Wider scope for native title compensation on the horizon?

Mark Geritz, Tosin Aro, Georgia Davis and Sophie-Rose Greer
26 Oct 2022
Time to read: 1.5 minutes

If the Full Court finds in favour of Dr Yunupingu, the Commonwealth Government, States and Territories may find that they are liable for enormous historical debts to native title holders for “acts” on their traditional country pre-dating the Racial Discrimination Act.

Is native title compensation payable for acts that occurred prior to the commencement of the Racial Discrimination Act 1975 (Cth) (RDA)? This important question is being heard in Darwin this week, by the Full Court of the Federal Court, as part of the Galarrwuy Yunupingu compensation matter (NTD43/2019) (Gove Compensation Claim).

This proceeding is potentially very significant as it could alter the current “state of play” under the Native Title Act 1993 (Cth) (NTA).

Native title compensation

Under the NTA, native title holders may apply to the Federal Court for a determination of compensation for any loss, diminution, impairment or other effect of an act on their native title rights and interests. Such compensation claims generally follow a successful native title determination application once the native title holders, who are entitled to such compensation, have been determined.

The NTA, and its included compensation provisions, were enacted in response to the High Court’s decision in Mabo v Queensland (No 2) (1992) 175 CLR 1. The High Court held in Mabo that certain acts, such as grants of freehold and leasehold tenures, mining and other resources tenements, and other such “acts”, were potentially invalid because they had been done, in breach of the RDA, without providing relevant native title parties with corresponding rights to those that would have been accorded to the holders of freehold title. Such acts, where they occurred between 31 October 1975 and 1 January 1994, are defined in the NTA as “past acts”.

The NTA provided for the validation of these "past acts". In return, native title holders would be entitled to "just terms" compensation for the impact on their native title rights and interests of these (and any other) acts that have affected native title.

Accordingly, to date, the law has been understood as providing only for acts that extinguished or otherwise impaired native title rights after the commencement date of the RDA to be compensable. This was the approach taken at first instance, and endorsed by the Full Court and the High Court, in Timber Creek. Compensation was not claimed, and was understood not to be available, for pre-RDA acts on the basis that, while such acts may have extinguished or otherwise impacted native title, they were not invalid by reason of inconsistency with the RDA.

Gove Compensation Claim

Native title compensation law may be about to change.

On 28 November 2019, Dr Galarrwuy Yunupingu made an application in the Federal Court of Australia on behalf of Gumatj persons who are members of the Gumatj Clan or Estate Group seeking compensation from the Commonwealth and Northern Territory for the acquisition of property (being native title rights and interests) on the Gove Peninsula.

Unusually, this compensation application was made before the applicants had been determined to hold native title over the area of the application. Where this occurs, the Federal Court cannot determine the compensation application without also making a determination of native title in relation to the area.

The matters covered by the claim include whether the enactment of mining legislation in the Northern Territory, which reserved to the Crown the rights to all minerals, effected an acquisition of property otherwise than on “just terms” (in breach of section 51(xxxi) of the Constitution).

Importantly for the native title compensation landscape, the acts for which compensation is being sought occurred before 31 October 1975 – in other words, before the enactment of the RDA, which is currently assumed to be the point from which native title compensation can be claimed.

It is understood that Dr Galarrwuy Yunupingu is seeking up to $700m in compensation.

Key takeaway

To bring matters to a head, the Commonwealth has filed a type of formal objection to the whole application (called a “demurrer”), and the Full Court has made orders for the demurrer to be heard separately to and in advance of any other matters in the proceeding. If the Full Court finds in favour of the Commonwealth, the dismissal of the claim would likely follow, and the status quo would be maintained.

If, on the other hand, the Full Court finds in favour of Dr Yunupingu, the Commonwealth Government, States and Territories, may find that they are liable for enormous historical debts to native title holders for “acts” on their traditional country pre-dating the RDA. The range of acts in respect of which native title holders would be entitled to apply for compensation would also be significantly broadened, and a question arises as to the funding for such compensation noting that in some jurisdictions governments have already sought to pass through compensation liability for various acts affecting native title to project proponents.

We will keep you updated as the matter progresses.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.