This is a guest post by Megan Brayne, a lawyer and Director of Comhar Group, a legal and policy advisory firm specialising in native title, environment and planning and climate change law.

Yesterday for the first time the High Court determined compensation for native title, and lawyers are pretty excited.

Native title holders are entitled to compensation when States or Territories do things like grant leases and freehold lots that extinguish (legal speak for destroy) or permanently impair native title.  That’s because non-indigenous people have the right to compensation on just terms if a State or Territory compulsorily acquires their property (kind of like in the nineties movie The Castle).  The right to compensation applies to actions that occurred post 1975, when the Racial Discrimination Act (Cth) 1975 was enacted.

However, the problem is that in 1975 States and Territories all over the country didn’t know native title existed.

They went around for decades happily granting leases and freehold estates which extinguished or impaired native title.  Later, in 1992 the High Court found that native title existed in the famous Mabo case.  The Native Title Act (Cth) 1993 (Native Title Act) was enacted shortly after, and made provision for compensation for certain State and Territory actions that occurred after 1975.

Unfortunately this was not the end of the confusion.  For example, States and Territories were under the misapprehension that non-exclusive pastoral leases that existed at one time or another across much of the Australian land mass had extinguished native title, and continued to grant leases and licences and other tenures on them.  In 1996 the High Court held in the Wik case that native title had largely survived the grant of non-exclusive pastoral leases, and co-exists with them.

The Native Title Act provides that compensation is payable on just terms, to compensate the native title holders for any loss, diminution, impairment or other effect of the act on their native title rights and interests.  So how did the Courts quantify what should be paid to traditional owners in this case?

The High Court supported the idea there are two components to native title compensation.  Firstly, an amount for economic loss associated with the impact on native title.  The High Court found this is up to 50% of the freehold value.  Simple interest is also payable from the date of extinguishment, which adds up.  This means that traditional owners in towns with higher property values such as Broome or Katherine will be awarded a greater amount for economic loss than traditional owners of remote areas where property is not as highly valued.

A separate component is payable for non-economic (cultural) loss.  So, for example, where State or Territory actions interfere with a significant site, the cultural loss will be higher.  The High Court rejected the Commonwealth and Northern Territory’s arguments that the compensation awarded for cultural loss awarded by the trial judge ($1.3 million) was manifestly excessive.  The Commonwealth had wanted to limit the value to $230,000 and the Northern Territory to 10% of the value for economic loss.

Yesterday’s High Court case involved 53 acts being the grant of leases, freehold lots and a cemetery reserve in Timber Creek, a small town (population 230) half way between Katherine and Kununurra.  The end result was the High Court awarded the total amount of $2,530,350 including interest.  This comprised:

(a)   Economic Loss:  50% of the freehold value, being $320,250.

(b)  Interest on the sum of $320,250 calculated at $910,100.

(c)   Non-Economic Loss (cultural loss) of $1.3 million.

Lawyers will be excited and busy this week. Government lawyers will be reading the decision closely and working out how to proceed.  Often where States or Territories have granted tenure for specific projects (such as a mine) there is a contractual agreement between the State or Territory and the project proponent that passes compensation liabilities through to the proponent, so there will also be some company lawyers busy assessing potential liabilities.  Lawyers who represent indigenous groups will be carefully considering where to go next.

For all stakeholders, the decision provides some certainty but leaves open significant areas for negotiation and disagreement.  This is unlikely to be the last time the courts will be asked to consider native title compensation issues.  Much will turn on the facts of each case, such as the nature and content of native title rights and interests and the impacts on culture of the particular acts.  The High Court’s assessment provides useful guidance but cannot be rolled out en masse.

The High Court has delivered a road map for calculating native title compensation, but just how we all navigate it remains to be seen.

The case is Northern Territory of Australia v Griffiths and others [2019] HCA 7 available here: http://eresources.hcourt.gov.au/downloadPdf/2019/HCA/7

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