High Court rules on Commonwealth liability for native title acquisitions in the NT

Commonwealth exposed to compensation claims for pre-1975 native title extinguishments 3 min read

The High Court has recently ruled, in Commonwealth of Australia v Yunupingu (on behalf of the Gumatj Clan or Estate Group) & Ors,¹ that any actions taken by the Commonwealth before 1975 that extinguished or impaired native title, without providing just compensation, are invalid acquisitions of property under section 51 (xxxi) of the Constitution.

As a result, these actions can be considered 'compensable acts' under the Native Title Act 1993 (Cth) (the Act), exposing the Commonwealth to potentially significant compensation claims by native title holders in the Northern Territory, and potentially other parts of Australia. We explain the implications, including the effect on private entities.

The key questions and decisions

There were two key issues for the High Court to decide:

1. whether the Commonwealth's power to make laws under the territories power in s122 of the Constitution empowered it to enact laws allowing the acquisition of property but without the requirement to provide 'just terms' under s51(xxxi)—the court ruled it did not, and that the 'just terms' requirement must apply to any such acquisition; and
2. whether the extinguishment or impairment of native title by the Commonwealth constitutes an 'acquisition of property' under s51(xxxi) —the court said it does.

Background

The Gumatj Clan initiated two claims in the Federal Court—one seeking a determination that they hold native title rights to an area of the Gove Peninsula in the Northern Territory; and a second one for compensation against the Commonwealth and the Northern Territory, challenging land acquisitions on the Gove Peninsula between the 1930s and 1960s.

The claim focused on a series of grants and appropriations made under ordinances issued by the Governor-General under the Northern Territory (Administration) Act 1910 (Cth), including relating to the vesting of minerals in the Crown, and the granting of special mineral leases under the ordinances and the Mining (Gove Peninsula Nabalco Agreement) Ordinance 1968 (NT).

The Gumatj Clan succeeded in their arguments that:

• if these acts extinguished native title, they were constitutionally invalid due to the absence of just terms compensation, as required by s51(xxxi); and
• if that was so, the acts could be categorised as 'compensable acts' under the Act, triggering a right to compensation.

What is the significance of the case?

It has always been accepted that if native title rights were extinguished or impaired after 31 October 1975, when the Racial Discrimination Act commenced, native title holders are entitled to compensation from the government responsible.

Now, the High Court's decision has opened the door for compensation claims against the Commonwealth under the Act for its historic actions that extinguished or impaired native title before 1975, when that was not done on 'just terms'—which will likely have almost always been the case, given native title was not recognised until 1992, in the Mabo case. It will be particularly relevant to what acts the Commonwealth has taken in the territories, and the Northern Territory in particular.

What's next?

This is primarily an issue for the Commonwealth and its liability exposure, and will have less relevance to the states. State government actions are primarily responsible for pre-1975 extinguishment of native title but, unlike the Commonwealth Constitution, there is no 'just terms' obligation in state constitutions. There could, though, be some limited application to states where the Commonwealth has taken action regarding land acquisitions in a particular one.

The decision does not have any direct impact on private entities currently using land and waters, or planning future projects. It does not invalidate their approvals or activities, and does not itself expose them to compensation claims. However, there would be an impact on private entities if they are exposed to an arrangement, through legislation or contract, where the Commonwealth has the right to pass on its native title liability.