Native title valued

On 24 August 2016, Justice Mansfield handed down his decision in the first case involving judicial consideration of the calculation of native title compensation: see Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900 (‘Timber Creek’).

Background

Timber Creek is a small township proclaimed on 10 May 1975 on a site at the junction of Timber Creek and the Victoria River in the Northern Territory.

Land surrounding the township was progressively granted under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (Land Rights Act) to the Ngaliwurru and Nungali Peoples.

Land within the township was not eligible to be granted under the Land Rights Act, but was claimable under the Native Title Act 1993 (Cth) (NTA) and in 2006 the Federal Court determined that native title existed in certain land within the township.

In 2011, the Ngaliwurru and Nungali Peoples filed their claim for compensation for the effect on their native title of grants of land or the construction of public works within the township prior to 23 December 1996. The compensation claim was subsequently amended in 2015 to include a further claim for damages in respect of three grants of freehold which had occurred invalidly in 1998.

The Northern Territory was the only respondent to the proceeding, whilst the Commonwealth, the State of South Australia and the State of Queensland intervened to varying degrees. Queensland was represented by the Solicitor-General and Senior Deputy Crown Solicitor, Tony Keyes.

The court’s reasoning

The parties had agreed a list of compensable acts, with the dispute centering around how compensation should be calculated.

The first issue for consideration was one of timing. The Applicant submitted that the relevant calculation should be made at the time the compensable act was validated by the NTA and the Validation (Native Title) Act 1994 (NT). The Territory and the interveners submitted that compensation should be evaluated at the time the compensable act was done.  Mansfield J accepted the Territory and interveners’ submission, preferring a construction of the NTA that the entitlement to compensation arises at the time the extinguishment occurred.

The second issue concerned the method of valuation. Ultimately, Mansfield J chose not to adopt the submissions of any party, instead intuitively finding the appropriate value for the loss of non-exclusive native title rights and interests or the indefinite application of the non-extinguishment principle to those rights and interests, was equivalent to 80 per cent of the freehold market value at the time the act took place.

The same intuitive value was held to apply to the invalid future acts considered under the general law as for the past and intermediate period acts considered under the NTA. In the circumstances of Timber Creek, the award of compensation for the past and intermediate period acts amounted to $512,000, and $19,200 for the invalid future acts.

The third issue concerned the calculation of interest. The Applicant submitted various methodologies including both simple interest and compound interest. Mansfield J found the evidentiary basis was not sufficient to found an award of compound interest but specifically left the door open to a Court making such a finding in another matter.

Given the passage of time since the first compensable act took place in July 1980, the award of interest on a simple basis amounted to $1,488,261 with a further $29,397 in simple interest payable on the invalid freehold grants in 1998.

The final issue involved non-economic loss. Once again Mansfield J preferred his own intuitive calculation of $1.3 million for the loss of the applicant’s cultural and spiritual relationship with the areas affected by the compensable acts.

What next?

In their written submissions to the Court, the Commonwealth valued the effect on native title at $1.2 million and the Applicant at figures between $4.7 and $22 million. The Court’s findings of a total of $3.3 million comes in at twice the amount estimated by the Commonwealth and well short of that contended for by the Applicant.

In light of the divergent views of the main parties, and the precedent value of these calculations on a national scale, the decision is likely to be appealed.

In the interim, interested parties are encouraged to seek legal advice on the implications of the decision for any proposed dealing.

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