The High Court recently handed down a momentous decision for Indigenous Australians. The case, known as the Timber Creek Decision, concerned the award of compensation — both economic and non-economic — to the Ngaliwurru Nungali peoples of the Northern Territory for loss of their property rights in their traditional lands.
The case is the first of its kind to be successfully publicly litigated. In 2006 a claim by the traditional owners of Yulara, near Uluru, was rejected by the Federal Court because the judge found that the claimants could not establish native title.
Subsequently, the Yankunytjatjara people in the De Rose Hill native title claim received compensation from the South Australian government for extinguishment of their rights over sacred sites. The compensation was agreed under a confidential negotiated settlement between the government and the traditional owners. Consequently, it offers no precedent for just how to calculate compensation, and on what basis compensation might be offered.
That native title holders are entitled to compensation is not in dispute. The Native Title Act is clear that the Federal Court has power to award compensation, including for valid extinguishment of native title. The act also makes clear that compensation will be awarded on 'just terms'. Although the act has been in force since 1993, the big question about compensation has been how to attach a dollar value to 'just terms' for extinguishing native title.
Where the state resumes freehold titles, this question is settled. There is a market value for freehold land, and well-established valuation methods to ascertain the compensation value. Native title, however, by definition has no market value. The rights attaching to native title are communal rights held by the community in common. The very concept of native title is the opposite of property in land as is understood by the Anglo-Australian legal system. This difference in character has created a challenge for Australian law in working out principles of compensation valuation.
At first instance, before a single judge, the Timber Creek applicants were awarded compensation for economic loss of property rights at a value equivalent to 80 per cent of the freehold value of the land. This valuation recognised that the claimants suffered only a partial loss of their native title. There was considerable discussion about the valuation method applied. Subsequently, the Full Court, on appeal, disagreed with the valuation method proposed and it reduced the compensation valuation to 65 per cent of the freehold