Ward v State of Western Australia

Factual background to the costs application 18 The factual background to the costs application is relatively uncontentious, at least so far as the chronology of events is concerned. The significance of particular events is, however, not commonly shared by the claimants and the State, as the submissions below illustrate. 19 The claimants refer to and rely upon the history surrounding the lodgement and progress of the compensation application, in particular the circumstances in which the Court granted leave, shortly before the scheduled hearing of the compensation application in August 2014, to the State to make a third further amendment to its defence, including the withdrawal of admissions previously made that the claimants possessed an exclusive native title in the Nature Reserve area at material times. See Ward v State of Western Australia (No 2) [2014] FCA 825 (Ward (No 2)). 20 At [3]-[15] of Ward (No 2) the Court stated as follows: [3] The filing of the compensation application followed the Ngaanyatjarra Lands determination. [4] The Reserve falls within the external boundaries of the application for a determination of native title which was the subject of the Ngaanyatjarra Lands proceeding which was settled by agreement between the parties, including the State and the Commonwealth and resulted in a consent determination of native title in 2005. [5] Recital G of the Ngaanyatjarra Lands determination stated: The State has agreed with respect to the areas set out in Schedule 2 of the Minute of Consent Determination of Native Title that, but for the complete extinguishment of native title effected over those areas, the Applicants in WAD 6004 of 2004 would have held native title rights and interests conferring the right to possession, occupation, use and enjoyment of the land and waters to the exclusion of all others, save in respect of flowing and subterranean water. [6] Schedule 2 described the areas excluded from the determination of native title as including: Reserve 34606 (Gibson Desert Nature Reserve) for the purpose of 'Conservation of Flora and Fauna' vested in and held in trust by the Western Australian Wildlife Authority pursuant to s 33 of the Land Act 1933 (WA) on 22 April 1977… [7] The parties to the Ngaanyatjarra Lands determination, including the State and the Commonwealth, agreed that native title within the Reserve had been extinguished by the vesting of the Reserve in the Western Australian Wildlife Authority. [8] A Memorandum of Understanding (MOU) was entered into between 'Fred Ward on behalf of the Gibson Desert People native title claim group' and the Executive Director of the Department of Conservation and Land Management (CALM) for the establishment of joint management of Reserve 34606. The MOU provided for the development of a working together project between the traditional owners of Reserve 34606 and CALM (now known as the Department of Parks and Wildlife and the Department of Environment Regulation). A grant agreement dated November 2005 was signed between the traditional owners of the Reserve and the State. [9] Clause 3.8 of the grant agreement recognised that a compensation liability existed on the part of the State for the extinguishment of native title rights and interests brought about by the creation and vesting of Reserve 34606. Clause 3.8 provided: 3.8 Compensation under Native Title Act 1993 (Cth) The parties recognise that a compensation liability exists on the part of the State of Western Australia for the extinguishment of native title rights and interests in the Gibson Desert Nature Reserve. The Grantor is committed to negotiating a compensation package which will fully compensate those people who, but for the extinguishment of native title rights and interests, would have held those native title rights and interests in the Gibson Desert Nature Reserve. The parties acknowledge that the contribution of funds made under this Agreement may be added, and a form of land tenure over the Gibson Desert Nature Reserve transferred to the PGDNR (People of the Gibson Desert Nature Reserve) will be added, to the 'mix' of compensation options to be negotiated as part of any such 'compensation package'. [10] The compensation package was never finalised and ultimately, with a change of Government, the State withdrew from the negotiations. [11] It appears the Central Desert Native Title Services Limited, which acts for the applicant, considered exclusive possession would not be in issue if an application for compensation for extinguishment of native title was then brought on behalf of the traditional owners of the Reserve. [12] The hearing of the compensation application is currently due to commence on country in the vicinity of the land the subject of the application - the Gibson Desert Nature Reserve - between 19 and 29 August 2014, when the first tranche of evidence will be taken from members of the compensation claim group. Further evidence is expected to be taken later in Perth. [13] For the purposes of the imminent hearing on country, counsel and solicitors for the applicant have been in the process of proofing and preparing a number of witnesses. [14] Senior counsel for the applicant has explained that the witnesses are being proofed on the basis that the compensation they claim should reflect the fact that the holders of the relevant native title would have held exclusive possession rights to the land in question, including the right to control the access of all other persons to that land, but for the extinguishment of native title by the creation of the Reserve in 1977. [15] There is no dispute that, until recently, the State of Western Australia, as the respondent, and the Attorney-General of the Commonwealth of Australia, as intervener in the proceeding, have proceeded on the basis that, but for the extinguishment of native title by the creation of the Reserve, the native title over the area at relevant times was exclusive in nature and would have included the right to exclude other persons from the land.

Claimants' submissions 21 The claimants say that in 2005, the State recognised that exclusive possession native title had been extinguished by the vesting of the Nature Reserve. 22 The claimants also note what was said by the Court in Ward (No 2), that there was no dispute until recently before the time of that judgment, that the State and the Attorney-General of the Commonwealth proceeded on the basis that, but for the extinguishment of native title by the creation of the Nature Reserve, native title at material times was exclusive in nature and would have included the right to exclude other persons from the land. The claimants note the State admitted so in its original defence, and that that position was maintained in the State's amended defence filed 7 June 2013. 23 The claimants note that on 9 April 2014, the Court granted leave to the State to further amend its defence. No leave was then sought or granted to withdraw any admissions. On 21 May 2014, as the Court said in Ward (No 2), at [20], "some 12 months after the amended defence and less than three months before the commencement of the hearing", the State's second further amended defence was filed, which had the effect of denying that, at the material time, exclusive possession native title rights existed in the north-western portion of the Nature Reserve due to the prior grant of a right of occupancy under the Mining Act 1904 (WA). 24 The claimants then note that on 26 June 2014, less than two months before the on country hearing was scheduled to commence on 19 August 2014, the State sent the claimants a bundle of historical tenure documents, under cover of a letter, including applications for licences to prospect and permits to explore. The letter stated that the State anticipated "that it will be pleading in relation to these matters" but would await receipt of more tenure documentation. 25 The claimants say that when the letter was received, all Central Desert Native Title Services Ltd staff working on the compensation claim, and counsel, were proofing witnesses in the Nature Reserve in preparation for the hearing. 26 The claimants say that on 11 July 2014, they filed a witness proposal listing the witnesses they anticipated would give evidence during the on country hearing. From 23 to 25 July 2014, they filed a large number of witness statements and substances of evidence. 27 Further, the claimants note that on 21 July 2014, at a directions and interlocutory hearing before the Court, the State's legal representatives foreshadowed further amendments to its second further amended defence. An informal document was subsequently provided to the claimants and the Commonwealth Attorney-General under cover of a letter dated 25 July 2014, in the form of a draft proposed third further amended defence. 28 The claimants note they filed an interlocutory application on 4 August 2014, asking that leave be refused in relation to the State's application to file this third defence and asking that amendments made to the second further amended defence, that withdrew admissions without leave, be struck out. However, in Ward (No 2), on 6 August 2014, the Court granted leave for the State to file the third defence. 29 The on country hearing then proceeded, as scheduled, between 19 and 28 August 2014, at Patjarr Community and locations within the Nature Reserve. The claimants say they had prepared their case according to the admissions in the State's original defence in October 2012, and there was no time to convene a claimant meeting before the hearing to obtain further instructions to discontinue the claim, nor was there time to proof witnesses for the purpose of pleading a different case before 6 August 2014, when Ward (No 2) was decided. 30 The claimants note that the Court later made orders on 9 April 2015, for the hearing of separate questions regarding the extinguishing effect of the petroleum tenements, that were the subject, amongst other things, of the State's third defence. Then in Ward (No 3), on 1 July 2015, the Court determined that oil licence OPA 26H was validly granted over the Nature Reserve, and that its grant extinguished any native title right to control use and access to the whole of the Nature Reserve. As a result, the Court ruled that any native title was of a non-exclusive nature. 31 The claimants say that Central Desert thereafter received instructions to discontinue the compensation claim, as explained in the affidavit of Malcolm O'Dell affirmed 18 November 2015, solicitor from Central Desert, filed in support of the costs application. 32 As noted above, in relation to the power of the Court to award costs, the claimants first note that the Court has a wide discretion under s 43 of the FCA Act to make such orders as to costs in a proceeding as it considers appropriate. This includes awarding costs on an indemnity basis. 33 The claimants also note R 26.12(2)(b) of the Rules, which provides that, with the opposing party's consent, a party may file a notice of discontinuance before judgment has been entered; as well as R 26.12(7), which provides that, unless an order of the Court provides otherwise, a party who files a notice of discontinuance is liable to pay the costs of each other party. 34 The claimants accept that the effect of R 26.12(7) is that there is a prima facie entitlement for the party not discontinuing to have their costs; although the Court may form a different conclusion depending on the circumstances surrounding the discontinuance. 35 The claimants submit that, in relation to the costs question, s 85A of the NTA also applies. 36 The full terms of s 85A of the NTA should be set out: (1) Unless the Federal Court orders otherwise, each party to a proceeding must bear his or her own costs. Unreasonable conduct (2) 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. 37 The claimants note that in Cheedy v Western Australia and Others (No 2) (2011) 199 FCR 23 at [9]; [2011] FCAFC 163, the Court said it is now well established that in proceedings to which s 85A applies: (1) section 85A(1) 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. 38 The claimants accept that they need to respond to four issues in all of these circumstances: (1) Whether the presumption as to the award of costs on discontinuance is reversed in this case. (2) Whether there is unreasonableness for or by the State for the purposes of s 85A(2) of the NTA. (3) Whether the extent of any unreasonableness justifies an indemnity costs order. (4) The point in time from which costs, thrown away by virtue of the State's withdrawal of admissions in relation to extinguishment, have been incurred. The possibilities here are, if not from the time of the claim group meeting authorising the making of the compensation claim, then from the lodgement of the compensation claim. 39 On the question of unreasonableness, which really underlies each of these four matters, the claimants submit the State engaged in unreasonable conduct by withdrawing admissions very late in the proceedings, without any reasonable explanation for the late discovery of tenure documents, or why the discovery was initiated at all, which resulted in the claimants being severely prejudiced. 40 The claimants say s 85A(2) of the NTA puts beyond doubt the extent of the Court's discretion in cases where a party has acted unreasonably. In particular, the claimants refer to the decision in Watson v State of Western Australia (No 3) [2014] FCA 127 (Watson (No 3)) - where Gilmour J, at [72], said the section has the effect of focusing the enquiry on whether there has been an unreasonable act or omission which has caused another party to incur costs. 41 By reference to what the Court said in Ward (No 2) at [114]-[115], the claimants submit that a native title compensation claim is no different from any other piece of civil litigation where admissions are made. The State was not at liberty to treat its initial admissions as provisional only. 42 The claimants also draw attention to what the Full Court said in Oil Basins Limited v Watson [2014] FCAFC 154 at [163], namely, that the withdrawal of a defence by a respondent party, without an adequate explanation for having done so, may constitute unreasonable behaviour. 43 They say no different result should occur where what is withdrawn is an admission in a party's defence. Particularly where, as here, the withdrawal of these admissions places an entirely different complexion on the case that the claimants can present. 44 The claimants further say that, while the basis for the State's decision to withdraw the admissions is clear, namely, that it was in possession of new tenure information, the basis upon which it sought this information and its delay in seeking that information has not been explained. The claimants draw attention to what the Court said in Ward (No 2) at [57], to the effect that the Court was left with the "strong impression" that "late in the piece the State, through the SSO, determined to ascertain whether there was indeed some historical tenure capable of contradicting the admission that it had previously, and on the face of it deliberately, made in the proceeding". The claimants also referred to the observations on the evidence put before the Court in Ward (No 2), at [115]: At one level, one can understand that if the 'true facts' emerge at some point it may be open to a party, on that basis, to seek leave to withdraw an admission so that the Court can decide a proceeding on what the facts of the case truly are. The State, however, has had quite some time to make those inquiries, yet without any entirely adequate explanation, has only chosen to make further tenure inquiries as of March 2014. Mr O'Halloran's affidavit makes it clear that it would have been possible for the State to have made such inquiries, by reference to digitised and consolidated information, from early 2013. That is at least the inference I draw from the limited evidence put on by the State. 45 The claimants submit that the State appears to have actively sought, in March 2014, to locate additional historical tenure information and, as observed by the Court in Ward (No 2) at [114], "[t]he detriment or prejudice to the [claimants] by such a course is obvious" as the claimants had "reasonably maintained" their application, since it was filed, on the basis of a belief that the State did not contest the existence of exclusive possession of native title rights, but for the creation of the Nature Reserve. 46 The claimants contend that the State not making an effort to undertake these tenure searches until 2014 and 2015, and then only in part, where it could have done so in early 2013, and then withdrawing its admissions in relation to exclusive possession native title without any explanation, is unreasonable. 47 The claimants say that the considerable preparations undertaken for trial as of August 2014, were undertaken in reliance upon the formal admissions that exclusive possession native title existed within the area of the Nature Reserve prior to its vesting. The nature of the evidence that they prepared for the trial was dictated by the pleadings and included: witness statements directed in large part to the significance of the loss of the right to control access and the loss and damage which were a consequence of that loss; oral evidence directed to that same central issue; and several expert anthropological reports prepared by Dr Lee Sackett, also largely directed to the consequences of the loss of the right to control access. 48 The claimants further submit that the State's late provision of tenure evidence in connection with the extinguishment hearing demonstrates additional "unreasonableness". Here they refer to the provision of the affidavit of Stephen Collyer on 23 March 2015, which they say demonstrates a consistent pattern by the State of the late provision of tenure evidence, which is only held by the State. The State was obliged by orders of the Court made 13 October 2014, to provide all of its evidence in relation to the separate question by 19 December 2014. 49 By reference to well-known principles governing the award of costs on an indemnity basis, the claimants submit that such an order is warranted on the basis that the State's late withdrawal of its admissions was so unreasonable in the circumstances as to justify indemnity costs; and it has never provided a reasonable explanation for the delay or its motivation. 50 The claimants also submit that the State's role as model litigant, and its failure to act consistently with this role, should also be considered by the Court as a factor in favour of making an indemnity costs order; as should the terms of s 37M and s 37N of the FCA Act. 51 The claimants submit costs should be awarded on one of the following alternative dates: (1) 28 September 2011, being from the date of the authorisation meeting; or (2) 26 October 2012, when the State filed its original defence. 52 The claimants say the date from when the claim was authorised should be chosen on the basis that the action would not have been commenced but for the reasonable understanding of the claimants, based on recital G of the Ngaanyatjarra Lands determination and the grant agreement, and bearing in mind the State's model litigant obligations, that the question of extinguishment would not be put in issue. 53 In this regard, the claimants submit that costs incurred in anticipation of litigation can be recovered, provided they are necessary or proper. See Scheff v Columbia Pictures Corp Ltd [1938] 4 All ER 318. Similarly, legal costs incurred for work in anticipation of litigation can, in principle, be allowable. See Pathway Investments Pty Ltd and Daystay Pty Ltd v National Australia Bank Limited [2012] VSC 97 at [2].

State's submissions 54 The State, having regard to s 43(1) of the FCA Act, R 26.12(7) of the Rules and s 85A of the NTA, submits that the Court should exercise its broad discretion under s 43 of the FCA Act having regard to: (1) The default or usual position under R 26.12(7) of the Rules, whereby a discontinuing party is prima facie liable to pay costs. (2) The usual position under s 85A(1) of the NTA, whereby the parties bear their own costs. (3) Whether there is unreasonable conduct by the State that satisfies s 85A(2) of the NTA. (4) Whether there is some special or unusual feature that warrants a departure from the usual position that costs be rewarded on a party-party basis. (5) Whether the claimants' conduct in maintaining the proceeding after 6 August 2014 was unreasonable. 55 As to the commencement of the compensation application proceeding and the significance in that regard of recital G of the Ngaanyatjarra Lands determination and cl 3.8 of the grant agreement, the State submits that neither are admissions for the purpose of this proceeding, and that the Court in Ward (No 2), at [112], correctly characterised that determination as creating a "general expectation that, but for the extinguishment caused by the creation of the Nature Reserve, exclusive possession native title would have existed over the Nature Reserve as all the lands surrounding it". 56 The State points out that the Court, in [113], also said it was likely that "all parties at material times when this proceeding was commenced held the view that but for the extinguishment created by the Nature Reserve exclusive possession native title existed". 57 The State says that importantly, it appears likely that the view was held by the parties on the basis of the tenure information available to them at that time, as Mr O'Halloran suggests at [6] of his affidavit sworn 5 August 2014. 58 The State submits that a general expectation or even a "reasonable expectation" of the State adopting a particular position in separate and contested proceedings, should not give rise to an award of costs against the State on the basis of unreasonable conduct in a case such as this. 59 The State says that whatever construction is given to recital G, it says nothing about the existence or otherwise of any historical grants of tenure which existed prior to native title being wholly extinguished in relation to the Nature Reserve. 60 The State nonetheless accepts that one interpretation of the effect of recital G is an acknowledgement that the native title which was wholly extinguished by the vesting of the Nature Reserve on 22 April 1977, comprised possession, occupation, use and enjoyment to the exclusion of all others. It submits, however, that, in the context of the Ngaanyatjarra Lands determination as a whole, it is also open to interpret recital G as an acknowledgement that, but for the Nature Reserve, the land would have been treated the same as all the lands surrounding it, being areas to which s 47A or s 47B of the NTA applied. 61 In respect of cl 3.8 of the grant agreement, the State notes it makes no reference to the nature of the native title rights or interests (but for extinguishment) that would have been held in the Nature Reserve and says nothing about exclusivity of those rights. 62 The State says the claimants' reliance on some of these matters in commencing the proceeding is misplaced because the State made no "representation" or "assurance" in relation to historical grants of tenure. It says that, to the extent any representation or assurance was given, it was not given in the context of this compensation proceeding, nor in anticipation of the commencement of this proceeding. The claimants did not seek any assurance from the State as to that position before commencing the proceeding. 63 Thus the State submits it was not unreasonable for it to agree to the inclusion of a recital in a determination of native title made by consent, in the circumstances in which it did. The recital was agreed on the basis of the best information available to it and the parties at the time, and it was not unreasonable for the State to enter into the grant agreement on the terms that it did. The State says it could not have anticipated that by doing so it would engender a belief in those contemplating a subsequent compensation claim that there had been no prior grant of historical tenure, and that proceedings would be commenced on the basis of those matters alone. 64 Further, the State says it was not alone in departing from the general expectation created by the Ngaanyatjarra Lands determination, as on 10 December 2012, the claimants submitted their further amended statement of facts, issues and contentions to plead that native title had not been extinguished by the vesting of the Nature Reserve, but merely suppressed. 65 As to the circumstances in which the historical tenure information came to light and led to the withdrawal of admissions in May 2014, the State relies on the following events or narrative: (1) on 14 May 2014, the existence of an historical "temporary reserve" which the Department of Minerals and Petroleum (DMP) had not discovered previously was revealed, as to which see the affidavit of Ms Lealiifano sworn 4 August 2014 at [7]; and (2) on 6 June 2014, the existence of a number of historical petroleum titles which wholly covered the compensation claim area were revealed, as to which see the affidavit of Mr Rorrison sworn 11 December 2015 at [8]. 66 The State notes that it proceeded to amend its defence on 21 May 2014 in respect of the temporary reserve tenure, and then foreshadowed further amendments to its defence on 25 July 2014, in respect of the historical petroleum titles. 67 It notes that in Ward (No 2), on 6 August 2014, the Court granted leave for the State to amend its pleading unconditionally, the State's third defence having then been filed on 8 August 2014 in the same terms as the draft foreshadowed on 25 July 2014. 68 The State says that, as at the date of filing its original defence on 26 October 2012, the State's representatives based its pleading in [11] on the Ngaanyatjarra Lands tenure information. 69 The State explains that on 19 March 2014, the State's representatives requested that "usual tenure searches" be undertaken for the purpose of this proceeding. 70 These further searches, it says, relying on Mr Rorrison's affidavit sworn 11 December 2015 at [8(b)], were considered necessary in order to: (1) adduce evidence in relation to the creation and vesting of the Nature Reserve, as well as evidence of any public works (particularly roads); and (2) facilitate the making of a determination of the nature and extent of native title as at 22 April 1977 for the purposes of s 13(2) of the NTA. 71 The State says that until the petroleum information was obtained, the State had conducted its case consistent with the pleading in [11] of its original defence. Importantly, it says the searches were not the focus of the State's preparation of the matter in 2014. 72 As to the Court's observation in Ward (No 2), that the Court was left with the impression that from about March 2014, the State had "embarked on a process of gathering further tenure information of an historical nature to ascertain whether its initial admission should be maintained", the State submits, based on Mr O'Halloran's affidavit sworn 5 August 2014 at [6] and Mr Rorrison's affidavit sworn 11 December 2015 at [7], that the petroleum tenure information was in fact obtained as a result of a routine tenure request which, unexpectedly, revealed the existence of historical petroleum interests which had not formed part of the tenure evidence for the Ngaanyatjarra Lands determination and for which the State had not otherwise had any reason to conduct searches. Additionally, it had not been capable of making these searches until late 2012, as explained by Mr O'Halloran in his affidavit sworn 5 August 2014 at [7]. 73 Further, the State submits, in reliance on [12]-[13] of Mr Rorrison's affidavit sworn 11 December 2015, that it is apparent that when Mr Rorrison issued the standard request for tenure information on 19 March 2014, he did not anticipate that it would yield the result it did. 74 The State thus says the searches were conducted in the ordinary course of preparing the State's case on extinguishment. At that stage, neither party had opened its case. The Court's programming orders were limited to the taking of lay connection evidence in August 2014, with the expert anthropological and valuation evidence to follow later. The Court did not make any orders programming the extinguishment case until 13 October 2014 which, the Court notes in passing, was after the decision in Ward (No 2) and the filing of the third defence. By those orders, when made, submissions and evidence in relation to extinguishment were to be exchanged between December 2014 and February 2015 with the extinguishment hearing originally listed on 8 April 2015. The State notes the claimants' complaint that the tenure information was discovered "very late" in the proceedings. The State, however, submits that its representatives commenced the process of undertaking tenure searches in advance of any programming orders. 75 The State submits that at least since 26 May 2014, the claimants were aware that the State was conducting historical tenure searches. The State says the petroleum tenure information was brought to the claimants' attention as soon as practicable after the State became aware of it. 76 The State accepts that it is a model litigant and subject to model litigant duties, but says this takes the current costs question no further. It submits, however, there has been no departure from the standard of conduct expected by the State or its representatives in the course of this proceeding. To the contrary, it says the circumstances in which the tenure information was requested, disclosed and dealt with, was consistent with the State's obligations. 77 The State says that Mr Rorrison's affidavit sworn 11 December 2015 explains the circumstances and timing of the State Solicitor's Office (SSO) standard request for tenure information in the proceeding. Having become aware of that information, the State was obliged to disclose it. Consistent with the obligation to assist the Court to arrive at the proper and just result, both the fact of the existence of that tenure information and its affect was notified to the parties, and pleaded to, as soon as reasonably practical after it became known. The State alerted the claimants to the petroleum tenure information and its effect ahead of the commencement of the hearing. The State says it would have been in breach of its obligations had the State instead elected not to disclose that information until its extinguishment evidence fell due. 78 As to the claim for indemnity costs, the State says it would be an unusual result if the Court were to award costs against the State on an indemnity basis because the State amended its defence to align with the known facts, in circumstances where leave for the amendment was granted by the Court unconditionally. 79 The State says there is no basis for awarding indemnity costs against it. 80 The State further draws attention to the decision of the claimants to maintain the proceeding in light of the new petroleum tenure information first made available to them by Mr Rorrison's letter dated 26 June 2014, the subsequent provision of the draft third defence dated 25 July 2014, the State's précis of matters for consideration for the purposes of a directions hearing held on 31 July 2014, and its third defence dated 8 August 2014. In particular, the State says the letter of Mr Rorrison dated 26 June 2014, disclosed the key documents including oil licence 21. 81 The State refers to Mr O'Dell's affidavit affirmed 1 August 2014, which accepts that Central Desert received Mr Rorrison's letter of 26 June 2014 on that date. The State submits that Mr O'Dell's affidavit effectively states that no action was taken by the claimants until they received the State's proposed third defence on 25 July 2015. The State says that, contrary to Mr O'Dell's affidavit, that letter alerted the claimants' representatives to the ramifications of the petroleum tenure information, and that the evidence "does not disclose that none of the [claimants'] legal representatives read the letter on 26 June 2014" (excusing the double negative), only that their focus was on proofing witnesses. 82 The State submits it is clear that, by 30 July 2014, the claimants' representatives appreciated the significance of the tenure information. By letter dated 30 July 2014, they expressed concern about the amendments set out in the draft third defence. Thus by their interlocutory application filed 4 August 2014, they opposed the proposed amendments to the defence and sought an urgent listing. 83 The State draws attention to what Mr O'Dell then said in his affidavit affirmed 1 August 2014 at [28]-[29], and also to what senior counsel for the claimants said at the hearing on 5 August 2014, to the following effect: There are significant doubts now, your Honour, as to whether this case will, in fact, proceed. We do not have time to organise a claim group meeting between now and 18 August, I think, when the case is to be commenced. But, clearly, in circumstances where, if these amendments are allowed, our client's case has been changed radically. It's a matter for instruction as to whether this application proceeds at all. 84 The State also draws attention to what Mr O'Dell said in his affidavit affirmed 18 November 2015 at [6], to the effect that Central Desert would not have advised its clients to commence the proceeding were it not for the admissions by the State in the Ngaanyatjarra Lands determination. 85 Additionally, the State notes that in Ward (No 2) at [120], the Court observed that: I should observe that the applicant is not thereby prevented from pursuing its compensation application, although it is understood that, if the State can prove that at material times relevant native title holders held a non-exclusive native title right, such a finding may have implications for the assessment of any compensation the applicant and compensation claim group members may be entitled to. Such issues, however, remain for determination at the hearing of the application. 86 The State notes that following the decision in Ward (No 2), the claimants did not apply for costs of the State's amendments thrown away, nor did they amend their statement of issues, facts and contentions to restate their case in response to the amendments. Rather, the claimants made a "strategic decision" to maintain the proceeding notwithstanding the provision of the new petroleum tenure information and the legal consequences of it, and having recognised that that information related to the whole of the claim area in circumstances where the claimants had been unsuccessful in objecting to the State's amendments to its defence. 87 As to the claimants' statement that, in effect, they proceeded because there was insufficient time to convene a claim group meeting before the hearing was due to commence on 18 August 2014, the State says there is no evidence to explain why it was necessary to convene a claim group meeting to obtain those instructions and that the four persons who comprised the "applicant" in the proceeding could have, under s 62A of the NTA, provided those instructions. No reason is given as to why that would not have been possible. 88 The State also says the claimants do not explain why no other steps were taken, such as seeking to delay the commencement of on country evidence, whilst a meeting of the claim group was held. 89 Further, there is no explanation, the State says, as to why the matter was not considered or dealt with at a meeting of the compensation claim group prior to 18 August 2014. 90 As to the late provision of the affidavit of Mr Collyer sworn 23 March 2015, for the subsequent extinguishment hearing, the State submits that any complaint is not relevant in respect of the permits, which were also held to extinguish native title if that had been relevant. 91 The State, having regard to the authorities referred to and relied on by the Court in Ward (No 3), submits that if, as the claimants contend, their claim was radically changed by the amendments to the State's defence and they would not otherwise have commenced this proceeding, then it was unreasonable for them to maintain this proceeding after 6 August 2014. 92 The State says that all the reasons for discontinuing the claim set out in Mr O'Dell's affidavit affirmed 18 November 2015, at [10], were known at 6 August 2014: (1) as to [10(a)], this was known from the pleadings; (2) as to [10(b)], the significance of the petroleum tenure information was appreciated by the claimants' representatives at 6 August 2014 and Mr Rorrison's letter of 26 June 2014 was consistent with the subsequent decision in Ward (No 3). The effect of Ward (No 2) was not to defeat the claim, but it meant that a claim based on the extinguishment of exclusive native title could not likely succeed; (3) as to [10(c)], this was known, apparently from the outset of the proceeding; and (4) as to [10(d)], in its third defence, the State denied that the claimants were entitled to non-monetary compensation. On 9 December 2014, the claimants first wrote to the State setting out a proposal for mediation to narrow the issues between the parties, including discussion of non-monetary compensation. The State says pursuant to orders made on 12 December 2014, the State replied by letter dated 15 January 2015, stating that the nature of the compensation was not something in respect of which the State would mediate. 93 The State submits that a claim based on the extinguishment of exclusive native title by the making of the Nature Reserve could only have succeeded after 6 August 2014 if: (1) the State failed to discharge its onus of proof in respect of oil licence 21 and each of the permits; and/or (2) the Court was persuaded to not follow the binding authorities on extinguishment. 94 The State thereby submits that, viewed objectively, the claimants' decision to maintain this proceeding, as pleaded, from 6 August 2014 until 24 August 2015, was made without due regard to the facts arising from the petroleum tenure information and the established law on extinguishment. 95 The State submits that from 6 August 2014, when leave was granted to the State to amend its defence, the parties continued to incur significant costs in the matter: The most substantial costs were incurred during the on country hearings. Substantial costs were incurred in preparing for and dealing with the hearing of anthropological evidence. Substantial costs were incurred in dealing with the extinguishment hearing. Costs were incurred in briefing non-anthropological experts to comply with programming orders made by the Court on 12 December 2014, which were vacated at the extinguishment hearing on 9 April 2015. The parties prepared a statement of agreed facts dated 18 November 2014. Ongoing costs continued to be incurred in the day to day management of the matter, court attendances and correspondence. 96 The State submits that, on a proper analysis, the claimants should be liable to pay all of the State's costs incurred after 6 August 2014 but, observing the spirit of s 85A of the NTA, the State does not seek costs. 97 The State makes the point, however, that the claimants' conduct after 6 August 2014 reinforces the view that the correct disposition of the matter is that the parties audit their own costs. 98 As to the claim for costs thrown away, the State submits that for costs to be thrown away they must have been reasonably incurred and relate to work which, in the circumstances of the case, has become wasted. 99 Amongst other submissions made, the State says that a claim based on the extinguishment of non-exclusive native title could have been maintained after Ward (No 2) but this was not pursued by the claimants. Instead, they persisted with their claim based on extinguishment of an exclusive native title. 100 In all of those circumstances, work done in preparation for the compensation claim based on exclusive native title remained "useful" to a claim for compensation for extinguishment of non-exclusive native title. 101 The State says the claimants pressed their case against the petroleum tenure information and its extinguishing effect. Having not succeeded in Ward (No 3), they now seek costs thrown away. These are not costs thrown away, in the submission of the State, and so the application should be refused.

Claimants' reply submissions 102 The claimants filed reasonably extensive submissions in reply to the submissions of the State. It is appropriate to record the essence of the reply submissions. 103 As to the consequences of representations, if any, made by the Ngaanyatjarra Lands determination, the claimants submit that the relevant enquiry is not what the State thought was the likely consequences of its representations, but to determine whether the claimants acted reasonably in making an application for compensation on the basis that the exclusive nature of rights and interests affected by the vesting of the Nature Reserve would not be an issue. 104 The claimants say that if the State had adequately conducted land tenure searches before agreeing to that determination in 2004, or later in 2012 when the compensation application was filed, little expense or time would have been wasted. In that regard, the claimants refer to the overarching purpose of civil practice and procedure stated in s 37M of the FCA Act, namely to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible. 105 The claimants say that by agreeing to a consent determination, the State could reasonably have anticipated that an applicant party might file an application for compensation in reliance on the acknowledgment in that determination, and should not have been surprised that the compensation claim was filed after the failure of the "compensation package". 106 The claimants further note that their alternative pleaded argument, that the effect of the vesting of the Nature Reserve was to merely suppress and not extinguish native title, did not challenge or depart from the two significant representations arising, as I see it, from the Ngaanyatjarra Lands determination concerning exclusivity of native title and its extinguishment. 107 As to recital G of the determination, the claimants contend the construction most apparent on the face of the text, and consistent with the State's original defence, is that it was an acknowledgement that native title, which was wholly extinguished, comprised possession, occupation, use and enjoyment to the exclusion of all others. 108 As to cl 3.8 of the grant agreement, while contesting the State's reading of it, the claimants say that even if it is read as the State suggests, the cumulative effect of recital G and cl 3.8 must fully support the claimants' submission that the compensation application, in reliance on the previous representations, was reasonably pursued in the circumstances. 109 In those circumstances, it is not to the point, the claimants submit, that when the representations were made, they were not given in the context of the proceeding or anticipation of the proceeding. 110 The claimants also return to the question of the reasonableness of the tenure searches and submit there was nothing "routine" about the first native title compensation claim in Western Australia, nor was there an "ordinary course of preparing the State's case on extinguishment" in the context of a compensation proceeding. 111 The claimants submit it is trite to say that a native title compensation application proceeding is very different to a native title determination application proceeding. In short, the claimants submit there was no particular reason for further tenure searches to be conducted late in the piece, prior to the commencement of the hearing in relation to the compensation claim, in the manner that they were. 112 The claimants emphasise that the relevance of the historical tenure to the compensation proceedings cannot be understated: the State, like the claimants, relied upon the tenure searches done for the Ngaanyatjarra Lands determination. 113 The claimants further say, in relation to Mr Rorrison's affidavit sworn 11 December 2015, that it did not occur, and has not occurred, to Mr Rorrison, that it was the State's responsibility to conduct tenure searches before making admissions in both the Ngaanyatjarra Lands determination and its defences in this proceeding. The claimants submit the State could and should have conducted searches before making those solemn admissions. 114 As to the State's submission that it was not until December 2012 that the DMP completed the digitisation of early historical petroleum tenure to enable the information to be searched, the claimants say that before 2013, the State had other, perhaps less convenient, means of conducting tenure searches that could have produced that tenure. In that regard, it notes that similar oil prospecting licence tenures were adduced in evidence and found to have an extinguishing effect in Daniel on behalf of the Ngarluma People v State of Western Australia [2003] FCA 666. See also Graham on behalf of the Ngadju People v State of Western Australia [2014] FCA 516 and Banjima People v State of Western Australia and Others (No 2) (2013) 305 ALR 1; [2013] FCA 868. 115 The claimants say that, even if the State's "excuse" for not carrying out effective searching earlier was accepted, the State does not adequately explain why searches were not undertaken until March 2014, when the technological capacity to do so existed from late 2012. The claimants ask rhetorically, when the searches would have been carried out if Ms Lealiifano had not sent her email on 4 November 2013. 116 The claimants say it is notable that Mr Rorrison did not file an affidavit of explanation relating to the late tenure searches until 11 December 2015. They further say that the State's submission that the timing of the search was at a "routine" stage of the proceedings, before either party had opened its case and before the Court made programming orders for the extinguishment case on 13 October 2014, understates the significance of the role which pleadings have in clarifying issues to be determined. The claimants say there was no need for any further programming orders in respect of tenure. 117 The claimants emphasise that Mr O'Dell made clear in his affidavit affirmed 1 August 2014, that the claimants had prepared all of the Aboriginal evidence for the on country hearing in reliance on the admissions in the pleadings, and that the claimants were not aware of the possible ramifications of the new tenure evidence until the State's proposed third defence was received on 25 July 2014. They say the covering letter by the State on 26 June 2014 provided no explanation as to why the tenure documentation enclosed had not been produced earlier or why it was being produced at all. 118 The claimants say that, at the very least, the digital means of discovering the petroleum tenure information were available in December 2012, but no request was made by the SSO in this regard until March 2014, and the State has not offered a reasonable explanation for the delay. 119 In response to the State's questioning of the reasonableness of the claimants continuing the proceedings in light of the decision in Ward (No 2) on 6 August 2014, the claimants refer to Mr O'Dell's affidavit affirmed 18 November 2015 and the "strong and unwavering" instructions regarding the security of control and management of the Nature Reserve by the claim group. Thus, the claimants submit it was necessary to consult the whole group and not just the four named applicants before altering course. 120 As to the State's suggestion that the claimants' decision to maintain the proceedings without amending their pleaded case after 6 August 2014 was a "strategic decision"; that it was unreasonable to continue the proceedings in circumstances where the claimants maintain that, but for the admission, they would not have commenced proceedings; and all the reasons that Mr O'Dell gave for discontinuance in his affidavit affirmed 18 November 2015 were within the knowledge of the claimants as at 6 August 2014, the claimants submit that maintaining the proceeding until the decision in Ward (No 3) was delivered was reasonable in the circumstances, given that the only authority which had dealt directly with tenements of that kind was Mineralogy Pty Ltd v National Native Title Tribunal and Others (1997) 150 ALR 467. In those circumstances, the claimants say it was reasonable for them to argue that Mineralogy had been correctly decided and that Akiba v The Commonwealth of Australia and Others (2013) 250 CLR 209; [2013] HCA 33 supported the position of non-extinguishment. They say in circumstances where they had structured their case "so heavily on the basis of the admissions of exclusive possession native title" it was reasonable to advance the argument that no earlier extinguishment had occurred. 121 The claimants say the State has also not taken into account that had they not discontinued the proceeding, there would have been considerable additional expense and Court time.

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.