Northern Territory v Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples [2019] HCA 7

Northern Territory v Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples [2019] HCA 7.

Between

Northern Territory of Australia (Appellant) and Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples & Anor (Respondents).

Commonwealth of Australia (Appellant) and Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples & Anor (Respondents).

Mr A. Griffiths (deceased) and Lorraine Jones on behalf of The Ngaliwurru and Nungali Peoples (Appellant) and Northern Territory of Australia & Anor (Respondents).

Judges: Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ.

Judgment

This is the High Court of Australia's first ruling in relation to the payment of compensation on 'just terms' for the extinguishment of native title rights and interests under Part 2 of the Native Title Act 1993 (Cth) (Native Title Act). Compensation on 'just terms' is stipulated by s 53 of the Native Title Act and is a reference to the constitutional guarantee of 'just terms' compensation for the acquisition of property under s 51(xxxi) of the Commonwealth of Australia Constitution Act 1900 (Imp). 

The Court addressed three appeals about the compensation amount that the Northern Territory of Australia (Northern Territory) was to pay the Ngaliwurru and Nungali Peoples (the Claim Group) for having granted tenures and done public works that extinguished the Claim Group's non-exclusive native title rights and interests over specific areas in the town of Timber Creek between 1980 and 1996. The Court allowed two appeals in part and ordered that the Northern Territory pay the Claim Group $2,530,350 in compensation, including $1.3 million for non-economic or cultural, loss.

The Court ruled that: 

1. the objective economic value of the Claim Groups' non-exclusive native title, given that it did not include the right to exclude others or to control what others did on the land, was 50% of the freehold value of the land. This amounted to an award of $320,250, measured according to land value at the time of extinguishment, and was a reduction from the trial judge's award of 80% and from the Full Federal Court of Australia's award of 65% on appeal; 
2. interest on the economic component of the compensation amount is payable to the native title holders. This is to compensate for having been deprived of the use of the compensation amount from the date at which their entitlement arose, that is, from when the extinguishing acts were done, until the date of judgment. In the circumstances of this case, interest was held to be payable on a simple interest basis and amounted to $910,100; and 
3. compensation for cultural loss is the amount that society would rightly regard as an appropriate award for the loss. In this case, the Court upheld the trial judge's award of $1.3 million, finding it to be consistent with acceptable community standards.

Judicial History and Public Response

The High Court's decision comes eight years after the Claim Group commenced their compensation claim on 2 August 2011. At trial, Justice Mansfield awarded compensation for economic and non-economic loss (Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900). On appeal, the Full Federal Court reduced the economic component (Northern Territory of Australia v Griffiths [2017] FCAFC 106). The High Court appeal reduced the economic component further. However, all the Federal and High Court Judges upheld Mansfield J's $1.3 million award for non-economic, or cultural, loss. 

Chris Griffiths, whose father gave his name to the case, said that although the reduction in the economic valuation is disappointing, recognition of their spiritual connection was "what our old people wanted. Our culture is still alive, our law is still in the land, our blood is still running in the country, our tears will fall on the land" (Cath McLeish, 2019). The Northern Land Council (2019) and the National Congress of Australia's First Peoples (2019) hailed the ruling as a landmark decision in native title and welcomed the Court's recognition of Aboriginal peoples' spiritual connection to country. Mr Jak Ah Kit, interim CEO of the Northern Land Council, stated that the decision "sets the rules" for future agreement making and alleviates the need for costly litigation (2019). As most native title compensation claims will be payable by governments, the decision is likely to trigger significant political debate (Isdale, 2019) and to inform future state-based compensation schemes (Dwyer, 2019).

Background

The town of Timber Creek is located on the Victoria Highway, about halfway between Katherine and Kununurra, in the north-western area of the Northern Territory. The town covers an area of approximately 2,362 hectares. It is bounded on the north by the Victoria River and on the east, south and west by Aboriginal land granted under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth).

Between 1980 and 1996, the Northern Territory was responsible for 53 compensable acts, comprising various grants of tenure and the construction of public works. The compensation claim area is approximately 127 ha and consists of just over six per cent of the total area previously determined to be subject to native title.

Details of Judgment

The High Court outlined principles for how compensation for the loss of native title rights and interests is to be assessed. In the plurality's judgment (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ):

1. Given the absence of precedents, a holistic approach to assessing compensation would depend upon idiosyncratic notions of fairness [86]. The appropriate approach is to conduct a dual assessment of economic and non-economic (cultural) loss. This is because the approach parallels that taken in common law cases of compensation for other land title infringements, and because the criteria for determining compensation set out under s 51(1) of the Native Title Act reflects the equality of treatment mandated by the Racial Discrimination Act 1975 (Cth) [84].
2. Establishing entitlement to compensation under s 51 requires a case by case analysis with consideration of the nature and timing of the compensable act, the nature of the native title rights and interests, the effects of the compensable act upon the native title, the native title holders' identity and connection to the affected land and waters [46], [224].

Economic Loss

1. Division 5 of the Native Title Act equates native title to freehold title and intends to provide compensation for its loss on 'just terms'. Sections 51 and 51A provide for compensation to be paid with reference to, and be capped at, the freehold value of the land together with compensation for cultural loss [54].
2. Section 51A caps compensation payable for the economic loss component of exclusive native title at the freehold value of that land. Equating the economic value of exclusive native title to the value of freehold title makes the inalienability of native title irrelevant to the valuation of exclusive and non-exclusive native title [101].
3. The Native Title Act's compensation scheme requires a comparison between the value of 'like' or similar titles. For example, exclusive native title with freehold, or non-exclusive native title with another interest which does not amount to 'lawful control and management' of land. This is non-discrimination, and accords with the Racial Discrimination Act 1975 (Cth) [74] - [76].
4. Non-exclusive native title rights, being without the right to exclude others or to control the conduct of others on the land, are of a lesser value than a full title [69]. The economic value of non-exclusive native title is evaluated as a percentage of the exclusive native title value amount [70]. The Court awarded 50% of the freehold title value for the Claim Group's loss of non-exclusive native title [107].
5. Technically interest on economic loss is not part of the compensation payable for extinguishment of native title, but rather a separate compensation for failing to receive the financial amount which should have been received at the time of extinguishment. Both amounts must be paid under the statutory scheme [150].
6. In the circumstances, interest on economic loss is to be calculated on a simple interest basis because equity allows for such in compulsory acquisitions of land. Whilst compound interest is available in equity for cases such as fraud or breach of fiduciary duty [125], or at common law where there is evidence that a person would have used the compensation in business to generate a profit (i.e. compensation for the 'lost opportunity of investment', as Mansfield J posited) [133], it was not necessary to decide whether that may apply to native title because it did not arise on the facts at Timber Creek.

Cultural Loss

1. Section 51(1) of the Native Title Act states that an entitlement to compensation on 'just terms' is an entitlement to compensation for 'any loss, diminution, impairment or other effect of the act'. It is not required that the detrimental effects of the act arise from the act directly [218].
2. The entitlement to compensation is a 'communal or group entitlement' which recognises that the composition of the group changes as senior members die and new members are born [229]. The loss of native title was permanent and intergenerational, which was properly taken into account in assessing compensation [230].
3. Adopting Mansfield J's approach to the assessment of compensation, the Court stated that it would be wrong to consider each act in isolation when the effect of each act was to "put a hole in what could be likened to a single large painting - a single and coherent pattern of belief in relation to a far wider area of land" [219].
4. The evidence revealed "not only a duty but a concern to look after country[194]. The Court likened the effects of compensable acts on the native title holders' spiritual connection to the land as having caused "emotional, gut wrenching pain and a deep or primary emotions accompanied by anxiety for the Claim Group" [279].
5. An award of compensation for cultural loss is a social judgment of what the Australian community, at this time, would regard as an appropriate amount [237].

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