Consideration
122 The costs issue is a difficult one to resolve, because there is force in many of the arguments made on each side of the costs equation.
123 The various provisions of the FCA Act, particularly s 43, which gives the Court a wide discretion as to costs, to be exercised judicially; the terms of R 26.12(7) of the Rules, governing costs on the withdrawal of a proceeding; and the terms of s 85A of the NTA, have been set out above. What the Full Court said in Cheedy is relevant and should be repeated here:
(1) section 85A(1) of the NTA removes the expectation that costs will follow the event, but the Court retains its discretion as to costs under s 43 of the FCA Act;
(2) the "unreasonable conduct" of the parties is not a jurisdictional fact which preconditions the exercise of the discretion, and on the other hand, s 85A(2) of the NTA does not control or limit the discretion in s 85A(1);
(3) whilst the exercise of the discretion when making a costs order should be judicial, the starting point is that each party will bear their own costs; and
(4) it is not a proper use of the power to award costs to punish either a successful or an unsuccessful party or as a deterrent to other would-be applicants.
124 In the submissions of the parties, s 85A(2) has been the subject of particular focus. The full terms of s 85A(2) should be noted:
Without limiting the Court's power to make orders under subsection (1), if the Federal Court is satisfied that a party to a proceeding has, by any unreasonable act or omission, caused another party to incur costs in connection with the institution or conduct of the proceeding, the Court may order the first-mentioned party to pay some or all of those costs.
125 The primary argument made by the claimants is that, having regard to the Ngaanyatjarra Lands determination and everything that surrounded it, they should have their costs from the meeting of the claim group authorising the making of the compensation claim because, at that point, as confirmed by the State's subsequent original defence, exclusive native title was not in issue. It was only the subsequent withdrawal of that admission in August 2014, that changed that position. It is thus said that the State thereby did an "unreasonable act" which caused the claimants to incur costs in connection with the institution of the proceeding and the subsequent conduct of the proceeding. As I apprehend it, the claimants say that, by its conduct, the State made an "unreasonable omission" by not conducting a further tenure search before filing its original defence in the proceeding. They say, in the alternative, the State acted unreasonably in withdrawing its admissions in late 2014, when the hearing was imminent.
126 There can be little doubt that when the claimants authorised the making of the compensation claim, they would have reasonably considered that the proposition that, but for the creation of the Nature Reserve, they, and their antecedents, would have held exclusive possession native title over that area, would not be disputed by the State. The fact of recital G of the Ngaanyatjarra Lands determination and the terms of cl 3.8 of the grant agreement all strongly pointed in that direction.
127 The Ngaanyatjarra Lands determination was made following tenure searches conducted by the State that supported the proposition that there had been no relevant extinguishment of native title rights and interests in the large area of the Western Desert that surrounded the relatively small area of the Nature Reserve. There was no reason then to think that the nature of the native title in the Nature Reserve area would be any different from the title over the large surrounding area.
128 The claimants' compensation application was then filed on 29 March 2012. As of 2 August 2012, the Court required pleadings, by way of a statement of facts, issues and contentions by the claimants, to clarify exactly what matters were in issue. At that point, the proceeding was apparently considered by the parties as something of a "test case", it generally being understood that it was the first contested application for compensation in Western Australia under the NTA.
129 In October 2012, in its original defence, the State admitted the allegation that, in effect, prior to the creation of the Nature Reserve, the claimants held exclusive possession native title to the subject land - a title that included the right to control access to and use of the subject area.
130 I have no doubt that up to the time of the filing of the original defence, both the claimants and the State believed that the tenure/extinguishment status of the area the subject of the compensation claim was exactly the same as in the case of the areas the subject of the Ngaanyatjarra Lands determination.
131 While it might reasonably be said that whatever representations arose from recital G of that determination and cl 3.8 of the grant agreement were made in the particular context of the consent determination, and at that point there was no compensation claim in prospect in respect of the Nature Reserve, if any party had turned their mind to the question, for a moment, they would have nodded in agreement to the proposition that the tenure in the Nature Reserve area would be the same as the tenure in the surrounding determination area.
132 As it transpires, from late 2012, the State possessed the technological capacity to search digitised records for relevant tenure that might have an extinguishing effect on native title in the Nature Reserve area. Prior to that, the State undertook such searches by more traditional, manual processes, such as it had employed for the purposes of the Ngaanyatjarra Lands determination, and in such NTA proceedings as Daniel, Ngadju People and Banjima. Prior to filing its original defence in October 2012, the State did not conduct any fresh tenure search by such traditional means. Nor did it require any fresh tenure search after filing that defence, upon or soon after a digitised tenure search became available to it in late 2012.
133 As of October 2012, as the claimants have pointed out in their submissions, that oil prospecting licences had been granted in the State under the Mining Act Amendment Act 1920 (WA), was well known to the State. An oil prospecting licence, of the same kind as was found in Ward (No 3) to have a similar partial extinguishing effect on native title, had been adduced in evidence and relied upon for its partial extinguishing effect in Daniel and in Banjima, proceedings which were decided and heard respectively before October 2012. As a matter of fact, the State could have, at those earlier times, but did not, conduct any further tenure search before filing its original defence. Instead it relied on the Ngaanyatjarra Lands determination research when making the October 2012 admissions. If it had then conducted further tenure searches, the clear inference, on the available evidence, is that the extinguishing tenure later relied on in Ward (No 3) would have been discovered. At the least, it would have been turned up by a search of the digitised tenure records from late 2012.
134 There can be little doubt that, if the claimants had been told either before they commenced this proceeding in 2012, or even in, say, late 2012 or in early 2013, that an oil prospecting licence had issued in 1921 and covered the Nature Reserve, the prospects of the compensation claim proceeding to final hearing would have been assessed in an entirely different light from what eventually occurred. The claimants would have had to confront the extinguishing implications of the tenure early in the proceeding. A costly hearing on country in all probability would have been avoided.
135 To the State, these questions must be addressed: Why did it take the State so long to discover the tenure it eventually sought to rely upon in late 2014? Why did the State apparently go searching for this tenure in early 2014?
136 As I observed in Ward (No 2), in allowing the withdrawal of the State's admissions and the filing of its third defence in August 2014, questions of that nature were not then answered by the material before the Court. As I then said, the impression was created that, in effect, the State had gone looking for such tenure at that point. As I then stated, at [111], if it had not been for the (impending) formal involvement of the Commonwealth as a party to the proceeding (which was, relevantly, untainted by the tenure search of the State in 2014), the question of the withdrawal of the State's admissions might have raised a very serious question. In the event, leave was given for the withdrawal of the State's admissions.
137 The State in its submissions submits that the late discovery of the tenure information is not subject to intrigue, and it was incumbent upon the State, as a model litigant, to produce to the claimants the new tenure information that it became aware of in the ordinary course, and to proceed to amend its pleadings to reflect the true state of tenure at material times.
138 As a general proposition, the Court accepts that ordinarily matters that go to hearing should be resolved on the true factual state of affairs, rather than on some artificial or fictional state of affairs. However, there are occasions on which parties, due to the way they have conducted proceedings, will not be permitted by a Court to alter the position they have taken in the course of a proceeding, especially in relation to significant admissions previously given. See Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [93]-[103], [111] and [112] (Gummow, Hayne, Crennan, Kiefel and Bell JJ); [2009] HCA 27. The reasons for that are self-evident. Parties having adopted serious positions in litigation cannot be free to twist and turn and alter their positions prior to hearing. The case management powers of the Court, including relating to the amendment of pleadings, late production of documents and the like, are ample to ensure that justice is done all round in a proceeding, so that no party is able to take unreasonable advantage of another in that regard. In short, there are well understood rules of engagement in litigation and they are to be complied with unless there are very strong reasons to allow some indulgence or departure from them in the course of the proceeding. These principles are reflected by s 37M of the FCA Act, which makes it clear that the overarching purpose of civil practice and procedure is to facilitate the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible. While this overarching purpose involves the balancing of those considerations, it too can, in appropriate circumstances, justify orders that do not permit unreasonable twists and turns by a party to a proceeding.
139 While the claimants say it was unreasonable for the State to have made its admissions in October 2012, I consider the reason they did so is explicable, having regard to the research done for the Ngaanyatjarra Lands determination. I am not prepared to find the State acted unreasonably by making the admissions it did in its original defence of October 2012.
140 The most troubling aspect of the State's change of plea remains, for me, the circumstances in which the fresh tenure information came to light in 2014. The explanation for its discovery is provided by Mr Rorrison in his affidavit sworn 11 December 2015, at [8]. The sequence of events as described by him, is as follows:
(1) He first became aware of the existence of a number of historical petroleum titles on or about 6 June 2014.
(2) He discovered them when he opened the first version tenure DVD supplied to SSO by Native Title Special Services, Landgate (NTSS) on or about 29 May 2014.
(3) NTSS supplied that tenure DVD in response to a standard form tenure request issued by his colleague, Ms Lealiifano, law clerk, by email dated 19 March 2014, on his instructions.
(4) The circumstances which lead to that request were:
(a) On 4 November 2013, he received an email from Ms Lealiifano to all staff within the native title and State lands group at the SSO asking them to provide "a list of claims which you reasonably expect will require some tenure work to be completed by Landgate/DMP in 2013-2014". He replied that it was "likely" that historical land and mining tenure before 22 April 1977 would be required in this proceeding.
(b) "At that stage of the proceeding, the Court had not made orders programming the matter to hearing"; however, he nominated the proceeding as likely requiring the provision of tenure information in 2013-2014 for the following reasons:
(i) First, he anticipated that while the Court had not yet made orders programming the extinguishment case to hearing, it would do so in due course and he had in mind "that the State would need to produce its best evidence in relation to the creation and vesting of the Gibson Desert Nature Reserve … as well as evidence of any public works, particularly roads". He thought it was appropriate to check whether there were any additional documents on which the State would want to rely for the purpose of this proceeding, additional to the Ngaanyatjarra Lands tenure information contained in notices published in the Government Gazette relevant to the vesting of the Nature Reserve. That tenure information did not contain any documents relevant to the existence of roads prior to 22 April 1977. His experience in other matters suggested that NTSS's ability to capture information in relation to roads had likely improved since the Ngaanyatjarra Lands searches were undertaken.
(ii) Second, "I was conscious that the Court would be required, when determining the compensation claim, to make a determination of the nature and extent of native title as at 22 July [April] 1977: s.13(2) of the Native Title Act 1993 (Cth) (NTA)"; which prompted him to consider the need for the "usual" searches the State would undertake prior to the making of a determination of native title, particularly to identify the extent of "other interests" as at 22 April 1977.
141 As the claimants reasonably point out, however, this proceeding involved a compensation claim where admissions had been made about the nature of the native title at material times before the creation of the Nature Reserve. It was not, at any material time, capable of being characterised as an application for determination of whether or not native title exists. The question of searching for tenure in order to establish what native title rights and interests may have been extinguished, if native title existed, did not obviously or reasonably arise as one of the stages of the conduct of this particular proceeding in this Court.
142 In this case, at an early stage, in August 2012, I required the parties to put on pleadings so that it was clear exactly what they were saying about compensation issues and how they arose. That is how it came about that the State admitted, in its original defence in October 2012, that there was no relevant extinguishment and that, in effect, the claimants held an exclusive native title over the Nature Reserve area.
143 In those circumstances, it seems odd, to say the least, that a senior lawyer in the SSO would have thought that it was "likely" that historical land and mining tenure before 22 April 1977 would be required to be provided in this proceeding, when he received the 4 November 2013 email from Ms Lealiifano. Mr Rorrison does not say that he was unfamiliar with the nature of a compensation claim at that point, even though this proceeding was referred to as a test case. Mr Rorrison anticipated, he says, that while the Court had not yet made orders programming the matter to hearing, it would do so, and the State would need to "produce its best evidence" in relation to the creation and vesting of the Nature Reserve as well as evidence of any public works, particularly roads. Again that "anticipation" seems a little odd, in that the whole case was being run on the basis that there was no relevant extinguishment and the State had already, in October 2012, admitted an exclusive native title.
144 Mr Rorrison also refers to being conscious that the Court would be required, when determining the compensation claim, to make a determination of the nature and extent of native title as at 22 April 1977, being the Nature Reserve creation date, and refers to s 13(2) of the NTA. This subsection provides that:
If:
(a) the Federal Court is making a determination of compensation in accordance with Division 5; and
(b) an approved determination of native title has not previously been made in relation to the whole or part of the area concerned;
the Federal Court must also make a current determination of native title in relation to the whole or the part of the area, that is to say, a determination of native title as at the time at which the determination of compensation is being made.
Note: In these circumstances, the compensation application must be accompanied by the affidavit, and contain the information, that would be required for a native title determination application for the area: see subsection 62(3).
145 Given the admissions by the State in its original defence in October 2012, the requirement for the Court to make a current determination of native title in this case should have appeared something of a formality - to be done by consent. While perhaps it may be thought that information about roads could somehow be relevant to the final disposition of the compensation claim having regard to s 13(2) of the NTA, it is very difficult to understand why Mr Rorrison was prompted to consider the need for what he has described as the "usual" searches that the State would undertake prior to the making of a determination of native title in order to identify the extent of other interests as at 22 April 1977, in light of the State's admissions of exclusive possession native title as at October 2012.
146 On the one hand, Mr Rorrison's conduct in requesting the further tenure search when he did, for the reasons he gives, might be considered, as the submissions of the State suggest, to have been quite innocent; or, on the other hand, that some less innocent explanation ought to be attributed to it.
147 In all the circumstances, I do not consider that any explanation, other than the relatively innocent, can be given to it. The claimants did not require Mr Rorrison for cross-examination on his affidavit at the hearing of this costs application. They have accepted Mr Rorrison's affidavit evidence at face value - although they have questioned why Mr Rorrison thought that it was necessary to conduct the "usual" tenure search in this case, as one would ordinarily do in a native title determination application proceeding. Mr Rorrison's apparent reliance on the requirements of s 13(2) of the NTA is not challenged.
148 In these circumstances, I infer that Mr Rorrison acted in the way that he did as a result of what might be called a misapprehension as to the State's need in the proceeding to conduct further tenure searches. If there were truly a less innocent explanation for ordering the further tenure searches when he did, I would have expected Mr Rorrison, as a senior SSO lawyer acting for a model litigant, to have been frank about it.
149 That still leaves the question whether, in all of those circumstances, the State, having requested and obtained the further tenure at such a late stage of the proceeding, in June 2014, (when Mr Rorrison read it), should bear some responsibility for the costs that the claimants now say they would not have incurred but for the late tenure disclosure.
150 While it is most unfortunate indeed that the late tenure disclosure occurred, the question remains whether, in the proper, judicial exercise of the Court's costs discretion, it is appropriate to visit a costs order (indeed, an indemnity costs order) upon the State for the late disclosure.
151 While the State contends that, as of 26 June 2014, when the State actually disclosed the new tenure, the claimants should be taken to have been on notice about the changed tenure situation, and its implications, I consider such a submission to be artificial. No doubt everything dates from about that time when it comes to assessing the reasonableness of the State's, and the claimants', conduct. However, not until the question of the State's withdrawal of the earlier admissions was determined in Ward (No 2), can the reasonableness of the conduct of the parties truly be assessed. There are two aspects to the reasonableness question. First, the lateness of the State's withdrawal of the admissions. Secondly, as the State puts it, the reasonableness of the conduct of the claimants in pressing on with the claim knowing that there were, at least, very serious questions in light of authority (as ultimately found in Ward (No 3)) that suggested the oil prospecting licence and the petroleum tenures partially extinguished the native title right to control access to the subject area. Put another way, the State suggests that, if the claimants did not then press on with the scheduled hearing, the costs they now claim would have been avoided or minimised.
152 As I have said above, I do not consider, in all the circumstances, the conduct of the State in not carrying out further tenure searches in 2012 before filing its original defence in the proceeding, or, for that matter, soon after when the digitised record could be searched, can properly be characterised as an unreasonable act or omission that should give rise, under s 85A(2) of the NTA (or more generally), to an award of costs in relation to the subsequent change of position. The State and the claimants appear to me to have acted, in a relevant sense, in good faith on the basis of searches conducted up to that point for the purposes of the Ngaanyatjarra Lands determination. No one, as stated above, expected some different position to prevail in the period after the compensation proceeding was commenced.
153 Because I have found the conduct of Mr Rorrison, which caused the further tenure to be produced in mid-2014, was, in a relevant sense, innocent, I do not consider that it is reasonably open to suggest that that tenure work was calculated to undermine the admissions concerning exclusive native title previously made by the State in the proceeding. I apprehend Mr Rorrison did not fully appreciate the nature of the compensation proceeding and the significance of the way it had been conducted and, in particular, that by reason of the admissions about exclusive native title already made in the proceeding by the State, further tenure searches were not obviously required.
154 Having received the result of that tenure search, however, I do not consider one can criticise the State for having then acted on it. While it may be appropriate in some cases for the State not to consider relying on such materials at a late stage of a native title proceeding, in all the circumstances of this case, I do not consider the State was, in effect, obliged to ignore the tenure information obtained by it. While the claimants say the admissions should not then have been withdrawn, on balance, in the circumstances of this case, I do not think the State can be criticised for moving to withdraw the admissions. The questions I asked in Ward (No 2) as to how tenure came to be ordered, have been answered.
155 The final question is whether, these observations notwithstanding, the State's innocent discovery of the extinguishing tenure should nonetheless lead to a finding of an unreasonable act or omission that should lead to a costs order under s 85A(2) of the NTA (or more generally).
156 The situation is complicated by the fact that, at that point, it might have been open, indeed would have been open, to the claimants to abandon, or seek the adjournment of, the hearing then programmed for trial on country in a remote part of the Western Desert region of Western Australia. On one view, it is fair to say, as the State does, that that course of action could and should have been taken. Certainly it was open at that point to the claimants' lawyers to advise the claimants, particularly the four persons comprising the "applicant" as defined in the NTA, that despite everything that had gone into the preparation, to that point, of the hearing, it was necessary to adjourn and to obtain a ruling, if necessary, on the extinguishing effect, if any, of the recently produced tenures.
157 The explanations for why the claimants did not do that, provided in Mr O'Dell's affidavits and further explained by senior counsel in the course of making submissions on this costs application, are plausible; but, it must be said, not definitive. While it is entirely explicable that, at that very late stage, the view was ultimately taken that the claimants should press on with their claim, having prepared for the hearing, and argue later about whether, despite the authorities, the claimants continued to hold an exclusive native title, not only with the benefit of hindsight was that decision debateable. By saying that I do not mean to criticise the lawyers for the claimants for giving advice to their clients, or relying on instructions, to proceed with the hearing. It was a very difficult matter to advise on and a very difficult decision to make. My point is, that the option to adjourn and reconsider was a real option; but one not taken. While the late production of the (potentially) extinguishing tenure at that point meant the State was the immediate cause of the claimants' grief, I am not sure, and do not find, that the State can be fixed with the claimants' ultimate decision to proceed with the hearing.
158 The fact is that soon after the hearing on country was completed, a few months later in February 2015, the evidence of the anthropologist, Dr Sackett, was taken, and then the question of the appropriate way forward was, obviously, fully considered by the claimants. At the 9 April 2015 hearing, which was set up on 13 October 2014 to deal with extinguishment questions that had arisen, the three separate questions formulated by the claimants were raised with the Court and, effectively by the consent of the parties, the Court dealt with them. The answers were provided in Ward (No 3).
159 In the result, unlike a case such as Watson (No 3), which was confirmed on appeal in Oil Basins, this is not a case where a deliberate forensic strategy was adopted by a party to a native title proceeding which was properly held to be unreasonable within the terms of s 85A(2) and resulted in an indemnity costs order. The circumstances in this case are more benign, although equally unfortunate, in that, by the sequence of events described above, the historical tenure information which placed a different light on the extinguishment position as of April 1977, was discovered late in the piece.
160 While it is very much a matter of judgment, I am not satisfied that:
the State's failure to conduct fresh tenure searches before filing its original defence in October 2012, instead relying on the tenure searches carried out for the Ngaanyatjarra Lands determination, was an occasion that should lead generally, or under s 85A(2) of the NTA, to a costs order against the State; or
the conduct of the State, leading up to and in the making of an application to withdraw its admissions in the circumstances as found above in late 2014, should lead to a costs order under s 85A(2).
161 In those circumstances I would not exercise the discretion of the Court to grant costs in this case, upon the withdrawal of the proceeding by the claimants. The State do not seek any order for costs on the discontinuance.
162 The appropriate order in these circumstances is that the interlocutory application of the claimants dated 31 August 2015 be dismissed.
I certify that the preceding one hundred and sixty-two (162) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.