15 Apr 2021

Billions to bust: deficiencies in Native Title compensation applications

By Mark Geritz, Tosin Aro, Georgia Davis and Matthew Hales

The Federal Court of Australia recently struck out two applications seeking tens of billions of dollars in Native Title compensation; and, in doing so, offered a warning about how deficiencies in the application itself, in particular a failure to identify compensable acts, can be fatal to claims for Native Title compensation.

In the Timber Creek compensation case in 2019 (Northern Territory v Griffiths (2019) 364 ALR 208), the High Court handed down Australia’s most authoritative statement to date on the criteria for assessing claims for Native Title compensation – a right that has always been provided for under the Native Title Act 1993 (NTA) but had not, before Justice Mansfield’s 2016 first instance decision in Timber Creek, been the subject of a determination by the Courts.

While there haven’t been any further Native Title compensation determinations since then, two recent Federal Court decisions help to clarify the roles of the applicant and the State in Native Title compensation applications and emphasise the need to follow the requirements under the NTA.

Recently, Justice Rangiah of the Federal Court handed down two decisions to strike out Native Title compensation claims due to deficiencies in their respective applications:

  • Saunders on behalf of the Bigambul People v State of Queensland (No 2) [2021] FCA 190 (Bigambul); and
  • Wharton on behalf of the Kooma People v State of Queensland (No 2) [2021] FCA 191 (Kooma).

While neither decision provides further guidance on the criteria for assessing Native Title compensation posited in Timber Creek, the decisions stress that the onus for establishing a Native Title compensation claim is on the applicant and it is not sufficient for an applicant to put together a vague and uncertain application with an intention to amend it through the proceedings so as to ultimately meet the requirements for a proper compensation claim.

We would also make mention of Smith on behalf of the Single Noongar Claim Group v State of Western Australia [2021] FCA 252, in which Justice McKerracher recently granted the applicant leave to discontinue the proceeding. Leave to discontinue had been sought in view of the imminent commencement of the South West Native Title Settlement, which included a final settlement of all Native Title compensation applications between the Noongar people of the South West region of Western Australia and the State. However, even without the Settlement, the Smith application may have been dismissed in response to the State’s summary dismissal application given that it suffered from similar deficiencies to the Bigambul and Kooma applications.

These decisions are of interest not only for government as, while the NTA provides that compensation for acts (such as grants of mining leases) that have extinguished or otherwise impaired Native Title is payable by the Commonwealth, State or Territory government responsible for the acts, some jurisdictions (such as Western Australia and New South Wales) have enacted legislation that provides, in particular cases, for the government’s liability for Native Title compensation to be “passed through” to the project proponent or other private entity that was the beneficiary of the act in question.

That being so, project proponents (particularly those in current “pass through” jurisdictions – but noting that other States and Territories could also enact “pass through” legislation) should ensure that they are at least generally aware of the principles according to which Native Title compensation is required to be assessed.

What happened?

The applications for determination of compensation were made under sections 61(1) and 50(2) of the NTA, which require identification of the boundaries of the "area covered by the application" and a map identifying same. Both applications proceeded on the basis that the compensation claim area comprised all of the land and waters contained within the boundaries of their respective Native Title determinations, other than areas where exclusive Native Title rights and interests had been determined.

Applications are also required to detail the “compensable acts” which are to have extinguished or otherwise affected Native Title rights and interests. Crucially, neither of the applications in Bigambul or Kooma specified any compensable acts – they were instead submitted with a statement to the effect that the relevant part of the application would be updated at a later date once more expert and lay evidence had been provided.

In these circumstances, the State applied for the strike out/ summary dismissal of each application on the basis that each failed to comply with the NTA – that is: the applications failed to identify the acts said to found an entitlement to compensation; and, that being so, they necessarily also failed to identify the “area covered by the application”, being the land or waters in respect of which the compensable acts were done.

In response, the applicants in both matters sought leave to amend their applications to correct these deficiencies. The State opposed the applications to amend on the grounds that giving such leave would contravene section 64(1) of the NTA, which notes that an amended application must not include any area of land or waters not covered by the original application. That is, as the original applications had, in reality, not identified any areas covered by the applications, amending the applications to introduce such areas would fall foul of section 64(1).

In considering these issues, Justice Rangiah held that:

  • the original applications were liable to be struck out because the deficiency of not containing the prescribed information led to non-compliance with section 61(5)(c) of the NTA; and
  • as argued by the State, any amendment would be impossible as it would inherently involve the inclusion of land or waters that had not been covered by the original application.

What do I need to know?

  • Applications for a determination of compensation must include details of all the acts in respect of which compensation is claimed. This work should be conducted prior to lodgement of the claim and applicants should not anticipate being able to supplement their claims after filing.
  • The phrase "area covered by the application" refers to the areas in relation to which the applicant alleges that Native Title rights and interests were or are affected by compensable acts. It is not sufficient to state that the area covered by a compensation application is that which was subject to a successful determination of Native Title. Such a statement will in fact not identify any area as being covered by the application.
  • It is important that the specific details of a Native Title compensation claim are settled early so that the State, and other third parties (such as project proponents) who may be affected by the application, are afforded the opportunity to be heard and actively participate in the determination of compensation.
  • Relatedly, project proponents and developers should consider joining as respondent parties to any compensation applications that cover their areas of interest, particularly those made in “pass through” jurisdictions, to allow them to monitor developments arising in relation to the applications, and also to participate fully in any negotiations that may be had for a determination by consent of the compensation payable for the extinguishment or other impairment of Native Title.

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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.