Insights

17/06/19

Native Title Compensation – When can’t you pay?

In the first decision of its type from a Superior Court, Justice Smith has today (14 June 2019) held that a compensation agreement made under the Native Title Act 1993 (Cth) with a native title claim group who, subsequent to their entry into the contract, had their claim dismissed is not enforceable, and was frustrated from the point at which the claim was dismissed.  This was so notwithstanding that a “trustee” company was incorporated and was party to the native title agreements in question.

In Thaluntha Pty Ltd v Citic Pacific Mining Management Pty Ltd [2019] WASC 196, her Honour Justice Smith ruled that in the circumstances of the case, there was no identifiable group to whom payments could be made.  The fact that there was a company that was purportedly the trustee of funds on behalf of the native title group did not render the contract certain given that the trustee company was to hold the funds on behalf of the native title party, the membership of which could not be determined.

Further, the dismissal of the native title party’s claim was a frustrating event, as the situation that arose from the dismissal and subsequent deregistration of the native title party as a registered claimant group was fundamentally different from the situation contemplated by the compensation agreement. Her Honour found that the existence of a native title party was critical to the performance of the compensation agreement.  Also, as a matter of construction, her Honour also found that the dismissal of a native title claim is not the same as a ‘determination’ within the meaning of the Native Title Act.

The background of the case is that the Wong-Goo-Tt-Oo native title claim was commenced in 1998.  It was heard in part with the Ngarluma Yinjibarndi native title claim, the result of which was that the Wong-Goo-Tt-Oo claim was dismissed (see Daniel v State of Western Australia [2003] FCA 666 and the subsequent determination of native title [2005] FCA 536).  Part of that decision was that the Wong-Goo-Tt-Oo group did not exist as a group constituted by traditional laws and customs, but rather were persons from other native title claim groups (such as Yinjibarndi or Banjaimi) who had formed a loose association for the purpose of pursuing native title claims.  The balance of the claim was later struck out by the decision of Justice McKerracher in Dale v Western Australia [2009] FCA 1201; (2009) 261 ALR 21.

In those circumstances, her Honour Justice Smith held that the Wong-Goo-Tt-Oo compensation agreement was frustrated from the point at which the native title claim group had ceased to be on the Register of Native Title Claims and was in any case insufficiently certain to enforce.  This was partly because of a contractual mechanism but partly because of the non-existence of the native title party following the dismissal and unascertainable nature of the membership of the group. 

In different circumstances, where a native title agreement is over an area of land to which native claims are no longer applicable, frustration has been held to apply: see Jabiru Metals Ltd v Lynch [2009] WASC 238.

The only other case where this question has directly arisen is in Bidjara People Claim Group & Ors v PAPL (Upstream) Pty Ltd & Ors [2017] QLC 44, but having a superior court consider the issue offers greater clarity moving forward.

The above cases are not an indication that all instances where a native title agreement with a group whose claim has been dismissed or potentially been dismissed, even over a particular area, are unenforceable.  However, regard should be had to changing circumstances and, in particular, the question of whether an agreement can be enforceable after the effective disbanding of the statutory construct comprising a “native title claim group” or “applicant” under the Native Title Act, once a claim is dismissed.

[Note: Marshall McKenna, Lauren Shave and Arabella Tolé of Gilbert + Tobin were solicitors in relation to the Wong-Goo-Tt-Oo case and Mr McKenna was the solicitor on record in relation to the Jabiru Metals case.]