'The time has come' High Court of Australia finds in favour of compensation in The Commonwealth v Yunupingu

Overview

On 12 March 2025, the High Court of Australia handed down its decision in Commonwealth of Australia v Yunupingu [2025] HCA 6. The High Court dismissed the Commonwealth’s appeal from the Full Federal Court of Australia, which found that various grants and legislative acts by the Commonwealth extinguished the Gumatj Clan’s non-exclusive native title rights, giving rise to a right to compensation. The High Court accepted the Applicant’s argument that:

1. the legislative acts/grants constituted an acquisition of property within the meaning of s 51(xxxi) of the Constitution because they were inconsistent with native title rights recognised at common law; and
2. the Constitution does not permit the making of a law for the acquisition of property other than on just terms within the meaning of s 51(xxxi) of the Constitution.

The case is important from a constitutional and native title perspective, with potentially significant ramifications for the Commonwealth with respect to compensation claims by native title claimants. The decision provides authority for claimants to seek compensation for acts prior to the 1975 (when the Racial Discrimination Act 1975 (Cth) was enacted) that extinguished or impaired native title but just terms were not provided.

Background

The Applicant, Dr Yunupingu AM, brought two claims on behalf of the Gumatj Clan in the Federal Court of Australia:

1. seeking a determination of native title; and
2. seeking compensation for effects on native title of certain executive and legislative acts done between 1911 and 1978.[1]

The claim area the subject of the Gumatj Clan’s claim is located in the Gove Peninsula, in north-eastern Arnhem Land in the Northern Territory.[2] In 1886, a pastoral lease was granted in respect of the claim area resulting in the claimants’ exclusive native title rights being extinguished. However, the Applicant contends that the claimants continued to hold non-exclusive native title rights in respect of the claim area, including the right to access, take and use for any purpose minerals on or below the surface.[3]

The Applicant argued that several grants or legislative acts were inconsistent with the continued existence of the non-exclusive native title rights and extinguished or impaired those non-exclusive native title rights at common law.[4]  The Applicant argued that the grants/legislative rights constituted an acquisition of property as set out in s 51(xxxi) of the Constitution and the Commonwealth did not provide “just terms” as required by the Constitution. As a result, the Applicant argued these grants were invalid, unless validated under the “past acts” regime of the Native Title Act 1993 (Cth) (NTA).

The Applicant’s claimed 'past acts'

Division 2 of Part 2 of the NTA sets out certain circumstances in which native title holders are entitled to compensation for “past acts”. “Acts” include the making of legislation and the exercise of executive power.[5] “Past acts” include legislative acts which occurred before July 1993 and executive acts which occurred before January 1994 which, separate from the NTA, would have been invalid due to the existence of native title.[6]

The applicant identified four legislative acts or grants which were said to give rise to a right to compensation: 

1. The grant of what the court refers to as the Mission Lease in 1938. The lease was granted by the Administrator of the Northern Territory to the Methodist Missionary Society of Australia Trust Association and covered the whole of the claim area.[7]
2. Enactment of Mining Ordinance 1939 NT under the Northern Territory (Administration) Act 1910 (Cth), which provided that all minerals or metals found on or below the surface of land in the Territory was deemed to be the property of the Crown (1939 Ordinance).[8]
3. Enactment of the Minerals (Acquisition) Ordinance 1953 (NT) which provided that all minerals on or below the surface of land in the Territory are acquired by and vested in the Crown (1953 Ordinance).[9]
4. Five special mineral leases granted by the Commonwealth to the Commonwealth Aluminium Corporation Pty Ltd, to Gove Bauxite Corporation and to Swiss Aluminium and Gove Alumina Ltd over part of the claim area in 1958, 1963 and 1969.[10]

The Applicant contended that each of the grants/acts falls within the definition of a “past act” under the NTA. Because the grant or act vested certain rights, the applicant argued it was entitled to compensation under the NTA.[11]

The Federal Court noted the wider significance of this case is due to the manner in which the Applicant deployed the word “invalid” in s 288 of the NTA (the provision which defines “past acts”). The Applicant argued that the compensable acts are invalid because they were acts done under the authority of s 122 of the Constitution (the Territories power) and that an exercise of that power engages s 51(xxxi) of the Constitution. Since there was an acquisition of property, without just terms being provided, the Applicant argued that each compensable act falls within the terms of s 228(2)(b) of the NTA, because the act would have been valid to that extent if the native title did not exist.[12]

The Federal Court found in favour of the Applicant. The Commonwealth then appealed to the High Court.

The High Court’s decision

The High Court held that:

1. The power conferred on the Commonwealth parliament by s 122 of the Constitution to make laws for the government of a territory does not extend to making a law with respect to the acquisition of property otherwise than on just terms. [13]
2. An extinguishment by or under a law of the Commonwealth of native title recognised at common law before the commencement of the Native Title Act on 1 January 1994 does constitute an acquisition of property within the meaning of s 51(xxxi).[14]
3. The grant of a pastoral lease in 1903 did not have the effect of extinguishing any non-exclusive native title rights over minerals on or under the subject land.[15]

These key findings are discussed in more detail below.

Power in s 122 does not allow for acquisition of property otherwise than on just terms

The Applicant argued that the power conferred on the Commonwealth Parliament by s 122 of the Constitution to make laws for the government of a territory does not extend and has never extended to making a law with respect to the acquisition of property otherwise than on just terms within the meaning of s 51(xxxi) of the Constitution.[16]

On the other hand, the Commonwealth argued that:

• the relevant acts in this case found Constitutional support solely in s 122;
• the scope of s 51(xxxi) (requiring the payment of just terms), does not extend to laws solely supported by s 122;
• this meant that the acts were not subject to the constraints in s 51(xxxi) (the payment of just terms); and
• the constraints in s 51(xxxi) to pay just terms would only be applicable if the power to support the relevant legislative act was found in both s 51(xxxi) and s 122.[17]

The High Court rejected the Commonwealth’s approach, noting that it would “produce disconformity”.[18]

The High Court noted that whether s 51(xxxi) “abstracts” from the legislative power conferred by s 122 of the Constitution was addressed in the case of Teori Tau v The Commonwealth (1969) 119 CLR 564.[19] In overruling Teori Tau, the High Court noted that s 51(xxxi), as a grant of legislative power, should be “given as full and flexible an operation as will cover the objects it was designed to effect” and “with all the generality which the words used admit”.[20]

The High Court stated emphatically that: “The time has come for it to be finally and authoritatively declared that the power conferred on the Commonwealth Parliament by s 122 of the Constitution to make laws for the government of a territory does not extend to making a law with respect to an acquisition of property otherwise than on just terms within the meaning of s 51(xxxi) of the Constitution.”[21]

Extinguishment of native title recognised at common law is an acquisition of property

The Commonwealth argued that a legislative grant of an interest in land inconsistent with native title recognised at common law should not be characterised as constituting an acquisition of property within the meaning of s 51(xxxi).[22] The essence of the Commonwealth’s argument is that the grant of an inconsistent right or interest that results in the extinguishment of a native title right or interest does not involve the taking of property,[23] because native title was “inherently susceptible to a valid exercise of the Crown’s sovereign power…”[24]

On the other hand, the Applicant contended that a law is properly characterised as a law with respect to the acquisition of property otherwise than on just terms if and to the extent that the law (before the commencement of the NTA) purported to appropriate or grant an interest in land which was inconsistent with a native title right or interest in relation to that land then recognised at common law.[25]

The High Court found that the Commonwealth’s argument relied on common law recognition of native title rights and interests as being “inherently fragile” and went too far in equating inherent fragility with inherent defeasibility.[26] The High Court stated that whilst native title rights at common law can be described as “inherently fragile”, this does not indicate that they are inherently defeasible at common law. Rather it describes the fact that, before the NTA, they would have been susceptible to extinguishment.[27]

Grant of a pastoral lease did not extinguish non-exclusive native title

The third ground of appeal raised a more specific issue regarding the extent to which the native title rights of the Gumatj Clan recognised at common law were extinguished upon the grant of a pastoral lease in 1903.

The Commonwealth argued that continuing recognition of any native title rights or interests in minerals after the grant of the pastoral lease would be inconsistent with the provision of the lease itself.[28] The High Court rejected the Commonwealth’s argument and instead found that the provisions of the lease contained a mere reservation in favour of the Crown of minerals, not an appropriation to the Crown of those minerals.[29]

Implications of the decision

The decision will likely have significant implications for the Commonwealth, particularly in relation to compensation claims from native title claimant groups for acts that occurred in the Northern Territory and other territories, including the Australian Capital Territory prior to 1993 (when the NTA was enacted) that had the effect of extinguishing native title that would otherwise be recognised at common law.   

In its submissions, the Commonwealth highlighted the significance and scope of the decision “…for almost seven decades a vast but indeterminate number of grants of interests in land in the Territory would have been invalid. Further, upon the validation of those grants by the Native Title Act 1993 (Cth) (NTA), the Commonwealth would have become liable to pay compensation of a vast but presently unquantifiable amount (including interest, potentially going back to 1911.”[30]

What happens next?

No court has yet determined the Gumatj Clan’s native title claim. The matter will now return to the Federal Court for a native title determination.