KIEFEL CJ, BELL, KEANE, NETTLE AND GORDON JJ. These appeals concern the amount of compensation payable by the Northern Territory of Australia to the Ngaliwurru and Nungali Peoples ("the Claim Group"), 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 over lands in the area of the township of Timber Creek in the north‑western area of the Northern Territory.
The issues are extensive, and in some respects complex, but fundamentally there are three questions:
(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.
For the reasons which follow, those questions should be answered thus:
(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.
These reasons are in seven parts: facts; claim for compensation; legislative framework; economic loss claim; interest on the economic loss claim; cultural loss; and orders.
A Facts
Timber Creek is a tributary of the Victoria River situated in the north-western corner of the Northern Territory. The area was first explored by non-Aboriginal people in the mid-nineteenth century and, around the end of that century, a number of pastoral leases were granted in the Victoria River district, including one pastoral lease granted in 1882 over the area that now comprises the town of Timber Creek. The town, which was proclaimed as such in 1975, is located on the Victoria Highway about halfway between Katherine and Kununurra and covers an area of approximately 2,362 hectares. It is bounded on the north by the Victoria River and on the east, south and west by Aboriginal land granted under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). It has a population of approximately 230 people, some two thirds of whom identify as Aboriginal; principally, native title holders. The principal buildings, apart from houses, are a road-house and general store, a hotel and caravan park, local council offices, a police station, a primary school, and a health clinic. The town's economy is centred on tourism and associated services and regional service delivery.
Compensable acts
Between 1980 and 17 December 1996, the Northern Territory was responsible for 53 acts, on 39 lots and four roads within the town, comprising various grants of tenure and the construction of public works, which were later held to have impaired or extinguished native title rights and interests and which give rise to the Claim Group's entitlement to compensation under Pt 2 of the Native Title Act ("the compensable acts"). Twenty-two of the compensable acts were grants of development leases incorporating covenants to effect improvements in exchange for freehold title. The remainder of the acts consisted of a grant of a Crown lease, freehold grants to government authorities on which, in some cases, public works were later constructed, and public works constructed without any underlying tenure. The total area of land affected by the compensable acts was approximately 127 hectares ("the application area"), comprising just over 6 per cent of the area previously determined to be land in relation to which native title exists.
History of claims
In 1999 and 2000, the Claim Group instituted three proceedings under the Native Title Act for determination of native title to land within the boundaries of the town. The trial judge (Weinberg J) held that the Claim Group had native title rights and interests comprised of non-exclusive rights to use and enjoy the land and waters to which s 47B of the Native Title Act applied in accordance with their traditional laws and customs. On appeal, the Full Court of the Federal Court (French, Branson and Sundberg JJ) varied his Honour's determination, holding in relation to those parts of the determination area to which s 47B applied that the Claim Group's native title rights and interests comprised a right to exclusive possession, use and occupation, but otherwise affirmed Weinberg J's determination. The total area of land determined to be subject to exclusive native title was approximately 2,053 hectares.
On 2 August 2011, the Claim Group instituted a claim for compensation under s 61(1) of the Native Title Act in respect of the compensable acts. The compensation application concerned an area wider than that the subject of the determination, and included specified areas within the town where there had been no determination that native title existed. The parties were agreed, however, that native title existed in relation to the application area at the time of the act or acts for which compensation was claimed. By a statement of agreed facts, the parties adopted the terms of the Full Court's native title determination as a description of the native title potentially affected by the compensable acts.
As a preliminary issue, the trial judge (Mansfield J) determined that the historic grant of pastoral leases was effective at common law to partially extinguish native title to the application area and that, in compensation proceedings as opposed to the proceedings for the determination of native title, s 47B of the Native Title Act, being inapplicable, did not permit the common law extinguishment of exclusive native title to be disregarded.
Native title rights and interests
Accordingly, Mansfield J found that the native title rights and interests affected by the compensable acts consisted of the following non-exclusive rights exercisable in accordance with traditional laws and customs of the Claim Group:
(1) the right to travel over, move about and have access to the application area;
(2) the right to hunt, fish and forage on the application area;
(3) the right to gather and use the natural resources of the land such as food, medicinal plants, wild tobacco, timber, stone and resin;
(4) the right to have access to and use the natural water of the application area;
(5) the right to live on the land, to camp, and to erect shelters and structures;
(6) the right to engage in cultural activities, to conduct ceremonies, to hold meetings, to teach the physical and spiritual attributes of places and areas of importance on or in the land and waters, and to participate in cultural practices related to birth and death, including burial rights;
(7) the right to have access to, maintain and protect sites of significance on the application area; and
(8) the right to share or exchange subsistence and other traditional resources obtained on or from the land and waters (but not for commercial purposes).
B Claim for compensation
The claim for compensation was framed, pursuant to s 51(4) of the Native Title Act, in terms that compensation for loss, diminution, impairment or other effect on native title of the compensable acts should consist of the following elements:
(1) compensation for economic loss of the native title rights and interests to be determined as if the effect of each compensable act was equivalent to the compulsory acquisition of an unencumbered freehold estate in the subject land;
(2) compound interest at the superannuation rate or alternatively on a compound "risk free rate" of yields on long-term (10 year) government bonds or alternatively simple interest at the Pre‑Judgment Interest Rate fixed by the Federal Court of Australia Practice Note CM16 ("the Practice Note rate") on the amount of compensation awarded for economic loss to be computed from the date as at which the compensation is assessed until judgment or payment; and
(3) compensation for loss or diminution of connection or traditional attachment to land and intangible disadvantages of loss of rights to live on and gain spiritual and material sustenance from the land, to be assessed by adaptation of the criteria in Sch 2 rr 2(b) (special value) and 9 (intangible disadvantage) of the Lands Acquisition Act (NT), to be assessed as at the time of trial.
Trial judge
The trial judge assessed compensation in the amount of $3,300,661 comprised as follows:
(1) compensation for economic loss to be assessed at the date at which native title is taken to have been extinguished under the Native Title Act and assessed as being 80 per cent of the unencumbered freehold value of the affected land, namely, $512,400;
(2) interest payable as part of compensation for economic loss on a simple interest basis calculated at the Practice Note rate from time to time and computed from the date of extinguishment of native title until judgment, being a sum of $1,488,261; and
(3) compensation for non-economic loss payable in the amount of $1.3 million.
Full Court
The Full Court varied the trial judge's assessment of economic loss from 80 per cent of the unencumbered freehold value of the affected land as at the date of extinguishment to 65 per cent of the unencumbered freehold value as at that date but otherwise, relevantly, affirmed the trial judge's decision. Accordingly, the orders of the trial judge were varied to award the Claim Group $416,325 for economic loss and $1,183,121 in interest on that sum, with the total compensation award being $2,899,446.
Appeals to this Court
By grants of special leave, the Claim Group, the Northern Territory and the Commonwealth each appeal to this Court.
The Claim Group appeal on two grounds, being in substance that:
(1) the Full Court erred in assessing the Claim Group's economic loss at 65 per cent of the freehold value of the subject land and should have assessed it as being the freehold value of the land without reduction; and
(2) the Full Court erred in awarding interest only on a simple interest basis computed at the Practice Note rate and should have allowed interest on a compound basis computed at the risk free rate.
The Northern Territory appeals on grounds in substance that:
(1) the Full Court erred in rejecting the valuation methodology advocated by one of the valuers who gave evidence, Mr Wayne Lonergan, or alternatively, in assessing the Claim Group's economic loss at any more than 50 per cent of the unencumbered freehold value as at the date of extinguishment; and
(2) the Full Court erred in affirming the trial judge's assessment of compensation for non-economic loss in the amount of $1.3 million by:
(a) failing to approach the assessment as an award given as consolation or solace for distress consequent upon a loss for which no monetary value can be put;
(b) upholding the trial judge's erroneous reliance on the effects of one compensable act on a nearby ritual ground to support a finding that some other, unidentified compensable acts had a collateral detrimental effect on native title beyond the land on which those other, unidentified compensable acts occurred;
(c) failing to apply a causation analysis consistent with ss 23J and 51(1) of the Native Title Act, by upholding the trial judge's erroneous reliance on the compensable acts as part of an overall erosion of connection to country; and
(d) failing to find that the award for non-economic loss was manifestly excessive.
And the Commonwealth appeals on grounds in substance that:
(1) the Full Court's assessment of the Claim Group's economic loss at 65 per cent of the freehold value of the subject land was erroneous or manifestly excessive and should not have exceeded 50 per cent;
(2) the Full Court erred in not holding that the trial judge was in error in awarding interest under s 51(1) of the Native Title Act as part of compensation rather than as interest on compensation;
(3) the Full Court erred in upholding the trial judge's assessment of non-economic loss in the amount of $1.3 million because they:
(a) included a component relating to the capacity to conduct rituals on adjacent land not the subject of compensable acts despite the fact that on the facts as found by the trial judge there was no effect on that capacity which was an "effect of" a compensable act within the meaning of s 51(1) of the Native Title Act;
(b) included a component for a "sense of failed responsibility for the obligation under traditional laws and customs to have cared for and looked after the land" despite there being no evidence that the Claim Group experienced any such feelings over all of the land the subject of the compensable acts and, to the extent that there was evidence that they did experience such feelings, their feelings were the result of a pre-existing absence of a recognised right to control access to the land rather than the "effect of" the compensable acts within the meaning of s 51(1) of the Native Title Act;
(c) included a component for the purported effect of compensable acts on future descendants of the Claim Group despite the Native Title Act not conferring an entitlement to compensation on persons who would have become members of the Claim Group only after native title had been extinguished;
(d) failed to find that the trial judge did not consider the geographical extent of the areas of land over which the compensable acts took place in comparison to the overall area of land available to the Claim Group to exercise and enjoy their rights as "native title holders" within the meaning of the Native Title Act and as "traditional owners" under the Aboriginal Land Rights (Northern Territory) Act; and
(e) found that commercial agreements entered into by the Claim Group, which contained agreed, minimum, solatium-type payments for damage to or destruction of sacred sites, had no relevance to the assessment of compensation; and
(4) the Full Court erred in failing to hold that the assessment of $1.3 million was manifestly excessive, because they:
(a) applied the wrong test by asking whether the sum was substantially beyond the highest figure which could reasonably have been awarded, when the correct test was to ask whether the sum was a wholly erroneous estimate of compensation;
(b) failed to consider the upper limit of a sound discretionary judgment for an award of compensation for non‑economic loss;
(c) wrongly had regard to decisions of the Inter-American Court of Human Rights in breach of the rules of natural justice and erroneously found that those decisions validated the sum awarded when they were incapable of doing so; and
(d) wrongly had regard to a 2002 discussion paper entitled "How Can Judges Calculate Native Title Compensation?", in breach of the rules of natural justice.
The Commonwealth contended that the sum awarded for non‑economic loss should have been in the order of $230,000.
The Attorneys-General for the States of South Australia, Queensland, and Western Australia, and the Central Desert Native Title Services Limited and the Yamatji Marlpa Aboriginal Corporation were each granted leave to intervene.
C Legislative framework
It is necessary to begin by examining and considering the provisions of the Native Title Act. The Native Title Act recognises, and protects, native title and provides that native title is not able to be extinguished contrary to the Native Title Act; any extinction or impairment of native title can only be in accordance with the specific and detailed exceptions which the Native Title Act prescribes or permits.
The scheme of the Native Title Act reflects the context in which it was enacted - it operates upon native title rights and interests defeasible at common law but substantially protected against extinguishment, from 31 October 1975, by the Racial Discrimination Act 1975 (Cth) and, in particular, s 10(1) of that Act.
"Native title" or "native title rights and interests", elaborately defined in s 223, comprise a number of elements, all of which must be given effect. Section 223(1) provides that the expression "native title" or "native title rights and interests" means:
"the communal, group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where:
(a) the rights and interests are possessed under the traditional laws acknowledged, and the traditional customs observed, by the Aboriginal peoples or Torres Strait Islanders; and
(b) the Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters; and
(c) the rights and interests are recognised by the common law of Australia."
As that definition provides, the rights and interests of Aboriginal peoples may be "communal, group or individual". The rights and interests must be "in relation to land or waters" and have three characteristics: that they be possessed under the traditional laws acknowledged and the traditional customs observed by the Aboriginal peoples concerned; that, by those traditional laws and traditional customs observed by those Aboriginal peoples, those peoples have a connection with the land or waters; and that the rights and interests be recognised by the common law of Australia.
The first and second of those characteristics - that native title is a bundle of rights and interests possessed under traditional laws and customs and that, by those laws and customs, Aboriginal peoples have a connection with the land or waters - reflect that native title rights and interests have a physical or material aspect (the right to do something in relation to land or waters) and a cultural or spiritual aspect (the connection with the land or waters).
As the plurality in this Court said in Western Australia v Ward:
"The question in a given case whether is satisfied presents a question of fact. It requires not only the identification of the laws and customs said to be traditional laws and customs, but, no less importantly, the identification of the rights and interests in relation to land or waters which are possessed under those laws or customs. These inquiries may well depend upon the same evidence as is used to establish connection of the relevant peoples with the land or waters. This is because the connection that is required by par (b) of s 223(1) is a connection with the land or waters 'by those laws and customs'. Nevertheless, it is important to notice that there are two inquiries required by the statutory definition: in the one case for the rights and interests possessed under traditional laws and customs and, in the other, for connection with land or waters by those laws and customs." (emphasis in original)
Not only is native title recognised and protected in accordance with the Native Title Act and not able to be extinguished contrary to the Native Title Act, but if native title is extinguished, then the Native Title Act provides for compensation.
As the Preamble to the Native Title Act records, Aboriginal peoples and Torres Strait Islanders have been progressively dispossessed of their lands, largely without compensation, and the enactment of the Native Title Act was intended to rectify the consequences of past injustices. The provisions of the Native Title Act are intended to secure the adequate advancement and protection of Aboriginal peoples and Torres Strait Islanders and to ensure that they receive the full recognition and status within the Australian nation to which history, their prior rights and interests, and their rich and diverse culture, fully entitle them to aspire. The Preamble goes on to state: "[j]ustice requires that, if acts that extinguish native title are to be validated or to be allowed, compensation on just terms … must be provided to the holders of the native title".
The system established by the Native Title Act to address, in a practical way, the consequences of acts impacting native title rights and interests is complex. That complexity arises because the Act seeks to deal with concepts and ideas which are both ancient and new; developed but also developing; retrospective but also prospective. It arises because the Native Title Act requires the just and proper ascertainment and recognition of native title rights and interests; that certain acts that extinguish native title rights and interests are to be validated or allowed; that, where appropriate, native title should not be extinguished, but should be revived after a validated act ceases; and that, where native title rights and interests are extinguished, compensation on just terms is to be provided.
As has been seen, there are different categories of compensable acts in issue, and those acts took place at different times. The statutory source of the entitlement to compensation, and the consequences that flow from validation of an act, depend on the category of act, and whether the act was a past act, an intermediate period act or a previous exclusive possession act within the scope of Divs 2, 2A and 2B of Pt 2 of the Native Title Act. Hence, the categorisation of the act and the timing of the act are both relevant.
Turning first to past acts, they are addressed in Div 2 of Pt 2 of the Native Title Act. A past act is, relevantly, an act which occurred before 1 January 1994 when native title existed in relation to particular land, which act was invalid (apart from the Native Title Act) to any extent but would have been valid to that extent if native title did not exist. In short, a past act is a pre‑January 1994 act which is invalid because of the existence of native title.
There are four categories of past act. A category A past act relates to a grant of certain freehold estates, a grant of certain leases and the construction of certain public works. A category B past act relates to a grant of certain leases. A category C past act relates to the grant of mining leases and a category D past act is one that is not a category A, B or C past act.
The classification of an act affects the impact of the act on native title. Category A past acts, relevantly, extinguish native title and category B past acts extinguish any native title to the extent of any inconsistency. The non‑extinguishment principle applies to category C and D past acts. Where the non‑extinguishment principle applies, the Native Title Act does not extinguish native title but native title may be suspended wholly or in part to take account of the act.
Putting the categories aside, the classification of an act as a "past act" determines the validation mechanism in respect of that act. In the present appeals, all but five of the acts were past acts within the meaning of s 228 of the Native Title Act. Those past acts were attributed to the Northern Territory and were validated on 10 March 1994 by s 19 in Div 2 of Pt 2 of the Native Title Act and s 4 of the Validation (Native Title) Act (NT). Both of those provisions, in their terms, provide that a past act is valid and is taken always to have been valid. That validation perfected, or made absolute, the compensable acts and removed any restriction by which the acts had no validity as against the native title holders. In short, validation effected a clearing of the native title rights and interests from the freehold title.
Separate to past acts are "intermediate period acts". In these appeals, the remaining five acts were intermediate period acts. Intermediate period acts are acts which, relevantly, occurred between 1 January 1994 and 23 December 1996, where native title existed in relation to particular land, which acts were invalid (apart from the Native Title Act) to any extent but would have been valid to that extent if native title did not exist. Division 2A of Pt 2 of the Native Title Act deals with validation of intermediate period acts. The intermediate period acts were validated on 1 October 1998 by s 22F in Div 2A of Pt 2 of the Native Title Act and s 4A of the Validation (Native Title) Act (NT).
There is a further relevant category of acts, being "previous exclusive possession acts". Division 2B of Pt 2 of the Native Title Act, headed "[c]onfirmation of past extinguishment of native title by certain valid or validated acts", deals with previous exclusive possession acts. Section 23B of the Native Title Act provides that a previous exclusive possession act is, relevantly, a grant made before 23 December 1996 which was validated under Div 2 or Div 2A of Pt 2 of the Native Title Act (thereby confirming that certain validated past acts and intermediate period acts were validated). Thus, both past acts and intermediate period acts may be previous exclusive possession acts. The important distinction to bear in mind is that acts to which the non-extinguishment principle applies are not previous exclusive possession acts, a point to which it will be necessary to return.
The majority of the compensable acts in these appeals were previous exclusive possession acts within the meaning of s 23B of the Native Title Act. Validation of a previous exclusive possession act results in extinguishment of native title. The previous exclusive possession acts in these appeals, attributable to the Northern Territory, extinguished native title.
The exceptions were category D past acts within the meaning of s 232 of the Native Title Act. These acts were not previous exclusive possession acts, because the non-extinguishment principle applied to these acts. However, all but three of the category D past acts were followed by subsequent previous exclusive possession acts affecting the same lots which extinguished native title over those lots.
Section 23J in Div 2B of Pt 2 of the Native Title Act provides that native title holders are entitled to compensation in accordance with Div 5 for any extinguishment under Div 2B of their native title rights and interests. Accordingly, by operation of s 23J in Div 2B, in relation to the compensable acts which were previous exclusive possession acts, the native title holders were entitled to compensation in accordance with Div 5 for the extinguishment of their native title rights and interests by each act.
For the category D past acts which were not followed by subsequent previous exclusive possession acts, the native title holders were entitled to compensation under s 20 in Div 2 of Pt 2 of the Native Title Act, which, in turn, provides that they are entitled to compensation under s 17(1) or (2) on the assumption that s 17 applied to those category D past acts. Section 17, by its terms, applies only to acts attributable to the Commonwealth. However, when read with s 20(1), s 17 is to be read and applied as if it covered acts attributable to the Northern Territory. Relevantly for the purposes of these appeals, s 17(2) provides, under the heading "[n]on-extinguishment case":
"If it is any other past act [other than a category A or category B past act], the native title holders are entitled to compensation for the act if:
(a) the native title concerned is to some extent in relation to an onshore place and the act could not have been validly done on the assumption that the native title holders instead held ordinary title to:
(i) any land concerned; and
(ii) the land adjoining, or surrounding, any waters concerned; or
..." (emphasis added)
These appeals were conducted on the basis that the date of validation of all acts was 10 March 1994.
After an entitlement to compensation has been established, the compensation payable under Div 2, 2A, 2B, 3 or 4 of Pt 2 of the Native Title Act in relation to an act is payable only in accordance with Div 5. As has been seen, the compensation payable to the Claim Group arises under either Div 2 or Div 2B of Pt 2 of the Native Title Act, and accordingly, s 51(1) applies in relation to determining the compensation claims in these appeals.
Section 51(1) is the core provision. It provides that:
"Subject to subsection (3), the entitlement to compensation under Division 2, 2A, 2B, 3 or 4 is an entitlement on just terms to compensate the native title holders for any loss, diminution, impairment or other effect of the act on their native title rights and interests." (emphasis added)
Specific aspects of s 51(1) must be recognised at the outset. It is the native title holders - relevantly, the person or persons who hold the native title - who are entitled to compensation on just terms. And those native title holders are entitled to compensation for any loss, diminution, impairment or other effect of the act on their native title rights and interests. Relevantly, an act is an "[a]ct affecting native title" if it extinguishes the native title rights and interests.
The Native Title Act does not expressly provide the date upon which the entitlement to compensation arises, or the date on which the value of the native title right and interest being extinguished is to be determined. However, as the entitlement to compensation is for the "act" itself and the validation provisions deem the extinguishing act to be valid and always to have been valid from the time of the act, the date for the assessment of the compensation is the date of the act.
Next, s 51(1), in its terms, recognises the existence of the two aspects of native title rights and interests identified in s 223(1) to which reference has already been made - the physical or material aspect (the right to do something in relation to land) and the cultural or spiritual aspect (the connection with the land) - as well as the fact that the manner in which each aspect may be affected by a compensable act may be different.
Both aspects are addressed in terms by s 51(1) providing for an entitlement on just terms to compensation to the native title holders for "any loss, diminution, impairment or other effect of the act on their native title rights and interests" (emphasis added).
Section 51(1) thus recognises that the consequences of a compensable act are not and cannot be uniform. The act and the effect of the act must be considered. The sub-section also recognises not only that each compensable act will be fact specific but that the manner in which the native title rights and interests are affected by the act will vary according to what rights and interests are affected and according also to the native title holders' identity and connection to the affected land. As the trial judge held, s 51(1) does not in its terms require that the consequence directly arise from the compensable act. The court's task of assessment under s 51(1) is to be undertaken in the particular context of the Native Title Act, the particular compensable acts and the evidence as a whole.
Section 51(2) then addresses acquisition of native title rights and interests under compulsory acquisition law. Section 51(3) deals with an act which is not the compulsory acquisition of all or any of the native title rights and interests of the native title holders but which satisfies the "similar compensable interest test". That test is satisfied if, in relation to a past act, an intermediate period act, or a future act, the native title concerned relates to an onshore place and the compensation would, apart from the Native Title Act, be payable under any law for the act on the assumption that the native title holders instead held ordinary title to any land or waters concerned and to the land adjoining, or surrounding, any waters concerned. None of the compensable acts in these appeals falls within either s 51(2) or (3). Where neither s 51(2) nor (3) applies, s 51(4) provides that if there is a compulsory acquisition law for the Commonwealth (if the act giving rise to the entitlement is attributable to the Commonwealth) or for the State or Territory to which the act is attributable, the court, person or body making the determination of just terms may, subject to s 51(5)‑(8), in doing so have regard to any principles or criteria set out in that law for determining compensation. Here, there was such a law - the Lands Acquisition Act (NT).
Section 51A provides that, subject to s 53, the total compensation payable under Div 5 for an act that extinguishes all native title in relation to any particular land or waters must not exceed the amount that would be payable if the act were instead a compulsory acquisition of a freehold estate in the land or waters.
Section 53 provides that where the application of any of the provisions of the Native Title Act in any particular case would result in a s 51(xxxi) acquisition of property of a person other than on s 51(xxxi) just terms, the person is entitled to compensation as is necessary to ensure that the acquisition is on just terms. Section 53 is a shipwrecks clause.
Section 51A provides a cap on compensation by providing that the total compensation payable under Div 5 for an act that extinguishes all native title in relation to particular land or waters must not exceed the amount that would be payable if the act were instead a compulsory acquisition of a freehold estate in the land or waters. The statutory recognition in s 51(1) that the two aspects of native title rights and interests - the economic value of the native title rights and interests and the non-economic value of those rights and interests - are to be compensated assists in understanding the work to be done by s 51A of the Native Title Act. As the Commonwealth submitted, those two aspects of native title rights and interests inform the operation of s 51A.
When introducing s 51A as part of the 1998 amendments to the Native Title Act following this Court's decision in Wik Peoples v Queensland, Senator Minchin said that the "underlying premise of the Native Title Act is to equate native title with freehold for the purposes of dealing with native title" and the cap "should reflect the compensation payable if native title amounted to freehold". Under the general law, the compensation for the compulsory acquisition of land comprises the freehold value of the land as well as compensation for severance, injurious affection, disturbance, special value, solatium or other non-economic loss.
Consistent with equating native title rights and interests with freehold for the purposes of compensation, s 51(2) and (4) of the Native Title Act refer to the fact that the court, person or body making the determination of compensation on just terms may have regard to any principles or criteria set out in a compulsory acquisition law for the Commonwealth, or for the State or Territory to which the act is attributable. Those various acquisition laws address the non‑economic aspect of the compensation in different terms.
It is important, however, not to allow words like "solatium" in land acquisition statutes, or cases about those statutes, to deflect attention from the nature of the rights and interests that have been acquired and the compensation that must be assessed to provide just terms for their acquisition. Asking what would be allowed as "solatium" on the acquisition of rights that owe their origin and nature to English common law distracts attention from the relevant statutory task of assessing just terms for the acquisition of native title rights and interests that arise under traditional laws and customs which owe their origins and nature to a different belief system.
The label "solatium" is also distracting in another way. What the Native Title Act requires to be compensated is the cultural loss arising on and from the extinguishment of native title rights and interests. Given that the Native Title Act is a Commonwealth Act which, under Div 5, equates native title rights and interests to freehold for the purposes of dealing with native title, and is intended to provide compensation for the extinguishment of those rights and interests on just terms to all native title holders affected by a compensable act, ss 51 and 51A are to be read as providing that the compensation payable to the native title holders is to be measured by reference to, and capped at, the freehold value of the land together with compensation for cultural loss. Principles or criteria set out in a compulsory acquisition law for the Commonwealth, or for the State or Territory to which the compensable act is attributable, may be of assistance but they are not determinative of the issues arising under s 51(1).
D Economic loss claim
The Claim Group are entitled to compensation on just terms for any loss, diminution, impairment or other effect of a compensable act on their native title rights and interests. In order to assess the value of the affected native title rights and interests, it is necessary first to identify the date on which the value is to be assessed and then the nature of the affected native title rights and interests.
The date on which the value is to be assessed was not in dispute before this Court. Following a relevant holding from the trial judge, the matter was conducted on the basis that the economic value of the Claim Group's native title in the application area fell to be determined according to the rights and interests actually held by the Claim Group as at the date that their native title to the land was taken to have been extinguished by the compensable acts.
The reason for adopting that approach was that, under the "rules for the assessment of compensation" for compulsory acquisition of land in Sch 2 to the Lands Acquisition Act (NT), each person having an estate or interest in land which is compulsorily acquired has a separate and independent claim to compensation for the value of the interest that is taken from him or her by the acquiring authority. As was earlier observed, s 51(4) of the Native Title Act provides that the court, person or body making the determination of compensation on just terms may have regard to such rules or principles.
In identifying the nature of the Claim Group's native title rights and interests it assists to begin with the approaches adopted by the trial judge and the Full Court.
Trial judge
As has been noticed, the trial judge assessed the economic value of the native title rights and interests as being 80 per cent of freehold value. His Honour described that assessment as an "intuitive decision, focusing on the nature of the rights held by the [C]laim [G]roup which had been either extinguished or impaired by reason of the [compensable] acts in the particular circumstances" and which reflected "a focus on the entitlement to just compensation for the impairment of those particular native title rights and interests". As it appears from the trial judge's reasons for judgment, there were four principal considerations that informed his conclusion.
The first was that, in his Honour's view, it was artificial to focus on the amount which a willing but not anxious purchaser would have been prepared to pay for the native title rights and interests which were affected by the compensable acts, because the native title rights and interests were incapable of alienation and thus could not be sold or transferred to anyone other than the Northern Territory or, possibly, the Commonwealth. Likewise, in his Honour's view, it was artificial to focus on the amount for which the Claim Group would have been willing to sell the native title rights and interests. It followed, according to his Honour, that the "conventional valuation approach expressed in Spencer[] ... seems inappropriate".
The second was that, in his Honour's view, it was inappropriate "simply to proceed on the basis of a comparison of the bundle of rights held by the [Claim Group], remote from their true character, for the purposes of assessing the extent to which they might equate to, or partially equate to, the bundle of rights held by a freehold or other owner or person having an interest in land" - although his Honour added that he was careful in making his assessment not to include any allowance for the elements related to the cultural or ceremonial significance of the land or the Claim Group's attachment to the land, which fell to be assessed separately.
The third was that, having regard to the express purposes of the Native Title Act and the recognition of Aboriginal peoples as the original inhabitants of Australia, his Honour considered that it would be wrong to treat native title rights and interests in land as other than the equivalent of freehold, at least in the case of exclusive native title rights and interests, or to treat the economic value of exclusive native title rights and interests as other than equivalent to the economic value of freehold interests. In his Honour's view, the inalienability of the native title rights and interests did not constitute a significant discounting factor. For as his Honour conceived of it, that appeared to be "the undebated premise" in Amodu Tijani v Secretary, Southern Nigeria and Geita Sebea v Territory of Papua.
The fourth was that, although the subject native title rights and interests were inalienable and so not transferable, the trial judge considered that they existed as a real impediment to any further grants of interest in the land, and, more generally, were in a practical sense "very substantial" and "exercisable in such a way as to prevent any further activity on the land, subject to the existing tenures". The trial judge, however, rejected the Claim Group's contention that their non-exclusive rights and interests should be valued as if they were exclusive. His Honour also rejected the notion that compensation on just terms for the extinguishment of non-exclusive native title rights and interests should be assessed on the basis that upon extinguishment the Crown acquired radical or freehold title unencumbered by native title, and thus that freehold value was the appropriate measure of the compensation. His Honour stated that it was necessary to arrive at a value which was less than freehold value and which recognised and gave effect to the nature of the native title rights and interests.
Full Court
To some extent, the Full Court reasoned differently. Like the trial judge, their Honours took the view that the starting point for the calculation of the economic value of the Claim Group's native title rights and interests should be the freehold value of the land and that it should be adjusted to take account of the restrictions and limitations applicable to the non-exclusivity of those rights and interests. But the Full Court considered that the trial judge had erred in holding that those rights and interests constituted a real impediment to any further grants of interest in the land and, in a practical sense, were exercisable in such a way as to prevent any further activity on the land subject only to existing tenures. In the Full Court's view, the trial judge had also erred in holding, in effect, that the loss to the Claim Group was to be calculated by reference to the benefit to the Northern Territory of acquiring the rights and interests, and that his Honour had thereby improperly inflated the figure for compensation. Further, in the Full Court's view, the trial judge had erred in failing to discount the value of the Claim Group's native title rights and interests to allow for the fact that they were inalienable and also by rejecting the Spencer test of what a willing but not anxious purchaser would have been prepared to pay to a willing but not anxious vendor to secure the extinguishment of those rights and interests. The Full Court, however, rejected the Commonwealth's contention that the economic value of the Claim Group's native title rights and interests was no more than 50 per cent of freehold value. In the Full Court's view, they were worth 65 per cent of freehold value.
At this stage, one further matter should be mentioned. The trial judge assessed the economic value of the native title rights and interests on the basis of the market value of freehold estates in various lots the subject of the compensable acts as valued by Mr Ross Copland, an expert land valuer called on behalf of the Commonwealth. On appeal to the Full Court, the Northern Territory unsuccessfully challenged the trial judge's adoption of Mr Copland's valuations in respect of certain lots. Before this Court, the parties were agreed that Mr Copland's valuations should form the basis of the assessment of compensation save with respect to lot 16, in relation to which the Northern Territory urged this Court to adopt the valuation provided by its expert, Mr Wayne Wotton. That contention was put on the basis that Mr Lonergan's methodology for valuing native title rights and interests should be accepted. For reasons to be explained later in this judgment, Mr Lonergan's methodology is rejected.
Criteria of valuation
In this Court, all parties accepted that the economic value of the native title rights and interests should be determined by application of conventional economic principles and tools of analysis, and, in particular, by application of the Spencer test adapted as necessary to accommodate the unique character of native title rights and interests and the statutory context. The difference between the parties was as to how the Spencer test should be applied.
The Full Court were right to begin their ascertainment of the economic value of the native title rights and interests with the identification of those rights and interests. At common law, freehold ownership or, more precisely, an estate in fee simple is the most ample estate which can exist in land. As such, it confers the greatest rights in relation to land and the greatest degree of power that can be exercised over the land; and, for that reason, it ordinarily has the greatest economic value of any estate in land. Lesser estates in land confer lesser rights in relation to land and, therefore, a lesser degree of power exercisable over the land; and, for that reason, they ordinarily have a lesser economic value than a fee simple interest in land.
Similar considerations apply to native title. Native title rights and interests are not the same as common law proprietary rights and interests but the common law's conception of property as comprised of a "bundle of rights" is translatable to native title, and, as has been held, draws attention to the fact that, under traditional law and custom, some but not all native title rights and interests are capable of full or accurate expression as rights to control what others may do on or with the land. So, therefore, just as it is necessary to determine the nature and extent of common law proprietary rights and interests as a first step in their valuation, it is necessary to identify the native title rights and interests in question as the first step in their valuation.
As the trial judge found, the Claim Group's rights and interests were essentially usufructuary, ceremonial and non-exclusive. The Claim Group's rights and interests were perpetual and objectively valuable in that they entitled the Claim Group to live upon the land and exploit it for non-commercial purposes. But they were limited. As earlier mentioned, the historic grant of the pastoral leases extinguished the Claim Group's traditional right to control access to the land and to decide how the land should be used; and, once so extinguished, the right did not revive. Thereafter, the Claim Group had no entitlement to exclude others from entering onto the land and no right to control the conduct of others on the land. Nor did the Claim Group have the right to grant co-existing rights and interests in the land. And because the Claim Group's native title rights and interests were non-exclusive, it was also open to the Northern Territory to grant additional co-existent rights and interests in and over the land, including grazing licences, usufructuary licences of up to five years' duration and licences to take various things from the land.
The economic value of the Claim Group's native title rights and interests fell to be valued accordingly. The task required an evaluative judgment to be made of the percentage reduction from full exclusive native title which properly represented the comparative limitations of the Claim Group's rights and interests relative to full exclusive native title and then the application of that percentage reduction to full freehold value as proxy for the economic value of full exclusive native title.
The Claim Group contended that so to proceed offended the Racial Discrimination Act in two respects. The first was said to be that, because the Full Court did not equate the measure of compensation payable to native title holders to the compensation payable to the holders of other forms of title, the Full Court's reasoning was ex facie inconsistent with the protection afforded by s 10(1) of the Racial Discrimination Act. So much plainly followed, it was said, from the following observations of Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ in Western Australia v The Commonwealth (Native Title Act Case):
"Security in the right to own property carries immunity from arbitrary deprivation of the property. Section 10(1) thus protects the enjoyment of traditional interests in land recognised by the common law. However, it has a further operation.
If a law of a State provides that property held by members of the community generally may not be expropriated except for prescribed purposes or on prescribed conditions (including the payment of compensation), a State law which purports to authorise expropriation of property characteristically held by the 'persons of a particular race' for purposes additional to those generally justifying expropriation or on less stringent conditions (including lesser compensation) is inconsistent with s 10(1) of the Racial Discrimination Act." (footnote omitted)
In that connection, the Claim Group also relied on the observation of Gleeson CJ, Gaudron, Gummow and Hayne JJ in Ward that:
"the [Racial Discrimination Act] must be taken to proceed on the basis that different characteristics attaching to the ownership or inheritance of property by persons of a particular race are irrelevant to the question whether the right of persons of that race to own or inherit property is a right of the same kind as the right to own or inherit property enjoyed by persons of another race."
In the Claim Group's submission, it followed that s 10(1) of the Racial Discrimination Act required that the Claim Group's non‑exclusive native title rights and interests be valued in no different fashion from exclusive native title rights and interests, and, therefore, at not less than freehold value.
Those contentions must be rejected. Whether or not the value of any given native title is to be equated to freehold value for the purposes of assessing just compensation must depend on the exact incidents of the native title rights and interests. If the native title rights and interests amount or come close to a full exclusive title, it is naturally to be expected that the native title rights and interests will have an objective economic value similar to freehold value. By contrast, if the native title rights and interests are significantly less than a full exclusive title, it is only to be expected that they will have an objective economic value significantly less than freehold value. There is nothing discriminatory about treating non-exclusive native title as a lesser interest in land than a full exclusive native title or, for that reason, as having a lesser economic value than a freehold estate. To the contrary, it is to treat like as like.
The point made in both the Native Title Act Case and Ward was that, although native title rights and interests have different characteristics from common law land title rights and interests, and derive from a different source, native title holders are not to be deprived of their native title rights and interests without the payment of just compensation any more than the holders of common law land title are not to be deprived of their rights and interests without the payment of just compensation. Equally, native title rights and interests cannot be impaired to a point short of extinguishment without payment of just compensation on terms comparable to the compensation payable to the holders of common law land title whose rights and interests may be impaired short of extinguishment. There was no suggestion in either the Native Title Act Case or Ward that the nature and incidents of particular native title rights and interests are irrelevant to their economic worth or to the determination of just compensation for extinguishment or impairment. To the contrary, it is plain from the holding in Ward that, because the non-exclusive native title rights and interests in that case did not amount to having "lawful control and management" of the land, the native title holders were not to be assimilated to "owners" but could at best be regarded as "occupiers" and thus could be compensated only at the lesser rate applicable to occupiers. As Gleeson CJ, Gaudron, Gummow and Hayne JJ stated:
"This result is no different from that which would obtain in respect of any holder of rights and interests that did not amount to the 'lawful control and management' of the land. The [Racial Discrimination Act] is therefore not engaged on this basis."
In sum, what the Racial Discrimination Act requires in its application to native title is parity of treatment and there is no disparity of treatment if the economic value of native title rights and interests is assessed in accordance with conventional tools of economic valuation adapted as necessary to accommodate the unique character of native title rights and interests and the statutory context. To argue, as the Claim Group did, that there is disparity because their native title rights and interests have a lesser economic value than the economic value of an estate in fee simple is to ignore that the Claim Group's native title rights and interests were comparatively limited and considerably less extensive than full exclusive native title. Thus, as has already been emphasised, the proper comparison was not between the native title rights and interests and the rights and interests which comprise an estate in fee simple, but between the native title rights and interests and the rights and interests of a full exclusive native title.
The second respect in which it was contended that the Full Court's analysis offended the Racial Discrimination Act was that the Full Court took into account that the Claim Group's native title was vulnerable to diminution by the grant by the Northern Territory of lesser co-existing titles. The Claim Group contended that the operation of s 10(1) of the Racial Discrimination Act precluded the Northern Territory from granting any further interest in the land unless the same interest could have been granted over freehold or leasehold land under the Crown Lands Ordinance (NT) or the Crown Lands Act (NT), and thus that the Northern Territory would have been prevented from granting rights and interests over the land even if those grants were not inconsistent with the continued existence of the Claim Group's non‑exclusive native title rights and interests. Alternatively, it was contended that, even if it had been open to the Northern Territory to grant such further interests, on the facts of this case the Northern Territory would not realistically have done so.
Those contentions must also be rejected. It is necessary to consider the treatment of pastoral leases under the relevant legislation. Pastoral leases, before the determination in Wik, satisfied the definition of a category A past act in the Native Title Act (an act which wholly extinguished native title if still in existence on 1 January 1994). In Wik, this Court held that a pastoral lease was not necessarily inconsistent with all native title rights and interests. The Native Title Act was subsequently amended by the inclusion of a definition of previous non‑exclusive possession act, and by prescription of the effect of a previous non‑exclusive possession act on native title.
Whilst that amendment acknowledged there could be a grant of a non‑exclusive pastoral lease, there was no reversal of total extinguishment of native title by previous exclusive possession acts as had already occurred under the Native Title Act (as first enacted). Accordingly, if an exclusive pastoral lease granted after the enactment of the Racial Discrimination Act were still in force on 1 January 1994 that lease would be classified as a category A past act which wholly extinguished native title. If, however, a non-exclusive pastoral lease were to some extent not inconsistent with native title, the grant was not classified as a past act but rather as a previous non-exclusive possession act and thus, native title was extinguished only to the extent of any inconsistency with native title.
According to the Claim Group's argument, every pastoral lease enacted after the commencement of the Racial Discrimination Act that was still in force on 1 January 1994 would have been invalid. But if that were so, it would mean that, perforce of ss 23G(2) and 15(1) of the Native Title Act, every such pastoral lease would be taken wholly to have extinguished native title. Contrary to the Claim Group's submissions, it has consistently been held that the question of validity of pastoral leases enacted after the commencement of the Racial Discrimination Act is to be determined according to whether the grant of a pastoral lease had any further extinguishing effect on native title. Provided such further rights and interests were not inconsistent with the continued existence of native title, they did not detract from the native title holders' rights and interests and so did not discriminate against them.
The Claim Group's contention as to the improbability of the Northern Territory granting further interests in the land is beside the point. The contention as advanced focused on pastoral leases alone. It is plain, however, that the Full Court had in mind a variety of other interests, including grazing licences, usufructuary licences and licences to take things from the land. Furthermore, even if the likelihood of grants of further interests was slight, and none were in fact granted, it was the possibility of or potential for such grants that was relevant to economic value. For reasons already given and which will be discussed in more detail later in these reasons, it is the incidents of native title rights and interests and not the way in which they might be or not be exercised that is determinative of their nature and thus their economic value. The way that native title rights and interests are used and enjoyed may affect their non-economic or cultural value, which is dealt with separately, later in these reasons.
The Claim Group argued that, even if that were so, the native title rights and interests were not concurrent with other rights and interests, because no other person held any rights or interests in the subject land that were valid against the native title rights and interests; that the recognition of native title rights and interests by the common law meant that those rights and interests could have been protected by legal and equitable remedies as if they were common law interests in land; and that the historic extinguishment of the Claim Group's right of exclusive possession did not in fact lessen the ability of the Claim Group to determine the use of their country by others through their power to surrender native title so as to enable the conferral of valid rights on others.
Those arguments must also be rejected. The fact that the Claim Group may have had use and enjoyment of the subject land says nothing directly as to the nature of their native title rights and interests in the land and therefore nothing directly as to the entitlement of the Northern Territory to grant co‑existing titles. Equally, the fact that infringement of the Claim Group's native title rights and interests might have been prevented by legal or equitable remedies says nothing against the entitlement of the Northern Territory to grant co-existing titles. And to the extent that the argument should be understood as being that the Claim Group had some sort of qualified right otherwise to control access to land, it is precluded by analogy with the holding in Ward that the grants of pastoral leases in that case were inconsistent with the continued existence of the native title right to control access to land and make decisions as to how the land could lawfully be used by others.
Bifurcated approach to valuation
The parties were agreed before the trial judge and the Full Court that the approach to the assessment of just compensation should proceed according to what was described as the bifurcated approach of first determining the economic value of the native title rights and interests that had been extinguished and then estimating the additional, non-economic or cultural loss occasioned by the consequent diminution in the Claim Group's connection to country. That was an appropriate way to proceed. Just as compensation for the infringement of common law land title rights and interests is ordinarily comprised of both a component for the objective or economic effects of the infringement (being, in effect, the sum which a willing but not anxious purchaser would be prepared to pay to a willing but not anxious vendor to achieve the latter's assent to the infringement) and a subjective or non‑economic component (perhaps the most common instance of which is an allowance for special value), the equality of treatment mandated by s 10(1) of the Racial Discrimination Act, as reflected in s 51 of the Native Title Act, necessitates that the assessment of just compensation for the infringement of native title rights and interests in land include both a component for the objective or economic effects of the infringement (being, in effect, the sum which a willing but not anxious purchaser would have been prepared to pay to a willing but not anxious vendor to obtain the latter's assent to the infringement, or, to put it another way, what the Claim Group could fairly and justly have demanded for their assent to the infringement) and a component for non-economic or cultural loss (being a fair and just assessment, in monetary terms, of the sense of loss of connection to country suffered by the Claim Group by reason of the infringement).
Admittedly, there is a degree of artificiality about applying an adapted Spencer test in circumstances where it may be assumed that the Claim Group would not have been at all interested in selling their native title rights and interests and it is plain that no one could lawfully have bought them. But, at the same time, the native title rights and interests unquestionably existed and they had a recognisable economic worth which lay in the sum that might fairly and justly have been demanded for their lawful extinction in favour of the Crown. In those circumstances, it is no more artificial to seek to assess their economic value by means of the Spencer test of what a willing but not anxious purchaser would have been prepared to pay to a willing but not anxious vendor in order to buy them (or, more accurately, to obtain the latter's assent to their extinguishment) than it is to apply the Spencer test to the assessment of just compensation for the compulsory extinguishment of, say, a general law easement or profit à prendre.
At one point in the Full Court's reasons, their Honours reflected as to whether it might have been preferable to approach the assessment task on an "holistic" basis without the division of value into economic and non-economic components. Their Honours were correct to avoid that approach. There may be exceptions, but ordinarily the only way of achieving the degree of precision envisaged by s 51A of the Native Title Act - which, as has been seen, stipulates that the total compensation payable for an act which extinguishes native title must not exceed the amount that would be payable if the act were instead a compulsory acquisition of a freehold estate in the land or waters - is by the determination of economic value according to established precepts for the valuation of interests in land. Given that there is no range of decided comparable cases such as those which may be called in aid, for example, in sentencing or when fixing damages for personal injuries, an holistic approach would mean that the determination of the economic value of native title rights and interests would be largely dependent on idiosyncratic notions of what is fair and just.
Determination of economic value of native title rights and interests
Having determined the fair value of a freehold interest in the subject land, the Full Court were right to discount that figure by reference to the more limited nature of the Claim Group's native title rights and interests in order to arrive at the economic value of those more limited rights and interests. As the Northern Territory submitted before this Court, it is fundamental that there must be economic equivalence between the value of what is lost and the compensation which is paid and, therefore, that the economic value of the property that was lost must be assessed according to the rights and interests that were held. Granted, as the Full Court observed, the process necessitates making a fairly broad‑brush estimate of the percentage of rights and interests comprising freehold title which is considered to be proportionate to the native title rights and interests, but that is an unavoidable consequence of the statutory scheme. The courts must do the best they can to achieve the statutory objectives of the Native Title Act.
Rejection of Mr Lonergan's thesis
The Northern Territory contended that there was available expert evidence in the form of the opinion given by Mr Lonergan as to what he conjectured might be the amount that the Claim Group would have been prepared to pay to acquire similar rights and interests in a different, more remote and undeveloped location, and that the Full Court should have accepted it. That contention must be rejected. Evidently, Mr Lonergan's thesis was that, in the absence of a relevant market or comparable sales data, the fair value of the Claim Group's native title rights and interests was to be assayed by reference to an appropriate comparator and, because the freehold value of land increases with the availability of services and surrounding infrastructure, whereas the Claim Group's enjoyment of their native title rights and interests did not, the appropriate comparator was freehold market value stripped of so much of it as reflected the availability of services and infrastructure. According to Mr Lonergan, that figure could be gleaned by 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 Mr Lonergan postulated could be derived by splitting the difference between the market value of the land (which includes the value of the availability of services and infrastructure) and the usage value of the native title rights and interests as so calculated, according to what Mr Lonergan described as principles of behavioural economics and game theory, economic experience and notions of fair dealing.
As will be apparent, the principal difficulty with Mr Lonergan's thesis is 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 on which they might have lived and behaved in much the same way that they had been entitled to live and behave in the exercise of their native title rights and interests in the subject land.
To demonstrate the difficulty, it assists to consider first what the position would have been if the Claim Group had had full exclusive native title in the subject land. As was earlier explained, s 51A of the Native Title Act read in context and with regard to the purpose of Div 5 of Pt 2 of the Native Title Act equates the economic value of full exclusive native title to the economic value of a freehold interest. If, therefore, the Claim Group had had a full exclusive native title in the subject land, the economic value of their native title as required to be determined by the Native Title Act would have been the freehold value of that land as determined by Mr Copland. If, however, the economic value of the Claim Group's supposed full exclusive native title were determined according to Mr Lonergan's thesis, it would be some lesser amount based on the economic value of a freehold interest in some other land at a different location. That is not what the Native Title Act requires.
The same problem applies to non-exclusive native title of the kind in suit. Consistently with the aim of the Native Title Act that the economic value of full exclusive native title in land be equated to the economic value of a freehold title in that land, the economic value of non-exclusive native title in land falls to be determined by making an evaluative judgment of the percentage reduction from full exclusive native title which properly represents the comparative limitations on the non-exclusive title relative to a full exclusive native title and then applying that percentage reduction to the economic value of a freehold estate in the land as proxy for the economic value of a full exclusive native title in the land. Application of Mr Lonergan's thesis would be most unlikely to produce the same dollar figure, and, if it did, it would be entirely adventitious.
There is, too, a further, pragmatic reason to eschew the sort of approach favoured by Mr Lonergan. An opinion of the kind that the Northern Territory commissioned Mr Lonergan to produce is a complex and expensive exercise, and, as experience shows in litigation, where one party introduces an expert report of that complexity and expense it more often than not leads to another party commissioning another expert to produce a similarly complex and expensive report to rebut the thrust of the first, leaving it to a trial judge, often after extensive cross-examination of both experts at further considerable cost, to decide between the two. That degree of complexity and cost can be avoided if economic value is determined by the comparatively simple and relatively thrifty means 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. Given the presumably limited resources of most native title claimants, such simplicity and economy is surely to be encouraged.
Conceivably, an approach of the kind advocated by Mr Lonergan could be of some assistance if parties were agreed that native title rights and interests are to be valued according to the kind of restorative or reinstatement approach urged before this Court on behalf of the Central Desert Native Title Services Limited and the Yamatji Marlpa Aboriginal Corporation intervening; assuming of course that the relevant court were persuaded on the evidence that such an approach was likely to be productive of just compensation. In this case, however, the content of Mr Lonergan's thesis makes plain that that possibility is excluded.
The parties were right to agree before the trial judge and the Full Court that the Claim Group's native title rights and interests are to be valued according to the bifurcated approach. It would have been wrong to act upon Mr Lonergan's thesis and the trial judge and the Full Court were right to reject it.
Differing values in different areas
The Northern Territory and the Attorney-General for the State of South Australia criticised the Full Court's methodology as productive of what was contended to be the irrational consequence that native title rights and interests so valued would have a higher value in developed areas, where it was likely that the enjoyment of native title rights and interests would to some extent be compromised by encroaching development, and a lower value in remote areas, where the absence of encroaching development would allow native title rights and interests to be enjoyed to the full.
The criticism is misplaced. As was observed in Western Australia v Brown, the identification of native title rights and interests is an objective inquiry and it is the legal nature and content of the rights and interests that must be ascertained, not the way in which they have been exercised. Likewise, the economic valuation of rights and interests is an objective exercise and so, as has been emphasised, essentially an objective question of how much a willing but not anxious purchaser would be prepared to pay to a willing but not anxious vendor to obtain the latter's assent to their extinguishment. Plainly enough, a willing purchaser would be likely to pay more to achieve the extinguishment of native title rights and interests over high-value land in a developed area (given that the economic potential of that kind of land is likely to be greater) than for the extinguishment of native title rights and interests over low-value land in a remote area (where the economic potential of the property is likely to be sparse). Consequently, it is neither irrational nor surprising that the economic value of native title rights and interests in developed areas should, in many cases, prove to be greater than the economic value of comparable native title rights and interests in a remote location.
It is also no more than fair and just that the economic value of native title rights and interests should be assessed accordingly. With the compulsory acquisition of land, the value of land is generally speaking not limited to the pecuniary benefit of past uses but extends to its highest and best use in light of possible benefits in the future. So, too, with the valuation of native title rights and interests in land, the value of the native title rights and interests is not ordinarily to be confined to the benefit of their past uses but should be extended to their highest and best use. As Dixon CJ stated in Turner v Minister of Public Instruction:
"the purpose is to ascertain the full return which may reasonably be expected from the sale of the land, not the most conservative value. The ultimate purpose of the inquiry is to find a figure which represents adequate compensation to the landowner for the loss of his land. Compensation should be the full monetary equivalent of the value to him of the land. All else is subsidiary to this end."
And later:
"[The interest in land] is, of course, to be valued in cases of compensation with a view to ensuring that the actual value contained in the land is replaced in the hands of the owner by an equivalent amount of money. The value must therefore be the value to the owner which the land possessed to him in its condition at the date of resumption. That value was necessarily affected by all the advantages which the land possessed and these might be a matter of future or even contingent enjoyment. Future advantages or potentialities must not be excluded. At the same time the value of these things must be assessed according to the condition of the land as it stood at the time of resumption: 'it is the present value alone of such advantages that falls to be determined': Cedars Rapids Manufacturing & Power Co v Lacoste." (emphasis added)
It may be that any sense of loss of connection to country resulting from the infringement or extinguishment of native title rights and interests in higher‑value, developed areas is likely to prove less than the sense of loss of connection to country with respect to lower-value, remote areas because, depending on the facts of the case, the sense of connection to country in higher‑value, developed areas may have declined as the result of encroaching developments before the act of extinguishment or other compensable diminishment. But if so, the amount to be awarded for non-economic loss of native title with respect to higher-value, developed land will be less.
Significance of inalienability
The Full Court were incorrect, however, in holding that the inalienability of native title rights and interests was a relevant discounting factor in the assessment of their economic value. The assessment of the economic value of native title rights and interests is in that respect different from the assessment of the economic value of common law land title.
The alienability of a freehold estate is a relevant, although not always significant, consideration in the determination of its economic value. Valuation cases involving inalienable freehold land disclose a range of discounted values of between 10 per cent and 80 per cent according to the extent of inalienability. The lowest, of 10 per cent, involved freehold land that was wholly inalienable. The highest, of 80 per cent, concerned land that was limited to trust purposes but could be sold or leased with the permission of the Governor. Between those extremes lies a range of cases reflecting the economic significance of inalienability most commonly resulting in a reduction for inalienability of around 50 per cent.
By contrast, although native title rights and interests are inalienable, s 51A of the Native Title Act equates the economic value of full exclusive native title to the economic value of unencumbered, freely alienable freehold title and thus, in practical terms, deems the inalienability of full exclusive native title to be irrelevant to the assessment of its economic value. Similarly, just as the inalienability of full exclusive native title is deemed to be irrelevant to the assessment of its economic value, so too must it follow that the inalienability of non-exclusive native title is irrelevant to its economic value; for the latter, as has been explained, falls to be determined by applying the appropriate percentage to the economic value of a freely alienable freehold title.
The trial judge drew support for that conclusion from the decision of the Privy Council in Amodu Tijani and the decision of this Court in Geita Sebea. Those decisions, however, turned on the specific legislation under which land was acquired in those cases. The Native Title Act is different. Here it is s 51A of that Act, read in light of the extrinsic materials, which makes clear that inalienability of native title is irrelevant to the assessment of its economic value.
Benefit to Northern Territory
The Full Court held that the trial judge erred in the assessment of the economic value of the native title rights and interests by taking into account the economic value to the Northern Territory of achieving their extinguishment. Their Honours based that conclusion on the trial judge's observations that, although the individual bundle of rights to which the Northern Territory succeeded by reason of the compensable acts was different in character from the bundle of rights that the Claim Group had enjoyed, what the Northern Territory acquired was capable of indicating the economic value of the native title rights and interests; and so, if the valuation test focused on the value to the Northern Territory of the rights and interests which were surrendered, then the answer would be a figure close to freehold value.
It is not clear that the trial judge made that error. It may be that all his Honour had in mind was that, as with the economic value of any other encumbrance, the economic value of native title rights and interests accords to what a willing but not anxious purchaser is prepared to pay to a willing but not anxious vendor to obtain the latter's assent to their extinguishment. But either way, the benefit of extinguishment to the Northern Territory was relevant only in so far as it would have informed the amount that the Northern Territory, as the sole, hypothetical willing purchaser, would have been prepared to pay for the consensual extinguishment of the native title rights and interests. And the Full Court were right to hold that, for whatever reason, the trial judge had significantly over‑estimated the value of the native title rights and interests as a percentage of freehold value.
Possibly, as the Full Court observed, one of the factors that led the trial judge to do so was to reason that it was inappropriate "simply to proceed on the basis of a comparison of the bundle of rights held by the [Claim Group], remote from their true character" (emphasis added). As the Full Court concluded, that observation suggests that his Honour may have included some allowance for the cultural loss or loss of connection to country despite having earlier noticed the importance of confining such considerations to the assessment of non-economic value. Whatever the reason, however, the percentage was far too high.
Manifest excessiveness
Given the Claim Group's native title rights and interests were essentially usufructuary, ceremonial and non-exclusive, without power to prevent other persons entering or using the land or to confer permission on other persons to enter and use the land, without right to grant co-existing rights and interests in the land, and without right to exploit the land for commercial purposes, the trial judge's estimate of the economic value of the native title rights and interests as 80 per cent of the freehold value of the land was manifestly excessive. But so, too, with great respect, was the Full Court's estimate of 65 per cent. Granted, the determination of the appropriate percentage calls for an evaluative judgment about which reasonable minds might sometimes differ. But here, given the native title was devoid of rights of admission, exclusion and commercial exploitation, a correct application of principle dictates on any reasonable view of the matter that those non-exclusive native title rights and interests, expressed as a percentage of freehold value, could certainly have been no more than 50 per cent. The Full Court's estimate of 65 per cent was plainly so high relative to the limited extent of the native title rights and interests as to bespeak error of principle. That is so notwithstanding that the Full Court included inalienability as a discounting factor in its estimate.
Other things being equal, it would be appropriate to remit the matter to the Full Court for redetermination on that basis. But since no party suggested that the percentage should be set at below 50 per cent, it can be accepted for the purposes of the disposition of these appeals that 50 per cent is the figure.
E Interest on the economic loss claim
It was common ground that interest should be awarded on the economic value of the extinguished native title rights and interests in order to reflect the time between when the entitlement to compensation arose and the date of judgment, and that the function of such an award is to compensate a party for the loss suffered by being kept out of his or her money during that period. The issue was whether the interest should be calculated on a simple basis or compound basis and, if on a compound basis, at what rate it should be compounded.
The Claim Group argued that equity dictated an award of compound interest. As these reasons will explain, the Claim Group had no entitlement to compound interest.
Decisions below and contentions in this Court
The trial judge rejected the Claim Group's contention that equity dictated an award of compound interest. His Honour did not consider that the authorities on which the Claim Group relied supported the proposition that, in circumstances like the present, equity regards the fact that the Claim Group had not received their entitlement to compensation for a considerable period as a sufficient basis for an award on a compound interest basis. The trial judge noted, however, that there was no authority which would preclude the Court from granting compound interest if persuaded that such an award was an appropriate means of securing fair compensation or compensation on just terms. Accordingly, his Honour held, it was necessary to decide whether, if the Claim Group had been compensated as at the date of the compensable acts, they would have made such a use of the compensation as to warrant an award of compensation on a compound interest basis to compensate the Claim Group for the damage suffered by reason of that loss of opportunity. But his Honour was not persuaded that the Claim Group would have invested the moneys without expenditure, accumulating interest year by year, to the present time, or that they would have used the moneys to undertake any sort of commercial activity that would have been profitable to the same or a greater degree. Thus, his Honour held that the appropriate interest calculation was simple interest at the Practice Note rate.
Before the Full Court, the Claim Group contended that they were entitled to compound interest without proof of how they would have used compensation moneys, on the basis of the equitable principle that a fiduciary is not permitted to profit from the improper withholding of trust funds. The Claim Group further contended that, even if the Northern Territory were not a fiduciary, equity now allows for an award of compound interest without need of showing the loss suffered by being kept out of the money. Further or alternatively, the Claim Group argued that fair compensation or compensation on just terms was to be arrived at only by awarding the Claim Group the interest which the Northern Territory saved on its borrowings by retaining the compensation moneys over a very long period. The Full Court rejected those contentions.
Before this Court, the Claim Group contended that an award of compound interest was necessary to achieve the requirement of compensation on just terms mandated by s 51(1) of the Native Title Act and that only compound interest at the risk free rate would satisfy that requirement. The argument was the subject of a notice issued pursuant to s 78B of the Judiciary Act 1903 (Cth) because it was considered to raise an issue as to whether "just terms" in s 51(1) is informed by the meaning of "just terms" in s 51(xxxi) of the Constitution. But, in the event, that point ceased to be of any consequence, and was not pursued. In substance, the Claim Group submitted that equity informs the notion of just terms; that it was inequitable for the Northern Territory to retain both the compensation moneys and the land or its rents or profits; and that simple interest unfairly favoured the Northern Territory where, as here, there was a lengthy period, which included times of high inflation, in which the Claim Group were seeking recognition of their infringed rights while the Northern Territory gained by saving on borrowing costs that were compounded.
In short, as will be explained, equity allows for simple interest in proceedings for specific performance of a contract for the sale of land and although that rule has been extended to the compulsory acquisition of land, the rule provides for simple interest, not compound interest. Equity does allow for compound interest for suits for recovery of money obtained by fraud or withheld or applied in breach of fiduciary duty but the facts in these appeals do not fall into either of those categories. Finally, although a plaintiff may be able to claim restitution of a defendant's unlawful enrichment and that claim may include a claim for compound interest, the Claim Group did not make a claim for restitution of benefits; and the benefits derived by the Northern Territory are statutory and thus there was no "unjust enrichment".
Although the Claim Group did not before this Court devote as much attention to the panoply of cases concerning the courts' power to award interest as they did in the Full Court, those cases nonetheless underpinned the Claim Group's contentions in this Court and it remains necessary to consider them in some detail.
Interest in equity
As the trial judge stated, courts of law routinely allow pre‑judgment interest on damages. But it is important to understand that the power of courts of law to award interest as such is essentially statutory. As Lockhart J observed in Whitaker v Commissioner of Taxation, up until the nineteenth century, courts of law allowed interest only in cases where it was provided for by contract or custom. Effectively, it took the enactment of statutory provisions akin to those which now appear in s 51A of the Federal Court of Australia Act 1976 (Cth) and comparable State and Territory enactments to achieve the present position. Section 51A of the Federal Court of Australia Act applies to actions for the recovery of money (including debt, damages or the value of any goods). In view of the Claim Group's submissions, s 51A has no direct application to these proceedings for an award of compensation under the Native Title Act.
By contrast, in equity it was early recognised that it is proper to award simple interest on a money decree where the justice of the case requires it, and, as a result, equity developed detailed rules governing the award of interest. One such rule is that, in a suit for specific performance of a contract of sale of land where the vendor had shown title, the purchaser is required to pay interest on the purchase price, computed from the time at which the purchaser might prudently have taken possession until the date of decree. As Lord St Leonards expressed the rule, in Birch v Joy:
"From the time at which the purchaser was to take possession of the estate he would be deemed its owner, and he would be entitled as owner to the rents of the estate, and would have kept them without account[.] From the same period the seller would have been deemed owner of the purchase‑money, and that purchase-money not being paid by the man who was receiving the rents, would have carried interest, and that interest would have belonged to the seller as part of his property. A Court of Equity, as a general rule, considers this to follow. The parties change characters; the property remains at law just where it was, the purchaser has the money in his pocket, and the seller still has the estate vested in him; but they exchange characters in a court of equity, the seller becomes the owner of the money, and the purchaser becomes the owner of the estate. That is the settled rule of a court of equity …"
The rule for the payment of simple interest in proceedings for specific performance of a contract of sale of land was later extended in In re Pigott and the Great Western Railway Co ("Pigott's Case") to a proceeding brought by summons under the Vendor and Purchaser Act 1874 for the determination, inter alia, of whether a railway company which had compulsorily acquired land under the Lands Clauses Consolidation Act 1845 was liable to pay interest on the purchase price. Jessel MR explained the application of the rule in that context thus:
"The course of decision has been that after notice to treat has been given [by the railway company], and the price has been fixed [by arbitration under the Lands Clauses Consolidation Act 1845], but has not been paid, a contract is established which is enforceable in a Court of Equity, and on which an action for specific performance can be maintained. …
The course of decision then being that specific performance of the contract as a contract of purchase and sale, or sale and purchase, may be enforced, I take it that, unless you find some statutory enactment in the way, all the ordinary rules apply. Consequently, … where the vendor has shewn his title, the purchaser pays interest from the time at which he might prudently have taken possession …"
Application of the equitable rule to compulsory acquisition
Subsequently, in Inglewood Pulp and Paper Co Ltd v New Brunswick Electric Power Commission, the Privy Council further extended the application of the rule beyond circumstances involving specifically enforceable synallagmatic or compulsory statutory contracts of sale of land to the assessment generally of compensation under statutory schemes for the compulsory acquisition of land. In Inglewood, the statutory scheme provided for a notice of expropriation to be served on the owner specifying the amount of compensation which the acquiring authority was willing to pay, and that, if the owner considered the specified sum to be unacceptable, the acquiring authority could apply for compensation to be assessed by a judge of the Supreme Court of New Brunswick, whereupon the judge would designate himself or herself the sole arbitrator for the determination of the compensation to be paid. Relevantly, one of the questions in that case was whether, in the absence of express statutory provision for the award of interest, the judge qua arbitrator had power to award simple interest on the compensation so assessed. Lord Warrington of Clyffe, who delivered the judgment of their Lordships, held that he did:
"It is now well established that on a contract for sale and purchase of land it is the practice to require the purchaser to pay interest on his purchase money from the date when he took possession: per Lord Cave LC in Swift & Co v Board of Trade. The law on the point has also been extended to cases under the Lands Clauses Consolidation Act, 1845.
Their Lordships can see no good reason for distinguishing the present case from such cases. It is true that the expropriation under the Act in question is not effected for private gain, but for the good of the public at large, but for all that, the owner is deprived of his property in this case as much as in the other, and the rule has long been accepted in the interpretation of statutes that they are not to be held to deprive individuals of property without compensation unless the intention to do so is made quite clear. The statute in the present case contains nothing which indicates such an intention. The right to receive interest takes the place of the right to retain possession and is within the rule."
In Marine Board of Launceston v Minister of State for the Navy, to which it will be necessary to return in more detail later in these reasons, a majority of this Court reached a similar conclusion. In that case, reg 57(1) of the National Security (General) Regulations (Cth) provided that the Minister could by order requisition any property including ships and reg 60D provided that a person who suffered loss or damage by reason of anything done under reg 57(1) should be paid compensation to be determined by agreement or, in the absence of agreement, by a Compensation Board, and, if either party were dissatisfied with the assessment, by a court. A question arose as to whether the regulatory power to award compensation was limited to awarding a capital sum for the loss of the property or included a discretion to award interest on it. Dixon J, who was in the majority, observed that it is a question of legislative interpretation whether the legislative empowerment of a court or tribunal to determine compensation extends to "incidental matters and so to enable the court or tribunal to order that interest shall be paid on the compensation assessed and awarded, where according to legal or equitable principles it is payable", and that:
"the jurisdiction to determine compensation may be readily interpreted as extending to what is consequential upon or incidental to the award. Where the sum awarded carries interest according to the substantive law, including in that expression the doctrines of equity, it is no great step to say that the tribunal dealing with the matter may so declare."
Application of the equitable rule to the Claim Group's claim
As was earlier noticed, before the trial judge the Claim Group put their claim for interest on the basis of the equitable rule for the payment of interest as it applies to cases of compulsory acquisition but contended that the requirement for just compensation required that the interest be allowed on a compound basis. And as has also been seen, the trial judge rejected the argument on the basis that he could find no support for it in any of the authorities relating to the equitable rule for the payment of interest in cases of compulsory acquisition. The Full Court agreed.
Before this Court, the Claim Group did not contend that there was any authority for an award of compound interest but submitted on the basis of the authorities just referred to, together with a number of further authorities, that it would be consonant with equitable principle and just to award compound interest in the circumstances of this case.
The authorities already referred to were relied on as establishing that, absent contrary statutory indication, moneys payable as compensation for the compulsory acquisition of land bear interest from the date of dispossession. The further authorities relied upon by the Claim Group in this Court and the courts below fall into two additional groups: cases where compound interest has been awarded in equity in suits for the recovery of money obtained by fraud or withheld or applied in breach of trust or other fiduciary duty; and cases where a defendant has had and received moneys to the use of a plaintiff and restitution has been awarded in an amount that includes a sum for what are conjectured to be the costs that the defendant would have incurred if the defendant had had to borrow the subject moneys.
Taking each of the three groups of cases in turn, the first, as the trial judge held, establishes an entitlement, analogous to the equitable entitlement to interest in a suit for specific performance of a contract of sale of land, to interest on an award of compensation for compulsory acquisition of land. There is no support in that group of cases for the award of interest on a compound basis. Rather, to the contrary, in The Commonwealth v Huon Transport Pty Ltd, Dixon J, after recitation of Lord St Leonards' explication of the rule in equity for the award of interest on unpaid purchase money in a suit for specific performance of a contract of sale of land, stated:
"That being the ground of the rule, applying alike to voluntary and compulsory sales, it does not extend to compensation for injurious affection, upon which interest is not payable unless an intention to give interest upon unpaid compensation appears in the statute." (citation omitted)
Although not directly on point, Dixon J's refutation of the notion that the equitable rule for the payment of interest on the outstanding purchase price under an uncompleted contract for the sale of land can be extended to allowing interest on outstanding hire fees suggests that the application of the rule in Pigott's Case to compulsory acquisition proceedings requires close adherence to equitable principle. To that extent, it provides no support for expansion of the rule to any broader basis of recovery.
The second line of authority, as the trial judge held, goes no further than that compound interest may be awarded in equity in cases where money is obtained or withheld by fraud or in breach of fiduciary duty and the award is made in lieu of an account of profits. It does not suggest that, in a case of this kind where there is no fraud or breach of trust, equity would treat the fact of the Claim Group being kept out of their entitlement to compensation - even for over a decade - as a sufficient basis for the award of compound interest.
According to the Full Court's reasons, the Claim Group argued before the Full Court that the Northern Territory stood in fiduciary relation to the Claim Group on the basis that equity attached to the Northern Territory's unilateral extinguishment of native title in the same way that equity attaches to the voluntary surrender of native title, and thus that it was incumbent on the Northern Territory to exercise its power of unilateral extinguishment of the Claim Group's native title for the benefit of the Claim Group. Although not clear from their Honours' reasons, presumably it was also contended that, because the Northern Territory owed fiduciary obligations to the Claim Group, the Northern Territory had a duty not to profit at the expense of the Claim Group by delaying the payment of just compensation for the extinguishment of the native title, and thus that the Northern Territory was liable in equity to pay compound interest on the compensation for extinguishment of native title in lieu of accounting for the profit derived by not paying it any sooner. But whether or not that was the way the argument was put, the Full Court rejected it, as their Honours said, because, absent express statutory provision requiring the Crown to act for the benefit of native title holders, it was doubtful that equity would impose fiduciary duties on the Crown in relation to the voluntary surrender of native title, and still more doubtful that equity would impose fiduciary duties on the Crown in relation to the unilateral extinguishment of native title. Moreover and more importantly, as the Full Court observed, whatever may have been the position in the absence of statutory provision, it had been overtaken by the validation of the compensable acts by the Native Title Act, which meant that the power of the Crown was unrestricted by any obligation that it be exercised for the benefit of native title holders.
Before this Court, the Claim Group disavowed any suggestion of basing their claim for compound interest on breach of fiduciary duty. Even so, they contended in their written submissions that:
"equity imposes an obligation to pay interest [scil, presumably, compound interest], that this applies equally to the consideration for extinguishment on surrender or acquisition, and that this analysis is consistent with considered dicta that obligations may attach in relation to the surrender of native title."
As has been observed, there is no question that equity may impose an obligation to pay interest on an uncompleted contract of sale of land and that the rule has been transposed by courts and tribunals to the assessment of just compensation under statutory schemes for compulsory acquisition of land. It may also be accepted that the principle applies as much to statutory schemes for the compulsory extinguishment of land title (including native title) as it does to schemes for the compulsory acquisition of land. In point of principle, there is no relevant difference between a contract for the sale of land and a contract for the surrender of an interest in land, or, therefore, between the compulsory acquisition of land and the compulsory extinguishment of an interest in land. But as has already been emphasised, the rule provides for the payment of simple interest and there is no suggestion in any of the authorities, or apparent reason in principle, to extend it to compound interest.
Further, the considered dicta cited by the Claim Group in support of the view that obligations of a fiduciary nature may attach in relation to the surrender of native title do nothing to advance the contention that interest on compensation for the extinguishment of native title should be paid on a compound basis. The Claim Group cited passages from Mabo v Queensland [No 2] in which Brennan J posited the possibility, which his Honour expressly did not resolve, that if native title holders voluntarily surrendered their native title to the Crown in the expectation of a grant of a tenure to the native title holders, there might be a fiduciary duty on the Crown to exercise its discretionary power to grant a tenure in the land so as to satisfy that expectation; in which Deane and Gaudron JJ stated that, where common law native title has not been extinguished, the rights under it may in appropriate circumstances be protected by equitable remedies including the imposition of a remedial constructive trust; and in which Toohey J stated that the Crown owes a fiduciary obligation to native title holders arising out of its extraordinary power to destroy or impair common law native title rights and interests. The observations of Brennan J and Deane and Gaudron JJ in Mabo [No 2] are equivocal. And in Wik, in a passage also cited by the Claim Group, Brennan CJ stated that where the Crown extinguishes native title under statutory authority, the Crown is under no duty to exercise the power of extinguishment in the native title holders' interests:
"The exercise of statutory powers characteristically affects the rights or interests of individuals for better or worse. If the exercise of a discretionary power must affect adversely the rights or interests of individuals, it is impossible to suppose that the repository of the power shall so act that the beneficiary might expect that the power will be exercised in his or her interests. The imposition on the repository of a fiduciary duty to individuals who will be adversely affected by the exercise of the power would preclude its exercise. On the other hand, a discretionary power - whether statutory or not - that is conferred on a repository for exercise on behalf of, or for the benefit of, another or others might well have to be exercised by the repository in the manner expected of a fiduciary. …
The power of alienation conferred on the Crown by s 6 of the [Land Act 1910 (Qld)] is inherently inconsistent with the notion that it should be exercised as agent for or on behalf of the indigenous inhabitants of the land to be alienated. Accordingly, there is no foundation for imputing to the Crown a fiduciary duty governing the exercise of the power." (footnote omitted)
As the Full Court observed, those observations, taken together with the fact that the Native Title Act provides for the validation of certain acts that impair or extinguish native title, tend against the conclusion that fiduciary obligations exist or that an analogy to such obligations is appropriate. In short, the passages cited by the Claim Group from Mabo [No 2] and Wik do not assist the claim for compound interest.
The Claim Group contended that, despite the retrospective validation of the compensable acts, it remained an historical fact that there was a period of more than a decade between the commission of the compensable acts and their validation, during which the acts were invalid, and thus that the Northern Territory should be accountable on a compound interest basis for the unfairness of having had the benefit of unlawful extinguishment of title for that period; in just the same way that those who obtain money by fraud or in breach of fiduciary duty may be held accountable in equity on a compound interest basis for the benefit of their unlawful gain.
The difficulty with that argument, as the trial judge and the Full Court stated, however, is that, by reason of the retrospective validation of the compensable acts, those acts must now be taken as always having been valid. Whatever might have been the position before the enactment of the Native Title Act and its validation of the compensable acts, what the Claim Group now have is neither more nor less than a statutory right to just compensation for the lawful extinguishment of their native title rights and interests. In the absence of a recognised juridical basis for the award of compound interest on compensation for the lawful extinguishment of land title, it does not appear unjust that interest should be awarded on a simple interest basis.
As has been observed, it is possible that there may be circumstances in which, by analogy with an award of damages at common law for loss of use of money, it would be just to award interest on a native title compensation claim on a compound interest basis. The Native Title Act provides that regard may be had to the rules applicable to compulsory acquisition of land, which, as has been seen, in effect import the rule in Pigott's Case. But the Native Title Act does not dictate that the rules applicable to compulsory acquisition of land are the only considerations to which regard may be had. Thus, as the trial judge posited, if the evidence established that, upon earlier payment of the compensation, the Claim Group would have put the compensation to work at a profit, or perhaps used it to defray costs of doing business, it may be that an award of compound interest would be warranted to compensate for the lost opportunity of investment or those costs, by analogy with damages awarded at common law to compensate for expenses incurred or opportunity costs arising from moneys paid away or withheld as a result of breach of contract or negligence. But, for the present, that point need not be decided. As the trial judge found, there was sparse evidence that the Claim Group would have invested the compensation at a profit and no suggestion that the Claim Group incurred costs that could have been avoided with the aid of an earlier payment of the compensation.
That leaves the third line of authority, which was said to support a free‑standing entitlement to compound interest as a means of redressing the alleged injustice of the Northern Territory having derived rents and profits from some of the land subject to extinguished native title. That contention faces difficulties at three levels, and should be rejected.
First, in The Commonwealth v SCI Operations Pty Ltd, McHugh and Gummow JJ doubted that there is a free-standing right to interest where a defendant has been unjustly enriched by the use of a plaintiff's money at the plaintiff's expense:
"Independently of their reliance upon s 51A [of the Federal Court of Australia Act] as the source of curial authority to award the interest they seek in these proceedings, SCI and ACI assert a 'free‑standing' right to the recovery of interest where the defendant has had the use of the plaintiff's money in circumstances which indicate an unjust enrichment at the expense of the plaintiff. The existing state of authority does not favour acceptance of such a broad proposition.
The present is not a case where the assertion is that the appellant's breach of contract or negligence has caused the respondents to pay away or the appellant to withhold money and as a result the respondents have been deprived of the use of the money so paid away or withheld. Nor do the respondents seek an award of damages representing compensation for a wrongfully caused loss of their money, which is assessed wholly or partly by reference to the interest which would have been earned by safe investment of the money.
It is true that in the administration of its remedies, equity followed a different path to the common law with respect to the award of interest. In cases of money obtained and retained by fraud and money withheld or misapplied by a trustee or fiduciary, the decree might require payment of compound interest. However, in Westdeutsche Landesbank Girocentrale v Islington London Borough Council, the House of Lords answered in the negative the question whether, where statutes, of which s 51A(2)(a) is a local example, provide for orders for payment of simple but not compound interest upon common law claims, equity, in its auxiliary jurisdiction, will supplement the statute by providing for an award of compound interest.
In other instances, equitable relief might involve the payment of simple interest. As an element in the relief administered upon rescission of a contract under which the plaintiff had paid over moneys to the defendant, the order might require the defendant to make the repayment with interest calculated from the date of the initial payment. Relief against forfeiture by a vendor of payments under an instalment or terms contract might require repayment with interest from the dates the respective instalments were paid. An account of profits would carry interest. Conversely, a party seeking equitable relief may be obliged to do equity by the payment or repayment of moneys with interest. A purchaser who, after the date fixed for completion, seeks specific performance will be treated in equity as having been in possession from the completion date and, in general, will be required to offer the vendor interest on the purchase price from that date. However, the present litigation does not involve the administration of any equitable relief and so call for consideration of the issue whether it was unconscientious of the appellant to make the refunds on 3 June 1994 without the addition of payments on account of interest." (footnotes omitted)
Secondly, properly analysed, such authority as there now is in favour of a free-standing right of the kind contended for goes no further than recognising a restitutionary entitlement at law calculated to redress a defendant's unlawful enrichment through use of moneys which the defendant is regarded as having had and received to the use of the plaintiff. The Claim Group's claim is not a claim for restitution of benefits unjustly obtained by the Northern Territory at the expense of the Claim Group. It is a claim for just compensation for the loss caused to the Claim Group by the extinguishment of native title. And the purpose of compensation is to put the Claim Group, so far as money can do, in the position in which they would have been if the native title had not been extinguished. It is not in any sense to provide restitution of benefits which it might be supposed the Crown derived by reason of the extinguishment of native title. Nor is there an analogy to be drawn between a claim for compensation for extinguishment of native title and a claim for money had and received, or with the recovery of money obtained by fraud or money withheld or misapplied by a fiduciary. As the trial judge held, such if any benefit as the Northern Territory derived from the extinguishment of the native title is irrelevant.
Thirdly, and most importantly, even if benefits derived by the Crown were a relevant consideration in the assessment of compensation for extinguishment of native title, the statutory validation of the compensable acts means that any benefit the Northern Territory derived from the extinguishment of the Claim Group's native title was not unjust. To adopt and adapt the language of McHugh and Gummow JJ in SCI Operations, such benefits as the Northern Territory might have derived from the extinguishment of native title, or from the delay in payment of compensation, are the product of statute, and the restitutionary considerations which are present in various areas of the law cannot purport to override statute by claiming a superior sense of justice to Parliament's.
The Claim Group's claim for compound interest was rightly rejected.
Practice Note rate
Although the Claim Group made much in written submissions, and to a lesser extent in oral argument before this Court, of whether the trial judge should have allowed interest at the risk free rate rather than the Practice Note rate which his Honour adopted, the Claim Group acknowledged before this Court that, unless they were successful in their claim for compound interest, they were better off with interest at the Practice Note rate.
Further, apart from the Claim Group, no party contended below or before this Court that the trial judge was in error in awarding interest at the Practice Note rate, and, before this Court, the Claim Group accepted that, if the trial judge were not in error in declining to award interest on a compound interest basis, the Claim Group did not wish to be heard to say that there was any error in the selection of the Practice Note rate.
Interest on or as part of compensation
Finally in respect of interest, there is a question agitated by the Commonwealth of whether the trial judge and the Full Court were correct to award interest as part of compensation, as their Honours did, or whether their Honours should rather have awarded the interest as interest on compensation. For present purposes, it is a matter of little consequence because, either way, the amount of interest payable will be the same. But the Commonwealth pressed the issue because it sought to establish that interest of the kind that was awarded does not count as part of the "total compensation" within the meaning of s 51A(1) of the Native Title Act. For the reasons that follow, that contention should be accepted.
In Swift & Co v Board of Trade, the House of Lords held that to award interest on compensation for goods which had been requisitioned under the Defence of the Realm Regulations (UK) would be to award compensation not for the goods themselves but for the time occupied in ascertaining their true value in accordance with the regulations, and, since the rule in Pigott's Case did not extend to the compulsory acquisition of goods, the power to award compensation for the goods did not extend to awarding interest. Viscount Cave LC, with whom Lord Buckmaster agreed, stated:
"To hold otherwise is to give compensation, not for the goods themselves, but for the time occupied in ascertaining their value in accordance with the law."
Lord Sumner, with whom Lord Dunedin agreed, dealt with the matter to the same effect but more explicitly:
"Now, not only is 'compensation' the word used [in the regulation] and not 'interest' but there is nothing in the regulation to attach an allowance of interest to. There is no debt, for no final award has been made; there has been no wrong done, for the requisitioning was legal and the goods became the minister's goods from the time of requisition. It is the regulation itself that prescribed arbitration, a proceeding which involves delay and causes the merchant to be out of his compensation for a substantial time, or rather postpones the date at which his compensation can be fixed and so become payable. To give interest is really to give additional compensation for being the victim of war legislation, and this subject of compensation is not within the regulation." (emphasis added)
A similar question fell for determination by this Court in Huon Transport. In that case, s 67 of the Defence Act 1903 (Cth) provided that "[t]he owner of any … boat or vessel … required for naval or military purposes, shall, when required to do so by [an authorised officer], furnish it for those purposes, and shall be recompensed therefor in the manner prescribed" (emphasis added). The issue was whether s 67, considered in light of s 51(xxxi) of the Constitution, authorised the court to allow interest. It was held, by majority (Latham CJ, Starke, Dixon and McTiernan JJ, Rich and Williams JJ dissenting), that it did not. Latham CJ decided the issue on a basis not presently relevant, that the matter was one of implied contract and that upon such a contract there was no liability to pay interest either at law or in equity. McTiernan J decided to the same effect. Starke J held, in accordance with Swift, that interest could not be allowed in respect of a requisition of goods unless the statute or regulation authorising the requisition itself authorised the allowance of interest. Rich J, in dissent, decided on the basis that, although Swift had determined that the power to award compensation did not include power to award interest, their Lordships had not decided what was just in respect of the payment of interest. Read in light of s 51(xxxi) of the Constitution, s 67 of the Defence Act was to be understood as providing for just compensation, and compensation was not just unless it provided for both the value of what had been expropriated and the "amount of any damage sustained by [the owner] by reason of the expropriation", which included being deprived of the use of the vessel for the considerable time which it took to assess compensation. Just terms therefore involved as a matter of elementary fairness the payment of interest. Williams J appears to have considered that the payment of interest could have been sanctioned consistently with Swift on the basis that the rule in Pigott's Case applies to a contract of sale of a ship (such a contract being specifically enforceable), but in any event, like Rich J, his Honour held that, read in light of s 51(xxxi) of the Constitution, s 67 of the Defence Act was to be understood as providing for recompense on just terms and just terms necessitated the payment of interest "to make the compensation adequate".
In light of subsequent developments, however, Dixon J's analysis of the issues was the most significant. His Honour rejected the notion that s 51(xxxi) of the Constitution required the payment of interest, on the basis that:
"the compensation represents, not the income-producing corpus, the capital value of the ships, but hire or charter moneys, a revenue item forming the income produced by the corpus. I do not think that even the American Fifth Amendment makes it necessary to add interest to compensation on revenue account while outstanding …"
His Honour also held in effect that, although it could be accepted that the rule in Pigott's Case applied to a contract for the sale of a ship, the matter was to be decided according to whether it was possible to extract from the word "recompense" in s 67 of the Defence Act authority to award interest. And his Honour held that it was not:
"If we work out the implications of the word 'recompense' according to ordinary legal principles, we have the decision in Swift's Case for our guidance upon the place interest takes in the conception of compensation in English law. As Starke J has pointed out in his judgment, the argument was fully stated by Scrutton LJ that, as his Lordship put it, 'the owner of property seized does not receive full compensation, if he loses the property in one year and only receives the value of the property at the time of loss five years afterwards.' … His dissenting judgment, however, did not prevail and the House of Lords plainly rejected the argument. Our Constitution, when it refers to 'just terms', is placing a qualification on the legislative power it bestows to acquire property compulsorily. But it is, I think, difficult to say that it makes it necessary for the legislature to give more than the full content of 'compensation', as compensation is understood in English law, and we know from the House of Lords that a right to interest on the amount payable for the thing is not always or necessarily included. Section 51(xxxi) has not the effect of transferring into our Constitution the Fifth Amendment, nor all the glosses placed upon it. But, whatever may be the correct view of compensation forming a replacement of income-producing capital assets, I do not think that we can find in s 67, interpreted in the light of s 51(xxxi), enough to enable us to award interest upon the recompense we now hold to be payable." (footnotes omitted)
Importantly for present purposes, it is apparent from that passage of the judgment that Dixon J took Swift to have established that interest allowed to compensate a claimant for being kept out of compensation for compulsory acquisition of the claimant's property is not, as a matter of general law, to be regarded as compensation for the compulsory acquisition of the property, and that, as a matter of constitutional law, s 51(xxxi) of the Constitution did not necessitate any different conclusion.
Subsequently, a similar question arose for consideration in Marine Board, in which Dixon J approached the matter consistently with the principles which his Honour had essayed in Huon Transport but with a different result. The issue there was whether a power to award "compensation" for the requisitioning of a ship included power also to award interest. After referring to Swift, Dixon J reiterated that there is a clear difference between a sum awarded or assessed as compensation for the loss of property and a sum awarded for interest or compensation allowed where a claimant has been deprived of the use and occupation of the property without immediate recoupment in money. Consistently with his judgment in Huon Transport, his Honour also reasoned that whether a court or tribunal charged under statute with awarding "compensation" for the acquisition of land has power also to award interest depended on the proper construction of the statute. But his Honour concluded, in apparent contradistinction to his interpretation of the power to award "recompense" in Huon Transport, that, absent contrary indication, the statutory power to determine "compensation" for the requisition of a ship could readily be interpreted as extending to awarding what is consequential upon or incidental to the award according to substantive law and equity. Furthermore, his Honour in effect regarded Marine Board as distinguishable from Swift because, although the rule in Pigott's Case did not apply to goods of the kind which had been requisitioned in Swift, it did apply to the requisition of a ship of the kind that was in issue in Marine Board and so provided a basis in equity for the award of interest. It followed, Dixon J concluded, that, upon the proper construction of the regulations conferring power to award compensation, there was incidental, implied jurisdiction to determine and order that interest be paid.
By contrast, Williams J held that the claimant should be paid interest "on the balance of compensation" because the payment of interest was required to make the compensation full and adequate and therefore just; and hence that statutory authority to determine "just compensation" was sufficient to authorise the award of interest. McTiernan J considered the Court to be bound by the authority of Swift to hold that interest on compensation is not generally an element in the compensation, but also concluded that the power to award interest was an incident of the jurisdiction to award "just compensation". Similarly, Rich J concluded that interest should be allowed as part of the compensation on just terms. Latham CJ and Starke J, in dissent, held that interest was not part of compensation for compulsory acquisition but rather compensation for delay in making payment of compensation for compulsory acquisition, and, therefore, that there was no jurisdiction to award interest.
Absent authority, there would be something to be said for the view of Lord Clyde in Commissioners of Inland Revenue v Ballantine (speaking of an arbitrator's award of interest on a claim by contractors for additional costs, losses and damages) that:
"In all such cases, however - whether the allowance is wrapped up in a slump award or is separately stated in the decree - the interest calculation is used in modum aestimationis only. The interest is such merely in name, for it truly constitutes that part of the compensation decerned for which is attributable to the fact that the claimant has been kept out of his due for a long period of time."
As has now been seen, however, although those Justices who comprised the majorities in Huon Transport and Marine Board did not agree as to whether interest allowed to a claimant for being kept out of compensation is part of that compensation or rather interest on it for being kept out of it - and adding in the views of the dissentients on the point does not produce a majority - the clear balance of persuasion lay with the view that such interest is not part of the compensation for compulsory acquisition but a separate compensation for being kept out of the money. And as a matter of principle, there is no reason to doubt that is so. To adopt and adapt the observation of Lord Sumner in Swift, an award of interest in the present proceedings is not compensation for the extinguishment of native title but, consistent with the legislative scheme for the establishment and extinguishment of, and compensation for, native title that is set up by the Native Title Act, is compensation for being kept out of that amount which the Claim Group should have received at the time of extinguishment. Such a conclusion is consistent with, and indeed favoured by, the terms of s 51(1) of the Native Title Act, which refers to the entitlement to compensation under the Act as an "entitlement on just terms to compensate the native title holders for any loss, diminution, impairment or other effect of the act on their native title rights and interests" (emphasis added).
The Commonwealth contended that, that being so, it followed that the interest ordered to be paid to the Claim Group was not part of the total compensation payable for the extinguishment of native title within the meaning of s 51A of the Native Title Act. That contention should be accepted.
F Cultural loss
This part of these reasons is concerned with compensation for the non‑economic effect of the compensable acts, consistently with the second of the inquiries required by the statutory definition of native title - the native title holders' connection with the land by reason of their laws and customs.
As was observed by the plurality in this Court in Ward:
"the connection which Aboriginal peoples have with 'country' is essentially spiritual. In Milirrpum v Nabalco Pty Ltd [(1971) 17 FLR 141 at 167], Blackburn J said that: 'the fundamental truth about the aboriginals' relationship to the land is that whatever else it is, it is a religious relationship … There is an unquestioned scheme of things in which the spirit ancestors, the people of the clan, particular land and everything that exists on and in it, are organic parts of one indissoluble whole'. It is a relationship which sometimes is spoken of as having to care for, and being able to 'speak for', country. 'Speaking for' country is bound up with the idea that, at least in some circumstances, others should ask for permission to enter upon country or use it or enjoy its resources, but to focus only on the requirement that others seek permission for some activities would oversimplify the nature of the connection that the phrase seeks to capture. The difficulty of expressing a relationship between a community or group of Aboriginal people and the land in terms of rights and interests is evident. Yet that is required by the [Native Title Act]. The spiritual or religious is translated into the legal. This requires the fragmentation of an integrated view of the ordering of affairs into rights and interests which are considered apart from the duties and obligations which go with them. The difficulties are not reduced by the inevitable tendency to think of rights and interests in relation to the land only in terms familiar to the common lawyer."
Compensation for the non-economic effect of compensable acts is compensation for that aspect of the value of land to native title holders which is inherent in the thing that has been lost, diminished, impaired or otherwise affected by the compensable acts. It is not just about hurt feelings, although the strength of feeling may have evidentiary value in determining the extent of it. It is compensation for a particular effect of a compensable act - what is better described as "cultural loss".
As the trial judge explained, his Honour's task was to determine the essentially spiritual relationship which the Ngaliwurru and Nungali Peoples have with their country and to translate the spiritual hurt from the compensable acts into compensation.
Agreed bases of assessment
Specific aspects of the approach to this component of the compensation claim were not in dispute before the courts below or in this Court. There was no dispute that an award of this kind was appropriate and that the award was to be made on an in globo basis to the Claim Group with the apportionment or distribution of the award as between members being an intramural matter.
Further, there was no dispute that it would not be appropriate for the award to reflect the number of native title holders at the time that native title was determined to have existed given that the cultural loss would be suffered by the native title holders as a whole and because of the inter-relationships between members of related country groups and their relationships to the countries of those groups.
And, finally, there was no dispute that the assessment of the effects of the acts causing cultural loss could not be divorced from the content of the traditional laws and customs acknowledged and observed by the Claim Group. That is unsurprising. The definition of native title rights and interests in s 223(1) comprises a number of interlocking elements, all of which must be given effect, and it is under the laws and customs of the Ngaliwurru and Nungali Peoples that the native title rights and interests in relation to the land are held by the Claim Group.
Trial judge
The trial judge, in assessing compensation for cultural loss, first identified the nature and extent of the native title holders' connection or relationship with the land and waters by their laws and customs and, second, considered the effect of the compensable acts on that connection. As with the assessment of economic loss, that is also the appropriate approach to the assessment of cultural loss. Accordingly, before turning to consider the various grounds of appeal against the trial judge's determination of cultural loss, it assists to set out, in summary form, the trial judge's identification of the nature and extent of the native title holders' connection to country and the effect of the compensable acts upon it.
The trial judge addressed cultural loss (albeit, using different terminology) under three headings - principles, findings and evidence, and consideration - and it is appropriate to restate them under the same headings. At the same time, it is important to recognise the need to read the trial judge's reasons as a whole. As will later become apparent, the Commonwealth and the Northern Territory sought to take particular parts of the trial judge's reasons and focus attention on those parts divorced from their place in the overall findings and reasoning.
Principles
After setting out that the claim for this component of compensation was made by the Claim Group on two bases - for loss from diminution in or disruption to traditional attachment to country and for loss of rights to live on, and gain spiritual and material sustenance from, the land - the trial judge identified various facts and matters which he considered were to be taken into account in assessing the effects of the compensable acts on the Claim Group's native title rights and interests.
Those facts and matters were: the content of the native title rights and interests; the communal and collective nature of those rights and interests; the fact that the native title rights and interests were non-exclusive; and the fact that this component of compensation had to be assessed by reference to the loss or diminution of the native title rights and interests from the compensable acts and not from earlier, or subsequent, acts, events or effects.
The trial judge described the assessment process as complex but essentially intuitive, with the compensation being assessed by reference to the spiritual and usufructuary significance of the area of the land affected relative to the other land that remained available to the Claim Group for the exercise of the native title rights and interests. It was in that context that the trial judge stated it was necessary to bear in mind that prior to the town of Timber Creek being proclaimed in 1975, European settlement of the area had occurred with the establishment of cattle stations in the late nineteenth century, and that progressively the township became an important centre including from the 1930s, when roads were constructed in the region. As the trial judge recorded, those events would have led to the Claim Group being partly impaired from enjoying their traditional lands - before the compensable acts - and the current claim for compensation had to take into account the extent to which spiritual attachment to the land had already been impaired.
The trial judge did not accept, however, that a compensation claim is to be reduced simply because there is other land over which a claim group may have native title rights and interests. Rather, his Honour stated that it is the consequences of the compensable acts on the native title rights and interests which are to be compensated and that those consequences do not exist in a vacuum uninformed by the wider areas in respect of which the Claim Group hold and enjoy their native title rights and interests. Further, his Honour rejected the contention that the effect of the acts on native title rights and interests had to be direct. Those findings led his Honour to the conclusion that the Claim Group were entitled to compensation for the loss evoked or caused by the compensable acts but that any loss generally derived from a loss of access to country in the town of Timber Creek and the inability of the Claim Group to exercise their native title rights and interests on that country lay outside the parameters of s 51(1) of the Native Title Act.
Here, the nature and timing of the compensable acts had specific consequences for the assessment of the compensation claim. Many of the compensable acts occurred 30 or so years ago. As a result in part of that being so, the trial judge found that, in assessing the consequences of the compensable acts, it was not appropriate to adopt a lot by lot approach, treating each lot as a boxed quarter acre block. That conclusion was also fortified by the fact that, consistent with the traditional laws and customs of the Ngaliwurru and Nungali Peoples, it was not possible to establish the comparative significance of one act over another; the consequences were necessarily incremental and cumulative and had to be understood in the terms of the pervasiveness of the Dreamings and the sites of significance. Thus, the trial judge found that, subject to the evidence before the Court, it was open to infer from evidence which did not specifically relate to an act or parcel of land that a further sense of loss was felt as a consequence of a compensable act.
As the trial judge correctly noted, not all groups will be the same and it is not sufficient to assess the effects of compensable acts by reference only to a statement of what would be the native title rights and interests were it not for extinguishment. Instead, the trial judge considered that evaluation of the compensable effects requires an understanding of the relevant effects of the acts on the Claim Group and that, in that respect, evidence about their relationship with country and the effect of the acts on that relationship is paramount. It is the trial judge's findings on those issues that are addressed next.
Findings and evidence
The trial judge addressed: the Claim Group's connection to the land; the effects, under their laws and customs, when country is harmed; and, then, the effects of the compensable acts. Again, it is appropriate to take each in turn.
Connection to land
Under s 86(1) of the Native Title Act, the trial judge received, uncontested, certain of the findings of, and evidence that was before, the trial judge in the native title determination application. The findings adopted included findings that:
(1) the native title holders were linked to the claim area through ancestral ties that go back to Lamparangana, and well before his time;
(2) the native title holders observe essentially the same rituals and ceremonies as were practised by their ancestors more than a century ago; and that those ritual and ceremonial practices are largely and inextricably bound up with the land and waters in and around Timber Creek;
(3) examples of ritual and ceremonial practices included high‑order ritual practice, initiating rites, head wetting ceremonies (Mulyarp), protection of Dreaming (Puwaraj) sites, traditional methods of hunting, fishing and gathering food, and ongoing practice of ritual and exchange (Winan);
(4) the native title holders share a set of beliefs that govern the rights and obligations of Indigenous persons who wish to have access to, and use, the land and waters of the region and that those who were Yakpalimululu (senior owners of country) could deny access to certain foraging areas, and that if a white person wished to go onto Yakpali (country), that person would be expected to ask for permission; the purpose of such a request being to enable the protection of sites of importance to the Ngaliwurru and Nungali Peoples;
(5) according to the traditional laws and customs of the native title holders, spiritual sanctions are visited upon unauthorised entry onto country or, as the Full Court in the native title determination application described it, the native title holders are the gatekeepers for preventing harm to others and avoiding injury to country;
(6) certain restricted evidence, given before the trial judge in the native title determination application, pointed to a link between the symbols of the higher-order ritual, and proprietary interests in land. The rituals and ceremonies signal a right to country which stems from the Dreamings;
(7) there is in place, in Timber Creek, a system of normative rules that governs a continuing ritual tradition which articulates an "owner's" right to country that passes through descent;
(8) the laws and customs upon which the normative system rests are part of a conservative oral tradition that would be unlikely to be amenable to significant change; and
(9) the native title holders had a duty and concern to look after country.
These findings require some further explanation. The trial judge made extensive reference to an expert anthropologists' report by Kingsley Palmer and Wendy Asche ("the Palmer and Asche 2004 Report") on the rights and duties under Ngaliwurru and Nungali law and custom to look after and speak for country, which his Honour found was supported by the lay evidence of the claimants.
Palmer and Asche reported sites of significance in and around the claim area and the travels of major Dreamings through the claim area. Palmer and Asche explained that Dreamings are spiritual beings that performed actions that resulted in physical and spiritual modifications to the countryside. As some Dreamings ranged widely over the landscape their spirituality is believed to encompass more than one country. The relationship between an individual and the Dreamings is a personal one. Dreaming is regarded as an absolute force and its requirements and mandates have about them the immutable quality of law.
Four major travelling Dreamings through Timber Creek were reported on, and documented in a map, by Palmer and Asche: Wirip (Dingo), Marna (Fish), Wuguru (Humpyback) and Lirimin (Centipede). The tracks the Dreamings took were also later documented alongside the locations of sacred sites on a map adopting the same data entered into the Northern Land Council's Geographic Information Systems to produce the map annexed to the Palmer and Asche 2004 Report. The later map was tendered before the trial judge. That map, shown below, identifies the lots on which the compensable acts occurred (in brown) as well as the sites of significance (marked with purple dots) and the tracks of the Dreamings (coloured in accordance with the key given).