FEDERAL COURT OF AUSTRALIA Starkey on behalf of the Kokatha People v State of South Australia [2016] FCA 1577 Appeal from: Lake Torrens Overlap Proceedings (No 3) [2016] FCA 899 File number: SAD 249 of 2016 Judge: WHITE J Date of judgment: 22 December 2016 Catchwords: NATIVE TITLE – application for stay of execution of order dismissing native title application – orders not of a kind which can be stayed. PRACTICE AND PROCEDURE – application for interim injunction pending the hearing or determination of appeal – inadequate undertaking as to damages. Held: application dismissed. Legislation: Corporations Act 2001 (Cth) Federal Court of Australia Act 1976 (Cth) s 25(2B), 25(2BB) Federal Court Rules 2011 (Cth) rr 17, 36.08, 41.03 Mining Act 1971 (SA) s 63N Native Title Act 1993 (Cth) ss 189A, 190 Cases cited: Bradken Limited v Norcast S.ár.L [2013] FCAFC 123 Cheedy v State of Western Australia [2010] FCA 1305 Samsung Electronics Co Ltd v Apple Incorporated [2011] FCAFC 156; (2011) 217 FCR 238 Starkey v State of South Australia [2014] FCA 924 Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2) [2000] FCA 87 Straits Exploration (Australia) Pty Ltd v Kokatha Uwankara Native Title Claimants [2012] SASCFC 121 Taylor v Crossman [2011] FCAFC 139 Date of hearing: 16 and 22 December 2016 Registry: South Australia Division: General Division National Practice Area: Native Title Category: Catchwords Number of paragraphs: 36 Counsel for the Appellant: Mr C Evans with Mr O Linde Solicitor for the Appellant: South Australian Native Title Services Counsel for the State of South Australia: Mr S Whitten with Mr P Tonkin Solicitor for the State of South Australia: Crown Solicitor's Office Counsel for the Fifth Respondent: Mr J Waters Solicitor for the Fifth Respondent: McDonald Steed McGrath Lawyers Counsel for the remaining Respondents: The remaining Respondents did not appear Counsel for the Barngarla People: Mr D O'Gorman SC Solicitor for the Barngarla People: Teitzel & Partners Counsel for the Adnyamathanha People: Mr C Alexandrides Solicitor for the Adnyamathanha People: Norman Waterhouse Lawyers ORDERS SAD 249 of 2016 BETWEEN: ANDREW STARKEY AND JOYLENE THOMAS ON BEHALF OF THE KOKATHA PEOPLE Appellant AND: STATE OF SOUTH AUSTRALIA First Respondent MICHAEL ANDERSON, ANTHONY CLARK, MARK MCKENZIE SNR, DEIDRE MCKENZIE, BEVERLY PATTERSON AND ANGELINA STUART ON BEHALF OF THE ADNYAMATHANHA PEOPLE Second Respondent ERIC PAGE, LORRAINE BRISCOE, HARRY DARE, JEANNE MILLER AND LINDA DARE ON BEHALF OF THE BARNGARLA PEOPLE (and others named in the Schedule) Third Respondent JUDGE: WHITE J DATE OF ORDER: 22 DECEMBER 2016 THE COURT ORDERS THAT: 1. Exhibits A1 and A2 are at the conclusion of this hearing to be placed in a sealed envelope and to be marked confidential and not to be opened without leave of a Judge of the Court. 2. I direct pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) and r 34.120 of the Federal Court Rules 2011 (Cth) that copies of Exhibits A1 and A2 provided by the Applicant to the parties are not to be distributed beyond counsel and solicitors for the respective parties. 3. The interlocutory application filed 12 December 2016 be dismissed. 4. Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. EX TEMPORE REASONS FOR JUDGMENT WHITE J: 1 On 9 August 2016, Mansfield J delivered judgment in the proceedings known as the Lake Torrens overlap proceeding. That proceeding concerned overlapping claims made by the Kokatha People, the Adnyamathanha People and the Barngarla People for determinations of native title in respect of the land and waters of Lake Torrens in the far north of South Australia. 2 By orders made that day, Mansfield J dismissed each of the applications: that made by the Kokatha People by Order No. 1; that made by the Adnyamathanha People by Order No. 2; and that made by the Barngarla People by Order No. 3. All three applicants have filed appeals against the dismissal of their respective applications. The appeals are to be heard in a single hearing in the week commencing on 27 February 2017. The judges designated by the Chief Justice to hear the appeal are Reeves, Jagot and White JJ. 3 I am concerned presently with an interlocutory application filed by the Kokatha People of 12 December 2016. By that application, the Kokatha People seek, first, an order staying the execution of the order made by Mansfield J on 9 August 2016 dismissing their application. The stay is sought until judgment of the Full Court, or at least until 27 February 2017, when the appeal hearing is to commence, with the prospect that an extension of the stay would then be sought from the Full Court. 4 The Kokatha People seek that order because the holders of exploration licences over Lake Torrens (Straits Exploration (Australia) Pty Ltd and Kelaray Pty Ltd (Kelaray)) or their joint venture partners have, by announcement to the Australian Stock Exchange, indicated that they intend, as soon as practicable, and in any event, before the judgment of the Full Court, to commence exploration activities, including by drilling, on Lake Torrens. To this end, on 16 November 2016 they served on the South Australian Native Title Services (SANTS), notices pursuant to s 63N of the Mining Act 1971 (SA) (the Mining Act). The effect of the notices is that from 16 January 2017, the exploration licence holders will, unless restrained by injunction, be able to apply ex parte to the Environment Resources and Development Court of South Australia (the ERD Court), pursuant to s 63N of the Mining Act for a summary determination authorising entry to the land for the purpose of carrying out mining operations, as well as the conduct of mining operations, and the ERD Court will then be obliged to make such a determination. 5 The Kokatha People are concerned about the prejudice which such activities may cause to their cultural and spiritual beliefs and their rights and interests in the event that their appeal succeeds. This is especially as the detriments which they fear they will suffer may not be compensable in damages, or at least fully compensable in damages. 6 The Kokatha People made their application for a stay initially pursuant to r 36.08 of the Federal Court Rules 2011 (Cth) (the FCR). Subrules (1) and (2) in r 36.08 provide: (1) An appeal does not: (a) operate as a stay of execution or a stay of any proceedings under the judgment subject to the appeal; or (b) invalidate any proceedings already taken. (2) However, an appellant or interested person may apply to the Court for an order to stay the execution of the proceeding until the appeal is heard and determined. 7 The Kokatha People's application is of a kind to which s 25(2B) of the Federal Court of Australia Act 1976 (Cth) refers and, accordingly, subject to one qualification, an application which may be dealt with by a single Judge of this Court. The qualification arises from s 25(2BB) which provides: An application for the exercise of a power mentioned in subsection (2B) must be heard and determined by a single Judge unless: (a) a Judge directs that the application be heard and determined by a Full Court; or (b) the application is made in a proceeding that has already been assigned to a Full Court and the Full Court considers it is appropriate for it to hear and determine the application. 8 The effect of (2BB) is that an interlocutory application of the present kind must be heard and determined by a single Judge, unless the proceeding is one which has already been assigned to a Full Court, and that Full Court considers that it is appropriate for it to hear and determine the application. The meaning of the word "assigned" in this context is not clear. However, in Bradken Limited v Norcast S.ár.L [2013] FCAFC 123, the Full Court at [16] proceeded on the basis that such an assignment has occurred when the Coram, that is to say the particular judges who will hear the appeal, have been identified. See also Taylor v Crossman [2011] FCAFC 139 at [7]-[8]. It is not necessary to consider this question in any detail presently, as the members of the Full Court who are to hear the appeals in the present matters have agreed that it is appropriate for me, as a single Judge, to deal with the application of the Kokatha People. No party has objected for the Court, comprised of a single Judge, dealing with the application by the Kokatha People. 9 The principles which govern the Court's discretion in granting a stay pending the determination of an appeal are well known. Having regard to the matters to which I am about to refer, it is not necessary to refer to those principles in any detail. 10 As I have already noted, the order which the Kokatha People seek is one "staying the execution" of the order made by Mansfield J on 9 August 2016. The application for an order in those terms has the difficulty that it seeks the stay of execution of an order which has no executory aspect, that is to say, the stay of an order which requires no further steps to be taken to give effect to the Court's judgment. That is because the order was that the claim for native title be dismissed. There is no further act of the Court remaining to be carried out which can be stayed. In saying that, I am not overlooking s 189A of the Native Title Act 1993 (Cth) (the NT Act), which required the Registrar of this Court to notify the Native Title Registrar of the decision as soon as practicable after it was made. The Registrar complied with that obligation some time ago and the Native Title Registrar has already amended, pursuant to s 190 of the NT Act, the Register of Native Title Claims by removing the entries concerning the dismissed claim. 11 The circumstances of this case are analogous to those considered by Gilmour J in Cheedy v State of Western Australia [2010] FCA 1305. Gilmour J was then dealing with a motion for a stay, pending the determination of an appeal to the Full Court against a judgment dismissing appeals against determinations of the National Native Title Tribunal. By those determinations, mining exploration licences had been granted over land the subject of a native title claim. The appellant in Cheedy sought the stay under Order 52, r 17 of the former Federal Court Rules. That Rule was the counterpart of r 36.08 in the 2011 Rules. Gilmour J held that the orders of dismissal were not executory and, accordingly, could not be stayed. In doing so, Gilmour J referred to the earlier decision of French J, as his Honour then was, in Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2) [2000] FCA 87 at [11], that, in circumstances of the present kind, there is nothing upon which a stay of execution may operate. 12 At the commencement of the hearing on 16 December 2016, I drew this difficulty to the attention of counsel for the Kokatha People and suggested that, if the Kokatha People were entitled to relief in the present circumstances, it could be by way of injunction. Initially, counsel persisted with the application for the order under r 36.08, but referred also to r 41.03. That Rule permits a person bound by a judgment or order to apply for an order that the judgment or order be stayed. However, an application for an order under r 41.03 in the circumstances of the present appeal would face the same difficulty as does the application under r 36.08. 13 Counsel for Kelaray, the fifth respondent, drew attention to a further difficulty for the Kokatha People, namely, that even if a stay order of the kind sought was made, it would have no practical effect. That is because, as noted, the Native Title Registrar has already amended the Register of Native Title Claims so as to remove the entry concerning the claims of the Kokatha. An order of stay, whether made pursuant to r 36.08 or r 41.03, would of itself have no effect on that circumstance. 14 For these reasons, I decline to make an order of stay, whether under r 36.08 or r 41.03. 15 However, ultimately at the hearing on 16 December, counsel for the Kokatha People sought, and was granted leave, to amend the interlocutory application so as to include a claim in the alternative for an interlocutory injunction. By the amendment, the Kokatha People seek an interlocutory injunction restraining Kelaray or its joint venture partners until further order, from applying to the ERD Court, pursuant to s 63N of the Mining Act, for a summary determination authorising entry onto the area, which is the subject of the claim by the Kokatha People, for the purposes of carrying out mining operations and the conduct of mining operations. 16 The principles which the Court applies when considering an application for an interlocutory injunction are well-known. See Samsung Electronics Co Ltd v Apple Incorporated [2011] FCAFC 156; (2011) 217 FCR 238. There are two principal matters to be considered. The applicant for the interlocutory injunction must establish a prima facie case in the sense that if the evidence remains as it is, there is a probability that at the trial of the action the applicant will be held entitled to relief. The second is whether the balance of convenience favours the grant or refusal of the injunction. It requires consideration of whether refusal of the interlocutory injunction would have the effect that the applicant may suffer injury or damage for which damages will not be adequate compensation. 17 Those two issues are not independent of one another. If the balance of convenience favours a respondent the stronger must be the prima facie case which the applicant must establish in order to obtain the interlocutory injunction. Conversely if the balance of convenience favours the applicant the strength of the prima facie case required to support the interlocutory injunction is generally less. 18 Although consideration of an application for an interlocutory injunction will often require the Court to consider the strength of the applicant's underlying case, generally the Court seeks to avoid undertaking "a preliminary trial". That is especially so in cases like the present, in which an appellant is seeking an interlocutory injunction pending the hearing and determination of an appeal. In such a case the respondent has the benefit of the first instance judicial determination of the merits of the matter. Such a decision is not to be understood as being provisional or as standing only subject to confirmation on the appeal. It is, as counsel for Kelaray emphasised, a considered determination by a judicial officer having regard to all the evidence bearing upon the issues in the matter. 19 Further, and in any event, the present case involved a substantial trial at first instance involving a large volume of evidence. It is not practically possible for the Court presently to engage in a detailed analysis of the appellant's prospects of success on appeal. Nor is it desirable given that I will be one of the Judges hearing the appeal. Accordingly, I intend to proceed on the basis that the Kokatha People's grounds of appeal are arguable but at this stage no more than that. It is undesirable, as I have said, to engage in any further analysis of the grounds of appeal. This makes consideration of the balance of convenience particularly important. 20 On that issue, the Kokatha People contend that, if the fifth respondent or its joint venture partners are permitted to enter the claim area and commence mining operations or exploration activity, irreparable damage may be caused to their native title rights and interests. That is because Kelaray and its joint venture partners will be able to conduct activities on the land without regard to those rights and interests. The Kokatha People's fear is that such damage or detriment as may be caused may not be compensable in damages or at least adequately compensable in damages. 21 Kelaray and its joint venture partners submit that the grant of the interlocutory injunction will cause them prejudice. The relevant entity is probably the public company, Argonaut Resources NL of which Kelaray is a wholly owned subsidiary. 22 Kelaray and Argonaut's submissions concerning the balance of convenience were to the following effect. Lake Torrens is highly prospective and there are indications that it overlays a very valuable mineral resource. Since the delivery of judgment by Mansfield J on 9 August 2016, Argonaut has taken steps to facilitate the raising of new capital in order to pursue exploration activities. It did so in particular by the passage of two resolutions at its Annual General Meeting on 25 November 2016 both of which involved approvals for the raising of capital by the issue of new securities. The first approval related to the issue of securities at 80% of the volume-weighted average market price of Argonaut's shares so as to raise $3 million. The second approval was for the issue of 10% in capital in addition to the 15% allowed annually under the provisions in the Corporations Act 2001 (Cth). 23 Mr Owler, a director of Argonaut, has deposed that the market is likely to respond favourably to the grant by the ERD Court of a summary determination pursuant to s 63N. He also deposed that the inability to pursue the application for the summary determination may have a negative effect on Argonaut's capital raising. In particular, Mr Owler deposed that if the interlocutory injunction is granted and near term capital raising is unachievable, Argonaut may suffer the following effects: a rushed sale of assets; a need to terminate staff and contractors; an inability to pay fees associated with maintaining its ASX listing; and an inability to pay its accountants and auditors as well as other detriments. 24 I think it pertinent to note that Mr Owler deposed to those detriments in general terms. He did not depose to any steps actually taken since the Annual General Meeting on 25 November 2016 to pursue the capital raising for which approval was given. Nor has Mr Owler provided any evidence as to the current financial status of Argonaut, whether by way of its assets or of its liabilities. It is, accordingly, not possible for the Court to make an assessment itself of the impact which a delay in being able to pursue an application under s 63N may have on Argonaut. As I put to counsel for Kelaray during the course of the submissions, it is reasonable to suppose that if a capital raising directed to the public is made, then any prospectus would have to include details of the present appeal and an assessment of the impact which success on the appeal may have on the obtaining of approvals under the Mining Act. If the capital raising is directed to sophisticated investors, it is to be expected that they would have a ready and acute appreciation of the risks which a success on the appeal by the applicants may cause to Argonaut's ability to pursue in an expeditious way, the exploitation of its exploration licenses. 25 It is also appropriate to take into account that there is some considerable history to the attempts to explore the mineral resources said to be under Lake Torrens. I do not intend to set out that history, apart from noting that it extends back to 1998 and has included litigation in the ERD Court in 2011, in the Supreme Court of South Australia in 2012 and that Argonaut or its subsidiaries has not, since the decision of the Full Court of the Supreme Court of South Australia (Straits Exploration (Australia) Pty Ltd v Kokatha Uwankara Native Title Claimants [2012] SASCFC 121), returned to the ERD Court to pursue a claim for authority to commence mining activities. The detriments to which Mr Owler deposed in resisting the present interlocutory injunction have to be seen, in my view, in the context of the reasonably long delays and periods of inactivity which have occurred so far. 26 I accept the submission of counsel for Kelaray that if an interlocutory injunction is granted, it may at least be several months before the decision of the Full Court is known so that Kelaray and its joint venture partners would be prohibited from making their application under s 63N for a period which is more than short. At the same time, that period has to be seen in the context of the longer history to which I have already referred. 27 Ultimately, I take the view that it is not necessary for me to reach a view about where the balance of convenience lies. It is sufficient to note, from what I have said so far, that there are matters which lie on both sides of the ledger. 28 The significant matter which to my mind should be decisive of the application for the interlocutory injunction concerns the provision of the usual undertaking as to damages. At the hearing on 16 December 2016 I sought to emphasise to the applicant the importance of the provision of an undertaking for damages in relation to an application for an interlocutory injunction and, amongst other things, said that I would like to see a detailed affidavit from the persons offering the undertaking. 29 Today an undertaking has been proffered by the Kokatha Aboriginal Corporation, the registered native title body corporate appointed as agent for the common law holders of native title in Pt A of Federal Court proceeding SAD 90 of 2009. Those common law holders are described in the judgment in Starkey v State of South Australia [2014] FCA 924. I accept that the undertaking is proffered in a bona fide manner. However, considered from the position of the Kokatha Aboriginal Corporation position by itself, the undertaking does not appear to be one of substance. As emerged during the course of the submissions today, the balance sheet of Kokatha Aboriginal Corporation as at 30 November 2016 shows that it has a significant negative net equity. That does not provide any assurance to the Court that, in the event that the joint venture participants, do suffer economic loss as a result of the grant of the interlocutory injunction, they will be able to recover that loss, or at least part of it, from the applicants. 30 Counsel for the applicants then referred to the trust ledger for the Kokatha People's Native Title Compensation Trust. That trust ledger does indicate that the Trust has substantial assets. The Trustee of the trust is not Kokatha Aboriginal Corporation: it is instead Kokatha People's Native Title Compensation Pty Ltd. The shares in that company are wholly owned by Kokatha Aboriginal Corporation. Counsel for the applicant noted that the objects of the Kokatha People's Native Title Compensation Charitable Trust Deed include: To assist the Kokatha People in relation to matters which arise in respect of native title, traditional law, custom and culture, including the resolution of their native title claims or the protection or advancement of their native title rights and interests. 31 The submission, as I understood it, was to the effect that the expenditure of monies by the Trust in meeting an undertaking for damages would be a proper use of Trust funds. It is not necessary for me to express a view one way or another about that, because the more important question is whether or not, in the event that the undertaking for damages was called upon, Kelaray and its joint venture partners would be able to enforce a judgment against the assets of the Trust. As I understand it, the argument for the Kokatha People is that Kelaray would be able to enforce a judgment against Kokatha Aboriginal Corporation, and that because that entity owns the shares in Kokatha People's Native Title Compensation Pty Ltd, it would therefore be entitled to enforce judgment against the assets held by it, at least in a liquidation. 32 I do not accept, at least without more evidence, that that is so. It is not the case that the shareholder of a corporate trustee is entitled to have recourse to the assets held on trust to meet liabilities which the shareholder has incurred independently of the trust, at least when those assets are held on trust for others. 33 This position could have been addressed by the applicants, because the solicitor for Kelaray and its joint venture partners wrote to SANTS on behalf of the Kokatha Native Title Claimants on 19 December 2016 asking, amongst other things, for an undertaking as to damages to be given by The Kokatha People's Native Title Compensation Pty Ltd in its capacity as trustee of the Kokatha People's Native Title Compensation Trust. Had such an undertaking been given, it may have been possible for Kelaray and its joint venture parties to enforce the undertaking against the assets of the trust. However, no such undertaking has been provided, notwithstanding the request made back on 19 December 2016. 34 It is exceptional for the Court to grant an interlocutory injunction when an appropriate undertaking as to damages in respect of the losses which might be caused by the grant, has not been provided. There are exceptions, as for example when a government is an applicant, and there are other exceptions arising from particular statutes. No such exception applies in the present case. 35 That being so, I am satisfied that, even had the balance of convenience ultimately been found to favour the applicants, it would not be appropriate to grant the interlocutory injunction. For that reason, I dismiss the interlocutory application filed on 12 December 2016. 36 I will reserve the question of costs. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White. Associate: Dated: 23 December 2016 SCHEDULE OF PARTIES SAD 249 of 2016 Respondents Fourth Respondent: BHP BILLITON OLYMPIC DAM CORPORATION PTY LTD Fifth Respondent: KELARAY PTY LTD Sixth Respondent: OZ EXPLORATION PTY LTD Seventh Respondent: OZ MINERALS CARRAPATEENA PTY LTD Eighth Respondent: OZM CARRAPATEENA PTY LTD Ninth Respondent: DOUGLAS MAXWELL GREENFIELD