The detail of the terms of the KM Compensation Deed
73 The submissions for the Participants did not address the detail of the terms of the KM Compensation Deed. They did not seek to demonstrate from a consideration of those terms as a whole how it might be said that the withdrawal by the KM People of their native title claim boundary so that it did not cover any part of the area on which the Project was to be undertaken was an event that resulted in a 'radically different situation' than that which was contemplated by the parties when they entered into the deed. Instead, a more generalised submission was advanced that the limited extent to which the KM People had been determined to be common law holders meant that the KM Compensation Deed 'cannot operate as originally intended'. It was a claim that focussed upon a contention that, by reason of the outcome of the Native Title Application by the KM People, they could not grant any future native title or heritage approvals that the Participants may require and a submission that certain provisions cannot apply. It also asserted that the KM Compensation Deed was 'premised' on KM People asserting that they hold 'primary rights' over the areas in which the Participants were to conduct the Project.
74 These submissions find no foundation in the terms of the KM Compensation Deed. As is explained below, regard to the terms of the KM Compensation Deed reveals that the submissions by the Participants as to the character of the deed are not supported by regard to the detail of its terms.
75 The background to the KM Compensation Deed refers both to the 'Project Titles and Mardie Station'. The defined term 'Project Titles' refers to all of the tenements for the Project (existing and pending) as well as the pastoral lease for Mardie Station. Therefore, the deed is not confined to the Tenement Area or to the process for obtaining consents to the grant of the tenements required to commence the Project. It is expressly concerned with the whole of the Agreement Area and specifically, the area of the pastoral lease for Mardie Station. The defined term 'Mardie Station' refers to 'the pastoral station operated by [one of the Participants]'.
76 The term 'Project Titles' is defined to further include future titles and replacement titles. That is to say, the recitals in the background to the deed invoke defined terms which contemplate the possibility of further consents to the grant of tenements being required at some future time.
77 There is a further recital that:
The Project Titles and Mardie Station are located within the boundaries of 3 registered Native Title Applications.
78 The background then recites that the parties have entered into the ILUAs 'for the purpose of allowing the Project to proceed according to its schedule'. Then it recites that the Participants 'wish to share the benefits of the Project with the KM People and other Indigenous people, and ensure that they are appropriately compensated for the effect of the Project on native tile and TO Rights, through the Benefits provided under this Deed'. These statements are unqualified. They certainly do not manifest an intention that the sharing of the benefits depends upon some particular outcome to the Native Title Application by the KM People. The recital as to compensation is not confined to native title rights. Further, the reference to sharing the benefits of the Project manifests a broader intention than simply compensating the KM People for allowing the Project to proceed. It points to an ongoing relationship by which the benefits of the Project will be shared into the future.
79 The background to the KM Compensation Deed then states:
In consideration for the KM Parties entering into [the ILUAs], and in order to provide the Benefits referred to …, [the Participants] have agreed to provide the Benefits to the KM Parties.
80 Significantly, the recitals do not identify a particular area where the Project is to be undertaken. Rather, they refer to an area that includes the whole of the pastoral lease for Mardie Station. Equally significantly, they refer to both native title rights and to 'TO Rights'. As has been mentioned, TO Rights are very broadly defined and extend well beyond those rights and interests that might be the subject of a determination of native title. These aspects of the background run counter to the Participant's claims that there was a common assumption as to the extent of claimed or determined native title rights as to some part of the area that was required to conduct the activities for the Project that was significant for the benefits to be provided (including the compensation by way of annual payments). Rather, the recitals indicate that the terms of the deed were to apply to the whole area covered by the pastoral lease for Mardie Station, and to do so in respect of native title and TO Rights.
81 In addition, the recitals indicate that the compensation was provided for purposes that extended well beyond securing the approvals to be able to conduct the Project or to compensate the holders of native title interests for the activities to be conducted as part of the Project on a particular part of the pastoral lease for Mardie Station. They refer to a sharing of the benefits of the Project. They also refer to compensation for TO Rights.
82 As has been mentioned, the term 'Activity' is used in the body of the KM Compensation Deed. It is defined as:
all activities the [Participants] are entitled to carry out on the land in the Agreement Area under the Principal Acts, this Deed, the Consent Agreements, the Project Agreements, and under the terms and conditions of the Project Titles, and includes both ground disturbing activities and non ground disturbing activities carried out under the relevant Project Title.
83 The Agreement Area is defined as the area of land and waters comprised within the granted and pending tenements, the pastoral lease for Mardie Station and an adjacent offshore area. The reference to 'Project Titles' includes the pastoral lease for Mardie Station.
84 Therefore, the term Activities is not confined to some identified part of the Agreement Area such as the Tenement Area. It includes the whole of the area the subject of the pastoral lease and it includes all activities that might be undertaken for the Project. So, it includes activities that might be undertaken for the purposes of the Project on any part of the pastoral lease. Examples given in the course of submissions were the construction of roads or the use of areas for tailings storage. Further, on the face of the definition, it is not confined to mining activities and extends to activities undertaken for the purposes of the pastoral station operated on the pastoral lease (being a Project Title), but a submission to that effect was not advanced by the RRK Claimants.
85 The operative provisions of the KM Compensation Deed begin with a statement that the parties have developed a positive relationship in the course of negotiations 'and wish to maintain and develop that relationship as they work together in relation to the Project': cl 2.1(a). Amongst other things, they agree that the deed is based on 'mutual collaboration with the common objective being the long term operation of the Project' and 'compensating KM People and enhancing the KM People's participation and benefit from the Project': cl 2.1(d)(3) and (4). Again, the reference to compensation is expressed much more broadly than compensation for consents given by parties with a claimed or determined native title interest in land upon which mining operations are to be conducted as part of the Project.
86 The KM Compensation Deed also deals with the fact that individual KM People may also be YM People or WGTO People. It provides that an individual person 'is only entitled to obtain Benefits under one of the three Compensation Agreements': cl 2.4(a). However, it reserves to the KM Parties the discretion to expressly permit a person to obtain benefits under two or more Compensation Agreements. There is also a provision to the effect that there will be no disadvantage in entering into the KM Compensation Deed and the ILUAs before other registered native title claim groups and a covenant to confer the same benefits on each of the three groups of peoples: cl 2.5. These provisions indicate an intention on the part of the Participants to provide an overall comprehensive package of equal compensation for the benefit of the three groups of people irrespective of the outcome of the Native Title Applications.
87 The KM Compensation Deed provides that it starts when the relevant agreements (compensation deeds and the ILUAs) have been signed by the three groups and written approval from the board of one of the Participants and its project financiers has been received and ends when the term of the last of the Project Titles (including any renewals) has expired: cl 3.1. That is to say, it continues for as long as the Participants hold interests in the tenements or the pastoral lease. Expressed in that way, it indicates that it is intended to apply in all circumstances that may pertain over a very long period of time. There is no suggestion in the language used that the obligations to pay compensation are tied to some particular aspect of the comprehensive terms continuing to apply or that the term may come to an end based upon the outcome of the Native Title Applications.
88 There is an express power for the Participants to terminate the deed if the Project is abandoned: cl 3.2(a) and (b). It also allows the KM Parties to invoke a procedure for termination 'before the commencement of Annual Payments' if they consider that the Project has been abandoned: cl 3.2(c) to (n). The deed provides expressly that if it is terminated for abandonment then its terms have full force and effect up until that termination and the terms of the deed otherwise cease to have force and effect: cl 3.2(o). The deed also terminates if for any reason the ILUAs are terminated: cl 3.2(p). These detailed provisions indicate that the parties considered the future circumstances in which the KM Compensation Deed would not be performed. Despite the obvious possibility that the KM Parties may not be determined to be the holders of native title over much of the Agreement Area, there was no express provision for termination in that event. The absence of such a provision suggests that there were ongoing benefits to the Participants in the observance by the KM Parties of the covenants in the deed even if they were not determined to hold native title over much or all of the Agreement Area. Those benefits are evident from the following consideration of the substantive terms of the KM Compensation Deed.
89 The KM Compensation Deed provides for milestone payments and annual payments. There are conditions which must be met in order for the Participants to be obliged to make the annual payments. However, the obligation of the Participants to make each of those payments is not conditioned upon the KM Parties being determined to be native title parties over some part of the Agreement Area (or some part of that area that is now said to be significant for the Project). Rather, the conditions are expressed as follows (cl 5.2(d) to (f)):
The Annual Payments are conditional upon satisfaction of the milestone events set out at clauses 5.1(c), 5.1(d), and 5.1(f) other than sub-clause 5.1(d)(1) and 5.1 (d)(2).
Subject to clauses 5.6, 14.2, and 14.3, the [Participants] will during the Payment Term make the Annual Payments, including any Additional Payments.
The KM Parties' entitlement to payment under this Deed is in consideration of the continued compliance of the KM Parties with the terms of this Deed, ILUA1 and ILUA2.
90 The milestone events do not include any particular outcome in relation to the Native Title Application by the KM People. This is significant given the extent of detail as to the milestone events and the extent to which their occurrence may affect entitlements to payments under the KM Compensation Deed, including the annual payments.
91 There is provision for the suspension of the payment of the annual payments for the duration of a 'Project Suspension Event' which is defined as an event which causes a suspension of the shipment of concentrate from the Project for a specified period (cl 5.6).
92 The Participants agree to consult with the 'KM Parties' in relation to the implementation and amendment of 'Protocols' in relation to 'Aboriginal cultural heritage' and any other matters agreed between the parties. The Protocols as at the date of the KM Compensation Deed are included as schedules. Schedule 4 to the deed is a 'Cultural Heritage Protocol'. It specifies the manner in which the Participants will conduct 'Surveys' it undertakes with KM People in the Agreement Area (cl 3(a)(1)). A Survey is an archaeological or ethnographic survey as described in the Protocol. It also deals with the manner in which the Participants will undertake consultations in relation to s 18 Notices in the Agreement Area (cl 3(a)(2)). Those notices seek Ministerial consent under the legislative provisions concerned with Aboriginal heritage.
93 The Protocol states (cl 3(c)) that:
In planning, constructing and operating the Project, the Community Engagement Programme and Major Mardie Infrastructure within the Agreement Area, the [Participants] will seek to avoid interfering with Aboriginal Sites so far as it is reasonably practicable to do so.
94 Significantly for present purposes, the provision is not confined to matters concerned with the Project. It also applies to planning, constructing and operating the Community Engagement Programme and 'Major Mardie Infrastructure'. The latter is defined in the Protocol as 'major, permanent buildings connected with the operation of Mardie Station, such as a new homestead'. Plainly, construction of that kind is unrelated to the mining and related activities to be undertaken as part of the Project.
95 The term 'Community Engagement Programme' is defined in the Second ILUA as the Participant's programme of engagement with the Native Title Parties (which includes the authorised applicants for the claim by the KM People). As has been explained, the Second ILUA includes an express approval for any activities conducted by the Participants within the boundaries of the pastoral lease for Mardie Station as part of its Community Engagement Programme 'such as tourism ventures and a prisoner release facility'. Therefore, it was within the express contemplation of the parties that the Participants may conduct activities that did not form part of the Project within the boundaries of the Agreement Area and the terms of the Protocol would apply to those activities. In the context of the recitals to the KM Compensation Deed about sharing the benefits of the Project with the KM People, these provisions are inconsistent with a common assumption of the kind contended for by the Participants.
96 There is further express reference in the Protocol to the conduct of a Survey by the Participants for ground disturbing works within the Agreement Area 'for the purposes of planning, constructing or operating the Project, the Community Engagement Programme or Major Mardie Infrastructure' (if outside a part where such surveys had been undertaken): cl 6.1.
97 The KM Compensation Deed provides for the establishment of a 'Relationship Committee' with three members from the Participants and four members from the KM People: cl 7.1(a). It must meet four times a year for the first five years after the commencement of the deed: cl 7.3. The functions of the committee are (cl 7.4):
(a) review the operation of this Deed;
(b) discuss employment, training and development opportunities with the [Participants] and the [joint venture for the Project];
(c) discuss business opportunities which will be available through the [joint venture for the Project];
(d) discuss matters of cultural heritage, to the extent that the KM People who are members of the KM Relationship Committee are able to do so;
(e) discuss environmental matters, including compliance with and amendments to any environmental approvals and management plans pursuant to those approvals; and
(f) discuss any issues concerning access to the Agreement Area.
98 These functions are not confined to dealing with native title interests. They are functions that can be caried out if people other than the KM People are determined to be the holders of native title for much or all of the Agreement Area. They are functions that can be carried out in respect of TO Rights other than native title rights, particularly rights under Aboriginal law and custom that may not be native title rights and interests. They are provisions which, on their terms, may have ongoing application irrespective of the outcome of the Native Title Application by the KM People. Their unqualified inclusion in the deed supports the conclusion that there was no common assumption of the kind contended for by the Participants.
99 There is also a provision as to what is to happen on the closure of the mine on the Lease Area. It is in the following terms (cl 7.5):
On the permanent closure of the mine …, the [Participants] will use their reasonable endeavo[u]rs to facilitate the KM Parties' assessment of business opportunities to the benefit of the KM People.
100 There are further provisions in the deed as to employment, training and contracting that are for the benefit of KM People (cl 8). They are expressed to relate from years four to thirteen of the period in which payments are to be made to the KM People under the terms of the KM Compensation Deed. Amongst other things, they require the joint venture for the Project to provide 10 full-time employment positions and three traineeship positions. There is also an express provision (cl 8.4(c)) to the effect that the Participants will use their best endeavours to ensure that the joint venture for the Project 'will implement and maintain an indigenous employment programme to assist KM People and other indigenous people whom it employs to remain in the workforce and meet job requirements'. There is a provision for the performance of these obligations by the Participants to be audited at the request of the KM People (cl 8.7).
101 On the Participant's case these unqualified provisions should be read as being subject to a common assumption that they would not apply if the Native Title Application was only upheld as to a limited part of the Agreement Area or if there was a voluntary relinquishment of most of the claim to native title in respect of the Agreement Area of a kind that is said to have occurred when the native title claims over the Agreement Area were determined. Again, neither the terms in which the obligations are expressed nor their subject matter indicate any such common assumption.
102 Significantly for present purposes, the KM Compensation Deed includes the following provisions as to cultural awareness training (cl 9):
(a) The [Participants] will provide a Cultural Awareness Training Course to the [Participants'] employees, agents and contractors who are based at the Project site for an aggregate of more than 3 months in any calendar year, within 4 months or such longer period as is reasonably required of that persons' commencement date.
(b) Subject to clause 9(c), the [Participants] will work with the KM Parties and the Other Registered Claim Groups in relation to the development and delivery of a Cultural Awareness Training Course and will use its best endeavours to ensure that the KM People and the Other Registered Claim Groups would each be involved in providing approximately one third of the cultural awareness training.
(c) If native title is determined to exist in the Agreement Area, the [Participants] will use its best endeavours to ensure that the determined native title holders are involved in providing the Cultural Awareness Training Course.
(d) The [Participants] must provide reasonable remuneration, consistent with industry standards, to KM People involved in providing cultural awareness training under this clause 9.
(emphasis added)
103 The emphasised words indicate that the parties have expressly considered what should occur once the outcome of the determination of the Native Title Applications is known. In that event, it is the determined native title holders that are to be involved in providing the cultural awareness training. The express agreement in cl 9 further supports the case advanced by the RRK Claimants for the KM People, namely that the assumption of the parties is that the other obligations would continue to apply irrespective of the outcome of the Native Title Applications (and would certainly apply if, as is the case, the KM People have been determined to hold native title as to part, albeit a small part, of the Agreement Area and therefore, by the express terms of cl 9(c) must be involved in providing the cultural awareness training).
104 Next, the agreement acknowledges that, provided the Participants observe the Cultural Heritage Protocol, under the Second ILUA the 'KM Parties' have agreed that they will not object to the grant, issue or renewal of approvals for the Project (cl 10(a)) and they will not oppose s 18 Notices issued in relation to the Project or seek declarations in relation to Aboriginal heritage under various statutes (cl 10(b)). These matters are not confined to claims based upon native title rights. On the Participants' case, even though these (and other key provisions) are expressed to apply much more broadly than to claims based upon native title rights, nevertheless the common assumption was that they would no longer have to be performed by the 'KM Parties' if they were determined to hold native title in a small area outside where the Project operations were to be undertaken or after any 'voluntary withdrawal' of native title claims to much of the Agreement Area. Given the breadth in which these key provisions are expressed they are inconsistent with the Participants' claim of frustration. They are all expressed to relate to TO Rights (defined in the same manner as in the Second ILUA). As has been explained, that is a definition which extends beyond native title rights (claimed or determined) and expressly includes all other rights and interests of traditional owners.
105 The provisions are also all expressed in unqualified terms to apply to Activities in the Agreement Area. As has been explained, the definition of Activities includes activities carried out under the terms of the pastoral lease for Mardie Station. Although the case for the RRK Claimants did not rely upon that aspect, it did rely upon the terms of the Cultural Heritage Protocol which was to that effect. It also relied upon the broad terms of all the relevant provisions in the KM Compensation Deed.
106 Other provisions of the KM Compensation Deed that relate to claims, rights and interests of the KM People that are expressed in broad terms by reference to TO Rights and Project Titles include:
(1) the provision by which the KM Parties and KM People acknowledge and agree that the compensation is in full and final satisfaction of any obligation by the Participants, the holder of any Project Title or the State of Western Australia to pay compensation to the KM Parties or the KM People arising out of or in connection with the grant, renewal or operation of the Project and the conduct of Activities in the Agreement Area and the effect of those matters on TO Rights (cl 11(a));
(2) a release and discharge by the KM Parties and KM People as to those same matters (cl 11(b));
(3) a covenant that neither the KM Parties nor the KM People will sue the Participants as to those matters, whether under the ILUAs or the KM Compensation Deed (cl 13.1); and
(4) a covenant that the KM Compensation Deed may be pleaded in bar, or by way of indemnity or set-off if any member of the KM Parties or the KM People makes a claim in their capacity as a member of the KM People (cl 13.2).
107 As with the Second ILUA, there is a warranty by the authorised applicant for the Native Title Application by the KM People that 'to the best of its knowledge and belief':
the KM People hold or may hold native title and the Traditional Rights in the Agreement Area [sic].
(emphasis added)
108 As has been mentioned, those terms may be contrasted with the warranties agreed to by the authorised applicants for each of the YM People and the WGTO People (as expressed in the Second ILUA) which was to the effect that they hold Traditional Rights and native title in the Agreement Area. There is no foothold in the warranty given by the KM People in the KM Compensation Deed (and the Second ILUA) for the claim that the YM People and the Participants entered into the deed on the basis of some certain expectation as to the outcome of the then pending application for a determination of native title over land that included the Overlap Area.
109 A warranty was also given (to the best of information and belief) that 'no persons other than the KM People, the YM People and the WGTO People hold or may hold native title in the Agreement Area' (cl 15.3). As has been mentioned, a warranty in those terms is consistent with the comprehensive character of the instrument. It seeks to establish that there are no others beyond those who have entered into the Second ILUA who have any claim as traditional owners.
110 The KM Compensation Deed has a provision that deals with future eventualities in respect of the Native Title Applications, being cl 16. It is in the following terms:
16.1 Combination of claims
If for any reason the Consent Agreements are not registered as ILUAs, then if the Native Title Party combines the Native Title Application with any other Native Title Claim or any new or replacement claim is lodged by the members of the KM People within the Agreement Area, or the Native Title Party intends to amend the Native Title Application by adding or removing any registered applicants to or from the Native Title Claim then the Native Title Party must:
(a) give prior written Notice of the proposed change in the status of the Native Title Application to the [Participants];
(b) if requested by the [Participants]:
(1) assign their rights under this Deed to the registered applicants under the new Native Title Claim; and
(2) procure that the Registered Applicants under the new Native Title Claim execute, and deliver to the Project Participants, a deed of assignment and assumption by which they assume the Native Title Party's obligations under this Deed with the prior written consent of the Project Participants.
16.2 Successful determination - assignment to prescribed body corporate
(a) if there is a determination under the NTA:
(1) that the Native Title Party holds native title in the claim area; and
(2) that the native title rights are held in trust by a prescribed body corporate under s 56 of the NTA,
then the Native Title Party may assign its rights and obligations under this Deed to the prescribed body corporate.
(b) If the Native Title Party assigns its rights and obligations under this Deed to a prescribed body corporate under clause 16.2(a) then the prescribed body corporate will be entitled to exercise all the powers, rights and benefits of the Native Title Party under this Deed and will become obliged to observe and perform all obligations of the Native Title Party under this Deed.
16.3 Unsuccessful determination
For the avoidance of doubt, this Deed survives any determination that the KM People do not hold native title in the Agreement Area.
111 Equivalent provisions were included in the compensation deeds entered into with the YM People and WGTO People. They are also to be found in the First ILUA and the Second ILUA (save, significantly, for cl 16.3).
112 For present purposes, the following aspects of the clause as included in each of the compensation deeds assume significance:
(1) its terms are premised upon a recognition that the Native Title Applications are competing claims;
(2) it provides a mechanism by which the Participants may require any people who are added to the Native Title Applications by 'any new or replacement claim' to be brought within the terms of the compensation deeds. That is to say, it ensures that the compensation deeds remain comprehensive;
(3) it does not include any mechanism by which the outcome of the Native Title Applications may affect the entitlement to any of the benefits agreed to be provided under the terms of the KM Compensation Deed (being obligations assumed by the Participants under the First ILUA and the Second ILUA); and
(4) it provides for a mechanism by which the rights under one compensation deed may be assigned by one group to another group in the event that there is a determination under the Native Title Act that 'one or more of the Native Title Parties holds native title in the claim area', but does not require any such assignment.
113 Accordingly, the parties directed their attention to what may occur in the future in respect of the outcome of the Native Title Applications. They recognised that there may be changes to those applications and that one or more may succeed. Yet, they made no provision that the obligations to pay compensation may come to an end if there was a particular kind of outcome (such as where the application only resulted in a determination of native title in favour of a particular group as to a small part of the Agreement Area). On the contrary, the KM Compensation Deed provided expressly for the possible assignment of the rights and obligations under the compensation deed of one group to another group. Necessarily implicit in a provision of that kind is that the rights and obligations under each of the compensation deeds would continue irrespective of the outcome of the Native Title Applications. Further, that it was a matter for each group (relevantly in the present case the KM People) as to whether they would enter into any such assignment.
114 Therefore, the frustration claim finds no support in the detailed terms of the KM Compensation Deed. On the contrary, due regard to the detailed terms of the KM Compensation Deed considered in the context of the other instruments entered into by the Participants (and expressly contemplated by the terms of the KM Compensation Deed) manifests an intention that its terms would continue to apply irrespective of the outcome of the Native Title Application by the KM People.
115 The Participants relied upon a number of provisions in the KM Compensation Deed that were said to be 'unworkable' having regard to the outcome of the Native Title Application by the KM People. For reasons that have been given, the submission finds no support in the terms of the KM Compensation Deed.
116 It follows that there is no significance to be given to whether the consent by the YM People to the exercise by the KM People of 'secondary rights' that formed part of the determination of the native title rights and interests of the YM People in land that included the Overlap Area might be a sufficient basis for concluding that the KM Compensation Deed has not been frustrated. Even if no provision had been made in the determination of the Native Title Application by the YM People as to those 'secondary rights' then, for reasons that have been given, the KM Compensation Deed would not have been frustrated.
117 Finally, as I have observed, the KM Compensation Deed contains a number of provisions that are expressed to be for the benefit of the State of Western Australia. For completeness, I note that if I had been inclined to the view that there was merit in the Participant's frustration case then I would have required further submissions as to whether the State of Western Australia should be heard before the grant of any relief.