BY WILLIAM ISDALE

Late last year, Dr Galarrwuy Yunupingu made news when he announced his intention to make a compensation claim in relation to Commonwealth grants of mining interests in the Gove Peninsula in the 1960s. The claim was lodged on 28 November 2019 in the Federal Court registry on behalf of the Gumatj People  – matter NTD43/2019.

The proceeding may come as a surprise to some practitioners, because it has been widely assumed that acts affecting native title prior to 31 October 1975 (the commencement date of the Racial Discrimination Act 1975 (Cth) (RDA)) are not compensable. The Claimant Application filed on behalf of Dr Yunupingu seeks to challenge that assumption. Although the precise contours of Dr Yunupingu’s claim have not yet been outlined, below I offer an account of how such a claim might be formulated, and explore its prospects.

The Constitutional guarantee of “just terms”

Dr Yunupingu’s case is likely to require, for the first time, judicial determination of whether native title rights can engage the Commonwealth Constitution’s guarantee of “just terms” (in s 51(xxxi)). In a previous post about the High Court’s 2019 Timber Creek decision, Aaron Moss and I suggested that this issue would be one of the key “battlegrounds” in future litigation about native title compensation. If the guarantee arises, the implications are significant, as this post will show.

Section 51(xxxi) of the Constitution provides a head of power for Commonwealth legislation to effect acquisitions of property, subject to a requirement to provide “just terms”. It has been the subject of a rich body of jurisprudence that has developed over the past 119 years of constitutional litigation. Despite that, the application (or not) of the guarantee to native title has never been authoritatively resolved. And, as will be seen, the musings of individual justices of the High Court have been at odds on the issue.

In essence there are three requirements for the prima facie enlivenment of the guarantee:

  1. there is an acquisition
  2. what is acquired is property
  3. this is brought about by Commonwealth legislation (in respect of which the Parliament has power to make laws).

Once those hurdles are cleared, it may be that an acquisition will nonetheless not enliven the guarantee due to certain judicially developed qualifications. Most relevantly, interests which are inherently defeasible will not enliven the guarantee.

So, how does native title fit within this rubric?

Requirement 1: Acquisition

Counterintuitively, the guarantee is not premised on a loss having occurred, but instead on some other party acquiring an interest of a proprietary nature (see JT International (2012)). Notably, because native title is inalienable, where the Crown undertakes a compulsory acquisition of land over which native title exists, it does not acquire the native title rights per se, but instead effects a clearing of those rights from the land.

This does not mean that no acquisition has taken place. The High Court has affirmed that there is no requirement of a precise correspondence between what is lost and what is gained. For example, in Newcrest Mining (1997) the Court considered that the guarantee arose where mining interests had been legislatively nullified by the Commonwealth. In that case the Commonwealth acquired the land freed of Newcrest’s ability to mine – a sufficient proprietary benefit to constitute an “acquisition”.

By analogy, the same result would be arrived at where legislation results in a loss of native title (whether by extinguishment in whole, or in respect of particular incidents of native title only). Where that occurs, the Crown, or some third party, will receive a corresponding proprietary benefit of the land cleared of the burden of native title.

Requirement 2: Property

Native title has never authoritatively been held to be a proprietary right or interest. Instead, judges have usually emphasised the sui generis nature of the title, and the “inappropriateness of forcing … native title to conform to traditional common law concepts” (Mabo (No 2) (1992), 89 per Deane and Gaudron JJ). For example, in Yarmirr (2001) a plurality of the High Court said that (at [11]-[14] per Gleeson CJ, Gaudron, Gummow and Hayne JJ):

Neither the use of the word “title” nor the fact that the rights and interests include some rights and interests in relation to land should, however, be seen as necessarily requiring identification of the rights and interests as what the common law traditionally recognised as items of “real property”.

On a conventional analysis of what constitutes property, native title may encounter some difficulty. For example, some indicia of property at common law include that the rights are capable of being assigned (ACTV v Commonwealth (1992), 166 per Brennan J), and include the “right to exclude others” (Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141, 272 per Blackburn J). Native title is inalienable, and some native titles are non-exclusive (meaning they do not include a complete right to exclude others from the land). Considerations of this kind led Blackburn J to conclude in Milirrpum that (at 273):

There is so little resemblance between property, as our law … understands that term, and the claims of the plaintiffs for their clans, that I must hold that these claims are not in the nature of proprietary interests.

Despite those difficulties, it is open for the High Court to conclude that native title does constitute “property” for the purpose of the “just terms” guarantee. This is for three reasons:

  • First, native title will often have enough of the conventional indicia that its characterisation as “property” (at least some of the time, such as where the rights are exclusive) is plainly arguable. For example, it is definable, and has a degree of permanence or stability (other indicia identified in National Provincial Bank v Ainsworth (1965) 1247 per Wilberforce LJ; see also Commonwealth v WMC Resources (1998) 99 per Kirby J).
  • Secondly, modern jurisprudence has retreated from the conventional criteria at common law to some extent. The creation of all manner of statutory rights and interests, in particular, has necessitated that retreat. The new approach simply holds that “property” is “a degree of power that is recognised in law as power permissibly exercised … Usually it is treated as a ‘bundle of rights’” (Yanner v Eaton (1999), [17] per Gleeson CJ, Gaudron, Kirby and Hayne JJ). Native title, of all kinds, has no trouble meeting that description (see, e.g. Ward (2002), [95], where the characterisation of native title as a “bundle of rights” was said to be “useful” by a plurality of the Court).
  • Thirdly, the High Court has taken a relaxed approach to the meaning of “property” for the purposes of the “just terms” guarantee. It is well established that constitutional guarantees invite a “liberal construction” (Clunies-Ross (1984), 201 per Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ). Thus, in Dalziel (1944), Starke J said that the guarantee applied to “every species of valuable right and interest” (at 290); and in the Bank Nationalisation Case , Dixon J considered that the guarantee was “not to be confined pedantically to the taking of title … to some specific estate or interest in land recognized at law or in equity” – instead, it “extends to innominate and anomalous interests” (at 349, emphasis added).

Requirement 3: Commonwealth legislation

The “just terms” guarantee only applies in respect of acquisitions of property effected by Commonwealth legislation (this includes acquisitions by the territories – see Wurridjal v Commonwealth (2009)). Historically, much Indigenous dispossession will have been brought about by state governments, who were free to legislate without any constitutional requirement to provide “just terms”.

However, since the commencement of the Native Title Act 1993 (Cth) (NTA), states derive their power to affect native title through that legislation. Without sanction under the NTA, all acts are sterilised in respect of any extinguishing effect they may have on native title (see s 11 NTA). Because the NTA is a Commonwealth law that allows for acquisitions of native title, it is subject to the “just terms” requirement – including when states now utilise its provisions (see Magennis (1949), showing how there may be a “cross-jurisdictional transmission” of the guarantee in this way).

Qualification: Inherently defeasible

The analysis so far sets out the prima facie case for the “just terms” guarantee applying to some losses of native title brought about by Commonwealth/territory legislation (since the commencement of the Commonwealth Constitution in 1901), or by states (since the commencement of the NTA). Such a conclusion was supported by Deane and Gaudron JJ in Mabo (No 2), who considered (in obiter) that (at 111):

Our conclusion that rights under common law native title are true legal rights which are recognized and protected by the law would, we think, have the consequence that any legislative extinguishment of those rights would constitute an expropriation of property, to the benefit of the underlying estate, for the purposes of s 51(xxxi).

However, since Mabo (No 2) the waters have been muddied by contrary obiter suggesting that native title may fall within an exception to the “just terms” guarantee – an exception for rights that are inherently defeasible (i.e. not exhibiting an enduring or robust character). This exception originally developed in the context of statutory rights: for example, in Peverill (1994) it was held that legislative amendments retrospectively reducing the entitlements of doctors to payments from Medicare did not attract the guarantee. Rights of that kind were “not based on antecedent proprietary rights recognized by the general law”, and “[r]ights of that kind … are inherently susceptible of variation” (per Mason CJ, Deane and Gaudron JJ at 226).

A suggestion that this doctrine might also apply to native title was first raised by Gummow J in Newcrest Mining (1997). His Honour said (at 613):

The characteristics of native title as recognised at common law include an inherent susceptibility to extinguishment or defeasance by the grant of freehold or of some lesser estate which is inconsistent with native title rights; this is so whether the grant be supported by the prerogative or by legislation.

The suggestion garnered vague support from Toohey and Kirby JJ in the same decision, but neither of them explained why (at 1368 and 1420 respectively). In contrast, McHugh J suggested that it was “at least arguable” that grants which had “extinguished native title rights and conferred a commensurate and identifiable and measurable benefit” had resulted in an “acquisition of the property of the native title owners” (at 1377). These divergent views will provide rich fodder for counsel in Dr Yunupingu’s claim.

A superb article by Associate Professor Sean Brennan argues that Gummow J’s suggestion doesn’t hold water. Brennan emphasises that the inherent defeasibility doctrine has only ever been applied to statutory rights – and in stark contrast to those rights, native title has antecedent recognition by the general law (i.e. it does not depend on the NTA). Further, native title – having survived since the assertion of British sovereignty – far from being inherently defeasible, displays ample durability.

In addition, in my view there is an even more fundamental issue: the NTA changed the basis upon which native title was recognised and protected by Australian law. It statutorily bolstered and solidified those rights, which had otherwise been vulnerable to defeasance. As a plurality of the High Court said in the 1995 Native Title Act case (per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ, 453, emphasis added):

The protection given to native title by [s 11 NTA] removes its vulnerability to defeasance at common law by providing a prima facie sterilisation of all acts which would otherwise defeat native title.

Dr Yunupingu’s claim under the Native Title Act

The Constitution does not afford private law causes of action in respect of its guarantees. In other words, the failure to provide “just terms” does not mean that a party may sue for it. Instead, as Professor Robert Baker has described, the result is that “the legislation falls to the ground and any action under it is without lawful foundation” (page 220).

One avenue for redress may be that government acts taken in such circumstances would be actionable as torts (for example, as a nuisance or trespass to property). However, in the case of Dr Yunupingu’s claim, the relevant government acts (comprising the grant of mining interests) took place in the 1960s. Any tortious causes of action that may have arisen would almost certainly now be time-barred (by Limitations of Actions legislation in force at the relevant times).

How then may Dr Yunupingu seek to claim compensation?

The simple and surprising means by which constitutional invalidity is converted into a statutory entitlement to compensation is via the NTA’s validation provisions. The NTA, in seeking to give certainty to governments and those with interests in land, provided that historical acts that were invalid due to the existence of native title could be retrospectively validated on the condition that compensation was provided under the Act (ss 14-20 NTA; complementary state and territory laws validating previously invalid acts for those jurisdictions). This was the means by which the claim group in Timber Creek was compensated.

There has been an assumption that the NTA only validated acts that had been made invalid by the RDA, from 31 October 1975. For example, Father Frank Brennan has written that (page 14):

Native title extinguished before 1975 was lost forever and those native title holders who had lost their rights had no legal entitlement to compensation.

The contrary view is that the validation provisions of the NTA do not limit themselves to invalidity arising only on account of the RDA. A failure to provide “just terms” where constitutionally required is another source of invalidity which the NTA retrospectively cures and then provides a compensation entitlement in respect of. As David Jackson QC and Stephen Lloyd SC foreshadowed in a 1998 paper (page 98):

it is appropriate to say a word or two about the effect of invalidity by reason of s 51(xxxi) [of the Constitution] on grants that have been made on native title land. To remain silent might imply that the grants would simply be invalid. As a result of the [NTA] and, in particular, sections 14-20 thereof, acts that were invalid because of the effect they purported to have on native title have been validated. This would include grants of freehold in the Northern Territory if such grants were found to infringe s 51(xxxi) of the Constitution.

Native title holders who lose rights as a result of this kind of validation are entitled to compensation [citing ss 17, 18 and 20 NTA].

This might seem surprising, because it appears to suggest that the Parliament may circumvent the paramount law of the Constitution. However, because the NTA ensures that an award of compensation on “just terms” is provided, the Constitution’s requirement for “just terms” is not circumvented at all; instead, it is effectuated (see s 51(1) NTA regarding the assessment of compensation, and s 53 which provides a top-up award where required to ensure constitutional validity).

Further, there is nothing unorthodox about such retrospective validation. A paper by Dr Will Bateman shows how even though it is a “little known feature of Australian constitutional law”, there are numerous cases in which “the High Court had upheld the constitutional validity of legislation that reverses the effect of an earlier declaration of constitutional invalidity”. (Note that, because such legislation is void ab initio, it is not strictly necessary for any declaration of invalidity to be made prior to validation.)

Conclusion

Dr Yunupingu’s claim is likely to contend that Commonwealth and territory legislation that has resulted in a loss of native title rights (constituting an “acquisition” of “property”) since Federation in 1901 will have been invalid if it did not provide “just terms” to native title holders. As to the meaning of “just terms”, it implies “full and adequate compensation” (see Johnston Fear (1943) per Latham CJ, 322). No doubt there are many cases where no compensation has been provided at all.

Where such constitutional invalidity has arisen, the NTA, upon its commencement in 1993, validated those acts done without lawful foundation and afforded a statutory entitlement to compensation in lieu. Unlike an entitlement to sue at the general law (e.g. for a tort), the NTA’s entitlement is not subject to any time bar. Accordingly, there may be large historical debts owed by the Commonwealth and the territories to native title holders who have been historically dispossessed.

If Dr Yunupingu’s claim proceeds in the way I have suggested and succeeds, it will have profound consequences for the Commonwealth and territory governments. Obviously enough, it will also have profound consequences for many Indigenous people who have been historically dispossessed of their lands without compensation. Nonetheless, a result of this kind would not require judicial adventurism or upheaval in the law, just the steady application of existing doctrine.

William Isdale is a lawyer with MinterEllison in Brisbane and a PhD student at the University of Queensland. The views expressed in this post draw on research the author has done for his forthcoming PhD thesis on native title compensation. They are his own views alone and not those of his employer.

Suggested citation: William Isdale, Dr Yunupingu’s claim for native title compensation – the Constitutional path not yet trodden, on AUSPUBLAW (18 March 2020) <https://auspublaw.org/2020/03/dr-yunupingu’s-claim-for-native-title-compensation>