7 April, 2016
State of Western Australia v Graham on behalf of the Ngadju People [2016] FCAFC 47
What you need to know
- The Full Federal Court has unanimously confirmed the validity of almost 300 mining leases, initially found to be invalid in a determination of native title made in favour of the Ngadju People in November 2014.
- The Court held that dealings in the mining leases, including their excision from the Nickel Refinery (Western Mining Corporation) Agreement Act 1968 (WA) (the Refinery State Agreement) and subsequent re-grants, were valid and where required, followed Native Title Act 1993 (Cth) processes (the Native Title Act).
- The decision clarifies the interaction between the Mining Act 1978 (WA) (the Mining Act) and the operation of certain State Agreements.
- The decision also provides some useful commentary around the interpretation of sections 24IB and 24IC of the Native Title Act, and how "invalid" interests may be dealt with in the drafting of native title determinations.
What you need to do
- The decision is potentially important for holders of mining tenure that have been granted under or pursuant to a State Agreement in Western Australia.
- While the decision should not lead to any practical changes to the way in which native title affects day to day mining operations, it is particularly relevant where State Agreements may expire, and mining operations are to continue under the auspices of the Mining Act only.
- The decision is a good reminder for companies that currently operate under State Agreements to be mindful of the way in which interests held under those agreements are dealt with. If a wrong step is taken in the process the native title consequences may be significant.
Key findings by the Full Court
State Agreements and the Mining Act 1978 (WA)
Fundamental to the ultimate decision of the Full Court were the findings in relation to the rights granted under the relevant mining leases and the interaction between the Refinery State Agreement and the Mining Act.
The Full Court held that the Refinery State Agreement did not constitute the statutory source of power required to enable the State grant of the mining tenements. Consistent with authority (including Brown (on behalf of Ngarla) v State of Western Australia) [2012] FCAFC 154; (2012) 208 FCR 505), the Full Court confirmed that the language of the Refinery State Agreement was such that it took effect as a contract only, and accordingly could not confer rights to grant tenements, consistent with the authority laid down in Nicholas v Western Australia [1972] WAR 168 and Minister for Mineral Resources v Brantag Pty Ltd [1997] NSWCA 206; (1997) 8 BPR 15,821.
The Full Court found that the relevant leases were granted pursuant to the Mining Act 1904 (WA) (the Old Mining Act). This meant that when the old Mining Act 1904 (WA) was replaced in 1982, the transitional provisions under Schedule 2 of the new Mining Act took effect so that:
● the State Agreement tenements became "deemed" mining leases under the new Mining Act;
● the mining leases therefore became "all minerals" leases; and
● the contractual arrangements that applied to the leases under the Refinery State Agreement continued unaffected.
The Court dismissed arguments by the Ngadju People that to apply the transitional provisions in this manner was inconsistent with section 5 of the new Mining Act. Rather, the Court confirmed that the Refinery State Agreement continued to operate unaffected, despite the transitioning of the leases to the new Mining Act as provided for by Schedule 2.
Future Act processes: Application of ss 24IB and 24IC of the Native Title Act 1993
Once the character of the relevant leases was determined, the Full Court turned to consider whether the subsequent dealings in those tenements had been dealt with properly under the Native Title Act. This included the excision of the leases from the Refinery State Agreement, and the subsequent re-granting of those leases under Schedule 2 of the Mining Act.
Importantly, the Full Court held that the excision of leases from the Refinery State Agreement did not "transform" the leases in any way, and accordingly, native title was not affected in the requisite sense.
In relation to the subsequent re-grant of those leases pursuant to Schedule 2 of the Mining Act, the Full Court considered the application of both sections 24IB and 24IC of the Native Title Act. Although ultimately the Court found that section 24IB did not apply, it provided some useful commentary, including that:
- the discretion of the Minister to refuse applications for re-grants of mining leases, meant that the application for such could not be considered the "exercise of a legally enforceable right" under section 24IB(a);
- an application under Schedule 2 of the Mining Act could also not be considered as giving effect to an "offer, commitment, arrangement or undertaking" under section 24IB(b), because there was no corresponding offer, commitment, arrangement or undertaking as to whether or not the mining lease would ultimately be granted. That is, there was no causal relationship between the application and the grant, that would satisfy this requirement; and
- consistent with the findings in Daniel v State of Western Australia [2004] FCA 1388; (2004) 212 ALR 51 at [58], an "offer, commitment, arrangement or undertaking" may involve something less than a right, although a "justified expectation" may not be sufficient.
The Full Court held that the re-grant of the leases was validly done in accordance with section 24IC. In doing so, the Full Court made some useful observations that:
- proprietary rights are not simply rights to use land in a particular way, particularly given that section 24IC applies to every type of lease, licence, permit or authority; and
- in considering whether the future act confers additional rights, it is relevant to consider the rights conferred by the lease immediately prior to the re-grant, not as originally granted.
Drafting determinations to deal with invalid interests
As a final consideration, the Full Court looked at the wording of the determination that dealt with invalid interests.
Although no findings were ultimately made on this point (the argument was the subject of a cross-appeal brought by the Ngadju People that was dismissed), the Court did note that the determination must set out the relationship between the relevant rights and interests, and the simple repetition of the terms of section 227 of the Native Title Act is not particularly helpful to that relationship.
On this basis, the language put forward by the miners and the Commonwealth was preferred by the Court, and is set out at paragraph [157] of the judgment. This may provide some practical guidance and precedent for parties drafting determinations in the future, where some interests are found to be invalid for native title purposes.
For further information, please contact:
Tony Denholder, Partner, Ashurst
tony.denholder@ashurst.com
