Shared Knowledge

Native title compensation

Native title compensation has become a popular talking point over the last three years with many of our clients interested in learning more about what to do and consider if lodging a compensation claim. This article provides some guidance and considers two compensation claims that were recently struck out:

  • 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).

Compensation for acts affecting native title – some background

In general terms native title holders can apply to the Federal Court for a determination of compensation for any act that causes an impairment to their native title rights and interests (a compensable act).1 The extent of the compensable act, which may either wholly or partially extinguish the native title rights, will determine the amount of compensation.

The compensable act must have occurred after 31 October 1975, which is the date of the enactment of the Racial Discrimination Act 1975 (RDA). The RDA meant that Aboriginal and Torres Strait Islander Peoples could enjoy the same rights as everyone else, including the right to compensation for loss of land. Certain acts, such as establishing a town and granting freehold lots, will wholly prevent native title holders from entering those areas to exercise their traditional rights, resulting in complete extinguishment of their rights in those areas. Whereas the act of granting a mining lease might only place limited restrictions on the activities that can be conducted by native title holders, suspending those rights temporarily or only partially extinguishing them.

How much?

Until 2019, lawyers and native title holders had little guidance about the amount of compensation payable. The Timber Creek case was the first time the High Court considered this area of law and provided some useful principles for lawyers and native title holders to follow when deciding to make a compensation claim.2

From the Timber Creek case, we know that compensation is payable for an act that causes economic loss on the land affected and for an act that causes non-economic loss [which the High Court termed “cultural loss”].

ECONOMIC LOSS:  The court will determine the market value of the land as if it were freehold, at the date of the extinguishing act. If the determined native title allows the native title holders a right to exclude others, the economic loss would be equivalent to 100% of the land value.  For non-exclusive rights, a discount of 50% would generally be applied.

CULTURAL LOSS: The court determines what the Australian community would consider as fair and reasonable compensation for the effect of the impairment or extinguishment of the native title holders’ spiritual connection to the land. This is based on evidence about the spiritual connections of the claimant group and the effect of the compensable acts to that connection. But individual acts are not viewed in isolation; the High Court used the analogy of holes being poked in a painting. Compensation for cultural loss is an attempt to quantify, in monetary terms, what is inherently spiritual. The consequences of each act are considered as ‘incremental and cumulative’ because ‘the ancestral spirits, the land and everything in it are organic parts of one indissoluble whole’.3

Together these two amounts form the compensation to be awarded to the native title holders. In some circumstances, simple interest will also be added from the date of the act until the date of judgment.

The Timber Creek case awarded over $2.5 million for the effect of various extinguishing acts over 127 hectares of land, upon which the town of Timber Creek had been developed. This amount included $320,250 for economic loss and $1.3 million for cultural loss, plus interest. On a crude, per hectare calculation this equates to about $20,000 per hectare in compensation.  This was the amount used to justify the compensation claims in Bigambul and Kooma, which was ultimately found to be flawed.

Bigambul and Kooma compensation claims

The Kooma People were recognised as native title holders in 2014.4 The Bigambul People were recognised in two (2) separate determinations in 2016 and 2017.5

Drawing from the Timber Creek case, the lawyers who brought both compensation claims for the Kooma and Bigambul People, were estimating very large amounts of compensation. The land area for the claims were 3.1 million hectares for Kooma, and 2 million hectares for Bigambul. The resulting monetary claims were $62 billion in compensation for Kooma; and $40 billion in compensation for the Bigambul.

For various reasons, these enormous dollar figures were not given in compensation.  The claims were struck out. In fact the claimants received no compensation at all. And the lawyers faced costs being awarded against them personally.

So, what went wrong?

Procedural Issues

As was noted earlier, compensation is paid based on the acts that affect native title rights and interests, which either wholly or partially extinguish those rights. So to accurately work out how much compensation is payable, it is necessary to identify the act that was done and the specific parcel of land which was affected.

In an area of land that is 3.1 million hectares (Kooma), or 2 million hectares (Bigambul) in size, identifying every act on every parcel of land is no small task. Generally, to identify an act and when it occurred, an “Historical Title” search must be completed on every parcel of land. An historical title search costs between $30 and $50 per search for one parcel depending on how far back the search goes. In the Bigambul and Kooma claims, there were thousands of parcels of land, each requiring their own historical title searches. The Bigambul claim alone could have cost several hundred thousand dollars in title searches.

To reduce the costs of the claims, the lawyers decided on a novel approach. They attempted to rely on the civil litigation procedure called ‘discovery’. Discovery requires one party to hand over relevant documents to the party on the other side of the case. The lawyers for the Kooma and Bigmabul claims tried to have the State of Queensland hand over the historical title searches for free.6

This had never been attempted in a compensation case before. Unfortunately, native title is not like other civil litigation. So when the claims were lodged, they were judged incomplete and defective, as they did not specifically identify the extinguishing acts as required. The claims could not be amended to include the affected areas later, as the law prohibits any addition of land in compensation applications. The way the claims were drafted meant the applications showed no compensable acts on no areas of land, resulting in no compensation.

Lessons learned

Important considerations to be made before a compensation claim is lodged.

Ensure the claim is correct before it is filed. This is necessary for the compensation claim to progress. If a deficient claim is filed, a court will likely find it unreasonable and unprofessional, potentially exposing claimants and their lawyers to costs orders against them.7

If the application is completed correctly, the amount of compensation payable is potentially significant.

An application for compensation takes a lot of time and financial resources. It is also likely to be emotionally, mentally, and spiritually taxing, and potentially retraumatising for any witnesses who have to give evidence of cultural loss.

 

This information provides advice of a general nature only and should not be relied upon as legal advice. If you have any questions, please do not hesitate to contact:

Michael Neal, Matt Patterson, Ryan Ellis, David Knobel & James Ellis-Smith
P 07 4041 7622 / 07 5479 0155   E reception@paelaw.com

 

REFERENCES

1  Applications are made under section 61 of the Native Title Act 1993 and determined pursuant to section 51(1).

2    Northern Territory v Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples & Anor [2019] HCA 7; 93 ALJR 327; 364 ALR 208; 235 LGERA 242

3    Northern Territory v Mr A. Griffiths @ [198]

4    Weatherall on behalf of the Kooma People #4 Part A v State of Queensland [2014] FCA 662

5    Doctor on behalf of the Bigambul People v State of Queensland [2016] FCA 1447; Doctor on behalf of the Bigambul People v State of Queensland [2017] FCA 716

6    Federal Court Rules 2011, r20.13

7    Saunders on behalf of the Bigambul People v State of Queensland (No 3) [2021] FCA 444.