Australia - Compensation Update: What Next For Native Title Compensation?
Legal News & Analysis - Asia Pacific - Australia - Dispute Resolution
8 May 2020
What you need to know
One year into the 'native title compensation era', we are not a lot wiser as to how it will all play out.
Some new compensation claims have been lodged since the Timber Creek High Court decision, but no tsunami.
There are numerous legal questions with respect to the methodology for the assessment of native title compensation still to be resolved by Courts. The larger process question remains – can native title compensation entitlements be honoured without years of litigation and huge transaction costs?
What you need to do
Acknowledge that native title compensation is a substantial liability for the States and, potentially, the Commonwealth and be aware that governments are trying to manage their risk by shifting it to land users.
Accept that it will take a few years for things to normalise and settlement of native title compensation claims to become reasonably routine.
If you are worried about your exposure we can help you identify potential compensable acts and outline key principles.
Timber Creek recap: Still the only judicial consideration of principles related to calculation of native title compensation
In March 2019, the High Court handed down its first ever decision relating to native title compensation, including how to put a price on intangible spiritual harm, or "cultural loss". The case – Northern Territory of Australia v Mr A Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples & Anor; Commonwealth of Australia v Mr A Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples & Anor; Mr A Griffiths (deceased) and Lorrain Jones on behalf of the Ngaliwurru and Nungalie Peoples v Northern Territory of Australia & Anor  HCA 7 (Timber Creek) awarded just over $2.5 million to the Ngaliwurru and Nungali Peoples for the effect of land grants and public works on their native title rights. This included an award of $1.3 million for cultural loss (or spiritual attachment to the land).
A summary of the case was provided in our Native Title Year in Review 2018 article Compensation update: First High Court decision on native title compensation in Timber Creek case.
Although the Timber Creek decision was enormously significant in the development of native title compensation law, many issues were not addressed. Last year we predicted that that the Timber Creek decision would likely result in a significant increase in the number of native title compensation claims. In our review of state of play a year on, there have been some surprising developments.
Developments in each State and the Territory post-Timber Creek High Court
In April 2019, the Northern Territory Government released the Northern Territory Land and Sea Action Plan (Action Plan) (available here) which includes as an identified action the development of a Northern Territory Native Title Policy Framework. This is intended to address:
acts, future act processes, and future acts compensation liability; and
the approach to compensation the NT Government will use in light of the Timber Creek decision.
We are monitoring its development.
The Gumatj compensation claim
The most interesting claim to emerge in the post-Timber Creek landscape is the Gumatj Clan's claim over the Gove Peninsula in the Northern Territory.
On 28 November 2019, former Australian of the Year and Indigenous leader Dr Galarrwuy Yunupingu filed a native title compensation claim on behalf of the Gumatj Clan in respect of the acquisition of land and minerals in the Gove Peninsula in the 1960s. The claim is for approximately $700 million.
If it runs, the case will have huge legal significance. The Gumatj are well-resourced and well organised. Galarrwuy Yunupingu is an influential and highly respected leader in Indigenous affairs and a veteran of land rights struggles. The claim revisits the same Commonwealth actions that gave rise to the Bark Petition and the Gove Land Rights Case - Milirrpum v Nabalco. It feels a bit like the beginning of a final reckoning on these issues.
(a) The Gumatj will first need to establish native title
Unlike the Timber Creek case, there is no pre-existing determination of native title over the Gove Peninsula on which to found the compensation claim. The Gove Peninsula was transferred to the Arnhem Land Aboriginal Land Trust under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth), and is a form of freehold tenure which does not affect native title rights and interests. Following Jango v Northern Territory of Australia  FCA 318, the Gumatj will need to first show that they would have held native title at the time the compensable acts took place.
As a result of this hurdle, two claims have been lodged: an application for a determination of native title (Gove Native Title Claim) and an application for compensation (Gove Compensation Claim). The Gove Native Title Claim seeks exclusive possession, inclusive of "the subsoil and subsurface elements, and including rights of ownership and other minerals, and of petroleum and gas". Where exclusive native title has been extinguished by an earlier act, non-exclusive native title is claimed, inclusive of "the right to gather and to use the natural resources of the claim area such as … minerals, petroleum and gas".
The inevitable findings of extinguishment will presumably become the central concern of the Gove Compensation Claim.
(b) Gove Compensation Claim to raise pre-1975 compensation issues
The Compensation Claim will test the question of whether the Commonwealth is liable for compensation for the extinguishment of native title pre-1975, before the commencement of the Racial Discrimination Act 1975 (Cth).
Before Territory self-government, the Mining Ordinance 1939 (NT) vested property in all minerals in the Commonwealth. In the early 1960s, the Commonwealth granted mining leases to Swiss company Nabalco. Mining proceeded despite traditional owners' objections.
The Gove Compensation Claim asserts that acts that extinguished or affected native title rights and interests and for which compensation is claimed were invalid. This is because they were done pursuant to Commonwealth legislation which purported to acquire property without providing just terms as required by s 51(xxxi) of the Commonwealth Constitution and then were retrospectively validated as "past acts" by the Native Title Act. If this is case, it would seem to give rise to an entitlement to compensation under the Native Title Act for the benefit of the native title holders.
(c) Compensation already paid?
The Gumatj clan are part of the Rio Tinto Alcan Gove Traditional Owners Agreement, signed in 2011. This agreement includes provision for the lease of the bauxite mine site. Traditional owners are expected to receive between $15 million to $18 million a year over the next 42 years, depending on the price of bauxite, notwithstanding the gradual closure of the refinery and mining operations (estimated by 2030).
The terms of the Traditional Owners Agreement are not public and we do not know if it includes any form of release for native title compensation.
For all these reasons, there looks to be a fair amount of legal complexity to be addressed in the course of the Gove Native Title and Compensation Claims. We will continue to monitor their progress.
The focus of the Western Australian government in recent years has been resolving determination applications by consent, and where appropriate seeking regional settlement ILUAs to resolve more complex claim landscapes in the State.
Single Noongar Compensation Claim
On 22 November 2019, a group of Noongar people of south-west Western Australia filed a compensation claim for $290 billion (Naomi Smith on behalf of the Single Noongar Claim Group v State of Western Australia) (Single Noongar Compensation Claim). If successful, the figure is estimated by the ABC to comprise almost a quarter of Australia's gross domestic product and more than Western Australia's annual gross state product
The compensation claim seeks compensation for the extinguishment of vast swathes of south-western WA, an area almost the size of Victoria. The claim seeks to apply an approach akin to that used in Timber Creek, apparently claiming $15,000 per hectare for economic loss and emotional damages across the 19.4 million hectare claim area.
The claim has a number of procedural flaws, including about a fundamental question as to the authority of the applicant to bring the claim. Further, native title has not been recognised to any part of the area and the application fails to identify the compensable acts. The State has now filed a summary dismissal application listed for hearing on 16 April 2020.
The Single Noongar Compensation Claim was filed against the background of ongoing litigation regarding the South West Native Title Settlement between the broader Noongar Groups (represented by the South West Land and Sea Council) and the State of Western Australia. It is over a similar area to that covered by the South West Native Title Settlement.
The South West Native Title Settlement will affect an estimated 30,000 Noongar people and is worth approximately $1.3 billion. It includes rights to joint management of some of WA's national parks, a housing program and a trust that receives nearly $50 million annually for 12 years. On 16 January 2020, applications for special leave to appeal to the High Court were lodged in relation to the registration of the South West Native Title Settlement ILUAs by those resisting the registration of the ILUAs. We note that the lead claimant for the Single Noongar Compensation Claim, Naomi Smith, was also an applicant in the McGlade proceedings, challenging the registration of the South West Native Title Settlement ILUAs.
The lodging of the Single Noongar Compensation Claim highlights the limitations of overarching settlement agreements where not all members of native title holding groups are in agreement. However, in light of the significant challenges faced by the claim it is unlikely to entirely derail South West Native Title Settlement in the long term.
Possible Yindjibarndi compensation claim?
The Yindjibarndi's recent win in the Full Federal Court against Fortescue Metals Group (FMG) paves the way, albeit subject to FMG's High Court appeal, for a long-touted Yindjibarndi compensation claim.
In October 2018, the Yindjibarndi Aboriginal Corporation indicated its intention to seek native title compensation from FMG, although no claim has yet been lodged. While it is difficult to speculate on the details of any such claim prior to lodgement, there is certainly scope for a significant quantum of compensation being sought.
The Queensland Government set up a Native Title Compensation Project Management Office within Queensland Treasury to manage future compensation claims and develop a native title compensation settlement framework. However, no formal announcements have been made about the progress of this policy development.
The three native title compensation claims filed in Queensland in 2016 did not progress in any meaningful way while the Timber Creek appeals were being heard. They were discontinued with leave of the Court in late 2019. We understand that the State has entered into ILUA negotiations with the groups to resolve native title compensation issues in their claim areas.
Kooma and Bigambul Compensation Claims
Two new compensation claims were filed in December 2019 on behalf of the Kooma People and Bigambul people seeking compensation from the State of Queensland for economic, cultural and spiritual loss in relation to land on which native title has been determined in southern Queensland (Wayne Morris Wharton and Ors on behalf of the Kooma People v State of Queensland and Leonard Saunders and Ors on behalf of the Bigambul people v State of Queensland).
The Financial Times reports that each group is claiming approximately $25 billion in compensation, although this is not apparent from the applications themselves. Both claims have significant procedural flaws, including that they do not identify the compensable acts in question. The State filed a strike out application in relation to each claim in March 2020 and these will be heard in May 2020.
The Kooma and the Bigambul people are being represented in their compensation claims by the same legal firm acting for the applicant in the Single Noongar Compensation Claim in Western Australia.
New South Wales, Victoria, South Australia and Tasmania
No compensation claims have yet been filed in New South Wales and Victoria partly because of those State's efforts to settle compensation at the time of the claim settlement. There are also far fewer determinations recognising native title in SA, NSW and Victoria and none in Tasmania.
Future of Native Title compensation claims
Observations in relation to the current suite of claims
The current suite of claims appear to have diverse strategic aims. While it is common to each of the current claims that a significantly higher amount of compensation than the Timber Creek case is being sought, the Gove Compensation Claim appears to be deliberately seeking to test new law in respect of pre-1975 past acts and compensation for mining interests. The Kooma and Bigambul Claims most closely follow the framework established by Timber Creek, but their failure to articulate the compensable acts leaves them susceptible to being struck out. The Federal Court has made it clear that it does not think it is appropriate for the States to have to identify the compensable acts against their own interests.
It is also notable that none of the current suite of compensation claims are being promoted by native title representative bodies (or equivalent). Representative bodies seem to favour a strategic selection of cases to build up useful precedent and are also interested, it seems, in exploring alternative approaches with the States. Understandably, though, some native title groups are keen to progress their statutory entitlements and are finding willing help amongst private law firms.
Clearly, further litigation in the native title compensation space is inevitable: both in respect of the need for further development of legal principles, and for native title parties to exercise their right to compensation where they are able to do so.
We also anticipate that the native title compensation space will continue to accommodate the parallel development of alternative settlement regimes (such as the South West Native Title Settlement ILUA) alongside litigated approaches. This parallel development will continue because it is reflective of different resources, approaches and aims of the State and native title parties involved in native title compensation issues, and the reality of the diversity of interests in applicant and respondent parties.
As a result of the development of alternative settlement regimes, we also anticipate a growing overlap with issues of treaty. While to date the overlap between compensation issues and the push for treaty around Australia appears to have been fairly minor, the growing prominence of native title compensation issues and the flexibility of treaty mechanisms will likely lead to a greater convergence. At this stage, however, a comprehensive national response to compensation, with or without treaty, still seems a long way off.
For further information, please contact:
Clare Lawrence, Partner, Ashurst