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Compensation for the compulsory acquisition of native title rights awarded by New South Wales Courts

Posted on 14 September 2021

Source: CBP - Insights

There have been two recent important New South Wales (NSW) Court decisions in respect of native title in the context of the compulsory acquisition of land. The emergence of these types of claims will need to be assessed and dealt with by the Courts in the years ahead. In anticipation of an increase of these types of claims, the Valuer-General of NSW has released a draft paper on valuing cultural heritage land (Draft Paper) under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Just Terms Act). 

This article considers the two cases, and provides a brief summary of the Valuer-General's Draft Paper.

Bandjalang People v Transport for NSW 

Early last year in the case of Bandjalang Aboriginal Corporation Prescribed Body Corporate RNTBC on behalf of the Bandjalang People v Transport for NSW [2020] NSWLEC 1008, the NSW Land and Environment Court (LEC) ordered the payment of $42,000 plus interest as agreed compensation for the compulsory acquisition of native title land, plus an agreed costs in the amount of $35,473.35.

Whilst there was limited information contained in the judgment, the following background was described:

  1. On 2 December 2013, the Bandjalang People's native title rights over the subject land were recognised by the Federal Court of Australia. 

  2. On 22 January 2016, Transport for NSW compulsorily acquired the subject land, including the land the subject of the Bandjalang People’s native title rights.

  3. On 20 January 2016, the Applicant lodged a claim for compensation under the Just Terms Act.

  4. On 12 April 2019, Transport for NSW offered the Applicant $9,080 in compensation.

  5. On 16 July 2019, the Applicant lodged an objection with the LEC.

  6. The parties entered into a "section 34 agreement" after a conciliation conference in October and December 2019.

The attributes of the subject land were not explored in the judgment given that it arose from a "section 34 agreement", which is an agreement reached between parties following a conciliation conference under section 34 of the Land and Environment Court Act 1979 (NSW) (even following the case of Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245, which has led to more details being provided in judgments in respect of section 34 agreements).

What can be ascertained from the judgment is that the subject land was Lot 6 on DP 1204340. Our review of SIX Maps records that the subject land has an area of 464m2, and is located outside of Broadwater, south of Ballina, in northern NSW. A review of Google maps shows significant road construction on the subject land, and it appears to have been acquired for the Pacific Highway upgrade currently underway. 

Non-exclusive native title in favour of the Bandjalang Aboriginal Corporation was determined over the subject land in 2013. We do not know if native title was extinguished as a result of the compulsory acquisition. 

It would be difficult to rely on the LEC judgment as a means of quantifying the compensation likely to be awarded for other compulsory acquisitions of native title land given that speculation would be involved. Like any claim for compensation resolved through a section 34 conference, which remains confidential, no one can properly unpick how the compensation was awarded, or more specifically, under what heads of compensation it was provided. All we know is the total amount of compensation, which in this case was $42,000.

Nevertheless, the decision is unique and one where the LEC had to be satisfied that the compensation for the compulsory acquisition of native title land was within power.

Lawson v Minister for Environment & Water (SA) 

The second decision was handed down by the NSW Court of Appeal (Court of Appeal) early this year in the case of Lawson v Minister for Environment & Water (SA) [2021] NSWCA 6

The case had unusual facts, and concerned a historical compulsory acquisition of land in the NSW Lake Victoria area in 1922 (part of the Murray-Darling Basin) under the Public Works Act 1912 (NSW) (Public Works Act). 

The case has a long history, and is still not yet fully resolved. In short, the Applicant sought compensation under the Public Works Act as a descendant of the holder of a possessory or native title asserted to exist at the time of the acquisition close to a century ago. 

The subject land was found by the primary judge to have become vested in the South Australian government as an estate in fee simple upon the commencement of the River Murray Waters Act 1915 (NSW) (1915 Act), which ratified an agreement between the Commonwealth and the States of NSW, Victoria, and South Australia. The primary judge went on to find that all native title or possessory title rights were extinguished when the land was vested. 

The consequence of the primary judge's findings was that there were no native title rights held at the time of the acquisition in 1922, and therefore, the Applicant was not entitled to compensation under the Public Works Act. 

The Court of Appeal allowed the appeal from the NSW Supreme Court and found the following:

  1. The land did not vest in South Australia as an estate in fee simple on the commencement of the 1915 Act. Rather the 1915 Act provided a mechanism by which South Australia could obtain the fee simple.

  2. Any pre-existing rights held were not extinguished by the 1915 Act, but rather by the 1922 acquisition under the Public Works Act.

  3. The acquisition had converted the native title rights into a claim for compensation meaning that the Applicant was entitled to make a claim for compensation under the Public Works Act.

Given the extension granted to make the claim for compensation by Biscoe J in Lawson v South Australian Minister for Water and the River Murray (No 2) [2014] NSWLEC 189, the Applicant will be able to make a claim in Court that will test how one compensates these types of "interests" in land.

Valuer-General's Draft Paper 

These are new and emerging cases and we expect further cases and claims to arise in the future following: 

It appears to us that the NSW Valuer-General also expects the emergence of more compulsory acquisitions involving native title, and to that point has recently released a Draft Paper in June 2021 titled: "Review of Forms of Cultural Loss and the Process and Method for Quantifying Compensation for Compulsory Acquisition". The Draft Paper proposes a policy for the determination of compensation for cultural loss following a compulsory acquisition. 

The Draft Paper notes that there is no clear process or statutory guidance on the process by which non-economic loss for cultural loss, including native title loss, is to be determined. 

The Draft Paper provides some explanation of how the processing of a native title claim fits within the conventional Just Terms Act process for land acquisitions. Of note is a proposed conference between the Valuer-General and a claimant (preferably following invitation to country) prior to the gazettal of the acquisition in order to better understand the nature of the claim.

The Draft Paper includes a non-exhaustive list of over 30 examples of cultural loss falling under the categories of access, residence, activities, practices, ecology, sites, and progressive impairment. If adopted, these categories will go some way towards establishing the threshold issues in the assessment of native title claims under the Just Terms Act and will likely be used to guide valuers when dealing with an acquisition involving native title. 

In respect of the issue of quantification, the Draft Paper canvasses a high-level valuation methodology built upon the following three pillars: 

  1. Identification of the form and number of forms of cultural loss.

  2. Identification of the significance of the forms of cultural loss. 

  3. Intuitive determination of cultural loss having regard to the whole of the evidence. 

The Draft Paper concludes with the following comment:

"For some, it may appear that the Valuer General is attempting to quantify the unquantifiable but, as the [Just Terms] Act requires cultural loss to be quantified as monetary value, the above methodology for the quantification of compensation is considered to be one possible route to a determination of compensation on 'just terms' in accordance with the relevant legislation for the purposes of discussion and community feedback."