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Key points
- The NTA requires that parties negotiate in good faith with a view to reaching agreement for at least six months from the date of a right to negotiate notice
- A party is not prevented from seeking an arbitral determination after six months solely on the basis that the negotiations, despite being in good faith, remain embryonic
- This decision does not limit or distinguish other decisions in relation to the obligation to negotiate in good faith
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On 14 October 2009, the High Court refused to grant special leave to appeal from the decision of the Full Court of the Federal Court in FMG Pilbara Pty Ltd v Cox1. The decision of the Full Court itself considered a future act determination of the National Native Title Tribunal (NNTT) in relation to aspects of the obligation to negotiate in good faith under the Native Title Act 1993 (Cth) (NTA).
These cases arose out of negotiations between FMG Pilbara Pty Ltd and the Puutu Kunti Kurrama Pinikura People from the Pilbara region of Western Australia for the grant of a mining lease.
The decision of the Full Court of the Federal Court was on questions of law only and did not review findings of fact. The matters before the court related to the question of whether a good faith negotiation must have advanced to a particular stage before a party may apply to the NNTT for an arbitral determination.
The Full Court stated that the NTA requires that:
- the negotiations which are directed to reaching an agreement are to be carried out in good faith, and
- a period of not less than six months has passed since the date on which the section 29 notice was given before a grantee party may apply to the NNTT for an arbitral determination.
The findings of the Federal Court are summarised below:
- the NTA does not dictate the content and manner of negotiations by compelling parties to negotiate in a particular way or over specified matters. It may be appropriate for negotiations to be conducted on a claim-wide basis, so long as it is clear to all parties that a particular tenement (the subject of the section 29 notice) is included in the negotiations
- parties must negotiate in good faith for at least six months with a view to reaching agreement. The NTA does not specify that negotiations must reach a certain stage. To conclude that negotiations must be more than ‘embryonic’ would be to put a gloss on the statutory provisions
- if such claim-wide negotiations (which specifically include a particular tenement) stall, it is not then necessarily a requirement to conduct a further tranche of negotiations solely in relation to a particular tenement the subject of the section 29 notice before seeking a determination of the NNTT in relation to that tenement.
These decisions relate to the length and breadth of good faith negotiations. We note that there are a number of other cases which consider other indicia of the obligation to negotiate in good faith. Whether parties have negotiated in good faith in any given case will always be a matter of fact and degree.
This article was written Chloe Piper, Special Counsel, Perth.
Endnotes
1. Cox v FMG Pilbara Pty Ltd [2009] HCATrans 277; FMG Pilbara Pty Ltd v Cox [2009] FCAFC 49
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