The Full Federal Court's decision yesterday on how Indigenous land use agreements (ILUAs) are made will be of major interest to all government, resources, pastoral and other players who have sought to (and who would seek to) enter into ILUAs to ensure that their operations are valid for native title purposes (McGlade v Native Title Registrar [2017] FCAFC 10).

The Full Court's decision adjudges to be incorrect what has been heavily relied on over the last six years as settled law in relation to who needs to sign an ILUA on behalf of native title parties. This means that the validity of many ILUAs has been put at risk as has the validity of the grant of mining and petroleum tenements and other interests that had been validated through the ILUA registration process. Further, the ramifications of the decision appear to go well beyond ILUAs extending into every aspect of native title law.

It would seem that the best solution to resolve the problem would be for the Commonwealth Parliament to amend the Native Title Act 1993 (Cth) (NTA) to ensure the validity of all of these interests and to create certainty as to the operation of the NTA, a possible solution flagged by the Court.

The position pre-McGlade on who must execute an ILUA

The case relates to four of six "Settlement ILUAs" entered into between the State of Western Australia and the Noongar People of South West WA. These ILUAs are the crux of efforts undertaken by the State and the Noongar People since December 2009 to achieve a voluntary settlement of the latter's native title claims throughout the South West.

Under section 24CA of the NTA an agreement will be an ILUA if it meets certain requirements, one of which is that all persons in the "native title group" for an area are parties to any ILUA over the area, as set out in section 24CD. The section defines the "native title group" for an area to include "all registered native title claimants" in relation to the area.

The individuals authorised by a native title claim group to jointly comprise the "applicant" for a registered native title claim over an area, also jointly comprise the registered claimant for that area (sections 253 and 61(2) of the NTA).

However, in QGC Pty Limited v Bygrave (No 2) [2010] FCA 1019, Justice Reeves decided that section 24CD did not mean that every individual comprising each registered claimant for an area was a mandatory party to any ILUA to be made over that area, or that such individuals were required to assent to or sign the ILUA. All section 24CD required was that one or more of the individuals comprising each registered claimant for the area be named as a party to the ILUA.

In the ensuing six years, the National Native Title Tribunal has registered many ILUAs in reliance upon Bygrave 2 ‒ that is, in circumstances where not every person who comprises the registered claimant has executed the ILUA. McGlade is the first Full Federal Court decision to consider the correctness of Bygrave 2.

The Full Court's decision: all individual members of each registered claimant must sign

The Full Court decided that:

  • in order for an agreement over a registered claim area to qualify as an ILUA under section 24CA, all individual members of each registered claimant for the area would have to sign the agreement;
  • contrary to previous thinking, the authorising group does not have power to direct the registered claimant to act in any way other than unanimously;
  • if any member of the registered claimant does not sign, the only way the agreement could become an ILUA would be for the non-signing member (or members) of the registered claimant to be relieved of their post using the process in section 66B of the NTA (involving a claim group authorisation and Federal Court application); and
  • a section 66B application to dismiss non-signing members will be needed before an agreement can be considered to be an ILUA, even if the reason they have not signed is that they are dead!

Ramifications of the McGlade decision for native title law generally

In light of the McGlade decision, governments, resources proponents, pastoralists and others who have relied on registered ILUAs to validate their future acts should review all of their agreements to determine how many of them were registered, on the strength of Bygrave 2, notwithstanding the absence of a "full set" of registered claimant signatures.

The consequence of the Full Court's decision is that future acts contained in any agreements with "missing" signatures may be invalid. In other words, the validity of the grant of mining and petroleum tenements and other interests that had been validated through the ILUA registration process is now at risk.

In practical terms, the decision may result in the established practice of registered claimants executing an ILUA only after they have been authorised to do so at an authorisation meeting being reversed in order to avoid a second authorisation meeting being required (for the purposes of section 66B) to remove any individual member of the registered claimant who does not sign the ILUA.

The fallout from the McGlade decision could also include resort to compulsory acquisition of native title where members of registered claimants refuse to sign ILUAs that are acceptable to most of the native title holders.

Further, the ramifications of the decision are likely to extend beyond ILUAs. It appears that in all circumstances, including with respect to making right to negotiate, cultural heritage and other agreements, instructing lawyers or taking steps in a native title claim, and despite any direction to the contrary that may be given by the claim group, the individuals who comprise an applicant or a registered claimant will be required to act unanimously.

Unless the Full Court's decision is overturned on appeal, perhaps only the Commonwealth Parliament ‒by introducing appropriate amendments to the NTA ‒ would be able to mitigate:

  • the potential invalidity of the grant of mining and petroleum tenements and other interests;
  • the resulting exorbitant costs that could lie in store for Australian business;
  • the needless extinguishment of native title by compulsory acquisition where a full set of registered claimant signatures has not been obtained; and
  • the uncertainty associated with the requirement in every instance for applicants and registered claimants to act by consensus.