States face billion-dollar native title compensation bill after High Court ruling

“The 375 groups that have proven native title across the country now have legal entitlements to make a compensation claim under the Native Title Act established by Paul Keating in 1994. It’s a natural next step they will seek compensation for public works on their land that have affected their rights.”

Queensland Treasurer Jackie Trad called for a coordinated federal response to deal with the new methodology for determining native title compensation into the future.

“A comprehensive federal approach must prioritise ways to settle native title compensation through negotiation rather than through expensive or protracted litigation in the courts,” she said.

“We will consider the High Court’s decision very closely in assessing any immediate implications for Queensland.”

It may be 25 years since the Native Title Act was legislated by federal Parliament, but cases to determine compensation for the extinguishment of native title are only just starting to be decided by the courts.

In the test case in the Federal Court in 2016,Justice John Mansfield awarded $3.3 million to the Ngaliwurru and Nungali peoples for 60 land grants or public works in the town of Timber Creek.

The Indigenous groups at Timber Creek applied for compensation of between $4.7 million and $22 million, while the Commonwealth valued compensation at $1.4 million.

But Justice Mansfield ruled $3.3 million – which consisted of $512,000 for economic loss, $1.48 million for interest and $1.3 million for pain and suffering – was “just” compensation to cover the loss of Aboriginal common law property rights.

On appeal in the Federal Court, the full bench trimmed economic loss from 80 per cent to 65 per cent of the freehold value of the land.

‘Manifestly excessive’

In the High Court, the Northern Territory and the Commonwealth claimed Indigenous group’s economic loss did not exceed 50 per cent of the freehold value of the affected land and claimed the award for cultural loss was “manifestly excessive”.

In its judgment handed down on Wednesday, the High Court trimmed the costs of economic loss to $320,250, interest to $910,100, but, significantly, upheld the $1.3 million loss for spiritual suffering.

“The court held that the award to the claim group was not manifestly excessive and was not inconsistent with acceptable community standards,” a summary judgment of the ruling said.

The High Court ruling is now expected to be used as a methodology for future native title compensation claims.

There are already three new compensation claims that have been lodged in Queensland alone after the original Timber Creek decision in 2016.

The Queensland government noted in its mid-year budget update in December that it could face a “significant liability” with respect to compensation arising from acts that have extinguished or impaired native title since 1975. It said the Timber Creek case would provide a formula for calculating native title compensation.

More case law required

Mr Denholder said the High Court decision would provide direction for assessing compensation for a few categories of impact, however more case law would be required to understand how native title compensation will be assessed for other impacts, including mining projects, pastoral leases, agricultural development and other land uses partially inconsistent with native title.

Former Labor prime minister Paul Keating committed the Commonwealth to fund 75 per cent of the compensation costs arising from native title in order to allay state concerns about the Native Title legislation in 1993. But subsequent federal governments have watered down the Commonwealth commitment to making a contribution to the compensation.

Former WA attorney-general and now federal Attorney-General Christian Porter warned in 2011 of the financial ramifications of the change, claiming it was a “one billion dollar plus issue”.

Some state governments have already negotiated compensation agreements with some Indigenous groups, but this could be challenged under the new precedent or through other native title groups.

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