In the recent case of Western Australia v Brown [2014] HCA 8 the High Court clarified the test for extinguishment of native title rights and interests. The Court confirmed where the grant of rights to use land for particular purposes, such as mining or pastoral purposes, is not accompanied by a right to exclude others from the land, the rights are not necessarily inconsistent with, and do not necessarily extinguish, native title, even where they permit the construction of significant improvements.

Background

The case concerned mineral leases for iron ore granted by the State of Western Australia pursuant to a 1964 agreement the State had entered into with some joint venturers. Some forty years after the agreement was made, the Federal Court determined the Ngarla People held non- exclusive native title rights and intereststo land within the area of the two mineral leases, subject to the question of extinguishment. At first instance, the Federal Court had to consider whether the grant of the mineral leases or theState Agreement had extinguished native title.

Based on longstanding High Court authority the Federal Court held that neither the grant of the mineral leases nor the State Agreement conferred exclusive possession which extinguished native title. However, the Federal Court went on to find that the rights granted pursuant to the mineral leases and the State Agreement were inconsistent with the continued existence of any of the determined native title rights and interests in the area where the mines,the town sites and associated infrastructure were constructed. This was consistent with the Full Federal Court’s earlier decision in De Rose v South Australia (No 2) (2005) 145 FCR 290 where the Full Court held the grant, in a pastoral lease, of the right to construct improvements on the land (such as a dwelling house or shed), when exercised, was inconsistent with native title rights and interests in the land and therefore the construction of improvements by the holder of a pastoral lease extinguished native title in the land on which the improvements were constructed. In applying De Rose, the Federal Court held the rights exercised by the joint venturers in the developed area of the mineral leases were analogous to rights of exclusive possession.

The Ngarla people subsequently appealed to the Full Court, alleging their native title rights and interests were not extinguished by the grant of the mineral leases, or by any subsequent activities on the land. The Full Court upheld their appeal and it was this decision that was appealed to the High Court.

The test of extinguishment of native title

The High Court noted the determination of whether two or more rights are inconsistent is an objective inquiry and held that what needed to be considered was whether the rights pursuant to the mineral leases were, at the time of their grant, inconsistent with the relevant native title rights and interests. The Court rejected De Rose saying,to the extent to which it countenances a notion of extinguishment contingent on later activities carried out pursuant to an interest, it is wrong and should not be followed. The Court found the decision in De Rose incorrectly held that the permitted construction of an improvement on land held under a “lease” affected the existence of native title rights rather  than  the  manner  of  their  exercise.

In overruling De Rose, the High Court explained that where the mineral lease holders constructed an improvement on the land, as they were permitted to do under the mineral lease, that improvement took (and continued to take) priority over the rights and interests of the native title holders for so long as the lease holders enjoy and exercise their rights to that improvement. Competition between the exercise of the two rights is to be resolved in favour of the rights granted by statute. However, when the joint venturers cease to exercise their rights (or their rights come to an end) native title rights and interests remain unaffected.

Implications of non-extinguishment of native title

The High Court’s decision confirms that where the grant of rights to use land for particular purposes (such as mineral or pastoral purposes) is not accompanied by a right to exclude others from the land, those rights are not necessarily inconsistent with, and do not necessarily extinguish, native title rights and interests to the land, even where they permit significant improvements to be constructed on land.

Importantly,  the  continued  existence  of native title will not prevent the holder of the relevant  interest  from  carrying  out  activities or  constructing  improvements  pursuant  to their  interest.  Where  an  improvement  has been  erected  pursuant  to  a  mineral,  pastoral or similar “lease” on land subject to native title, the lease holders’ rights and interests will simply have priority over the rights and interests of the native title holders. This means  when  the  improvement  is  removed or the interest comes to an end, the native title holder’s rights and interests continue and can be exercised once again.

While the decision does not affect the rights of interest holders to carry out activities or construct improvements on land pursuant to their current interests, it does mean the native title which continues to exist will need to be taken into account when any new rights and interests are granted. Where the grant of those rights and interests affects the continuing native title, the grant will need to be done consistently with the “future act” regime in the Native Title Act 1993 (Cth). Depending on the nature of the grant concerned, this may trigger the need to negotiate an agreement with the native title holders.

Philippa Metljak