New ruling sets precedent for future native title compensation claims.

A First for the High Court

In the Northern Territory v Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples  the Northern Territory was ordered to pay the Ngaliwurru and Nungali people $2.53 million in compensation for loss of native title rights in Timber Creek, a small town in the Northern Territory. This case marks the first time that the High Court has considered the Native Title Act in determining monetary compensation, with this ruling setting a precedent for future native title compensation claims.

Issues:

This case was an appeal made by the Northern Territory Government concerning the amount of compensation payable to the Ngaliwurru and Nungali people, “pursuant to Pt 2 of the Native Title Act 1993 (Cth), for loss, diminution, impairment or other effect of certain acts on the Claim Group’s native title rights and interests…” [1], with the questions to be answered being as follows:

“(1) how the objective economic value of the affected native title rights and interests is to be ascertained;

(2) whether and upon what basis interest is payable on or as part of the compensation for economic loss; and

(3) how the Claim Group’s sense of loss of traditional attachment to the land or connection to country is to be reflected in the award of compensation.” [1]

In the course of determining the appropriate amount of compensation, the opinions of numerous expert witnesses were considered. Expert evidence was admitted for two main disputed areas: the appropriate methodology to use in determining compensation for economic loss and the appropriate amount of compensation for non-economic (spiritual) loss suffered.

The Expert Evidence:

Land Valuation Evidence

One major point of contention was the appropriate methodology to determine the value of the land on which the native title rights had been lost. During the initial trial, the trial judge preferred the market value of the freehold estates in various lots as valued by Mr Ross Copland, an expert called by the Commonwealth. [65] During the Federal Court appeal, the Northern Territory unsuccessfully tried to appeal the trial judge’s adoption of several of Mr Copland’s valuations. In the High Court, the Northern Territory urged the Court to adopt the valuation of its expert, Mr Wayne Wotton, which was put forward on the basis that the expert methodology of Mr Wayne Lonergan, another expert valuer who provided evidence, should be accepted.

Mr Lonergan’s thesis was that, without having market or relevant sales data, the reasonable value of the Claim Group’s native title rights and interests was to be worked out through comparing it to “freehold market value stripped of so much of it as reflected the availability of services and infrastructure”. [88]

Mr Lonergan opined that the value of the relevant land could be determined through “taking the market value of a large nearby rural block without road access, power or water, yielding what Mr Lonergan termed a “usage value”, and then adding an uplift or ‘negotiation value’ which…could be derived by splitting the difference between the market value of the land…and the usage value of the native title rights and interests as so calculated…” [88].

The Full Court of the Federal Court Federal Court rejected this methodology, and the High Court affirmed this rejection, stating that Mr Lonergan’s methodology could not be accepted due to the fact that “what it purports to value is not the economic value of the native title rights and interests in the subject land as required by the Native Title Act, but rather what the Claim Group might have been prepared to pay to acquire other land at a different location…” [89].

Further, as observed in the High Court, Mr Lonergan’s suggested method of determining the appropriate amount of compensation was highly expensive and complex. Due to the “presumably limited resources” [92] of the majority of native title claimants, the straightforward approach of Mr Ross Copland, “of assessing the freehold value of the subject land and applying the appropriate percentage discount according to the nature of the native title rights and interests in suit…”  was preferred. [92]

The High Court agreed with the argument raised by the Northern Territory, however, that the lower courts had overvalued the native title rights, and that economic loss should be worth, at maximum, 50% of the freehold value of the land.

This was partly due to the fact that the native title rights were non-exclusive – there was no right to exclude other persons from it under Australian law, nor any right to use the land for commercial use.

The High Court found that the trial judge’s estimate of the freehold value of the land of 80% was overvalued, and likewise found the Full Federal Court’s estimate of 65% was excessive, stating that the appropriate native title rights and interests could be no more than 50%. [106] Due to the fact that neither party suggested that the percentage should be set below 50%, 50% was the amount that the High Court settled on for the relevant value.

Anthropological Evidence

In determining the amount of compensation for the loss of spiritual connection to the land, the trial judge considered the expert evidence provided by anthropologists Kinsley Palmer and Wendy Asche [169], with their joint report describing relevant sites of significance – the major ‘Dreaming’ sites in the area, with Palmer and Asche explaining that:

“Dreamings are spiritual beings that performed actions that resulted in physical and spiritual modifications to the countryside…with four major ‘Dreamings’ in the area being reported on” [171].

This report, and the map that accompanied it, made clear there were “compensable acts on lots on which there are sites of significance” [173]. The trial judge concluded, based on this report, that the loss and damage to the country caused “caused emotional, gut-wrenching pain and deep or primary emotions accompanied by anxiety” [194] to the claimants. However, the trial judge also accepted the argument made that the attachment to the land was not entirely lost, due to evidence that some developments in Timber Creek “were acceptable under the traditional laws and customs of the Ngaliwurru and Nungali Peoples” [195] with these developments being acceptable to at least some of the claimants.

The High Court accepted the trial judge’s awarding of $1.3 million for the spiritual and cultural damage caused by alienation from native title land, stating that:

“The trial judge was not bound to approach the assessment with particular restraint or limitation. An award of compensation of $1.3 million for the effects of the compensable acts on the Claim Group is an appropriate award. There is nothing to suggest that the trial judge’s award would not be accepted by the Australian community as appropriate, fair or just…” [237]

Findings:

The findings reached by the High Court were as follows:

“(1) the objective economic value of exclusive native title rights to and interests in land, in general, equates to the objective economic value of an unencumbered freehold estate in that land. In these appeals, the objective economic value of the non-exclusive native title rights and interests of the Claim Group is 50 per cent of the freehold value of the land;

(2) interest is payable on the compensation for economic loss, and in the circumstances of this case, on a simple interest basis, at a rate sufficient to compensate the Claim Group for being deprived of the use of the amount of compensation between the date at which compensation was assessed and the date of judgment; and

(3) the compensation for loss or diminution of traditional attachment to the land or connection to country and for loss of rights to gain spiritual sustenance from the land is the amount which society would rightly regard as an appropriate award for the loss. The appropriate award for the cultural loss in these appeals is $1.3 million.”

Takeaways:

This case is the first time that the High Court has decided on how to value the intangible cultural harm stemming from disconnection from country. The amount eventually reached by the High Court, of $2.5 million, was made up of $1.3 million for non-economic (spiritual) loss, with the remainder stemming from the loss of native title rights, comprising of the economic value of the land (50% of the freehold value) plus interest.

This case sets important precedents on the function of the Native Title Act’s compensation provisions, regarding how to put a price on the intangible damage caused by loss of connection to country.

This case is likely to have considerable impacts on current and future native title negotiations with state and territory governments in terms of native title claims throughout the country.

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[1] [2019] HCA 7 (13 March 2019)