This was an appeal from the decision of McKerracher J in Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd [2017] FCA 1240. The Full Federal Court of Appeal ordered that the appeal be dismissed and the appellant pay the respondent’s costs of and incidental to the appeal to be taxed in default of agreement.
[1] – [3] Buurabalayji Thalanyji Aboriginal Corporation (the Corporation) is the holder as trustee of native title rights on behalf of the Thalanyji people for an area to the south of Onslow in Western Australia. Under the terms of a state agreement, Onslow Salt Pty Ltd was granted a mining lease over an area located to the south west of Onslow and near the coast. The mining lease area is within the native title area. In July 2017, the Corporation commenced proceedings against Onslow Salt and the State of Western Australia concerning activities in the native title area.
[4] Onslow Salt complained that the proceedings had been commenced in breach of the requirements of a dispute resolution clause. It made an application for a stay of the proceedings on that basis. The application was refused (Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd [2017] FCA 1240) and leave was given for Onslow Salt to appeal against that decision.
[5] In the proceedings before the primary judge, the Corporation made 14 substantive claims. [6] – [8] There was also a claim under the terms of a Development Deed between the native title claimants for the Thalanyji people and Onslow Salt. It was said that pursuant to the Native Title Act 1993 (Cth) (NTA), the Corporation had become a party to the Development Deed. The failure to notify the Corporation of the real purpose of Onslow Salt in its dealings with Chevron was alleged to be a breach of the Development Deed. The Corporation sought a declaration that the purported approval was void and of no effect and sought damages against the State and Onslow Salt. At the heart of the proceedings brought by the Corporation were claims that there were native title rights at the relevant time and that public law relief should be granted in respect of the purported approval.
[9] The recitals to the Development Deed record, amongst other things, that the native title claimants (now represented by the Corporation) and Onslow Salt 'wish to set out the terms upon which the Salt Project is to proceed' in the then native title claim area (of which the native title area forms part). The Salt Project is defined to mean the development and operation of solar salt production, harvesting, processing and shipping facilities within the native title claim area. The Deed includes a provision which states that the operation and enjoyment of native title rights and interests over the Project Area is agreed to be suspended for the duration of the Salt Project.
[10] The Deed contains a dispute resolution clause which provides:
If there is a dispute question or difference between the Parties with respect to any matter then the Parties shall forthwith confer in an effort to settle the dispute question or difference but if they fail to agree within thirty (30) days after first conferring or if a Party refuses to confer then the dispute question or difference shall be referred by either or both Parties to an independent expert.
[11] – [14] The clause further provides that the expert is to decide whether to receive written or oral submissions, provided that no more than a month will be allowed for submissions. The expert must then express an opinion 'within a reasonable period from the date of reference' and furnish the parties with a copy. The clause provides expressly that no party shall be entitled to commence or maintain any action or proceeding until the dispute, question or difference has been considered by the expert. After the provision of an opinion under the agreed mechanism, there is no further obligation expressed in the dispute resolution clause for the parties to meet to resolve or negotiate after the opinion has been provided. So, the clause provides for a form of advisory opinion. [14] It was common ground that the opinion, if and when provided, would not operate as a determination or adjudication of the dispute.
The Full Court set then out the relevant principles for a stay of proceedings. [15] The power of the Court to stay proceedings is discretionary. The discretion is wide. In considering whether to grant a stay, parties are to be held to their agreed dispute resolution procedures, unless good reason be shown. The onus of showing good reason is on the party opposing the stay. Each case is to be considered on its own facts and circumstances. [16] A stay will be refused if it would be unjust to deprive a party of its right to have its claim determined judicially. Matters that have been identified as reasons that may, in the particular circumstances, cause the Court to refuse to grant a stay include:
the agreed process would deal with only part of the dispute;
there would be duplication of effort if the agreed process was to be followed in the particular case;
the refusal of a stay would result in a multiplicity of proceedings;
in the case of an expert determination, the dispute is inapt for determination by an expert because it does not involve the application of specialist knowledge to matters to be observed or investigated by the expert or is outside the expert's field of expertise; and
the agreed procedures are inappropriate or inadequate for the nature of the dispute.
[17] To these matters the Court also added circumstances where there is a wider public interest in the dispute being dealt with in the courts.
[18] As to the significance of the court proceedings involving parties who had not joined in the agreed dispute resolution mechanism, the Court stated that some care must be taken. In cases where one of the matters raised before the Court is dependent upon the determination of other matters required to be submitted to arbitration, even though all parties before the Court are not parties to the arbitration agreement, the Court may stay the whole proceedings until that matter is determined. It may also stay the court proceedings where they are ancillary to the matters to be arbitrated. Or, it may form the view that the arbitral claims should be held in abeyance pending the determination of the court proceedings on the basis that the issues to be submitted to arbitration are subsidiary or less substantial: see Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170 at [333]-[334]. Similarly, in cases where the agreed mechanism provided for something other than arbitration, the Court should give consideration to whether it is appropriate for the court proceedings to be stayed while an agreed dispute resolution mechanism is carried into effect even though it may not be a process in which all parties have agreed to participate or are otherwise willing to participate.
[19] In all cases, against the refusal of a stay is the weighty consideration that the parties should be held to their bargain. The Court will respect the terms of any agreement between the parties committing to alternative processes for the resolution of disputes. This means that the Court should not lightly refuse to grant a stay in circumstances where the clause relied upon is enforceable. In most cases the existence of an enforceable agreement to submit to a dispute resolution process will be a weighty consideration against the refusal of a stay. As Dixon J stated in Huddart Parker Ltd v The Ship Mill Hill [1950] HCA 43 at 509, there is 'a strong bias in favour of maintaining the special bargain'. This reflects the importance of giving effect to the terms of any enforceable contract the parties have made. However, the onus remains the same in any case where a stay is sought and falls upon the party opposing the stay.
[21] A stay may be granted until an agreed process of conciliation, mediation or good faith negotiation has been completed even if the outcome will not be a binding determination of the dispute.
[22] Finally, the approach on an application for a stay by reason of an agreed dispute resolution mechanism may need to accommodate relevant statutory provisions such as the Commercial Arbitration Act 2010 (Cth) where, for example, parties who claim 'through or under' entities who are parties to an arbitration agreement may be referred to arbitration: Hancock Prospecting at [289]-[323].
Alleged errors
[28] On the appeal, Onslow Salt accepted that House v The King [1936] HCA 40 applies and it must demonstrate that the primary judge's discretionary decision was guided by a wrong principle or irrelevant material or was unreasonable in result. [29] Onslow Salt raised two matters in support of the appeal:
The primary judge formed an incorrect view as to the scope of the agreed dispute mechanism by finding that it was limited to simpler, more specific issues arising under the Development Deed
The primary judge found it to be fundamentally important that the agreed dispute mechanism did not produce a determination or any binding outcome which was said to be in error because it was an irrelevant matter when it came to considering whether to grant a stay.
The scope of the agreed dispute mechanism
The Full Court held at [33] that ‘it is evident that his Honour decided the case on the basis that the clause applied, but the Court's discretion should be exercised against the grant of a stay.’ At [35] the Full Federal Court of Appeal concluded that ‘therefore, there was no error by the primary judge as to the scope of the dispute resolution clause.’
The Full Court stated at [40] that
as the primary judge correctly found, the mechanism chosen by the parties is entirely inapposite for the dispute the subject of the proceedings. The issues in the proceedings require a detailed consideration of complex factual issues to determine the actual purposes of Onslow Salt and Chevron. The expert will receive only submissions within a strict timeframe and then be required to provide an opinion. There is no procedure by which there will be disclosure of relevant documents or examination of witnesses. There is no procedure by which documents or submissions might be obtained from Chevron. Further, the proceedings raise novel questions about tortious interference with native title rights about which an opinion would carry little authoritative value.
[41] The claim against the State is a public law claim which arises from factual circumstances that are interwoven with those relied upon for the claim against Onslow Salt. There is no basis for a stay of proceedings against the State. Even if the State may be willing to participate in the expert process, there are public interest reasons why the whole of a dispute of that character should be addressed by Development Deed have been advanced to frustrate the rights of Onslow Salt under the dispute resolution clause.
[44] The Court held that the primary judge was correct to refuse to grant a stay. As the appeal was unsuccessful, and no submission was advanced to support a different exercise of discretion, the Court held that costs should follow the event.