faith. See Western Australia/Strickland (Maduwongga) & Ors 10 December 1997, NNTT WF97/4 at page 11 (proposition (9); Njamal at 224.

In considering the submission of the government party, it seems to me that the position is that all parties are required to adhere to the same standard of negotiating behaviour, but that what they do to satisfy that obligation must be judged by reference to the interests that they seek to advance in the negotiation, the behaviour of the other negotiation parties, and the circumstances in which the negotiation take place. For example, in relation to the government party’s obligation to negotiate, it is entitled to have regard to its interests in the orderly administration of tenements, and due performance of functions under the Mining Act, and other State legislation.

I conclude that in the circumstances of this case the government has discharged the obligation to negotiate in good faith in relation to both tenements. In the course of negotiations, the government party:

Sent out the ‘first negotiation protocol letter’ to grantee and native title parties;
advised the grantee party of changes in the representation of the original native title party;
followed up with the native title party the absence of any submission from them under s.31(1)(a) of the Act;
advised the native title party that it would request mediation if no communication was received; and
communicated with each of the native title parties and grantee party, attended the mediation, and offered assistance to the native title parties in relation to relevant statutory requirements in drafting the ‘deferred production agreement’.

The native title parties say that the government party should have been more proactive, and having taken an active role in negotiations by sending out the ‘first protocol letter’ it should have maintained that role by checking the adequacy of the grantee’s information supplied to the native title party. Although there is some evidence that the native title party complained about the adequacy of the grantee’s information to the government party, at that stage of the negotiations the grantee party could have been under no misapprehension about the native title party’s attitude to the information about the tenement. Although this may have been an attempt by the native title parties to induce the government party to exert pressure on the grantee to supply further information, this was not requested in terms: the letters simply noted the native title parties’ dissatisfaction. Doubtless the government party could have responded to those letters if it wished, but I do not consider that a failure to do so constitutes a failure to negotiate in good faith.

In summary, the government party has negotiated in good faith not because, as Mr Creewel submitted, it now is subject to a lesser negotiation standard than previously, but because, having regard to its interests in the negotiation, and other factors to which I have referred, it acted honestly and reasonably in the circumstances in an attempt to reach agreement about the doing of the act.

Negotiation in good faith – grantee party

The issue of negotiation in good faith by the grantee party arises in relation to both tenements. Although the parties treated the process as embracing both M28/171 and M28/208 there are somewhat different considerations applicable to the negotiation over each of the tenements to which I will refer shortly.

The native title party says that the grantee party did not negotiate in good faith for the following reasons:

(a)The grantee party delayed in providing information to the native title party about the nature of the activities of proposed to be undertaken on the tenements;

(b)The grantee party provided inconsistent information during the process;

(c)The grantee party made it clear that it was only interested in a determination and was merely engaging in the process in order to proceed to an arbitration as quickly as reasonably practicable.

The grantee party for its part says that it did not delay, nor did it give inconsistent information. It says that it engaged in negotiation on substantial matters, and that some matters upon which the native title parties relied occurred after the application for a determination was lodged and should not be taken into account.

The issues that arise are the following:

· What does negotiation in good faith involve under the amended Native Title Act?
· Did the grantee party negotiate in good faith?
· Did the native title party negotiate in good faith, and if not, what effect did this have?
· Does the lodgment of an application under s.35 prevent the Tribunal from considering matters that occurred after the lodgment of the application in considering whether good faith negotiation occurred?

The obligation to negotiate in good faith under the NTA raises different considerations to those which apply when considering the existence, or content, of an obligation to negotiate in good faith in commercial transactions (see Brownley v. State of Western Australia (1999) 95 FCR 152, para [19]). Commercial cases in which an obligation to negotiate in good faith has been considered have focussed on whether ‘good faith’ imposes a sufficiently certain standard for enforcement of a contract. (See Aiton v. Transfield [1999] NSWSC 996 (Einstein J, 1 October 1999); Elizabeth Bay Developments Pty Ltd v. Boral Building Services Pty Ltd [1995] 36 NSWLR 709; Hooper Bailie Associated Ltd v. Nation Group Pty Ltd [1992] 28 NSWLR 194.)

That consideration is absent here because the Act itself prescribes good faith as the standard. There is no question of certainty. The task of the Tribunal is to apply the standard to negotiations over future acts. In applying it, some instances may arise in which considerations of commercial probity are relevant (see RMG Services Pty Ltd v. The Barngala Families & Ors [1999] SAERDC 37 (29 June 1999)).

The obligation to negotiate in good faith was previously imposed solely on the government party under the old Act. This does not affect the content of the obligation in relation to the government party – the considerations discussed by Lee J in Brownley at paras 18-27 continue to apply.

Although all parties are now subject to the obligation to negotiate in good faith under the new Act, it would be surprising if the Parliament intended to impose a different standard just because a grantee party and native title parties are now subject to the same obligation.

If the term ‘negotiation’ is to be understood as bearing its ordinary and natural meaning of 'communicating, having discussions or conferring with a view to reaching agreement’, it appears that communication between the parties is central to discharging that obligation. Negotiation may also include a range of other activities such as:

making invitations to attend meetings or discussions and attendance at those meetings or discussions;
making suggestions about the process or substance negotiation and comment on those suggestions by other parties;
making proposals both about the procedure and substance of the negotiations and responses or counter-proposals from other parties;
making offers by one or other party and response or counter-offers to those offers;
making inquiries both of other parties and persons outside the negotiation process, and responses from other parties or third parties to satisfy those inquiries,
undertaking analysis of the proposals made for the purpose of formulating a counter-proposal or providing criticism of other parties’ proposals;
making requests for action on matters connected with the negotiation and responding to those requests by providing answers or complying in whole or in part with the request; and
seeking commitments from other parties and making of concessions or otherwise responding to the commitments sought.

This list of activities shows that there are steps which parties can take actively to progress the negotiation, that is, making invitations, suggestions, offers, proposals, inquiries, requests, and seeking commitment through active participation. Another set of activities might be described as responsive activities, involving reacting to the actions of other parties by making counter-offers, comments, providing information, criticism, taking action in response to requests, and making commitments.

At any one time one, or all, of the negotiation parties might be engaged in both active participation and in responsive activity generated by other parties’ suggestions or comments. Each set of activities will have some bearing upon whether the negotiation progresses, stalls or breaks down. The issue is to isolate those elements of negotiation activity which can properly be the subject of a statutory obligation to negotiate in “good faith”.

In the Njamal decision the Tribunal identified 18 criteria which help to indicate whether or not the parties have met the required negotiation standard. Those criteria are as follows (at pp224-225):

(i)unreasonable delay in initiating communications in the first instance;
(ii)failure to make proposals in the first place;
(iii)the unexplained failure to communicate with the other parties within a reasonable time;
(iv)failure to contact one or more of the other parties;
(v)failure to follow up a lack of response from the other parties;
(vi)failure to attempt to organise a meeting between the native title and grantee parties;
(vii)failure to take reasonable steps to facilitate and engage in discussions between the parties;
(viii)failing to respond to reasonable requests for relevant information within a reasonable time;
(ix)stalling negotiations by unexplained delays in responding to correspondence or telephone calls;
(x)unnecessary postponement of meetings;
(xi)sending negotiators without authority to do more than argue or listen;
(xii)refusing to agree on trivial matters eg. a refusal to incorporate statutory provisions into an agreement;
(xiii)shifting position just as agreement seems in sight;
(xiv)adopting a rigid non-negotiable position;
(xv)failure to make counter proposals;
(xvi)unilateral conduct which harms the negotiating process eg. issuing inappropriate press releases;
(xvii)refusal to sign a written agreement in respect of the negotiation process or otherwise;
(xviii)failure to do what a reasonable person would do in the circumstances

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 co-extensive 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.

This analysis recognises that in applying a standard to the performance of negotiation activities, parties will be affected by a variety of external circumstances constraining their ability to act freely in the negotiation. This must necessarily have a bearing on whether what they do is reasonable in the circumstances.

The Tribunal may take into account in determining whether the appropriate standard has been reached the constraints on government to manage the statutory regime for granting mining tenements in the public interest. It may have regard to the individual circumstances of the native title party or grantee party. It is legitimate to take into account resource constraints upon native title parties and representative bodies in determining whether activity, or lack of activity, is reasonable in the circumstances. The Tribunal may also have regard to financial and operational pressures upon the grantee party. However, even allowing for those differing kinds of external constraints, it is nevertheless necessary that each party participate in the negotiation process to the best of their ability in the circumstances.

To determine whether the grantee party and native title parties have negotiated to the required standard, the conduct of each party must be examined in the light of the actual circumstances in each case. It is unrealistic to apply a standard based on an artificial or hypothetical negotiation model, because to do so would suggest that a party need only follow mechanically a series of steps in order to be in a position to invoke the Tribunal’s jurisdiction. This is why decisions of the Tribunal such as Evans/Western Australia/Anaconda Nickel NNTT WF98/267 (Hon CJ Sumner 15 July 1999 at pp 44-45) emphasise that the fact that parties participate in mediation does not conclusively demonstrate negotiation in good faith.

The fact that at some stages of the negotiation, parties may not have demonstrated good faith negotiation behaviour does not prevent a finding that negotiation in good faith has taken place if, overall, the conduct of the parties shows that they have acted honestly and reasonably. So, for instance, the grantee party may be excused from behaving in an objectively reasonable fashion if faced with unreasonable conduct from the native title party.

Taking the history of the parties’ negotiations (at least from the commencement of the s.29 notice relating to M28/208) the grantee party could not have been said to have supplied information about the proposed activity on that tenement sufficient to enable even a casual observer to identify the activities proposed to be undertaken, or the existence of any form of program for the development of that tenement. If the grantee party had in early July lodged an application under s.35, it would not at that stage have been able to satisfy the good faith requirement. The grantee party had given an indication to the government that it wished to proceed to the “immediate” grant of the tenement, yet the information supplied to the native title party did not give sufficient detail of the proposed activities, and scanty and inadequate information about Aboriginal participation policies or cultural heritage issues. By 7 July 1999, at least, it appeared to have changed its mind about pressing forward with the tenement, but had not informed the government party.

The communication between the parties proceeded under the auspices of Tribunal mediation. This at least brought the grantee party and native title parties together and focussed them on the issues at hand. Both parties at this stage were hampered in their ability to progress negotiations. On the grantee’s part, the absence of any concluded project plan for the tenements (possibly due to the change in the management of the company in June) meant that it was unable to provide detailed information about the tenement. On the native title parties’ part, their representatives, the GLC, had to obtain and act on instructions in relation to the proposed tenements in circumstances where there were a large number of active negotiation files and a small number of staff to deal with them. This meant that is was difficult to adhere to timetables and provide specific responses. It is clear, however, that each of the grantee and native title parties regarded the efforts of the other to progress the negotiations as inadequate and at best non-responsive. Mediation did, however, enable the parties to ventilate the issues of lack of information concerning the project, the possibility of agreements for granting the tenements subject to further negotiation, and the issue of compensation.

It appears that both native title and grantee parties had something to complain of in relation to the conduct of the other. The grantee party did not produce any clearer or more detailed account of its intended use of the tenements than their original information. The native title party did not produce detailed and specific responses when requested to do so. Up to the second mediation meeting, it appeared that neither party could be said to have engaged seriously with the issues to be negotiated if agreement was to occur. After that, although these issues were ventilated through the mediation, there appeared to be little direct engagement on the substance of any agreement. Matters were raised and then inexplicably dropped.

Much was made by both native title parties and grantee party of failures by the other to act or to respond in accordance with requests made to them. At times communication between the parties was at cross-purposes. The native title parties did not provide an explanation of why a request by the grantee party for a “heads of agreement” document had been met by the “heads of compensation” document. On the grantee party’s side, it rejected the “deferred production agreement” with only cursory discussion of the way in which it could be modified to meet the grantee party’s interests. Mr Green says that the native title parties appeared to be satisfied with the responses that had been provided, both to the initial request for information, and to any further comment on the deferred production agreement. But this does not explain why the grantee apparently failed to pursue negotiations around the deferred production agreement. There is no indication, for example, that the grantee party was otherwise prepared to agree to the terms of that agreement, and that only the clause complained of was unacceptable. It appears to have been rejected in toto because of the existence of a single clause. There is no explanation why the parties failed to pursue discussion on modification of the agreement. Despite Tribunal mediation, these issues seem to have been raised and simply dropped.

The native title party points to the failure by the grantee party to respond to the ‘compensation letter’ of 13 December 1999. It appeared that the understanding expressed in the mediation report from the Tribunal at the conclusion of the third mediation conference was that the native title party would be consulting an expert financial adviser in relation to the claimed compensation and would be providing the grantee party with at least the grantee party terms of reference and the qualifications of the financial adviser. At a mediation conference on 20 December the mediation was terminated. The Tribunal communication states that that mediation was terminated with the consent of the parties. There is very little evidence of what took place at that conference other than that the amount of compensation sought was too high and unacceptable to the grantee party. It does not appear whether any counter proposal was made, or whether further discussion about either the quantum or bases for calculating compensation took place.

The native title parties point to the failure to respond to that compensation letter as an indication that the grantee party was not working towards agreement on the conditions under which the future act could go ahead. They say that the failure to respond to that letter is an indication that the grantee party was determined to seek arbitration and that participation in mediation was simply an exercise to establish that the basic criteria for the Tribunal’s jurisdiction had been met.

For the grantee’s part, they say that they had at all times indicated that a s.35 application would be lodged; that the native title party had agreed to the lodgement of the s.35 application, and so cannot complain that the grantee party lodged it. The question surrounding whether or not the native title party had agreed to the lodgement of a s.35 application received great attention during the course of the inquiry. Ms Walster, in her affidavit of 7 March 2000, indicates that Mr Bell was asked by Mr Green what the response of the native title parties would be to lodgement of the application, and Mr Bell’s response was that “he was not prepared to respond to a hypothetical situation”. Mr Bell says that he made no response. The NNTT minutes of the meeting record that “the parties agreed that a s.35 application could be lodged”.

I indicated during the course of the inquiry that I was not prepared to give any weight to the statement of the Tribunal that the native title parties had agreed that a s.35 application could be lodged. I accept that the matter was discussed, but the evidence about what happened is conflicting. I note, in considering this evidence, that lodgement of a s.35 application does not require the consent of any other party. The grantee party apparently relies on the statement from the Tribunal as a record of conduct from which an inference could be drawn that the native title party had conceded that grantee party negotiated in good faith for the purpose of attracting the jurisdiction of the Tribunal. I do not think such an inference can be drawn: the communication is not that of the native title parties but of the Tribunal; the statutory framework for arbitration does not require consent to lodgement, and Ms Walster’s and Mr Bell’s evidence on the matter cast doubt on whether any such admission contended for by the grantee was actually made.

The Tribunal’s inquiry is, in any event, not whether the parties have agreed that a s.35 application should be lodged, but whether they have taken honest and reasonable steps to work towards agreement. In this regard, the lodgement of a s.35 application does not indicate one way or another whether or not good faith negotiation has occurred and no negative inference on the good faith of any party can be drawn from the fact of lodgment (Strickland v Minister for Lands for Western Australia (1998) 85 FCR 303 at 322).

An application under s.35 can be lodged for a variety of reasons. One reason might be that parties have agreed, having negotiated in good faith, to submit an intractable issue to arbitration. On the other hand, the lodgement of a s.35 application may mean that all attempts at seeking to reach agreement have been abandoned, and that parties wish to proceed to litigate every aspect of the proposed future act. In the former situation, the agreement to invoke the jurisdiction of the Tribunal may indicate an acceptance of the precondition for the Tribunal to exercise jurisdiction. In the latter situation, the fact that one party has agreed to lodgement does not necessarily require the conclusion that all parties are content for the Tribunal to exercise jurisdiction. It is equally consistent with a party seeking to ventilate the question of good faith before the Tribunal as a preliminary issue. If, however, the native title party agrees, in terms, at the conclusion of negotiations not to contest the question of the grantee party’s negotiation in good faith, the grantee party would be entitled to rely on that concession if the native title party subsequently raised good faith negotiation as an issue. The circumstances of this case do not reveal any such agreement.

In this case, the grantee party must be taken to have been content for the question of whether good faith negotiations had occurred to have crystallised at the point of lodging the s.35 application. Indeed, Ms Gaunt for the grantee party said that the Tribunal was precluded from taking into account anything occurring after the s.35 application was lodged. She relies on s.36(2) to support her contentions in this regard.

Section 36(2) requires the Tribunal to cease to hear the matter if any negotiation party (in this case, the native title party) satisfies the Tribunal that there has been no negotiation in good faith. No party may lodge a s.35 application until 6 months has elapsed from the date of the s.29 notice, but there is no period prescribed within which negotiations must occur. It is open to the parties to continue negotiating after a s.35 application has been lodged: (s.35(3)). I do not think that the provisions in s.36 impose an obligation on the Tribunal to draw a veil across the parties’ negotiations at the moment the s.35 application is lodged. As I put to Ms Gaunt at the hearing, to do so would require the conclusion that the intention of Parliament was that even if the grantee party had not negotiated in good faith at the time of lodging the s.35 application, subsequent conduct involving good faith negotiation could not be used to support a contention by the grantee party that the Tribunal’s jurisdiction was properly attracted. This would mean, that even if negotiation in good faith had occurred, the Tribunal could not have regard to it and would be obliged to dismiss the application for lack of jurisdiction. Although the note to s.36(2) might seem to consistent with this construction, as it reminds the reader that the parties may lodge a fresh s.35 application, it does not seem to me that the existence of the note ought to compel a conclusion that the Tribunal must ignore facts relevant to the existence of its jurisdiction occurring after the s.35 application is lodged.

The effect of s.36(2) is to impose an evidentiary obligation on a party seeking to assert that a grantee party or government party has not negotiated in good faith. (See Placer (Granny Smith)/Western Australia/Harrington-Smith NNTT WF99/5 Hon CJ Sumner, 21 December 1999). It is up to the native title party to satisfy the Tribunal that other parties have failed to negotiate in good faith, and they may put forward evidence of matters occurring after the s.35 application is lodged. However, the practical utility of this may be limited. The fact that negotiations cease at or shortly before the lodgement of the s.35 application cannot of itself be adverse to a grantee party who seeks to invoke the Tribunal’s jurisdiction. If the grantee party wishes to give evidence of post-application conduct to respond to contentions of a native title party, the Tribunal ought not to be precluded from having regard to that evidence, particularly where the result of doing so may be to save the parties the expense of further proceedings on the same issue. If, however, the grantee chooses not to respond, this cannot be used against them.

If the grantee party does not continue negotiations after lodging the s.35 application, or put any evidence in reply about negotiations after lodgement, it must be taken to be content to rest its case for the Tribunal’s jurisdiction on whatever happened prior to the application being made. If that is inadequate, the result will inevitably be that the parties must either engage in fresh negotiations, or lodge a further application under s.35. I do not think that any adverse inference can be drawn from the grantee parties continued refusal to reply to the compensation letter of 13 December 1999 after lodgment of the s.35 application. Their failure to respond to it in a substantial way prior to the termination of negotiations may however, be relevant to the question of good faith negotiation.

As I noted earlier, the determination of whether negotiation in good faith has occurred relies on an overall view of the conduct of the grantee party and government party. The overall impression that I have of the negotiations prior to the lodgement of the s.35 application are that while at times, the parties managed to engage with each other on some issues connected with the grant of the tenements, that communication was flawed, and did not address substantial issues which needed to be dealt with if agreement was to result.

The grantee party was active in relation to the process of negotiation. It responded to the requests of the government party as far as it could. It sought mediation by the Tribunal. However, the native title parties contend that the grantee party’s participation in the negotiations was directed to securing an agreement of substantially similar content to that which it believed it would achieve in Tribunal arbitration. So, they say, the grantee party was primarily concerned to seek arbitration, and not an agreement.

In this respect there are several matters to consider:

Mr Green gave contradictory messages to the government about the intentions of the grantee party in relation to the tenements. From the position where the grantee party wished to have the tenement granted right away, by June-July 1999 it had shifted its focus from mining to web-site development. It does not appear that this change in focus was communicated to the government party or to the native title party until, at the earliest, 8 September 1999. It appears that the grantee party wished to get a tenement granted but because of the change in focus, was unable to provide to the native title party or the government party any more detailed information than appeared in two annual reports. I have already noted above that at least in respect of M28/208 this information was scanty, difficult to find and interpret, and in most respects inadequate to provide the native title party with any indication of the aspects of the tenement that they said were of most concern to them. These included how the exploration would proceed, how the drilling would taken place, to what extent the establishment of any mine would interfere with the environment and the possible opportunities for Aboriginal people to safeguard the environment or their cultural life in relation to the area.
Mr Green was adamant in all communications that the grantee party “reserved its right” to lodge a s.35 application. While I do not think that any adverse inference can be drawn from the grantee party reminding others of the possibility that an arbitral determination will be made, that has to be taken in the context that all parties must be aware of the statutory framework within which they are negotiating, particularly if they are participating in negotiation where the Tribunal is presiding. The emphasis on the lodgement of a s.35 application, is, however, something I can take account of, particularly when this is combined with Mr Green’s statement recorded in the mediation conference on 29 September 1999 that the grantee party would be very unlikely to agree to any conditions imposed on the tenement which departed significantly from those already imposed in arbitration. This is what I understand him to mean when he referred to the “worst case scenario”. While I do not consider that this reflects a concluded view by the grantee party that it would not accept any other conditions, it certainly illustrates that the grantee party came close to adopting a rigid or preconceived position that it would not enter an agreement containing conditions that extended the obligations of the grantee party to any significant degree beyond the conditions which, in its view, would be likely to be imposed by the Tribunal if it made a favourable determination about doing the act.
The grantee party did not make any counter-proposal to the ‘draft deferred production agreement’ other than to indicate that a second period of good faith negotiation before the commencement of productive mining was unacceptable. There is no indication that it would have otherwise been prepared to enter the agreement. The fact that this issue was apparently left on the table indicates that while the grantee party was active in relation to procedural aspects of the negotiation, such as providing documents or requesting meetings, it was curiously passive in undertaking responsive activities in relation to the substance of the negotiation about the conditions on which any tenement would be granted. There was no counter-proposal, and no further discussion about other terms of the draft agreement.
The grantee party did not respond to the compensation letter of 13 December 1999 other than to say that the quantum was unacceptable. The grantee party apparently failed to make any form of counter-proposal to that letter. This reflects its approach to the earlier proposal from the native title party concerning the ‘draft deferred production agreement’.

The question of negotiation about compensation under the right to negotiate regime was considered by Lee J in Brownley paras 48-57. Although that decision considered the obligation of the government party, it is relevant to the present case. Section 33 of the Act plainly contemplates that the parties may include compensation and royalty issues in their negotiations. Paraphrasing what Lee J said in Brownley at para 55, the grantee party may not be obliged to reach agreement, but it is required to receive and consider, a proposal from the native title party in a manner that has regard to the particular facts of the case and to the merits of the proposal. Bearing in mind the fact that it is the responsibility of the government party ultimately to pay compensation, it is nevertheless open to the government to permit the native title party and grantee party to negotiate about monetary payments in consideration for the grant of the tenement. The grantee party had engaged in such discussion at the mediation meeting of 22 October 1999. It did not then say that it declined to accept a ‘transfer of responsibility’ for compensation, or to engage with the government party about the allocation of responsibility for compensating native title holders. Not to have engaged in any further discussion in relation to the quantum, and in particular simply to have responded that it was unacceptable, tends to suggest that the grantee was in truth not prepared to engage with the native title party on the compensation issue at all, even though a productive gold reserve had been identified on tenements, and Mr Green had stated at the mediation meeting of 8 September 1999 that mining would occur at some time in the future.

In my view the overall impression of grantee party’s conduct is that in relation to the substantive issues for negotiation, it did not act reasonably to reach agreement on the doing of the future acts.

The grantee party says the native title parties’ failure to negotiate in good faith qualified its obligations, and it was required to do less than it otherwise might have done. The grantee party points to the native title parties’ representative apparently failing to get instructions in the negotiation, and the fact that two communications from the native title party were unresponsive and did not progress matters.

I think that I have to approach this question bearing in mind the difficulties that native title parties suffer when dealing with proposals to grant mining tenements. Although ostensibly these are granted for productive mining, they may be nothing more than a platform for continued exploration. If a productive resource exists, the tenements may be “warehoused” until the relevant commodity price makes productive mining a viable economic opportunity. Native title parties are hampered by inadequate resources and, in the case of the representative of the native title party here, a large volume of future act negotiations.

I am aware the native title parties may be difficult to contact or otherwise unable to give clear instructions. The fact that the Central East Goldfields claim was combined in the period of the negotiations indicates, however, that the native title parties were available to give instructions at least in relation to combination. There does not seem to me to be any reason why the native title parties could not comply with the request of the government party for submissions about the effect of the grants on their native title rights. Mr Bell’s letter of 14 October 1999 setting out “heads of compensation” was not responsive to Mr Green’s request for a “heads of agreement” to be prepared, unless, of course, the two representatives were completely at cross purposes about what was meant. Ultimately, the “draft deferred production agreement” was prepared. The native title parties’ communication through their representative was halting and although the grantee party suggested that Mr Bell did not have instructions at any stage during the negotiation, there is no evidence that this is the case.

The question, however, is whether the failure to act reasonably by the native title party had any practical impact on the grantee party’s approach to negotiations. Even though the grantee party may have viewed responses to its requests as inadequate, it was within the grantee party’s power to request further information or seek further action from the native title party as it saw fit. This information or action could have been sought without waiting for the Tribunal to convene mediation conferences. The fact that the grantee party chose not to seek elaboration or further information meant that each mediation meeting could only progress the issues between the parties in a halting and piecemeal fashion. Likewise, the complaints of the native title party about the adequacy of the grantee’s information were not pursued after the letters of 13 September 1999.

Deciding whether or not the grantee party has negotiated in good faith in this case has been a difficult exercise, bearing in mind the whole of the parties’ conduct in the circumstances. As I have noted above, I consider that the government party did negotiate in good faith because it took reasonable steps to bring the parties together, to seek information relevant to the tenement from the grantee party, and generally to assist the negotiations of the grantee party and native title parties. It contributed what it could in the way of suggestions or proposals having regard to its broader interests in the administration of the State’s mineral tenement regime. I find it difficult to escape the conclusion that the native title parties did not assist in the course of negotiations on, at least two occasions, by providing non-responsive answers to the grantee party’s requests.

On the other hand I am left with the strong impression that the grantee party, although it participated in the process of mediation and was diligent in complying with formal steps in that process, did not negotiate in good faith. In my view, the grantee party was concerned to be seen to participate in relation to procedural steps in the mediation, but did not respond to any significant degree to the documents prepared by the native title parties with any counter-proposals other than those which it believed would be imposed in an arbitration under s.35. I do not consider that participation on this basis is consistent with any genuine attempt to reach an agreement on the matters which are relevant to the authorisation of the grant of the tenements. (See Western Australia/Thomas (Waljen)/Anaconda Nickel Ltd (Hon CJ Sumner NNTT WF98/7, 4 September 1998 at pp.16,17).

These were tenements in which a productive gold reserve has been identified and in respect of which Mr Green stated in negotiations that a working mine would be established at some time in the future. Such material as was produced by the grantee party supported that conclusion. The grantee party did not provide relevant information, or explain earlier why no further relevant information could be provided. It made an about-face from pursuing productive mining to internet web-site applications with a corresponding cooling-off in the desire for the tenements to be issued. From the commencement of the negotiations its representative referred to the possibility that a s.35 application would be lodged and that the grantee reserved its right to seek arbitration. The grantee party failed to respond to the compensation letter or the draft deferred production agreement with any counter-proposal. Although some of these matters are capable of explanation by reference to changing circumstances, I am not satisfied on the material before me that the grantee party gave serious consideration to the terms of the draft deferred production agreement. Nor did they appear to give any serious consideration to the content of the compensation letter. These were matters which required a considered response if negotiations were to progress.

I am satisfied that the grantee party, although no doubt acting with subjective honest intent, did not conduct itself reasonably in the circumstances. It is hard to avoid the conclusion that its main objective was to participate in the process so as to enable it to invoke the jurisdiction of the Tribunal as soon as reasonably practicable after the period of 6 months had elapsed. If a party engages with the process, but not the substance of negotiations, it risks a finding that it has done so only as a prelude to making an application under s.35 rather than with a view to reaching agreement, and consequently, that it has not discharged its obligation under s.31(1)(b). I am satisfied that this is what occurred in these negotiations, and I conclude that the grantee party has not negotiated in good faith.

The Tribunal’s jurisdiction has not, therefore, been properly attracted and the application must be dismissed.

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Ms P M Lane
Member
9 August 2000