Full Court of the Federal Court finds that loss of cultural attachment compensation of $1.3 million is not excessive.

In 2006 the Federal Court determined that the Ngaliwurru and Nungali Peoples held Native Title over parts of the Timber Creek Township. This determination gave the Ngaliwurru and Nungali Peoples the right to seek compensation for loss of Native Title rights and interests.

Almost a year ago, in the case of Griffiths v the Northern Territory of Australia (No 3) (Timber Creek case) the Court awarded $3,261,000 in compensation to the Ngaliwurru and Nungali Peoples. The compensation was made up of $512,000 for the economic value of the extinguishment of their Native Title rights, $1,488,261 in compound interest, and $1,300,000 in non-economic loss for cultural and spiritual attachment.

The decision was appealed to the Full Court of the Federal Court by the Northern Territory Government on the grounds that the award was manifestly excessive.

On 20 July 2017 the Full Court of the Federal Court upheld the award of $1,300,000 for non-economic loss but reduced the component of economic loss to 65% of the freehold value of the land in question at the time of the compensatable acts rather than the original assessment of 80%.

The Court also found that the Ngaliwurru and Nungali Peoples were only entitled to simple interest and not compound interest.

What flows from the decision is a note of caution. If you are assuming liability from Native Title compensation, make sure your tenement agreements, leases and contractual provisions adequately deal with the extent of that compensation. As a first step, you should review your agreements and any negotiations you are involved in to ensure that liability for compensation is not passed under your contractual liabilities or, if it is, that there is a specific amount allocated for such compensation.