Compensation Update: Some interesting test cases on the horizon

What you need to know

• It has been 18 months since the High Court's Timber Creek decision on the assessment of native title compensation in Australia.  There are now a number of interesting test cases in the Federal Court.
• The Gumatj compensation claim in the Northern Territory may test whether pre-1975 acts are compensable and how the Commonwealth Constitution's safeguard against "acquisition of property otherwise than on just terms" applies in the native title context.
• The Tjiwarl compensation claim in Western Australia and the Pitta Pitta compensation claim in Queensland may address the assessment of compensation for the impact of resources interests on native title, and the operation of the compensation "pass on" provision in the Mining Act 1978 (WA). 
• Other claims fall squarely within the Timber Creek principles for the assessment of compensation and may be able to be settled by negotiation between the relevant State governments and the native title holders

What you need to do

• Be aware that new native title compensation claims to are being lodged all the time – maybe even to a native title area near you! Over 300 determined native title holding groups around Australia are entitled to make compensation claims.
• Watch the progress of the existing native title compensation claim test cases, as they will have ramifications for land users around Australia. 
• Manage you future native title dealings with an eye to future compensation liability.

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We have been monitoring the progress of native title compensation claims for many years.  This focus has intensified since the Timber Creek compensation claim progressed through the lower courts to be determined by the High Court in March 2019.

In our April 2020 article Compensation update: What next for native title compensation?, we outlined the developments in the compensation space in each State and Territory since the High Court decision. 

Six months on, we look at what has happened since. 

Peak body calls for coordinated approach

Notably in the last 6 month there has been a stronger lead from the peak representative body about how they think the resolution of compensation claims should proceed. The National Native Title Council (NNTC) has called for a national compensation framework, including:

• running test cases to further clarify compensation triggers and the value of certain compensable acts; 
• streamlining litigation by working to achieve multi-party consent and developing cooperative arrangements; 
• researching best practise models for negotiated settlements; and
• resourcing Native Title Representative Bodies and Native Title Service Providers to run test cases and negotiate settlements.

As we outline below, things have not been unfolding as the NNTC anticipated.  One notable trend is a single firm responsible for bringing 5 of the 8 claims (across 3 States) made since Timber Creek, whose clients are understandably focused on individual outcomes rather than the broader resolution strategy.

Developments in each State and the Territory

Northern Territory

The Gumatj Compensation Claim – test case on pre-1975 compensable acts

In our April 2020 article, we discussed the compensation claim filed on behalf of the Gumatj Clan over the Gove Peninsula in the Northern Territory (NTD43/2019). 

The claim has now reached the end of the notification period and the respondent parties have been settled.  They include the Territory, Commonwealth, East Arnhem Regional Council, Northern Land Council, Swiss Aluminium Australia Limited, Telstra and over 20 Indigenous respondent groups and individuals who claim a competing native title interest in the claim area. 

Native title has not yet been determined to exist in the Gove Peninsula and the claim for compensation has been brought concurrently with a claim for the determination of native title (NTD42/2019).  Determination of the native title claim may not be straightforward given the competing interests claimed by some Indigenous respondents. 

As anticipated, we understand the applicant is seeking to have the question of law regarding pre-1975 acts (i.e whether the Mining Ordinance 1939 (NT) purported to effect an acquisition of property in respect of native title rights to minerals other than on just terms as required by s 51(xxxi) of the Commonwealth Constitution) determined first, before any other aspects of the claims progress.  

We expect the Government parties' will be keen to test the asserted native title right to minerals before moving to the Constitutional question. It may be many years before this compensation claim (and the issues in this "test case") are resolved.

Western Australia

Tjiwarl Compensation Claim – test case on assessment of compensation for the grant of resource interests in WA and the WA "pass on" provision

After much speculation, the Tjiwarl People have filed the first compensation claims covering land the subject of mineral resource interests (WAD141/2020 and WAD142/2020).  

The claims cover more than 7800 square kilometres in the State's Goldfields region.  Compensation is sought in relation to a large number of specific acts done by the State, including the creation of reserves, the dedication of roads and the grant of special leases, pastoral leases, water licences, mining leases, miscellaneous licences and exploration licences.  The taking of native title for the Goldfields Gas Pipeline is also covered. 

This claim will be a test case for the "pass on" provision in section 125A of the Mining Act 1978 (WA), which provides that:

"If compensation is payable to native title holders for or in respect of the grant of a mining tenement, the person liable to pay the compensation is … the applicant for the grant of, or the holder of, the mining tenement at the time a determination of compensation is made".

The claims are currently in the notification period, during which time potentially affected parties can seek to be joined as respondents to the claims.

It is not known whether the State will attempt to negotiate a settlement of these claims or welcome a test case on the assessment of native title compensation for the grant of resource interests and/or the operation of the "pass on" provision. 

Gibson Desert Nature Reserve Compensation Claim 

On 18 September 2020, the Traditional Owners of the Gibson Desert Nature Reserve filed a compensation claim (Daisy Tjuparntarri Ward & Ors on behalf of the Gibson Desert Nature Reserve Compensation Claim Group and State of Western Australia, WAD222/2020). 

The native title holders of the Gibson Desert Nature Reserve had brought a claim for compensation in 2012 but subsequently discontinued the proceedings, following an unhelpful Federal Court decision as to pre- Racial Discrimination Act 1975 (Cth) non-compensable extinguishment.

Now that the High Court's Timber Creek decision has determined the principles for the assessment of native title compensation, the resolution of the 2020 claim was straightforward and happened by negotiation between the native title holders and the State.   

The parties entered into a settlement agreement on 29 October 2020, which will see the reserve jointly managed by the traditional owners and the State.  The agreement allocates $7.5 million to support the joint management activities over the reserve (including to improve infrastructure that will support such activities), over a 10 year period.  The agreement will also see the renaming of the Gibson Desert Nature Reserve to the Pila Nature Reserve.

Single Noongar Compensation Claim 

In our April 2020 article, we discussed the purported $290 billion compensation claim filed on behalf of a group of Noongar people of south-west Western Australia. 

The State filed an application for summary dismissal of the claim because of its procedural flaws, which was to be heard in April 2020.  The progress of the application has been affected by Covid-19 related court disruptions. The matter has been adjourned (for the fourth time) to a directions hearing on a date to be fixed after 14 December 2020, to consider programming orders for the summary dismissal application.

Possible Yindjibarndi Compensation Claim?

In our April 2020 article, we speculated about an impending compensation claim by the Yindjibarndi Aboriginal Corporation, subject to Fortescue Metals Group's High Court appeal. 

In May 2020, Fortescue Metals exhausted its efforts to have the finding of exclusive native title over its Solomon Hub iron ore mining complex, reversed. This paves the way for the long-touted Yindjibarndi compensation claim.  The quantum sought is unlikely to be modest.

Queensland

Pitta Pitta Compensation Claim – test case on assessment of compensation for the grant of resource interests in Queensland

On 22 October 2020, a compensation claim was made on behalf of the Pitta Pitta People (QUD327/2020). 

The claim relates to hundreds of compensable acts including grants of freehold, leasehold (including pastoral and grazing leases), reserves, water licences, exploration permits held by over 50 named mining companies, authorities to prospect, boreholes, electricity infrastructure and gas pipelines covering almost 3 million hectares land in the Boulia, Cloncurry, Diamantina and Winton Shire Council areas of Queensland. 

It will be interesting to see whether the State attempts to negotiate a settlement of this claim, or welcomes a test case on the assessment of compensation for the grant of exploration and mining interests in Queensland.  

The claim should soon move into the notification period, during which time potentially affected parties can seek to be joined as respondents to the claim.

 Kooma and Bigambul Compensation Claims

In our April 2020 article, we discussed the compensation claims filed on behalf of the Kooma and Bigambul people (QUD785/2019 and QUD784/2019), which have now reached the end of their notification periods.) 

Like the Single Noongar claim, the State filed an application for summary dismissal of the claims because of their procedural flaws, which was heard in July 2020.  The Federal Court has reserved its decision.

New South Wales

Barkandji Malyangapa Compensation Claim – potential test case on application of Timber Creek principles in NSW

On 21 August 2020, a group of Barkandji Malyangapa People of western New South Wales filed a compensation claim (NSD925/2020). 

The compensation claim seeks compensation for the extinguishment of native title over a large area, spanning from Wanaaring to Wentworth, extending westerly to the New South Wales and South Australia border. 

This is the first compensation claim brought in New South Wales in over 20 years, so the State's approach to resolving it is not yet known.     

In the meantime, the claim must be publicly notified so that interested parties have an opportunity to join as respondents to the claim.

There are no active compensation claims in Victoria, South Australia or Tasmania.  There are also far fewer determinations recognising native title in Victoria and South Australia and none in Tasmania.  Further, South Australia has often agreed native title compensation with the native title holders concurrently with the determination of their native title, so the liability is already satisfied.  Similarly, the Traditional Owners Settlement Act 2010 (Vic), means that native title compensation liability has been addressed in some settlements in Victoria.

Observations in relation to the current suite of claims

Each one of these compensation claims is interesting for different reasons. 

The Gumatj compensation claim may test whether compensation is payable for pre-1975 acts, and the operation section 51(xxxi) of the Commonwealth Constitution (relating to the safeguard against the acquisition of property other than on just terms) in a native title context.  

Both the Tjiwarl Compensation Claim in WA and Pitta Pitta Compensation Claim in Queensland will test the assessment of compensation payable in relation to the grant of resources interests. Additionally, in Tjiwarl, the Federal Court will be required to consider the impact of the pass on provisions in the Mining Act 1978 (WA) and whether any liability should be passed on from the State to the holders of the mining tenements.  

The Barkandji Malyangapa Compensation Claim is notable for being the first compensation brought in New South Wales in over 20 years. We look forward to seeing how the State approaches the claim. 

Unsurprisingly, each of these claims has the potential to be a test case, as the law relating to native title compensation is still developing.  Every new claim is likely to raise an issue for resolution that hasn’t yet been considered by the court in earlier claims. 

It is not clear whether the tension between the NNTT's call for a reasoned, strategic national approach to claim resolution across Australia and the understandable desire of individual native title holder groups to file and progress claims as soon as possible, will be resolved.   

Authors: Leonie Flynn, Senior Expertise Lawyer; Larissa Harrison, Lawyer; and Clare Lawrence, Partner