On 2 February 2017, the Full Federal Court handed down its judgment in the matter of McGlade v Native Title Registrar [2017] FCAFC 10 (McGlade). The Court considered the validity of Justice Reeves’ earlier decision in QGC Pty Ltd v Bygrave (No 2) [2010] FCA 1019 (Bygrave), in which his Honour found that, provided an indigenous land use agreement (area agreement) (ILUA) was properly authorised by a native title claim group, it was not necessary for all individual members of the applicant for the registered native title claim (Applicant Members) to be party to, or execute, the ILUA.

The Full Court in McGlade unanimously overturned Justice Reeves’ decision, holding that a plain reading of the Native Title Act 1993 (Cth) (NTA) compelled the finding that all Applicant Members must be party to and execute an ILUA for the ILUA to be registrable in accordance with requirements under the NTA. The immediate result of the judgment (as reflected in the Court’s conclusion and the orders made) is that four of the six ILUAs that underpin Western Australia’s South-West Settlement deal with the Noongar People cannot be registered, and so their fate (at least for the time being) is uncertain. The wider implications of the judgment could include, in particular, the following:

  1. Existing interests may be invalid for native title purposes if such interests were granted or validated in reliance on an agreement that was not signed by all of the Applicant Members (this will be relevant only for ILUAs registered after Bygrave).
  2. New grants of interests may require completion of new native title processes or agreements, instead of reliance on existing agreements that were not signed by all Applicant Members.
  3. Native title negotiations may need some additional steps and strategies to ensure they result in agreements that enable valid grants of tenure, particularly where the Applicant Members now have an effective right of veto in ILUA negotiations.
  4. Aboriginal heritage processes, clearances and approvals under State regimes that rely on Applicant Members may also be affected by this decision.

The decision

The Full Court’s judgment centred upon a consideration of section 24CD(1) of the NTA, which provides that “All persons in the native title group in relation to the area must be parties to the agreement”. The Court observed the central importance of the words “All persons” and “must”. In determining whether the requirements of the NTA have been met, the Court observed that it was important to precisely identify the nature of the “native title group”. The Court then analysed section 24CD(2)(a), which provides that the native title group consists of “all registered native title claimants in relation to land or waters in the area”. The Court examined the definition of “registered native title claimant” as it appears in section 253, which is:

“in relation to land or waters,… a person or persons whose name or names appear in an entry on the Register of Native Title Claims as the applicant in relation to a claim to hold native title in relation to the land or waters”.

By virtue of the text of section 24CD(1) and (2), the Court held that the NTA requires the various persons who jointly comprise the Applicant Members to be parties to an ILUA for the ILUA to be registrable. The consequence of a person being party to an agreement is that they must sign it to evidence their agreement to be bound by its terms. Consequently, if one or more of the Applicant Members refuses, fails, neglects, or is otherwise unable to sign a negotiated ILUA for any reason (including because they have passed away), the agreement will lack the qualities to be a registrable ILUA.

The Court also observed that, if, as a result of an Applicant Member’s refusal to sign an ILUA that has been properly authorised, a native title claim group is dissatisfied with the conduct of the Applicant Member (or the Applicant Member is otherwise incapacitated or has died), the claim group may authorise the removal or replacement of the person as an Applicant Member. The Court held that the express and only mechanism provided for in the NTA expressly designed for undertaking such a course is contained in section 66B (which sets out the circumstances and procedures for the removal or replacement of an Applicant Member). In this way, an Applicant Member who declines to sign a properly authorised ILUA can be removed at the discretion of the group.

Implications

Are existing ILUAs and grants compromised?

Aside from the immediate consequence that four of the six South-West Settlement ILUAs cannot be registered, one of the broader implications of this judgment is the potential invalid registration of ILUAs that have not been executed by all Applicant Members between the date the Bygrave decision was handed down in 2010 and the present. Deregistration of ILUAs that fall into this category may depend on available rights to judicial review and the willingness of a member of a native title group to bring such an action. However the time limitations for bringing an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) are relatively short (normally within 28 days of the decision), and so an action on this basis is unlikely in most cases, and other sources of rights to judicial review or challenge would have to be considered.

Although an ILUA can be removed from the Register of ILUAs by the Federal Court under section 199C of the NTA upon application by a party to the ILUA, this is only on the basis that the party would not have entered the ILUA but for fraud, undue influence or duress.

For those ILUAs that are deregistered for any reason, where the native title group in question consented to a future act or acts that were the grant of a discrete interest or interests, the consequences may be minimal or nil in light of the effect of section 24EB of the NTA, i.e. a future act will be valid if, at the time the act is done, details of the ILUA which provides consent to the act are on the Register of ILUAs (provided there isn’t a basis to find the ILUA is not void ab initio, i.e. deemed to never have been registered). However, for ILUAs that provide consents that are required on an ongoing basis or at some future point, the implications may be more significant.

Future ILUA negotiations

If the Full Court’s decision is not appealed to the High Court, or it is appealed and the High Court upholds the Full Court’s decision, the law that will apply will be as it was prior to Bygrave. That is, where a native title claim group authorises an ILUA, but one or more Applicant Members refuses to sign the ILUA (or passes away before signing it), the ILUA negotiation process will also require the native title applicant to be replaced. Given the acrimonious and long-running disputes that often accompany section 66B applications, this may mean an ILUA is not a practicable option in many circumstances.

In addition to the legal consequences of the decision, the Full Court’s decision will undoubtedly impact upon the dynamics of future ILUA negotiations. As commonly experienced, individual Applicant Members can be implacably opposed to an ILUA from the outset of negotiations. Or they can be supportive throughout negotiations, but change their minds at closer to the final authorisation meeting when faced with having to persuade sceptical family members of the benefits of an ILUA. Negotiation strategies may need to be modified to provide for this, and there is a greater need to stay agile throughout the process to address any express or apparent dissatisfaction of the native title group. Indeed, proponents will need to pay greater attention to the dynamics and tensions between Applicant Members as well as between any factions that exist within the group.

Aboriginal cultural heritage

This decision may also have ramifications for the cultural heritage frameworks in those States where it is linked to the native title system. For example, in Queensland, where there is a registered native title claim, the Aboriginal party under the Aboriginal Cultural Heritage Act 2003 (Qld) is the Applicant Members. The State’s practice to date has been to accept a cultural heritage management plan (CHMP) for approval without all signatures of the Applicant Members (though an explanation of the absence of some signatures is required). Discontinuance of this practice is possible in light of the decision in McGlade, and the same issues that arise for proponents in obtaining the signature of all Applicant Members will apply for CHMPs (although referral to the Land Court is an option, this adds to the overall cost and delay, and may have adverse consequences for the proponent’s relationship with the Aboriginal parties for implementing the plan).

In the South-West of WA

The decision means that four of the six agreements that underpin Western Australia’s South-West Settlement deal with the Noongar People are not, in their current form, capable of registration as ILUAs. This means a key benefit of the settlement – removing the need to follow native title procedures for new grants on Crown land in the South West – cannot occur without the State and the native title claimants taking additional steps, which will take some time.

The State has been and will no doubt continue to follow native title procedures for new grants on Crown land. Proponents should re-consider decisions they may have made to “hold off” native title agreements in anticipation of the settlement resulting in a surrender of native title.

The Noongar Standard Heritage Agreement can still be used as a standard for heritage surveys, heritage due diligence and as a starting point for ‘right to negotiate’ and other native title negotiations.

Amending the NTA

The Court in McGlade recognised the “inconvenience” the decision may be seen by some to have caused and the effective right of veto it may grant to each Applicant Member in relation to ILUA negotiations. However, Justices Barker and North, in their joint judgment, observed that the issue is properly a matter for the Parliament to address, and not the Court. Given the potential difficulties in obtaining the signatures of all Applicant Members to enable an ILUA to be registered, amendments to the NTA by the Commonwealth would likely offer the fastest means of resolving the issues created by the Full Court’s decision in McGlade. Although the Commonwealth has shown a reluctance to amend the NTA in any substantive way in the recent past, the amendments required to address this issue would not necessarily need to be extensive. Such amendments would be vital for providing certainty to government, business, the community, and native title claim groups themselves. It would also render an appeal to the High Court unnecessary.

Looking ahead

Pending the outcome of any High Court appeal or amendment to the NTA by the Commonwealth, one way proponents of registered ILUAs that have not been fully executed by the Applicant Members can be sure that their project will not be an invalid future act would be to seek retrospective validation of the future acts in question by way of a new ILUA. Whether this is a viable solution or not will clearly depend on the circumstances in question. If the native title claim has since been dismissed, negotiation of a new ILUA will be complicated by the need to ensure that all people who hold or may hold native title in the ILUA area are identified and authorise the ILUA. Where native title has been determined, the process could be more straightforward, as the only native title party will be the registered native title body corporate.

It should also be remembered that if projects that entailed one or more future acts on the basis of what may now technically be an invalidly registered ILUA, any invalidity would be for the purposes of native title only. In other words, if an ILUA were to be deregistered, the acts undertaken in accordance with that ILUA would remain valid under other non-native title laws, and only the consequences for invalid future acts that arise under the NTA or the general law would apply. Courts have generally declined to uphold applications for an injunction (on the grounds that it would be against the balance of convenience). The only practicable option for native title parties would therefore be to seek compensation (which, of course, first requires the native title parties to show that native title existed at the time the act was done). In addition, any compensation paid under an ILUA would likely be taken into account in calculating the quantum of compensation payable under a compensation determination. Proponents may therefore decide to take a watching brief approach.

Moving forward, an option for proponents is to seek to persuade governments to invoke their powers to compulsorily acquire native title rights and interests as an option for expeditiously dealing with native title in a relatively straightforward way. However, the policy of most governments is currently that a proponent must at least attempt to negotiate an ILUA and using compulsory acquisition only as a last resort. This may need to be re-evaluated so that, for example, if a proponent could demonstrate that ILUA negotiations on their face would be fruitless, this would be sufficient for government to compulsorily acquire native title rights.

The decision, if undisturbed by a successful appeal or legislative amendment, may also foster greater uptake of other mechanisms available under the NTA in preference to ILUAs. These include non-claimant applications under section 24FA (provided the requirements are met, future acts done while the non-claimant application is in place will be valid), the right to negotiate for the grant of mining and petroleum titles, and the procedures under section 24MD(6B) for rights to mine for the sole purpose of construction of an infrastructure facility.

Advice should be sought to determine the different options, the risks of each of those options, and which approach might be best for the circumstances in question.