Today, the High Court of Australia handed down its decision on the various appeals brought in relation to the decision the Full Court of the Federal Court in Griffiths v Northern Territory [2007] FCAFC 107 (which itself was an appeal from the first instance decision by Justice Mansfield in Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900).

Appeals were brought by the Northern Territory, Commonwealth and the Ngaliwurru and Nungali Peoples in relation to the compensation payable pursuant to section 51 of the Native Title Act 1993 (Cth) (NTA) for the extinguishment of native title.

The Court upheld that two components for calculating compensation for the extinguishment of native title are:

  1. Economic loss; and
  2. Solatium (i.e. the “cultural loss” or hurt feelings evoked by the extinguishment).

In respect of economic loss, the Court held that compensation for the extinguishment of native title rights is equivalent to 50% of the freehold value of the affected land. This was a reduction from the Full Court’s assessment, which awarded 65% of the freehold value for that extinguishment. For ‘solatium’ (representing compensation for loss of connection with country), the Court affirmed the decision of the Full Court and the trial judge that the claim group was entitled to an ‘englobo’ sum of $1.3 million in compensation for that cultural loss.

The Court’s decision marks the (partial) end to the long-standing question of how much native title is worth under the NTA regime. As set out in our previous analysis on this issue, there are unlikely to be immediate effects on development proponents given the difficulties in native title holders obtaining a compensation award and that award being ‘trickled down’ to proponents.

However a key area of ambiguity that remains is the role of s 51A of the NTA in the compensation process. S 51A imposes a statutory limit on the total compensation payable by reference to the Commonwealth power to compulsory acquire land on just terms pursuant to s 51(xxxi) of the Constitution. The ambiguity that arises in this respect is whether, and how, that standard can be imposed on the States and Territories that are not directly bound by that provision of the Constitution.

S 51A is briefly mentioned as part of the Court’s decision that any simple interest payable was not to be included as part of the total compensation to be paid. The effect of this ruling may be to limit the total compensation payable to only the freehold equivalent of the amount payable.  However, there are several unanswered questions in relation to compensation, which will be explored over the next years. 

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