Northern Territory of Australia v Mr A Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples & Anor; Commonwealth of Australia v Mr A Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples & Anor; Mr A Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples v Northern Territory of Australia & Anor  HCA 7
The High Court in hearing its first ever native title compensation case, ultimately reduced the amount of native title awarded to the Ngaliwurru and Nungali Peoples of Timber Creek (Claimants). However, significantly, the Court rejected the appellants’ arguments against the cultural loss amount, upholding the trial judge’s original determination of $1.3 million.
The case concerned a claim made by the Claimants, who were recognised in 2007 as native title holders of the land in and around Timber Creek, for compensation for the impact of governmental acts on their native title. In the Federal Court Justice Mansfield awarded approximately $3.3 million to the Claimants for the 53 acts of the Northern Territory government that impacted their native title, the majority of which extinguished their Native Title rights and interests. The compensation amount was broken down into the following three categories:
Economic loss = $512,000 (this was calculated by reference to 80% of the freehold land value);
Simple interest on the economic loss = $1.488 million; and
Non-economic/cultural loss = $1.3 million.
On appeal, the Full Federal Court upheld the majority of the trial's judges findings, including the award for cultural loss. However the Full Court reduced the award for economic loss from 80% to 65% of the freehold value of the relevant land at the time of the compensable acts. The award of simple interest was sustained, although the Full Court stated that in other circumstances compound interest may be appropriate.
All parties appealed to the High Court on the following grounds:
the Claimants argued that there should be no reduction in the value of the freehold land and that compound interest should have been applied to the value of the economic loss;
the Northern Territory argued that the award for cultural loss was excessive; and
in addition, the Commonwealth Government argued, the value of the freehold land should have been reduced by 50% and interest should not have been awarded as part of the compensation.
The High Court upheld the award of $1.3million for cultural loss and the award of simple interest on the economic loss. The award of economic loss was reduced to $320,250, only 50% of the total value of the freehold land.
The High Court found that the correct approach to awarding native title compensation was bifurcated (two-pronged). The two components are:
determining the economic value of the extinguished native title rights and interests; and
estimating the cultural loss resulting from a loss of connection to country.
The joint judges began by noting that compensation for cultural loss focuses on determining the spiritual relationship between Indigenous peoples — here, the Ngaliwurru and Nungali Peoples — and their country, “to translate the spiritual hurt from compensable acts into compensation” (at )
In upholding the trial judge's award of $1.3 million for non-economic loss, the High Court stated the test was a social judgement made by the judge of what the Australian community at the time would think is an appropriate award and that there was “nothing to suggest that the trial judge’s award would not be accepted by the Australian community as appropriate, fair or just”.
The High Court agreed with both Justice Mansfield and the Full Court that economic loss should be calculated by reference to the value of the freehold land. It was held that the principles for determining the value of the freehold land were similar to those used in the assessment of compensation in compulsory acquisition cases. That is that the value should be calculated by reference to what a willing but not anxious purchaser would be willing to pay to a willing but not anxious vendor.
Further, the High Court found that if native title rights and interests are exclusive, the value of compensation awarded should be the full freehold value of the land. Alternatively, if the rights and interests are less than exclusive title, the economic value will be significantly less than freehold value. As the Claimants right to control access to their country had been extinguished and they were left with limited non-exclusive native title, the High Court ruled that a 35% reduction in the value of the freehold land was not enough. Instead, the High Court agreed with the Commonwealth's approach that the appropriate discount was 50%. The High Court commented that a figure lower than 50% may have been appropriate in these circumstances but no party had pressed for less than 50%.
Agreeing with the Full Court, the High Court upheld the award of simple interest but also stated that the type of interest will be influenced by the evidence of the claimant and in some circumstances compound interest would be appropriate. For example, in situations where it can be shown that the claimants would have put the compensation to work at a profit.
The High Court's decision has provided much needed clarity to the assessment of compensation arising from certain acts that impact native title rights and interests. If the small area of Timber Creek (1.26km2) can attract an award of $2.5 million, it is likely that the Commonwealth and State governments could be liable for compensation into the billions given that there is more than 2.8 million kilometres squared of native title holdings across Australia. However, the impact won't be felt immediately due to the time it takes for native title compensation claims to be determined.
A significant aspect of the decision was the introduction of the term cultural loss. In previous native title cases, including the Federal Court and the Full Federal Court hearings of this case, referred to non-economic loss or solatium. The High Court found that such language distracted from the purpose of the Native Title Act: the language should reflect the deeper loss native title compensation claimants feel in comparison to normal descriptions of non-economic loss in common law.
While the decision is a step forward in determining native title compensation, it is important to note that not all compensable acts were considered by the High Court. The High Court didn’t consider how compensation should be awarded for other impacts such as pastoral leases, mining grants and agricultural development. While it is likely that the freehold value of the land will be used in calculating the compensation for these acts further judicial guidance is needed.
The full text of the decision is available here.