A recent High Court decision raises significant issues for many local governments throughout Western Australia regarding native title issues in their district.
Northern Territory v Griffiths is known in native title circles as the ‘Timber Creek decision’ as that is the name of the township in the Northern Territory which is the subject of the case.[i] In this case, the High Court granted financial compensation for the extinguishment of native title rights for the first time in Australian history.
In what appears to be the most significant native title decision since the landmark Mabo case,[ii] the Timber Creek decision will have major repercussions throughout Australia. For local governments, it is not so much a question of if, but when a compensation claim will be lodged over any land it may have acquired.
This article highlights the key points from the Timber Creek case, explains the compensatory implications and provides suggestions to all local governments in anticipation of future extinguishment claims.
The Ngaliwurru and Nungali peoples sought financial compensation for the extinguishment of their native title rights which had previously been established to exist over 127 hectares of land around Timber Creek.
The losses in issue occurred during infrastructural developments undertaken by the Northern Territory government in the 1980s-90s.
The case, which was heard before the High Court on appeal from the Full Federal Court, dealt with three key issues:
Ultimately, $2.5 million was awarded. The economic loss was calculated as being $320,250. This was done by assigning the objective value of the non-exclusive rights as 50% of the value of the freehold land. Interest was found to be payable and was granted in the sum of $910,100. The amount awarded for cultural loss was determined to be the most subjective, and fixed at $1.3 million.
The High Court endorsed the following approach in determining compensation amounts for claims of native title extinguishment:
Determinations of economic loss must consider the nature and content of the rights at the relevant date. Where native title rights are exclusive, their objective economic value will generally equate to the objective economic value of an unencumbered freehold estate in that land. Where native title rights are non-exclusive, it is expected that their objective economic value will be significantly less than the freehold value.
Interest is applicable to compensation for economic loss. It will ordinarily be calculated on a simple interest basis at a rate sufficient to compensate the claimants for the deprivation of land usage between the date at which compensation was assessed as being payable and the date of judgment.
The quantum of compensation for cultural loss will be the most variable factor. Cultural loss, according to the High Court, is about the diminution of the connection to country and the spiritual damage caused by the compensable acts.[iii] The High Court states it should be measured against what society would rightly regard an appropriate award for the loss to be,[iv] with regard to the significance of the affected land to the claimants, the degree of physical effect on the land and the duration of the effect of the loss.
Indigenous claimant groups
The Timber Creek decision confirms that a substantial financial amount may be awarded to claimant groups for past interferences with their native title rights. It is significant because it recognises the cultural losses resulting from the acquisition and use of land by non-Indigenous bodies.
Over the years, a significant number of Indigenous claimant groups have had their native title rights established. Many have resulted in consent determinations and Indigenous Land Use Agreements.
Complacency may therefore have set in with regard to native title matters. However, the Timber Creek decision is likely to motivate such native title holders to now seek compensation for infringement of these rights.
Currently, a local government will only be held liable for compensation if it has compulsorily acquired native title land. In all other instances, a local government’s liability will be attributed and transferred to the State or Commonwealth under s 239 of the Native Title Act 1993 (Cth).[v]
Given the vast number of potential claims and the generous compensation precedent set by the Timber Creek decision, it would not be unreasonable to expect that the State Government will seek to recover some costs from local governments where they can be said to have done some act that caused the loss to the native title holders.
In that scenario, one could anticipate legislation being enacted or else claims from the State on a case-by-case basis.
The Timber Creek decision is also important as it creates a framework for ensuring that compensation granted to Indigenous groups is not arbitrarily determined but is arithmetically calculated (to a certain degree), accountable and based on High Court precedent. This will help far-sighted local governments begin to estimate their potential financial exposure to native title compensation claims.
For more information please contact: Andrew Read
Disclaimer: This article contains references to and general summaries of the relevant law and does not constitute legal advice. The law may change and circumstances may differ from reader to reader. Therefore, you should seek legal advice for your specific circumstances. The law referred to in this publication is understood by Civic Legal as of publication date.
[i] (2019) 93 ALJR 327.
[ii] Mabo v Queensland (No.2) (1992) 175 CLR 1.
[v] Section 239 of the Native Title Act 1993 (Cth) states that any act attributable to the Commonwealth, State or Territory will be payable by the Commonwealth, State or Territory. Attributable acts include any act done by any person under a law of the Commonwealth, State or Territory. As local government powers are created by State law, any action validly done by a local government would constitute an attributable act of the State.
[vi] When the Native Title Act 1993 (Cth) was commenced.
[vii] When the Racial Discrimination Act 1975 (Cth) was commenced.
[viii] Note that s 125A of the Mining Act 1978 (WA) transfers liability to the holders of mining tenements where appropriate.