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NATIONAL NATIVE TITLE TRIBUNAL WORKSHOP

Practical implications of the Griffith Decision

Perth Monday 19 September 2016

Mabo v Queensland (No 2) (1992) 175 CLR 1

The main difference between those members of the Court who constitute the majority is that, subject to the operation of the Racial Discrimination Act 1975 (Cth), neither of us nor Brennan J. agrees with the conclusion to be drawn from the judgments of Deane, Toohey and Gaudron JJ. that, at least in the absence of clear and unambiguous statutory provision to the contrary, extinguishment of native title by the Crown by inconsistent grant is wrongful and gives rise to a claim for compensatory damages.

Compensation applications 1 January 1994 – 18 August 2016

APPLICATION_TYPE APPLICATION_STATUS NSW NT QLD SA VIC WA Grand Total Compensation Active 1 1 3 5 Discontinued 12 2 3 1 1 1 20 Dismissed 4 4 1 9 Full Approved Determination 1 1 2 Withdrawn 2 2 Compensation Total 17 7 6 3 1 4 38

Timber Creek Determination and Compensation

S Y D N E Y | M E L B O U R N E | P E R T H

Griffiths v Northern Territory (No. 3) [2016] FCA 900

Marshall McKenna 19 September 2016

Practical implications of the Griffiths decision

SYDNEY | MELBOURNE | PERTH

Overview

• What the decision specifically addresses
• What the decision does not address:
• what is the quantum payable and test applicable for

compensating the grant of mining and petroleum tenure

• how does the decision sit with “flow through” and “provisions” on

paragraph 1 effect of indemnities

• effect of releases in native title agreements (including practical

issues)

page | 7

SYDNEY | MELBOURNE | PERTH

What the decision specifically addresses

page | 8

1. Basis of assessment of compensation for acquisition of land/grants

• f ‘standard’ land tenure

2. The relative value of non-exclusive native title rights 3. Interest 4. “Solatium”

SYDNEY | MELBOURNE | PERTH

Basis of assessment

page | 9

• Apparently based on Racial Discrimination Act 1975 (Cth) invalidity

– no compensation for acts prior to 31 October 1975?

• Exclusive native title is functionally equivalent to freehold for

valuation/compensation purposes. – context was acquisition of land for the purpose of grants under the Northern Territory’s land legislation

• Measured at the time of the impairing act (not at the time of

subsequent validation).

SYDNEY | MELBOURNE | PERTH

Value of non-exclusive rights

page | 10

• The value attributable to impairment of non-exclusive native title

rights was 80% of freehold value, based on the ability of the existence of (non-exclusive) native title rights to constrain the use of the land absent extinguishment – Apparently (but not expressly) based on the non exclusive rights as found, so it is not clear that 80% is ‘the number’ for assessment

• f the value of non-exclusive rights as opposed to the specified

rights – means that compensation is based on footprint not impact

SYDNEY | MELBOURNE | PERTH

Interest

page | 11

• The Court applied simple interest at the prescribed court rate
• The decision does not rule out interest might be payable at a

commercial rate if the Hungerfords v Walker principles satisfied.

• There is potential for the question of interest to be dealt with

differently in a different factual matrix (ie where there are structures that might have benefitted or there is evidence that alleviating poverty would have advantaged the community)

SYDNEY | MELBOURNE | PERTH

Solatium

page | 12

• Assessment was:

– ‘Complex’, ‘intuitive’ – ‘in globo’

• Relationship with country and the affect on relationship with country

are paramount

• Assessed against any impairment existing at the time of the act in

question – probably means that one ‘discounts’ the solatium to reflect the pre- existing harm

• Not tied to or limited by the economic value attributable to land.

SYDNEY | MELBOURNE | PERTH

What the decision does not address

page | 13

1. Assessment of the value of land by reference to special characteristics 2. The value of compensation for mining and petroleum interests 3. The effectiveness of flow through provisions i. economic value ii. solatium 4. Native title agreements i. utility to proponents ii. utility to the Crown

SYDNEY | MELBOURNE | PERTH

Mining and petroleum interests

page | 14

• Mining tenements and Petroleum interests can coexist with native

title and other land – compensation provisions under this legislation is NOT tied to land values – where there is coextensive tenure, which is the impairing act? – which compensation regime applies?

SYDNEY | MELBOURNE | PERTH

Effectiveness of flow through provisions

page | 15

• Can you break down the economic value applicable to the grant?
• Is “solatium” divisible?
• It is probably possible to break down economic value to a particular

grant.

• It is expressly and logically not possible to allocate solatium

SYDNEY | MELBOURNE | PERTH

Native title agreements

page | 16

• What is the effect of native title agreements on the liability of the

crown/entitlement of native title parties? – Section 24MD(3); – Release of a grantee party – Indemnity issues;

SYDNEY | MELBOURNE | PERTH

Section 24MD(3)

page | 17

• Applies to compulsory acquisitions notified under s29
• Applies regardless of who compensation was paid to
• Crown is in most cases not privy to the details but usually aware of

the existence

SYDNEY | MELBOURNE | PERTH

Release of a grantee party

page | 18

• Native title agreements commonly release grantee parties from

compensation claims

• grantee party is not (directly) at risk
• disconnect between claim and release (being that the party liable

for the compensation is (usually) not a party to the release)

• are releases of the grantee party ineffective?

SYDNEY | MELBOURNE | PERTH

Indemnity issues

page | 19

• Native title agreements not uncommonly include an indemnity of the

grantee parties in resect of compensation claims – will only apply if the Crown pursues allocated flow through

SYDNEY | MELBOURNE | PERTH

Indemnity issues: how will this work?

page | 20

• Crown does not know all of the native title agreements, releases and

indemnities – has some hints by reference to ancillary agreements recited in s31 Deeds – confidentiality restrictions?

• A grantee party may not be aware of a claim against the State that

affects it – may also be cost constrained from participating

PRACTICAL IMPLICATIONS OF THE GRIFFITHS DECISION

Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900

NATIONAL NATIVE TITLE TRIBUNAL WORKSHOP SEPTEMBER 2016

TESSA HERRMANN, CENTRAL DESERT NATIVE TITLE SERVICES

PERSPECTIVE ON KEY ISSUES

1. Date at which compensation entitlement arises 2. Freehold value as the starting point:

• Due recognition of status as owners of country
• Difficulty of ascertaining freehold value in remote areas
• Freehold valuation regardless of nature of extinguishing act?

3. Non-exclusive rights at 80% of freehold 4. In globo solatium assessment; cumulative impact 5. Approach to expert evidence; application of economic principles to valuation of native title rights

LINK BETWEEN ECONOMIC VALUE AND SOLATIUM

• Nexus between economic value and solatium?
• “No market for this” – a matter for “social judgment” (Crampton v

Nugawela (1996) 41 NSWLR 176)

• Factors considered:

– Loss of and damage to country -> pain and anxiety – Aggravation of pain and anxiety over time – Impact of acts felt beyond their physical footprint

• Significant considerations in Griffiths:

– Damage to dreaming track – General impact – Diminished ability to exercise rights; sense of failed responsibility

• Inability of the Native Title Act to deliver true compensation

ISSUES FACING CLAIMANTS FOR FUTURE APPLICATIONS: RELEVANCE OF SS 47, 47A & 47B NTA

• Sections 47, 47A & 47B NTA = “Clawback provisions”
• Griffiths v Northern Territory of Australia [2014] FCA 256: operation
• f s 47B NTA in compensation context may produce “apparently

idiosyncratic outcomes” and “recovering twice for the one loss”

• Is restoration of native title rights truly “recovering” for a loss? Is

this a place for compensation for ‘occupation’?

• Section 47B NTA in Griffiths #3:

– Acts 37, 38 and 39: Applicant not entitled to compensation because prior historical extinguishment is not disregarded in compensation context – no greater extinguishment effected once s 47B NTA put to one side – Act 34: claimants enjoyed native title over area since August 2006, compensation still payable in form of interest because s 47B NTA does not apply

• “Flow through” effect from determination

ISSUES FACING CLAIMANTS FOR FUTURE APPLICATIONS: SECTION 94 NTA

• Section 94 NTA -> compensation order must set out:

– Names of person/s entitled or method for determining persons entitled – Method for determining amount or kind – Method for determining dispute regarding entitlement

• Issue largely agreed in Griffiths #3
• Could be controversial in future applications:

– Absence of prior determination – Nature and location of land relative to rights holders

• Griffiths #3 -> present day rights holders entitled to compensation BUT

issue not contested. Will this be contested in future?

ISSUES FACING CLAIMANTS FOR FUTURE APPLICATIONS: RIGHTS FOR COMMERCIAL PURPOSES

• Rights for commercial purposes – will these -> additional value in a

compensation context?

• Non-exclusive rights (excluding commercial purposes) valued at 80% -

would the presence of a commercial purposes right increase this percentage for a non-exclusive bundle?

• Alternative – right for commercial purposes to operate as a form of

economic special value? Potentially focuses benefit of commercial right upon presence of actual resource rather than exercise of right re that resource.

ISSUES FACING CLAIMANTS FOR FUTURE APPLICATIONS: ECONOMIC SPECIAL VALUE

• Economic special value not included as a head of loss by Mansfield J –

but not outright rejected either

• Categories of economic loss under land acquisition legislation:

– Market value – Special value (value of additional advantage incidental to ownership / occupation) – Severance – Disturbance

• Solatium is not “special value”, special value is about greater economic

value than use of land for commercial or residential purposes

• Rare, unique or special qualities / uses of land? Relevance of “just

terms”

NATIONAL NATIVE TITLE TRIBUNAL WORKSHOP

Practical implications of the Griffith Decision

Perth Monday 19 September 2016