In this matter, Barker J heard an appeal in relation to the determination made by the National Native Title Tribunal (the Tribunal) in Sheffield Resources Ltd and Another v Charles and Others on behalf of Mount Jowlaenga Polygon #2 [2017] NNTTA 25 that the lease application M 04/459 under the Mining Act 1976 (WA) may be granted to Sheffield Resources Limited. The decision was made in respect of Sheffield’s s 35 application. Barker J ordered that the appeal be dismissed.
[1] The ‘appeal’ concerned the good faith negotiations obligations found in section 31(1)(b) of the Native Title Act 1993 (Cth) (NTA). [2] The obligation to negotiate in good faith arises in connection with a proposal for the doing of a ‘future act’, as defined in the NTA. [4] Barker J set out the Preamble to the NTA that from its commencement has stated:
Justice requires that, if acts that extinguish native title are to be validated or to be allowed, compensation on just terms, and with a special right to negotiate its form, must be provided to the holders of native title. However, where appropriate, the native title should not be extinguished but revive after a validated act ceases to have effect.
It is particularly important to ensure that native title holders are able to enjoy fully their rights and interests. Their rights and interests under the common law of Australia need to be fully supplemented. In future acts that affect native title should only be able to be validly done, if typically, they can also be done to freehold land and if, whenever appropriate, every reasonable effort has been made to secure the agreement of native title holders through a special right to negotiate. It is also important the broader Australasian community be provided with certainty that such acts may be validly done.
A special procedure needs to be available for the just and proper ascertainment of native title rights and interests which will ensure that, if possible, this is done by conciliation and, if not, in a manner that has due regard to their unique character.’
Background
[17] On 8 August 2014, Executive Director of the Department of Mines and Petroleum of the Government of Western Australia (The State Government Party) gave notice of the future act in accordance with s 29 of the NTA that a lease application M 04/459 under the Mining Act 1978 (WA) may be granted to Sheffield Resources Limited (the grantee party). The grant of the lease would constitute a future act as defined by the NTA. [18] This notification triggered the good faith negotiations obligation created by s 31(1)(b).
Following the s 29 notification, the Mount Jowlaenga Polygon #2 claim group (native title party), who claimed native title in the lease application area, appointed KRED Enterprises Pty Ltd as its lawyers to engage in negotiations with the grantee party for s 31 negotiation purposes. [20] After six months, on 24 October 2016, when an agreement had not been reached, the grantee party applied to the Tribunal as the relevant arbitral body, pursuant to s 35 of the NTA, for a determination that the act, being the grant of the lease, might be carried out. [21] Almost immediately after lodging the s 35 application, Sheffield sent letters putting their offer directly to three individuals who comprise the native title party (the registered native title claimant), stating that they had been attempting to negotiate with KRED but had been unable to ‘reach a conclusion’.
[23] At material times prior to making the s 35 application, a negotiation protocol had been agreed between the parties, which specified that all negotiations would be between Sheffield Resources and KRED on behalf of the native title party, not individual members of the claim group. This was to ensure that the native title party was professionally represented in the commercial negotiations.
[25] In submissions to the Tribunal concerning whether the s 35 application should be determined, the native title party raised this conduct by the grantee party as proof that the negotiations conducted by the grantee party failed to meet the s 31 good faith negotiations requirement, and why the s 35 application should not be determined.
[26] The Tribunal Member found that the grantee party had conducted the relevant negotiations prior to the making of the s 35 application, in good faith. [27] The Tribunal further determined that the grantee party did not labour under any duty to negotiate in good faith (see paragraphs [179], [195-196] of the Tribunal’s written reasons for the decision.
[31] Pursuant to section 169 of the NTA the native title party appealed the decision on a ‘question of law’. Three grounds for appeal are set out in the notice to appeal.
Grounds of appeal
First ground for appeal
[32] The native title party’s first ground of appeal is to the effect that the Tribunal erred at law in not finding the grantee party continued to labour under a good faith negotiation obligation at all material times, including following the making of the s 35 application when it approached the individuals comprising the native title party to the doing of the act? The native title party says that the Tribunal should have found that the conduct was not in good faith and so the s 35 application should not have been determined’.
[38] Mount Jowlaenga (the native title party) contended that the Tribunal erred when it found that if the grantee party chose to negotiate after the s 35 application had been made, it was not bound by the obligation of good faith. It referred to the Preamble and the objects of the NTA in s 3 (a) and (b) that the right to negotiate is a primary element of the protection of native title and that the requirement of good faith is not conditioned by the interplay between negotiations and the s 35 arbitral system. The native title party noted the beneficial nature of the obligation to negotiate in good faith and its recognition as a main object of the NTA.
[41] The native title party also acknowledged that s 36(2) places an evidentiary burden on the party alleging a lack of good faith in the negotiations. The native title party submits [54] that the Tribunal erred when it found that if the grantee party chose to negotiate after the s 35 application had been made it was not bound by the obligation of good faith.
[70] The essence of the submissions made by the Government Party and the Grantee Party is that s 35 (3) merely empowers parties to continue negotiations after the making of a s 35 application if they wish, in circumstances where in its absence, there may be some doubt as to the effect that an agreement reached after the making of a s 35 application might have. [71] The grantee party submitted that s 31(1)(b) contains two elements-the first being a process that the parties must negotiate in good faith with the view to reaching an outcome and the second is an outcome-an agreement that the future act may or may not be done with or without conditions. [74] The grantee party submitted that s 35 does not refer to the first element being the process of negotiation in good faith if negotiations continue after the s 35 application has been made.
Barker J stated at [80]:
The proposition that, following the making of a s 35 application, the Government party or a grantee party may, in a sense, actively seek to negotiate otherwise than in good faith would, one would think, be an anathema given the text of the Preamble and the general objects of the NTA set out above, not to mention s 31 (1) (b) itself. Every indication in the NTA points towards a “good faith” being a constant requirement in all dealings under the NTA.
[81] However His Honour then stated ‘that broad reflection cannot of itself dictate the manner in which s 35(3) of the NTA should be construed…if any government or grantee party continues negotiations with a native title party with a view to obtaining an agreement following the making of a s 35 application, and behaved badly, as it were, and demonstrated bad faith in doing so, it may be that conduct may well be relied on to inform a decision by an arbitral body, for the purposes of s 36(2), that the earlier negotiations had in fact been conducted otherwise than in good faith.’
Barker J further observed: [82] A good corporate citizen standing in the native title community more generally, would be greatly tarnished, if they were so to behave and would affect any future negotiations that they may wish to conduct with a relevant native title party, and indeed the preparedness of any Government party to do the proposed future act or to do a similar future act in the future.
[83] Barker J agreed with the submissions of the Government party and the grantee party as to their construction of s 35 (3). Principally section 36(2) appears to be drafted on the basis that the arbitral body will be considering whether the negotiations that preceded the making of the s 35 application met the requirements as set out in s 31 (1) (b).
[84] It was submitted that there is nothing in s 31(1)(b) or the NTA generally which says or implies that the outcome can only arise from the s 31(1)(b) process, that is, good faith negotiations under that provision. In this regard, the grantee party relied on what Carr J said in Walley v Western Australia [1996] FCA 490 at [375].
[86] Section 35(3) empowers the negotiation parties to continue to negotiate with a view to reaching an agreement and if the parties proceed to negotiate one would expect them to do so in good faith but ‘strictly speaking there is no obligation on them to do so’. They will however be required to have negotiated in good faith up until the point of making the s 35 application. If they move quickly from pre s 35 application negotiations to a s 35 application and then begin behaving badly then the arbitral body may well entertain real doubts that they never engaged in good faith negotiations.
[88] Barker J ruled that s 35(3), in authorising negotiation parties to continue to negotiate with a view to obtaining an agreement of the kind mentioned in s 31(1)(b), does not carry with it the express obligation, or the implied obligation, to negotiate in good faith’ and for this reason ground 1 of the appeal fails.
Once an application has been made, the Tribunal must make a determination under s 38 that the act must not be done, or may be done, or may be done subject to conditions. Barker J held that it is then, by virtue of s 36(2), that the question of the earlier good faith negotiations arises. If there have not been good faith negotiations, then by that subsection the Tribunal must not make a determination on the application. Where the Tribunal finds that the s 31(1)(b) obligation has not been satisfied, and so the s 35 application cannot be determined, s 36(2) notes that a further s 35 application can be made. His Honour considered this to presuppose that fresh negotiations are conducted for at least six months, in good faith.
His Honour considered that s 36(2) was drafted on the basis that the Tribunal will consider whether the negotiations that preceded the making of the s 35 application met the good faith requirements set out in s 31(1)(b), and that the provision is not framed with continuing negotiations in mind, reinforced by the past tense used in the section. The grantee party says that s 36(2), in providing that the Tribunal must not make a determination if the grantee party or Government party did not negotiate in good faith, refers to the process element and requires the Tribunal to satisfy itself that the relevant party did negotiate in good faith prior to the making of the s 35 application.
Second ground for appeal
[33] The second ground of appeal put by the native title party is that the post s 35 application conduct by the grantee party in approaching individual members of the native title party could have evidentiary value in assessing whether the pre-s 35 application conduct disclosed a failure to negotiate in good faith. Did the Tribunal err by failing to assess the significance of the post s 35 application conduct?
[91] The native title party submitted that the Tribunal failed to act upon the conduct by the grantee party and it post s 35 application and the direct contact that it made to members of the native title claim group (as set out at [101]). Only the grantee party made submissions with respect to ground 2 of the appeal [97]. The grantee party submitted that the contact demonstrated nothing about the grantee party’s conduct prior to the making of the s 35 application [102].
At paragraph [179] of its decision, the Tribunal referred to the Pilbara Stone Pty Ltd/Angelina Cox and Ors on behalf of Puutu Kunti Kurrama & Pinikura 2/Western Australia [2012] NNTA 114 and South Blackwater Coal Ltd Queensland/Cliff Kina and others on behalf of the Kangulu People (Qc98/25) and Lindsay Kemp and Others on behalf of the Ghungalu People (Qc 99/16) [2001] NNTTA 23 (27 March 2001) . In these decisions, it was held that negotiation conduct after a s 35 application may be relevant to whether a party has negotiated in good faith before the application was made. The Tribunal stated that it would take the same approach as Deputy President Sumner and Member Shurven in those decisions. Mount Jowlaenga submitted that the Tribunal failed to act upon its statement in [179], that it was bound to take into account the post s 35 application conduct and failed to do so.
[129] By reference to South Blackwater Coal Ltd Queensland/Cliff Kina and others on behalf of the Kangulu People (Qc98/25) and Lindsay Kemp and Others on behalf of the Ghungalu People (Qc 99/16) [2001] NNTTA 23 (27 March 2001) the Tribunal found that it would not make an adverse finding with respect of the grantee party on that ground.
[133] Barker J concludes that the Tribunal did take into account the direct contact made by the grantee party to the native title party following the s 35 application however it did not find that there was any good faith lacking in the negotiations conducted by the grantee party in the pre-application conduct. It follows that there was no error of law and that the second ground for appeal fails [140].
Third ground for appeal
[34] The native title party’s third ground of appeal raises the question whether the Tribunal was obliged as a matter of law to take into account the grantee party’s persistent conduct at the time when the s 35 application was before the Tribunal, in continuing to directly contact or seek to directly contact members of the native title party, as a relevant consideration when seeking to determine whether the grantee party's conduct satisfied its obligation to act in good faith. It is said that the Tribunal erred in law when it failed to consider any of the direct approaches by the grantee party to members of the native title party in respect of the negotiations that had occurred, and when notified to the Tribunal by the native title party during the s 35 application proceeding, despite having expressly indicated that the Tribunal would s consider the matter. Did the Tribunal err by failing to consider the incident of 7 March 2017?
[141] The native title party contended that post s 35 application conduct is relevant to the determination of the question of good faith, a question that can be agitated at any time prior to a determination under s 36A or s 38 of the NTA. The third ground of appeal related specifically to a further incident of post-application conduct, which occurred on 7 March 2017, at a time when the Tribunal had reserved its decision on the good faith issue. The grantee party sent an email to the legal representatives of the native title party attaching a letter of which the grantee party said ‘we are forwarding to the Mt Jowlaenga Named Applicants today to provide them with an update regarding native title matters at Thunderbird’.
KRED wrote to the Tribunal on 8 March 2017 regarding this conduct and were advised on 9 March 2017 that although the Tribunal had reserved its decision, Member McNamara had agreed to consider the information ‘in the context of overall behaviour in determining the question of good faith.’ The native title party contended that the Tribunal failed to consider the conduct.
[143] Barker J notes that The Tribunal did not make a factual finding about the 7 March 2017 letter in accordance with section 162 of the NTA, ‘nor was it obliged to do so, that is the Tribunal evidently did not consider it was relevant to the issue of whether the grantee party negotiated in good faith before making the s 35 application. That is a conclusion of law and not a matter which engages section 162.’
[145] Barker J does not consider ground 3 to be made out for the same reasons that ground 2 failed. His Honour considered that the Tribunal should be taken to have considered that the 7 March 2017 letter was not significant to the question whether the pre-s 35 application negotiations were conducted otherwise than in good faith and so did not specifically refer to it.
[146] Barker J ordered that the appeal be dismissed.