FEDERAL COURT OF AUSTRALIA

Edwards v Santos Limited [2010] FCAFC 64

THE COURT ORDERS THAT:

1. The application for leave to appeal from the order made on 18 December 2009 be dismissed.
2. The application for leave to appeal from the order made on 17 March 2010 be dismissed.
3. The applicants pay the first and third respondents’ cost of this application.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

Introduction

1                          The applicants in this matter seek leave to appeal from orders (Principal Orders) of Logan J made on 18 December 2009: [2009] FCA 1532.  His Honour dismissed the applicants’ application pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth).  The applicants also appeal from costs orders adverse to them made on 17 March 2010.  The costs were those of the first and third respondents “of and incidental to the application, including the summary judgment application”.

2                          Orders made pursuant to s 31A are interlocutory; Federal Court of Australia Act 1976 (Cth) (FCA) s 24(1D)(b).  Consequently, the applicants can only appeal from the principal orders with the leave of the Court: FCA s 24(1)(1A).

3                          The principles applicable to a grant of leave to appeal are well-established.  Leave will only be granted if the decision of the primary judge is attended by sufficient doubt to warrant its reconsideration and a refusal to grant leave would result in substantial injustice; Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401 at [44], Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400, and see generally the discussion in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at [41] – [44]) per French J, with whom Beaumont & Finkelstein JJ agreed.

4                          All the respondents submit that the primary judge’s decision is not attended with any doubt and for that reason leave should not be granted.  They further submit that even assuming there to be some doubt there would be no injustice to the applicants in refusing leave as such rights as they may have are able to be vindicated in more appropriate proceedings.

Background

5                          The applicants on behalf of the Wongkumara people are the registered native title claimants in separate proceedings in this Court.  The first and third respondents hold an Authority to Prospect (ATP 259) which is issued under the Petroleum Act 1923 (Qld) and which covers land that is subject to the applicants’ registered native title claims. The dispute between the applicants and the first and third respondents arose during negotiations for an indigenous land use agreement (ILUA) in respect of that land.

The application before the primary judge

6                          In their amended application before the primary judge, the applicants sought declarations in respect of any petroleum lease granted to the first and/or third respondents under s 40 of the Petroleum Act in respect of land subject to the native title claim and covered by ATP259.  Specifically the declarations sought were that any such lease would (a) not be a pre-existing right-based act within the meaning of Part 2, Division 3, Subdivision I of the Native Title Act 1993 (Cth) (NTA); and (b) not be valid pursuant to s 24ID of the NTA unless the requirements of Part 2, Division 3, Subdivision P had been satisfied.  The applicants also sought an order restraining the second respondent from granting any such petroleum lease to the first and/or third respondents.

7                          The learned primary judge held that the application had no reasonable prospects of success.  In reaching this conclusion his Honour took the view that the applicants’ claim for relief was premised on the proposition that the grant of a petroleum lease would be a future act within the meaning of the NTA.  The primary judge accepted the respondents’ submission that, “to secure final relief of the kind sought by the [applicants] it is not sufficient to establish only that an act might affect native title if native title were found to exist”.  In doing so his Honour followed the decision of the Full Federal Court in The Lardil Peoples v State of Queensland (2001) 108 FCR 453.

8                          The learned primary judge considered separately the question of jurisdiction and standing.  The applicants had pointed to s 213(2) of the NTA, s 39B(1A)(c) of the Judiciary Act 1903 (Cth) and to s 21 of the FCA as the source of the Court’s jurisdiction to entertain their application.  His Honour correctly noted that s 21 of the FCA is a source of power not jurisdiction and was therefore irrelevant.  In relation to the Judiciary Act and the NTA provisions his Honour noted that “the jurisdiction they confer is confined to the “matters” which those sections respectively specify”. 

9                          The learned primary judge referred to the principles expounded in the joint judgment in Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at [44] et seq, concerning the difference between a hypothetical question which would involve a court giving an advisory opinion and a judicial determination arising from a permissible invocation of judicial power.  At [39] of his reasons his Honour stated that the following propositions emerge from Bass:

(a)       The purpose of a judicial determination is the making of a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy (at 355, [44]);

(b)       In light of that purpose, courts have traditionally refused to provide answers to hypothetical questions or to give advisory opinions (at 355-356, [47]);

(c)       It does not violate this proposition for a declaration to be sought as to whether conduct which has not yet taken place will not be in breach of contract or a law (at 356, [47]); and

(d)       The crucial difference between the seeking of such a declaration and an advisory opinion  is whether what is sought is based on a concrete situation as opposed to being divorced from the facts (at 356, [48]).

10                        Applying those principles to the matter in hand the learned primary judge concluded that the application before him was an impermissible request for an advisory opinion and thus there was no possibility of it succeeding.  His Honour succinctly summarised the difficulty at [43]-[44] of his reasons:

Read with the relief sought by the Applicants, the amended statement of claim offers, in my opinion, a paradigm example of an impermissible attempt to secure an advisory opinion.  What is revealed is nothing more than a difference in contractual negotiating positions between the Applicants, who claim in other proceedings, but have not yet been determined to hold, native title in respect of the claimed land and Santos and Delhi Petroleum who may one day seek to obtain from the State a petroleum lease … over part of the claimed land on the strength of ATP259P.  It is not pleaded that any such lease has been granted or is even imminently to be granted.

In effect, what the Applicants seek is advice as to whether, were it to be determined that they hold native title and were a petroleum lease to be sought by and granted to Santos or Delhi Petroleum by the State, that lease, if otherwise valid, would be an invalid future act if the negotiation requirements found in Subdiv P of Div 3 of Pt 2 of the NTA were not complied with?  The hypothetical nature of the application is self evident.

11                        As such, pursuant to s 31A, it was appropriate to dismiss the application.   His Honour also held that the Federal law aspect of the application was “colourable” and that therefore there was “no jurisdiction to entertain the State law aspect of the claim, even if the Applicants had standing”.

12                        Finally, his Honour added that even if these conclusions were wrong, he would, in exercise of his discretion refuse to grant the relief sought.

The present application

13                        The applicants claim that the primary judge erred in applying s 31A.  The alleged error appears to be related to his Honour’s substantive findings rather than to his approach to the requirements of the section.  In so far as the application of s 31A is concerned, his Honour referred to the comment in Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401 at [25] to the effect that s 31A softened the test of a successful application for summary judgment, however he also noted that the Full Court advocated, at [28], the adoption of “a generally cautious approach” in exercising the power granted under the section.  There is nothing in this approach that would suggest error. 

14                        Turning to the substantive issues, senior counsel for the applicants, Mr McCarthy, submitted that, having found that the proceeding had its origin in a difference of opinion between the applicants and the first and third respondents, his Honour erred in finding that the applicants’ claim was premised on the proposition that the grant of a petroleum lease would be a future act.  The point is made in the applicants’ written submissions which state: “What the applicants seek is the assistance of the Court to resolve a dispute between parties” involved in the statutory process of negotiating an indigenous land use agreement.  The applicants’ position as it was put in oral submissions can be summarised as follows:

(a)          the NTA provides a statutory process for the negotiation of ILUAs;

(b)          in the course of the negotiation for an ILUA between the applicants and the first and third respondents, the respondents have made an assertion to the effect that the grant of a petroleum lease pursuant to ATP 259 would be a pre-existing right-based act as defined in s 24IB;

(c)          the assertion in (b) is incorrect and, consequently, the applicants have a right to a declaration to that effect;

(d)          the assertion of an incorrect position in the ILUA negotiations gives rise to a matter under s 213 of the NTA and thus enlivens the jurisdiction of this Court.

15                        Mr McCarthy submitted that this was an arguable analysis whether or not it would ultimately prove to be correct.  Consequently the applicants’ claims should not have been summarily dismissed.  He further submitted that as Lardil had nothing to do with ILUAs it should have been distinguished and the applicants allowed the opportunity to put their submissions at trial.

16                        As senior counsel for the second respondent, Mr Flanagan, was at pains to point out, the primary judge was considering an application under s 31A which must be determined on the case as pleaded.  The applicants’ submissions summarised in [14] above attempt to distinguish Lardil by characterising their case in terms quite different from the way in which his Honour characterised it.  They deny that their case was premised on the proposition that the grant of a petroleum lease pursuant to ATP 259 is a future act, however this position is inconsistent with the case as pleaded.  This is clear from clauses 5 and 6 of the Amended Statement of Claim which are as follows:

5.         In the course of negotiations for … the proposed ILUA the first respondent on behalf of itself and its joint venture partners has claimed that because ATP 259P predates the NTA the grant of a petroleum lease under the Petroleum Act is a pre-existing rights based act … within the meaning of Subdivision I of Division 3 of Part 2 of the NTA and as such is not subject to the right to negotiate provisions of Subdivision P of Division 3 of Part 2 of the NTA and should not be part of the negotiations for the proposed ILUA. 

6.         The applicants have maintained that they are entitled to the right to negotiate under the NTA in respect of the grant of a petroleum lease over the Claimed Land covered by the ATP and that the grant of a petroleum lease should be part of the negotiations for the proposed ILUA. 

17                        Clauses 5 and 6 make clear that the declarations sought by the applicants are directed to establishing that the grant of a petroleum lease does not fall within the subcategory of future acts that is exempted from the right to negotiate; in other words that it is not a pre-existing rights based act.  A declaration that the grant does not fall into that particular subcategory would make no sense if it were not premised on the grant being a future act.  It is clear that the application for injunctive relief is also based on the same premise as it too is directed to restraining an act that would interfere with the applicants’ right to negotiate.  The applicants’ submission as to how their case should be characterised cannot be accepted.  In our view the learned primary judge was correct in finding that the application was premised on the grant of a petroleum lease being a future act. 

18                        It is clear however, that on the applicants’ pleadings, they cannot establish the premise of their application.  A future act, by definition, is one that either validly affects native title, or is invalid because of native title and would affect native title if it were valid; NTA, s 233.  The applicants have not claimed that they hold any native title rights; they rely solely on their status as registered native title claimants.  This is precisely the position that pertained in Lardil.

19                        In Lardil also, the claim of the appellants was presented solely on the basis that they were registered native title claimants over certain sea areas in the Gulf of Carpentaria however no determination of their claim had been made.  Pasminco Century Mine Ltd was granted an authority to establish a buoy mooring in the area subject to the appellants’ claim.  The appellants had sought declarations and injunctions related to the buoy mooring primarily on the basis of non-compliance with the future act provisions of the NTA.  French J, at [59], referred to the appellants’ submission that the definition of future act in s 233 of the NTA “could be understood as encompassing an act which “may” affect native title”.  His Honour’s response was that “this would require a re-writing of the statutory definition in s 233 which would significantly alter the operation of the act” and which “is not justified by the language of a statute”; see also [70] per Merkel J and [114] per Dowsett J. 

20                        The applicants have submitted that Lardil should be distinguished because, unlike Lardil, the present case is not one in which the applicants seek to enforce procedural rights under Division 3 of Part 2 of the NTA.  The applicants’ submission misconceives the relevance of Lardil to the decision of the primary judge.  Lardil is authority for a proposition that a future act is one that affects native title rights not one that might affect native title rights. The applicants do not contend that Lardil is wrongly decided.  It follows that the decision in Lardil is not distinguishable; in fact it is directly in point. Consequently, the decision that status as registered native title claimants could not support the appellants’ claims in Lardil applies equally to the present circumstances.  As the learned primary judge noted at [30], the relief sought by the applicants in this case is final relief in a proceeding where no claim for native title is advanced.  His Honour pointed out that given the definition of “future act” in the NTA, the successful vindication of a native title claim, not status as registered native title claimants, is “just as central to the application of provisions upon which the Applicants rely as it was to those under consideration in Lardil.  To seek to distinguish Lardil on the basis that the rights within Div 3 of Pt 2 with which that case was concerned were “procedural rights” ignores this centrality”. 

21                        For these reasons we are satisfied that his Honour’s decision is not attended with sufficient doubt to warrant granting leave to appeal.  This is sufficient to dispose of the present application however, in deference to the submissions of counsel for both parties, we shall also make some observations on the issues of jurisdiction and standing.

Jurisdiction and standing

22                        As noted above, the primary judge held that the pleaded facts do not establish any matter forming part of a justiciable controversy between the parties.  No petroleum lease has been granted nor do the respondents have a legal right to require a lease to be granted.  Whether the respondents will ever be granted a lease derived from ATP 259 is purely speculative. 

23                        The applicants relied on s 213(2) of NTA and s 39B(1A)(c) of the Judiciary Act 1903 (Cth) in support of their submission that the negotiating dispute between them and the respondents is such as to evoke the court’s jurisdiction.  Both these sections require that there be a “matter” in order for the court to have jurisdiction.  In Re The Judiciary Act 1903-1920 and The Navigation Act 1912-1920 (1921) 29 CLR 257 the High Court (Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ, Higgins J dissenting) held, at 265, that “there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court”. The test for determining whether a proceeding is a ‘matter arising’ under a Federal Act is whether the right or the duty that is sought to be enforced owes its existence to a provision of the Act: Re McJanet; Ex parte Australian Workers’ Union of Employees (Qld) (No 2) (1997) 189 CLR 654 and 657 per Brennan CJ, McHugh and Gummow JJ. In Bass v Permanent Trustee Company Limited  (1999) 198 CLR 334 the High Court had occasion to consider the concept of judicial process in the context of the power to make declaratory orders.  In their joint judgment, Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ stated, at 355-6, that a judicial determination must include “a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy” and therefore the “courts have traditionally refused to provide answers to hypothetical questions or to give advisory opinions”.  Their Honours referred to the view that a declaratory judgment is tantamount to giving an advisory opinion and added:

However, one crucial difference between an advisory opinion and a declaratory judgment is the fact that an advisory opinion is not based on a concrete situation and does not amount to a binding decision raising a res judicata between parties. 

24                        Their Honours concluded that as the judgment under appeal had not been “based on facts, found or agreed” it was purely hypothetical and could not assist the administration of justice, quell a controversy or resolve a dispute.  Their Honours’ characterisation of the judgment under appeal in Bass would apply precisely to any declarations that might be made by this Court in accordance with the claims of the applicants.  For the Court to opine on the legal status of a petroleum lease that has not been granted and may never be granted would be to opine on what is, as the respondents submit, “an archetypical hypothetical situation”.   At best it would assist the parties in negotiating an agreement; it would not resolve any immediate right or interest (either vested or contingent) between them. The applicants’ written submission quoted at [14] of these reasons might therefore be reframed in these terms: “What the applicants seek is the assistance of the Court to resolve an ILUA negotiation”.

25                        The difficulty that arises from there being no immediate right or interest to be resolved applies equally to the applicants’ prayer for an injunction to restrain the second respondent from granting a petroleum lease as to the declarations sought.  An injunction must be directed to the protection of an existing legal or equitable right not a right that may arise in the future.  This much is clear from the insistence in Australian Broadcasting Corporation v Lenah  Game Meats Pty Limited (2001) 208 CLR 199 that it is necessary to identify the legal or equitable right to be protected; at 216 per Gleeson CJ, Gummow and Hayne JJ at 241.  

26                        For the reasons given above, there is no such legal or equitable right to be protected.  The position was accurately put in the written submissions for the State of Queensland:

In this case, the Applicants did not try to establish that they had any native title rights and interests, and their amended statement of claim made it clear that the injunction would restrain an act to which the right to negotiate applied.  Thus, the only right that the injunction could be said to protect was the right to negotiate under the NTA.  But this right is concerned only with certain ‘future acts’.  Subsection 25(1) of the NTA, which provides an overview of the right to negotiate provisions, makes this clear.  So does s 26.

It follows that Logan J was correct in holding that the relief was premised on the grant of a petroleum lease being a “future act’.

27                        As Mr Flanagan added in oral submissions, once the equity that the applicants seek to protect is characterised in this way Lardil applies.  We have discussed Lardil at some length above.  In our view the applicants’ submission that it can be distinguished must be rejected.  Consequently, his Honour was correct in refusing the injunction sought by the applicants.

Leave to appeal

28                        An application for leave to appeal will not be granted if the case sought to be put on appeal has no prospect of success.  In our view this is the position here.  That being so we agree with Mr Lloyd, senior counsel for the first and third respondents, that the applicants would not suffer substantial injustice should leave be denied.  In oral submissions, Mr Lloyd made the point that the applicants’ arguments stem from their view that the ATP has lapsed.  This, he submitted, is properly a matter of state administrative law and the effect of the primary judgment is that the applicants can run this issue in a state court if they have standing in that court.  In any event, the primary position of all the respondents is that the claim cannot succeed in this Court.

Appeal as to costs

29                  As the second respondent did not seek costs of the proceeding below it made no submissions in relation to the learned primary judge’s costs order made on 17 March 2010.  The challenge to his Honour’s order as to costs relies on the success of the applicants’ submissions as to errors in the primary judge’s reasons on the substantive issues. The applicants do not contend that s 85A of the NTA has any application.  In particular, it is submitted that his Honour erred in taking the decision in Lardil into account.  As we have found no such errors, it follows that his Honour’s order as to costs was a proper exercise of the power to award costs and that there is no basis to set it aside. 

Conclusion

30                  The applications for leave to appeal in respect of the orders made by the learned primary judge on 18 December 2009 and 17 March 2010 must be dismissed.  Only the first and third respondents have sought costs of the present applications.  There is no reason why costs should not follow the event. 

Associate:

Dated:         4 June 2010