Australia’s first native title compensation claim decision – August 2016
Summary
Australia’s first successful determination for native title compensation has been handed down. The Court ordered that the Northern Territory pay over 3.3 million to the native title holders as compensation for the loss and impairment of native title rights and interests as provided under the Native Title Act 1993 (Cth) (NTA). The largest amount of compensation around 1.3 million was for pain and suffering (which the court called solatium). This component for non-economic loss is more significant than had been predicted.
As no native title compensation amount had previously been successfully litigated, the Court provided new principles for valuing native title including:
1. The time for valuation of the loss is when the act took place (not later validation under the NTA)
2. For extinguishment of full native title rights (i.e. exclusive possession) the appropriate value for economic loss is 100% of the freehold value of the land.
3. For compensation for partial extinguishment – i.e. when the land had previously been subject to an act that created partial extinguishment, then the appropriate value for economic loss is 80% of the freehold value of the land.
4. Mechanisms for calculating non-economic loss, is complex
Native Title Compensation in General
After the Mabo case and the recognition that native title existed in Australia the Native Title Act (NTA) was drafted. One of the purposes of the NTA was to protect native title. The Racial Discrimination Act 1975 (Cth) (“RDA") also meant that any act after October 1975 was invalid if it affected native title.
This was potentially a significant problem for the States and the Commonwealth because if meant that there were numerous invalid grants of land, because of the previously unrecognised existence of native title, additionally they would be impeded from creating valid interests in land in the future,
To overcome this the NTA provides for:
1. Compensation for acts that have affected native title in the past – after the RDA in October 1975.
2. A scheme to validate future acts that will affect native title was also created and these acts are validated but providing for compensation.
Before the recent case in Timber Creek there had been no publically available decision on how compensation would be valued (there have been agreements made that provide for native title compensation).
Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900 Background:
The Ngaliwurru and Nungali Peoples filed native title claims under the NTA in 1999 and 2000 over lands and waters in the township of Timber Creek, approximately 400km south of Darwin.
The Ngaliwurru and Nungali Peoples commenced a claim for compensation under section 61 of the NTA in 2011. The matter was again litigated. Justice Mansfield handed down his decision on the question of the Northern Territory’s liability for the compensation claimed in 2014, but deferred the question of quantum, the compensation was brought in relation to:
• 53 compensable acts, including small grants of land some grants of land over 4 hectares and some public works and some areas to which 47B applied.
• Three invalid future acts, being 3 residential lots of 1000sq m. all of which had a house built on them after grant.
These acts, extinguished native title in whole or in part, or impaired or suspended native title where native title still existed. The native title holders and the rights and interests apart for the compensation acts were not in dispute. His Honour ordered that each lot be valued separately at the market value at the time the compensable act took place, with simple interest from that point.
All of the determination acts were attributable to the Northern Territory Government [41]. Significantly, it was not disputed by the parties that an award of solatium (non-economic loss for pain and suffering) was appropriate in the circumstances [291],only the quantum of solatium was in dispute.
1. For non-exclusive native title rights and interests – value is 80% of freehold value of the land subject (note this may be different for different levels of extinguishment)
2. Simple interest on that market value of the determination acts from the date of respective acts that affected native title to the date of the judgment.
3. Solatium (or non-economic loss) of $1.3 million.
4. The Court also found that the Northern Territory was liable to pay to the common law damages for three invalid future acts, totalling $48,597, made up of the following:
• $19,200 – value of native title rights impacted;
• $29,397 – pre-judgment interest
The date compensation is payable from is the date at which the act extinguished or impaired native title, not the date it was validated.
Invalid Future Acts:
The Applicants sought compensation for three future acts, which the parties had agreed, were invalid (i.e. the acts were not done in accordance with the future acts regime under the Native Title Act).
Because there is no provision for compensation in these circumstances in the NTA, the claim was based on an action for damages for the tort of trespass. Justice Mansfield found in favour of the Applicants. As the native title that existed over the area at the time of the acts was non-exclusive, the Court again applied a discount on the freehold value of 20%. On this basis, the valuation of $24,000 was reduced to $19,200, though interest was also awarded on this amount.
The Calculation of non-economic loss or solatium.
The native title holders claimed that there were 2 overlapping areas of non-economic loss:
(1) the diminution or disruption in traditional attachment to country; and
(2) the loss of rights to live on, and gain spiritual and material sustenance from the land.
SOLATIUM
• The court referred to a similar principle to the ‘intangible disadvantage’ element in the Lands Acquisition Act (NT), but can also be described as ‘solatium’. Whatever the terminology, it is about ‘the compensation component which represents the loss or diminution of connection or traditional attachment to the land’ [300].
• This Solatium in this case was for non-exclusive land. The assessment of non-economic loss is ‘complex’ and ‘intuitive’, but ‘must be assessed having regard to the spiritual and usufructuary significance and area of the land affected, but relative to other land that remained available to the Claim Group for the exercise of the native title rights and interests’ [302].
• The claimants law and customs are relevant to the assessment [317]
• The Court found: [a]n evaluation of what are the relevant compensable intangible disadvantages, with a view to assessing an amount that is fair and reasonable, requires an appreciation of the relevant effects on the native title holders concerned, which, may include elements of ‘loss of amenities’ or ‘pain and suffering’ or reputational damage. In that respect, evidence about the relationship with country and the effect of acts on that will be paramount. [318]
In addition:
• Solatium need not just be for those losses that arose ‘directly’ from the compensable acts [321]-[323].
• A ‘parcel-by-parcel’ approach of non-economic loss was not appropriate [324].
• However, his Honour proceeded to observe that [326]:
Any award of compensation for loss or spiritual attachment in respect of land affected by the compensable acts must properly take into account the extent to which the spiritual attachment to that land has already been impaired or land or in Timber Creek. In my view, it is open to the Court to infer from the evidence which does not specifically relate to an act or parcel of land, that a further sense of loss is felt in consequence of the determination acts.
Evidence presented at trial of pain and suffering or solatium.
There was evidence in this matter of ‘gut wrenching pain’, ‘anxiety’ and ‘hurt’[ 328]-[363]. but there was also evidence that ‘the attachment of the claimants to country has not been wholly lost’ [364].
• After assessing the evidence, his Honour sets out three particular relevant considerations: ◦ The construction of infrastructure and the impact on Dreaming which has ‘caused clearly identified distress and concern’ [378].
◦ The impact of the acts on the area generally and not just in relation the specific footprint, and the evidence of the effect of an act upon the capacity to conduct ceremony and spiritual activities on that and adjacent areas at [379].
◦ The general diminishment of native title rights and connection to country more generally, and the sense of ‘failed responsibility’ to look after the land [381].