Commonwealth of Australia v Mr A. Griffiths (deceased) & Anor; NT of Australia v Mr A. Griffiths (deceased) & Anor; Mr A. Griffiths (deceased) v NT of Australia & Anor

[2018] HCATrans 176

[2018] HCATrans 176

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Darwin  No D2 of 2018

B e t w e e n -

COMMONWEALTH OF AUSTRALIA

Appellant

and

MR A. GRIFFITHS (DECEASED) AND LORRAINE JONES ON BEHALF OF THE NGALIWURRU AND NUNGALI PEOPLES

First Respondent

NORTHERN TERRITORY OF AUSTRALIA

Second Respondent

Office of the Registry
  Darwin  No D1 of 2018

B e t w e e n -

NORTHERN TERRITORY OF AUSTRALIA

Appellant

and

MR A. GRIFFITHS (DECEASED) AND LORRAINE JONES ON BEHALF OF THE NGALIWURRU AND NUNGALI PEOPLES

First Respondent

COMMONWEALTH OF AUSTRALIA

Second Respondent

Office of the Registry
  Darwin  No D3 of 2018

B e t w e e n -

MR A. GRIFFITHS (DECEASED) AND LORRAINE JONES ON BEHALF OF THE NGALIWURRU AND NUNGALI PEOPLES

Appellant

and

NORTHERN TERRITORY OF AUSTRALIA

First Respondent

COMMONWEALTH OF AUSTRALIA

Second Respondent

KIEFEL CJ
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT DARWIN ON THURSDAY, 6 SEPTEMBER 2018, AT 10.02 AM

(Continued from 5/9/18)

Copyright in the High Court of Australia

____________________

KIEFEL CJ:   Yes, Mr Glacken.

MR GLACKEN:   If the Court pleases, in relation to compensatory interests the trial judge concluded, correctly in our submission, that without interest the native title holders would not be compensated on just terms, this was because material loss was to be assessed at the earlier date when an invalid act occurred rather than at the later date of validation, and there appears to be no issue about that fundamental conclusion.

Could I take your Honours to the trial judge’s reasons, at appeal book page 163, where his Honour expresses that conclusion.

KIEFEL CJ:   What paragraph is that, Mr Glacken?

MR GLACKEN:   It is paragraph 254 on page 163.  At that paragraph his Honour accepts the contention by the claimants that interest is awarded as part of the compensation and expresses the reason in terms of:

the entitlement . . . in circumstances where the market value is to be determined at –

the earlier date and expresses the view that that:

necessarily includes interest . . . to provide for compensation on fair terms, or compensation which is in a just amount –

and therefore is:

not . . . necessary or appropriate to resort to s 51A of the Federal Court ‑

I will come in a moment to the relationship between section 51 of the Native Title Act, the entitlement, and section 51A of the Federal Court Act.

The basis for his Honour expressing the view that it is not necessary to have resort to that statutory provision appears from the line of authority noted at paragraph 249, which has been described in the submissions so far as the “equitable principle” or the “equitable rule” in the line of cases such as Huon Transport and Marine Board of Launceston.  His Honour at line 10 encapsulates the reasoning of those authorities where his Honour says:

That is, the right to interest as recompense for the delay in payment of compensation is an equitable right, developed by analogy to the entitlement which would arise in relation to a specific performance of a contract [sale] ‑

And had earlier said that, in effect:

the right to receive interest on the compensation entitlement takes the place of the right to retain possession. 

That is, the possession of the land or receipt of its rents and profits.

Now, the Full Court also appear to have accepted the proposition that interest was payable by reference to that principle, that the right to interest takes the place of the right to possession of the land, and your Honours have been taken to the relevant passage in the Full Court’s reasons at paragraphs 231 and 233, appeal book page 339. 

Pausing at that point, and dealing with the Commonwealth’s appeal as to whether or not interest is part of compensation or on compensation.  Certainly in a non‑native title context, acceptance of the relevant equitable principle means that allowance of interest has the character of interest as something that is part of the compensation rather than something on top of the compensation.

We collect the authorities in our submissions but particularly paragraph 99, footnote 146 in the Bank Nationalisation Case, Justices Rich and Williams at 76 CLR 277‑8, note and conclude that the authority of this Court accepts that in cases of compulsory acquisition of land compensation includes interest as part of the award.

In the context of the present matter, we submit that the equitable principle or what has been developed in that line of authority, informs the entitlement expressed in section 51 of the Native Title Act and does so inform the construction of that entitlement by way of three indications, if you like. 

The first is simply by the measure of the entitlement in subsection (1), that is a just terms entitlement.  Equity recognises that the retention of compensation and the possession of land or its rents and profits is inequitable.  So in that sense to not provide that compensation of that sort, would not provide just terms.

The second indication is in the text of subsection (4) of section 51 in directing permissive regard to compulsory acquisition criteria. That compulsory acquisition criteria commonly in other statutes will now have provision for interest, but, as developed in that line of authority of Marine Board and Huon Transport, if the statutes providing for compulsory acquisition were silent as to interest, the equitable principle would still have a part to play for non‑native title so we say that subsection (4) is properly informed by this equitable principle. 

The third indication is within section 51A of the Native Title Act, which posits the cap by reference to the interest of a freehold estate on a compulsory acquisition.  Again, from that line of authority, if there were compulsory acquisition of a freehold estate then there would be an entitlement to interest as part of the compensation in equity, subject to contrary statutory provision.

As I indicated, the trial judge at paragraph 254 found it unnecessary to resort to section 51A of the Federal Court Act, which provides a source for the Federal Court to award compensation by way of interest or interest on compensation. Of course, subsection (2)(d) provides that the section does not:

limit the operation of any enactment or rule of law which . . . provides for the award of interest –

We submit that section 51 of the Native Title Act is an enactment which provides for the award of interest as part of the compensation.  That is all we wanted to say about that particular aspect which is the Commonwealth’s appeal.

Dealing with the measure of interest advanced by the Claim Group below, each of the trial judge and the Full Court rejected the case that the correct measure or rate to give effect to the principle that I have mentioned was supplied by the return on long‑term government bonds, which was the subject of expert opinion evidence by Mr Houston.  They did so for two connected reasons which can be found in the judgment at first instance at appeal book page 168, first of all at paragraph 269, where his Honour concludes that because of validation that the acts done by the Territory at the time are not invalid:

there is no justification for compound interest simply given the longer time period involved [because] there has been no period . . . of unlawful use of the land.

The second reason for rejecting the case appears at the end of paragraph 270, in the last three lines, and then it is developed in other findings of the trial judge and that was that there was an insufficient:

evidentiary foundation for the award of interest other than on a simple interest basis ‑

And, his Honour’s findings in that respect appear, for example, at paragraph 278, that:

if the monies received were invested –

his Honour found the Claim Group:

would have applied the interest received toward activities for their benefit.

We submit that those two reasons are faulty in this respect.  First of all, as to validation, it serves the particular purpose of ensuring that the titles or acts of others are valid as against the native title.  It does not remove the underlying inequity recognised in the equitable principle, that is, the inequity of the government retaining compensation and being in possession of the land or receipt of its rents and profits.

In the statutory scheme here, that inequity is brought about by the retrospective extinguishment – a relation back, if you like – by which there is deemed to be an entitlement to compensation at the earlier time of the act and, necessarily, a corresponding obligation to pay on the part of Government related back to that earlier time. 

As with the lines of authority like Inglewood, considered in Huon Transport and Marine Board, it is recognised that that underlying equity is not removed simply because an acquisition, a normal acquisition might be authorised by statute.  So in that respect we say the notion that there had been validation by the Native Title Act does not remove that inequity and the rationale for the relevant approach to interest.  On the second aspect, which is one of ‑ ‑ ‑

KIEFEL CJ:   But his Honour did not say that, did he?

MR GLACKEN:   In what respect?

KIEFEL CJ:   His Honour was not of the view that, just because of validation, the equitable principle did not operate.  His Honour applied the equitable principle regardless.  He considered it does not take you to compound interest.

MR GLACKEN:   No.  The short point I will come to lastly is that by reference to that principle the measure that we say should be a fair or mean return on a long‑term government security or secured loan and that what is put forward in the expert opinion evidence is formulated to that end. 

Now, what his Honour concluded was that, as of the arguments that have been presented, something more was required in the line of a flagrant default in fiduciary or the like to go beyond simple interest.  We submit that if one focuses on the measure, that is a fair or mean return over a relevant period, and in the statutory context of this retrospective extinguishment that is a basis for awarding something other than simple interest, and I will come to that last.

The second reason – and it is bound up with what I have just said – is that we submit as to causation it is inconsistent with the rationale in equity that some further causal link, for example, loss of use of moneys in a profitable way is necessary.  The relevant causal link is that in this case the Territory has obtained enjoyment of the land or its rents and profits without payment of compensation as from the time of taking possession.  That is the causal link, that the former owner is dispossessed without payment.

The next two points that we develop from that underlying principle which we say inform the statutory entitlement is that equity in this area imposes an obligation that speaks of having to repay interest and the parties are placed in a constructive trust relationship with respect to the land and the moneys.  It is what Lord Jessel, the Master of the Rolls, in Lysaght v Edwards described as a “constructive conversion in ownership” in the context of the purchaser/vendor line of cases.  It stems from what is said by Lord St Leonards in Birch v Joy.  That is quoted at length in Huon Transport, if I can give the citation.

EDELMAN J:   All of that needs to be read in light of what this Court said in Tanwar v Cauchi.

MR GLACKEN:   In what respect, sorry, your Honour?

EDELMAN J:   In the respect that the old analogies between specific performance and a trust need to be viewed with caution.

MR GLACKEN:   Yes.  The trust is only something that can be very limited - necessary for the particular obligations that attach to each party.  That is simply the obligation to pay is notionally secured.

EDELMAN J:   But the compound interest circumstances in relation to a trust arose because the trustee was accountable and the trustee was required to account for the money and account for everything that had been done with it.  That is very different in the circumstances of a constructive trust where the entirety of the constructive trust is co‑extensive with the order of specific performance.

MR GLACKEN:   No, and the measure that we take, though, from that constructive trust relationship is one that the award or the rate would be consistent with an authorised trustee investment.  For the early cases on the compulsory acquisition lines - and we mentioned two in the outline and one is dealing with the compulsory acquisition where the award is 4 per cent, that is the historic award, and at that time that was the percentage allowed by Court of Chancery for returns on authorised trust investments. 

Now, it is simply another check, if you like, to the final point I wish to make as to the measure and I have already formulated that in terms of looking for a fair or mean return on a long term security or loan for the relevant period - that can be an authorised trust investment or it can be just likened, if you like, to the situation of forced loan. 

Perhaps I might do it this way.  Justice Gageler asked a question about the Lands Acquisition Act (Cth) and can I hand up an extract of the Act together with the report of the Australian Law Reform Commission that led to its enactment.  If your Honours go to the Act, the particular current provision or the one that has been enacted since 1989 dealing with interest generally is section 91.  Subsection (2) provides for interest “from the day of the acquisition” until the compensation is paid.

Subsection (4) allows for rests of three months and successive periods of three months from the date of acquisition, in other words, rests by way of compounding, so it is interest upon interest.  We have included the current regulation which prescribes the rate by reference to the current government bonds of the Commonwealth.  We have not included the current table.

Now, the reason for that approach that we say captures the approach to be adopted in this case appears from the report of the Commission in its recommendations.  We have included some earlier discussion by the Commission as to some of the defects in the then present system at paragraph 202, including delays and what have you.  But the Commission’s recommendation on interest appears at paragraph 223 and it is the first five lines or so on that page:

The rate of interest should be that appropriate to a government security.  Essentially, the claimant is in the same position as a person who has lent money to the government.

Now, that was the basis upon the evidence given by Mr Houston.  He approached the question of compensating interest as an economist in two ways.  One was to look to see what would be any risk borne by the claimant, and the other was to look at what was the borrowing costs of the Territory. 

We collect the references to the report in our submissions at paragraph 108 and also some of the oral evidence where Mr Houston explained that what was being advanced was a measure of a claimant being in a forced position of making a loan to the Territory, in the same manner as this structure in the Commonwealth Act by reference to the government bonds of the Territory for the relevant period, in particular, in the Territory’s material of the transcript, Territory volume, pages 811 to 812.

For those reasons, we submit that the courts below erred in rejecting the measure that had been put forward and that the measure put forward, the government bond risk‑free rate, accords with the recognised approach in the line of equitable cases as developed and adapted in compulsory acquisitions which we say properly informs the construction of entitlement in the Native Title Act.

NETTLE J:   Mr Glacken, is this prescribed rate more favourable to you than the Federal Court rate?

MR GLACKEN:   Only by reference to what would be the period involved.  So I cannot speak of that rate, the Commonwealth rate, but in terms of Mr Houston’s evidence, the bond rate that Mr Houston used, those applicable to the Northern Territory, generally would have a lower rate than that prescribed under the equivalent of the Federal Court Act provisions but it is a matter of whether rests are allowed.  Mr Houston allowed for six month rests.

NETTLE J:   This is only any good to you if you get compound interest, is it not?

MR GLACKEN:   Yes – no, no ‑ ‑ ‑

NETTLE J:   Otherwise, you are ahead with the Federal Court rate.

MR GLACKEN:   Yes, but we draw upon that material that the rationale for allowing rests ‑ ‑ ‑

NETTLE J:   I understand.

MR GLACKEN:   Yes.  Just to complete the picture, Mr Houston has adopted 10‑year government bonds, having regard to the lengthy period so in effect there are two phases here.  There is a 15‑year period between the dates of acts, the commencement in 1980 and its validation in 1994, and then there is a second phase, if you like, after that where there was the new statutory regime, albeit related back.  He adopted 10‑year government bonds as the longest available bond for that phase and allowed for six‑month rests being the yields payable on those bonds.

Unless there is something else, I then wanted to address questions of intangible losses.  Could I ask your Honours to turn up the reasons of the trial judge, paragraph 317 at core appeal book 178?  What I intend to do, your Honours, is to explain the structure of the trial judge’s reasons, pay particular attention to some of the complaints that have been made and then return eventually to the Full Court, given the focus is naturally on the Full Court’s concurrent findings of what occurred at first instance. 

But the starting point, in our submission, for this aspect of the case is necessarily informed correctly, we say, by his Honour’s observations at paragraphs 317 and 318, that in assessing subjective intangible effects - first of all, at 317, it is necessary to go beyond the statement of recognised or determined rights which:

cannot be divorced from the content of the traditional laws and customs . . . that sustain rights –

and importantly:

and duties in relation to land held under the relevant Claim Group’s normative system, and –

we emphasise:

the customary practices and beliefs of the Aboriginal peoples concerned.

If we pause there, that inquiry is necessary because as Yanner v Eaton remarks, native title is not just a bundle of dual rights, it is also a socially constituted fact that is expressed by the requirement of connection in paragraph (b) of the statutory definition. 

One could not undertake an assessment of the kind that the trial judge was confronted with without appreciating that the nature of that connection for the persons concerned because, if you like, one cannot separate right and person or property and person or land and person.  They are one indissoluble whole and the statutory definition reflects that in the terms of paragraph (b) of the definition.  So, secondly at paragraph 318, his Honour observes, perhaps somewhat trite, that:

Not all groups will be the same -

and goes on to explain that:

An evaluation of what are the relevant compensable intangible disadvantages –

That is the language of the Lands Acquisition rule, rule 9:

requires an appreciation of the relevant effects on the native title holders concerned, which, may include elements of ‘loss of amenities’ or ‘pain and suffering’ ‑

et cetera, borrowing from the learning on non‑pecuniary damages and in the last sentence his Honour then says:

In that respect, evidence about the relationship with country and the effect of acts on that will be paramount.

If your Honours were to note, the evidence about the relationship of country, and this is the structural aspect of his Honour’s judgment, is at paragraphs 328 to 347 and then his Honour’s appreciation of the evidence of the effects of acts is at paragraphs 348 to 383.

So, in other words, what the trial judge did, and I will come to the detail in a moment, was inquire as to the normative relationship between the particular claim group and the area, traditional country concerned.  Then having grasped what was the nature of that relationship - so, if you like, that could be called generalised evidence - then came to deploy that understanding when appreciating the effects of the compensable acts. 

If your Honours recall the map that I handed up yesterday of the compensable acts they are, if you like, a job lot.  There is the subdivision area and then there are various parcels around the town.  There was a submission that it is open to a claimant to simply advance a claim for one lot but that, as the anthropologist explained, and I will come to this in a moment, would be artificial. 

It would not be productive in a case like this when you have a town where native title has been determined to exist save for extinguished parts and it is a question of what is the compensation for that part when native title has been destroyed.  But just staying with the approach taken by the trial judge at 317 and 318, can I draw upon some learning on the approach to non‑pecuniary loss.  It is a judgment of the Victorian Court of Appeal; it is in volume 6 of the cases at case 44.

BELL J:   What is the name of the case?

MR GLACKEN:   I am sorry, CSR Readymix v Payne.

BELL J:   Thank you.

MR GLACKEN:   Volume 6, case 44.  It is a personal injury case and President Winneke, commencing at 508 of the report – or PDF 2299 –reviews the relevant authorities such as Miller v Jennings on the nature of the evaluative task involved in an assessment of non‑pecuniary loss, makes observations as to the position of a trial judge compared to a jury, given that a trial judge is required to give reasons for the assessment unlike a jury – and if I can draw the Court’s attention to the very final paragraph on 508 of the report where President Winneke notes that although a judge is required:

to state his reasons for arriving at his assessments –

that should not:

be permitted to obscure the fact that the assessment of an appropriate sum in respect of a component of damage such as pain and suffering and loss of amenities is more likely to result from the trial judge’s observation of an injured plaintiff and his judgment of the effect which the injuries have upon him than is the assessment of an appropriate sum for loss of earnings or earning capacity which is more likely to be derived from the drawing of inferences from facts proved -

The assessment of the effects of acts upon a claimant will be concerned with subjective effects.  Another example in this Court is Rogers v Nationwide News dealing with defamation where Justice Hayne makes similar observations.

The implications for the present case are, in our submission, illustrated by the findings of the trial judge which I will come to in a moment – perhaps if I can identify them – about the effects of acts, commencing at paragraph 348, where his Honour records the strength of the evidence given and the nature of the beliefs expressed by the claimant witnesses and then onwards, for example, at 352, quotes particular evidence of some of the witnesses referring to the effects of loss of country and sites, in plural. 

There has been some suggestion in a case which we will deal with later that the evidence is a lot more isolated, we say, than what is actually the case.  Could I then say something about the structure of his Honour’s reasons and what we say are some key ‑ ‑ ‑

EDELMAN J:   Just before you move from 318, do you understand the exercise that the trial judge has performed as effectively - with the analogy of loss of amenities and pain and suffering that he has used at 318 - to have conflated both of them to give a single award for both of those conventional types at least in the area of non‑economic loss elsewhere?

MR GLACKEN:   In terms of his approach to this case, he has put the expression at 318 “‘loss of amenities’ or ‘pain and suffering’” in quotes by way of saying it is just offering an analogy.  But, likewise, his Honour also refers to reputational damage.  There is a reason for that both as principle and also, if you like, driven by the facts of the case.  A lot of the witnesses gave evidence about letting neighbouring groups down and a feeling of shame and anxiety so, in effect, like reputational damage.

I might go to it now, I was going to come back to it later.  But his Honour at 313 noted some usefulness from a judgment of the New South Wales Court of Appeal in Crampton dealing – it is a defamation case where the ultimate touchstone, if you like, is a social judgment ‑ ‑ ‑

GORDON J:   Did you say 313?

MR GLACKEN:   Paragraph 313 of the trial judge’s reasoning.  Then, at 314 Justice Mansfield says, although in a different context:

those observations are nevertheless apt to the present circumstances.

So, to answer Justice Edelman’s question, there is no separation in the reasons, if you like.  At the end, at 383 of the judgment, where his Honour refers to what is known as three particular considerations, he notes that they are not to be considered as having separate values.

EDELMAN J:   It is the amenity of the land and the pain and suffering are both mingled in the $1.3 million award.

MR GLACKEN:   Yes.  We would say necessarily so, given the nature of the property, if I can put it that way, by reason of paragraph (b) of the statutory definition.

I mentioned earlier in Ward there is a remark about the difficulty in the context of recognising native title about having to fragment what is a complex relationship.  There has been a passing remark by the Full Court about the fragmentation to some degree in this case.  I would submit that to fragment further, if I can adopt that phrase, will not be a helpful exercise.  But his Honour is certainly capturing at 318 by analogy what are analogous elements of loss known to the law.

I was going to come back to it later, but his Honour took into account the authorities mentioned by the Commonwealth dealing with injury to culture, and that commences at 307 through to 309.  At 309 his Honour mentions appendix A of the Commonwealth’s submissions, which has been provided.  His Honour also mentions an additional case to which we drew his attention, being Trevorrow.  Trevorrow was an award of some $450,000 in a tort case.  But his Honour said, correctly, in our submission, at the end of 307, that these cases were directed to:

personal loss, rather than the collective loss of a claim group which is the present focus of attention.

Although his Honour looked to other learning, if I can put that way, his Honour was correct, in our submission, to say that it always provides some limited assistance.  Indeed, having gone to CSR Readymix, I am prepared to say that that provides some limited assistance, but what I take from it is President Winneke’s observation that in this discourse it must necessarily depend upon a trial judge’s impression of the effects on the particular claimant, and those effects are necessarily subjective. 

Could I then say something about the structure of the trial judge’s reasons and what we submit are some critical findings that stand in the way of the complaints made by the government parties which might be encapsulated by the notion of whether or not there can be a parcel‑by‑parcel assessment.  The first plaint starts at 317 to 318, which I have mentioned:  it necessarily depends upon the laws and customs of the group concerned.

Before launching into the evidence in any detail, his Honour at 324 and at 325 seems to record that it is common ground but certainly agrees that:

a parcel‑by‑parcel approach to the assessment . . . is not appropriate, having regard to the fact that many of the acts in issue occurred some 30 or so years ago.  They were incremental and cumulative. 

That is a point to which his Honour returns at 382 and 383 of the reasons, that there is an incremental effect.  Secondly and importantly, at 325 his Honour notes:

It is not possible to establish the comparative significance of one act over another.  That is simply not how things are viewed according to the traditional laws and customs, in particular by the Ngaliwuuru‑Nungali people.

Then referring to the evidence of Dr Palmer and Ms Asche:

one cannot understand hurt feelings in relation to a boxed quarter acre block.  Rather, the effects of acts have to be understood in terms of the pervasiveness of Dreaming.

A number of things can be taken from that.  The first is to rebut any criticism of the trial judge that it was necessary to look at each individual lot, to make some finding about the significance of each individual lot and then make some finding about the effects of diminution of that act.  As we say ‑ and it is a brutal form, if you like – as a job lot, one looks at a chunk of country which has been removed and the overall effects of that removal of part of someone’s traditional country.

The second thing we take from that critical finding ‑ and the anthropological evidence is unchallengeable in this respect; there were attempts to challenge it at trial, but these are the findings – is that things reverberate, if I can put it that way.  This gets back to his Honour’s findings at 364, 379 and 380 about the ritual ground – that is given as an example.

But to do something on what we see as an allotment within certain metes and bounds would not be confined, in terms of its effects, to that quarter acre block.  They will carry forward and that is really the nature of the connection of the peoples to country but the nature also of connections among different groups. 

Hence the sense of shame expressed by some of the men that they feel they are letting down their fellow countrymen because dreaming is connected to a number of groups, and so forth.  That is what we take from those critical findings, which we say rebut many of the challenges and complaints made by the government parties.

Can I then say something ‑ which I have already touched on – about the structure of the reasons in his Honour’s approach.  As I said, at 328 and through to 347 his Honour looked at the evidence relating to the nature of the laws and customs and practices and belief of these people in relation to their traditional country.

Now obviously, like any judgment, it is not the totality of the evidence; it is the sum of the evidence that his Honour has brought forward in his reasons for judgment in, if you like, articulating the basis of his assessment and condescending into particularity.  Again, that is necessary, if you look at paragraph 333, where his Honour speaks about:

The evidence about the Claim Group’s relationship with Timber Creek and their wider country –

that that is an inquiry as to the socially constituted fact of their native title, that is in their society, and then dealing with the nature of their relationship includes various observations from the anthropologists who help explain these things at paragraph 334, that, for example, in the sixth line that:

Protecting the land is a way of protecting yourself.

In other words, there is no separation of land and people.  Again, at 336:

Drawing upon their own fieldwork –

And these anthropologists, particularly Dr Palmer, had worked with these people since about 1984, so it is what is known as “observation evidence” as much as “opinion evidence”.  But they, in the quotation there on the appeal book page, about line 15, explain what is meant by “site” – different to our normal understanding where the anthropologists say:

Sites are then far more than places or lists of names or locations.  They should also be understood as meta‑place –

Then, at 337, again dealing with the direct evidence of the claimants but as supported by the anthropologists, his Honour then looks at the “law and custom to look after and speak for country” and being “supported by the primary evidence”.

And at 338 – and there was mention of this the other day – what his Honour is examining is law and custom in relation to duties to look after country.  We submit that the proposition that there are findings of effects referenced to a recognisable native title right to control access is not a fair reading of the reasons.  As his Honour says later on, there are findings about duties and the nature of people being bound with country and that what is concerned is more than loss of access or loss of control over access.  It is about the spiritual integrity of the landscape, which necessarily means the spiritual integrity of the people’s concerns themselves.

And that is then repeated by his Honour, at 345, where referring to events the subject of the earlier evidence.  And remember his Honour has received the transcript of evidence from the earlier native title claim.  His Honour has seen some of the key witnesses who gave that evidence and assessed their credibility, if you like, which he makes comments about later.  Then, after referring to that evidence, which are non‑compensable acts, his Honour draws from that, at 345:

The evidence on these events reveals a duty and concern to look after country.

Again, it is about the socially constituted fact that to protect land is to protect oneself.  There is no separation between land and people.  And then, continuing with that understanding or inquiry into that socially constituted fact for these peoples, his Honour then at 348 deals with the particular evidence led in relation to the effects of loss of country and the effects of the acts.

At 349 his Honour well appreciated that the anthropologists had given more generalised evidence in their report relating to a number of areas and without delimiting the nature of the native title rights, in other words, to control of access.  But his Honour at the top of 187 of the appeal book notes that he:

considered their evidence in that context and in particular as a means of interpreting the evidence given by the lay witnesses.

So his Honour was fully aware, if you like, and says it more than once, that his assessment of effect is not on a premise that there is an existing native title right to control access.  Then at 350 his Honour makes what we say is a critical finding of the type reflected in – sorry, I should say 348 and 350 makes findings that are critical of the type in that passage from President Winneke that I read before, which is about the trial judge’s evaluation or impression of the effects on the people and that:

The beliefs expressed were generally held and demonstrated a deep connection to country -

and at 350 the type of “gut‑wrenching pain and deep or primary emotions” that had been brought forward in the evidence by reference to the effect of loss of country.  We are going to hand up a table when I conclude that collects some of this evidence by reference to his Honour’s findings because the government parties have gone into some detail.  But what we simply want to draw from that for present purposes is that his Honour first of all, as I said, looked at the nature of the relationship, then looked at the nature of the evidence dealing with the particular acts and the effects, and did so by reference to the laws and customs, practices and beliefs of the people and by reference to the duties.

Then that continues on in terms of what I might call primary findings and then at 368 the consideration commences, which involves an adaptation of a particular compulsory acquisition rule by reference to the way the case was being put below.  Then at 370 his Honour brings those two sections of his reasons to bear in his evaluation overall of the effect.  Again, if I can just highlight one critical conclusion that appears at each of 370 and 375, which also builds upon the findings at 325 and 326, first of all at 370 his Honour notes that:

The direct evidence of [the claimants] and the anthropological opinion evidence does not depend on any proposition that some parts of Aboriginal landscape are more important than others.

In other words, he rejected the notion that there could be country devoid of spirituality.  That was the burden of the anthropological evidence and hence at 375 his Honour repeats that sort of finding by saying:

It is clear that the Aboriginal spiritual relationship to land encompasses all of the country of a particular group, and not just particular “sacred sites” -

bearing in mind his Honour’s earlier observations of the state of the anthropological evidence about that, and then goes on to say:

It is also clear that the destruction of a particular sacred site may have implications beyond its physical footprint because of the spiritual potency –

et cetera, et cetera.  We will come to the detail later, but the Court was referred to some evidence about the water tanks.  We submit that the evidence tended to convey the impression that it is an isolated incident or it is a matter of just the physical footprint of the water tanks.

Perhaps while your Honours have these pages, at 370 the relevant area is kulungra, which the trial judge notes in the fifth line is a broad expanse and it was the subject of anthropological opinion evidence by both Dr Palmer and Professor Sansom who had been called by the Northern Territory, that it was a classic example of a thesis – I should not say a thesis – but a journal article by Professor Sansom on the effects of losing country with just an example of a hunting ground. 

So we say it is incorrect, if you like, to focus on a physical infrastructure and say that is the damage; things reverberate further.  I will develop that in a moment.  So that is the general approach his Honour took to the assessment.

Now, there was a submission we think to the effect that there was only evidence of a heightened sense of grievance or hurt in relation to the water tanks and a submission we think that that was to be contrasted with an alleged grievance or hurt as to the use - or in the case of the Wilson Street subdivision. 

May we make two points about that and then go to the findings of the trial judge.  The first is that it tends to treat the incident of the water tanks as something isolated and bounded, in effect, which is not made good by the findings.  Secondly, it assumes in the case of the Wilson Street example that an area can be unimportant and, as we say, I think the anthropologists sort of accept the proposition which is encapsulated at the end of 370 of the reasons, that it “defies logic in the Aboriginal tradition” that any area could be “devoid of spirituality”.

NETTLE J:   Mr Glacken, I had understood the Commonwealth to submit that the contrast was between evidence as to the effects of the water tank on the Dingo Dreaming track compared to a lack of evidence about any specific exacerbation of the sense of loss of country, the result of the effects upon the ceremonial site that had been compromised by the 1974 tourist road.  Was there any specific evidence that any of the compensable acts worsened or exacerbated the sense of loss and pain and suffering associated with that ceremonial site that had been compromised by the 1974 tourist trade?

MR GLACKEN:   Yes, could I say I will come to the facts of that case.  1974 is said to be Victoria Highway, but Victoria Highway is actually 1964 but that was the example that was given in the evidence.

NETTLE J:   The tourist lookout was what I was thinking of, the evidence given and the secret evidence about the site being overlooked and, therefore, could no longer be used.

MR GLACKEN:   Yes.  Within the restricted evidence and, in particular, Dr Palmer’s restricted report, paragraphs 23 to 25, Dr Palmer explains that the sense of grievance, if you like, caused by that site - and could we emphasise the relevant finding is no longer being secure.  I will come to the particular findings in a moment, but yes, that is the subject of evidence. 

In the chart that we will distribute perhaps in the morning tea break, there is also some reference to some other site damage, for example, the council buildings at Lot 79 which is not the subject of any particular cross‑examination.  But to answer that question more directly, yes, there was a sense of severe, heightened loss, if I can put it that way.

We say that that should not, if you like, diminish other forms of loss and loss of country and Wilson Street is a good example.  Maybe I will deal with the findings on Wilson Street first.  I was going to deal with the water tanks but I will deal with Wilson Street first, I think. 

The finding that I think the Court has been taken to – the finding as to what is said to be some acceptance of acts appears in context at paragraphs 364 and 365 of the trial judge’s reasons.  If I can summarise 364, first of all the trial judge notes that despite what has occurred it is clear that people still retain a connection to and responsibility for country:

despite the development of the Town and fencing of some lots, and that there were still places to go hunting and fishing –

et cetera.  Then, at 365 some reference to the evidence:

suggested that some developments in the Town of Timber Creek were acceptable under Indigenous law.  That included the evidence of Josie Jones –

in relation to construction of houses on Wilson Street.  Another example is said to be by AG in relation to the construction of the Army Bridge.  First of all, to put things in context, at the bullet point at the top of that page, the fourth bullet point above paragraph 363, this was the subject of – this proposition of acceptance was the subject of cross‑examination to the anthropologist and Ms Asche:

stated that an example like relocating the Army Bridge involved [the claimant’s] accepting a European imposition on him and making the least damage possible.

So it is an example, if you like, of what was said yesterday - a “torn heart”.  There is a sense of reality, if you like, that some developments will have to occur.  It is a question of making the best you can out of the situation.  But that in no sense removes any sense of loss in the subjective way and there was other evidence which we say the trial judge bought into the balance respecting Wilson Street cited in the reasons at paragraph 371.

His Honour quotes evidence of Lorraine Jones, who is the daughter of Josie Jones, and her recollection of being in Wilson Street with her grandmother.  That was not the subject of cross‑examination.  That, as his Honour then says at 371, is an experience of ongoing impairment.  So to put things in context, to say that Wilson Street is acceptable could be something of an overstatement in context.  It is a matter of having a torn heart, so to speak, that it still causes anguish and it still causes compensable subjective effects of loss of country. 

It is a question of, as Miss Asche said, making the least damage possible from imposition of outside events.  So that is an example where we think the submission that has been made tends to, if you like, overstate what was the nature of the evidence on that sort of situation. 

Can I deal with the example of the water tanks and to rebut the notion that it is some isolated or confined incident.  If your Honours turn to the reference to the evidence in the reasons for judgment at 187 – sorry, page 187 of the appeal book at paragraph 352.  His Honour introduces the specific evidence by noting that it was given:

at kulungra (which includes the water tanks on Lot 70) -

I mentioned that later at paragraph 370 his Honour gave a description of the broad expanse of the area.  It is a broad pocket between the highway and the escarpment and his Honour then refers to some aspects of the evidence.  The first one to note – the first one at paragraph 353 is that that broad area has a connection to what, in secular terms, is known as a trade.  But we refer to this in our submissions, it is the subject of restricted evidence as well relating to the ritual that has been the subject of questions earlier. 

So, it is a notion that has a secular dimension but also a much deeper dimension which his Honour heard in the restricted session, again disputing a notion that this is some isolated and bounded incident and effect.  If you notice the form of the evidence given by the witnesses, first of all in the quotation, it refers to:

this site as very important to us, and all these sites got rid of it.

It is plural and remember this is trying to convey this fairly complex relationship into English terms, and then again at 354, the next witness adds in the “whole lot”. 

Then, I have submitted already, at 370 the anthropologist treated this as a classic example of the effects of loss of country such as a wide hunting and foraging area and the evidence of Professor Sansom on that thesis if you like is at paragraphs 357 up to 358 where - it is a paper that Professor Sansom wrote dealing with loss of a hunting ground which he describes as having “primary feelings socially recognised” and somewhat “epic” feelings and Professor Sansom accepted that – this is at paragraph 370, that what he had written about in this paper was going on in the case at hand.

Could I then say something about the submissions that have been made concerning the ritual ground?  Could I ask your Honours to turn to the critical finding of the trial judge at paragraph 361 – and, without going to the volume, if I can give your Honours references to the actual evidence?  If your Honours go to about point 28 of the page where the trial judge commences with the observations that:

There was evidence in this proceeding of a place that is no longer a secure ritual ground, and evidence in the earlier proceeding of –

something similar occurring.  His Honour then says one witness:

gave evidence as to why the area could no longer be used –

If I can just pause there – it is not a finding that the place stopped being used because of an act.  Later, in his Honour’s reasons, at 379 – and this is brought to bear as what he describes as a general effect - what the finding is is that it could no longer be used because of acts in the vicinity.  The particular evidence as to why it could no longer be used was in the volume at page 644, line 41 – the restricted volume, I should say – and over the page to line 16.

GORDON J:   Could you give the references again, please?

MR GLACKEN:   The restricted volume, 644, line 41 – I was not going to go to it, though. 

NETTLE J:   Just speaking for myself, Mr Glacken, it is important, to deal with the Commonwealth’s submission, I think, that you do.

MR GLACKEN:   Yes.  Your Honours were taken to 644, line 41.  The relevant question is about “It had last been used” and:

Why not . . . here any more.

Over the page, the transcript records that the witness is pointing, and then at line 4 the witness refers to what was the subject of submissions by the Commonwealth. 

NETTLE J:   Is that the 1974 construction that was spoken of in the course of submissions?

MR GLACKEN:   That is what was spoken of.  That was spoken of as Victoria Highway, but there is a finding in the appeal book at page 20 – it was in the context of the judgment on liability, at paragraph 20, the Victoria Highway was constructed in 1964, not 1974.  There is a finding recorded, or an agreed fact, by the Full Court in the appeal book at page 270 that another road, George Street, was constructed in 1980.

I was going to read a passage from Yarmirr, where the evaluation of the evidence necessarily depends upon the advantage of the trial judge being at the place and hearing the witnesses and watching the witnesses explaining what is their concern.  We emphasise it is a finding as to why it is no longer secure.  It is not a finding as to why it stopped.  It is not a finding that it was stopped because of some act that occurred before 1975 or 1974.  Indeed, why it stopped at a particular time was the subject of different evidence in the volume at 658.

NETTLE J:   There is evidence here as to why it stopped in 1975, is there not, at the bottom of 644 going over to 645?  You asked the question at line 40.

MR GLACKEN:   Yes. 

NETTLE J:   “Why did it stop?  Why no ceremony any more” – in 1975.  He says what he says.

MR GLACKEN:   After 1975.  It happened in 1975.  Then the question is:  why no longer is it happening here?

NETTLE J:   He says.

MR GLACKEN:   He points to something which is referring to a road, and that was the subject of submission by the Commonwealth.  Their submission was it was a road constructed in 1974 but that is factually incorrect.  That road was constructed in 1964. 

As I say, this is a classic example.  In Yarmirr it was about the extent of sea country, where the generalised evidence or the only evidence was of a witness pointing, on a beach, to the horizon and saying, “This is the extent of my sea country.”  This Court held that the Full Court was correct to conclude that the trial judge was in the best position to assess the burden of that evidence and that this Court could not be in any better position than what the Full Court was.  Can I complete the reference to the evidence, your Honour, by ‑ ‑ ‑ 

NETTLE J:   Before you do, can I ask you in advance:  what is the compensable act that caused the 1975 cessation?

MR GLACKEN:   His Honour does not identify an individual act but refers to it as generalised at 379 of his reasons.  We say that relevantly in terms of this point of evidence that it is George Street and the two allotments, which are two houses nearby.  George Street was constructed in 1980 and the houses at around that time or slightly after.  As I said, it is important to emphasise it is a finding about not being able to go back.

GORDON J:   Do I understand that by reference to pages 644 and then 658 of the raw material, there is a temporal reason for not using that ground for that purpose which is unconnected with a compensable act, by reference to that evidence, and then you have the compensable act?  Is that the point you are trying to make?

MR GLACKEN:   Yes.  The reason why there was a stoppage, if I can put it that way ‑ ‑ ‑

GORDON J:   No, I understand.

MR GLACKEN:   That is borne out, for example, from the evidence at 648 as to how the area is to be used.  That is at line 27 or thereabouts.

NETTLE J:   Is what is spoken of at line 30 or thereabouts at page 648 the George Street Road as opposed to the 1974 construction?  Is what is spoken of at line 30 at page 648 said to be the George Street construction rather than 1974?

MR GLACKEN:   It is not entirely clear.  It is a matter of ‑ if one goes back to that earlier evidence, yes, in context, that is the available finding.  His Honour at 379 just referred to a general effect and finding.

KIEFEL CJ:   Is your point, Mr Glacken, that on each occasion that something occurs, the hurt, according to the anthropologist’s evidence, is compounded?

MR GLACKEN:   Yes, and reverberates, if we can put it that way.  But for the moment I am simply dealing and rebutting the suggestion that this evidence was to the effect that there was a road constructed in 1974 and that was the cause of the effect.  The relevant effect was not being able to use the ground any more.  It is no longer secure. 

To complete the evidence that his Honour was given, at 658 at line 40 through to line 15 there is a reference to what occurred within the group in 1974 to 1975.  To complete that evidence in terms of the question earlier from Justice Nettle in terms of the effects of loss of a secure ground, that was the subject of evidence by Dr Palmer.  In the same volume, it is at pages - in particular, pages 619 to 620.

GORDON J:   Where are we now?  What - 619 to 620?

MR GLACKEN:   Yes, of the same volume.

GORDON J:   In the same book- I see.

MR GLACKEN:   This was the evidence of Dr Palmer who reported upon the evidence given on that day and the significance of a loss of a secure ground. 

GAGELER J:   Mr Glacken, as I understand your submission it is that the Commonwealth submission to which you are responding is based on a misunderstanding of the facts.

MR GLACKEN:   Yes.

GAGELER J:   Precisely what was that misunderstanding?

MR GLACKEN:   The submission that they made was that the cause, the loss of security was the construction of Victoria Highway in 1974.  Now that is a misunderstanding because the Highway was constructed in 1964 and on the evidence there had been a use in 1974/1975.

GORDON J:   So the chronology is 1964, Victoria Highway.

MR GLACKEN:   Yes.

GORDON J:   The restricted evidence about the events in 1974 and 1975.

MR GLACKEN:   Yes.

GORDON J:   The reason why it stopped.

MR GLACKEN:   Yes.

GORDON J:   The construction of George Street in 1980:  that is your case?

MR GLACKEN:   Yes, which leads to the houses, and the significance of that sort of loss of security, if I can put it, was highlighted by the trial judge’s findings at 361 of the deep value of the ritual and the deep value of the need for its secrecy.

NETTLE J:   Is that directed to George Street in your submission?

MR GLACKEN:   Yes.

NETTLE J:   So, on this view of the matter, there was a cessation for whatever reason in 1975 but it was not until 1980 with the construction of George Street that the pitch was ultimately cruelled as a ceremonial site?

MR GLACKEN:   Precisely.  Hence I emphasise the finding of the trial judge at 361 is that it is no longer a secure ritual ground; it cannot be started up.

GAGELER J:   Was this detailed factual argument played out before the Full Court?

MR GLACKEN:   Yes, it was put before the Full Court.  I will turn up the Full Court’s treatment, perhaps after the break, if that is a convenient time.

KIEFEL CJ:   That might be a convenient time, Mr Glacken.

AT 11.16 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.32 AM:

KIEFEL CJ:   Yes, Mr Glacken.

MR GLACKEN:   Your Honours, could I clarify something for the Court generally in relation to a response I gave to a question from Justice Nettle?  In the context of Dr Palmer’s evidence about the effects, I should be clear, the ritual goes on.  It is about the effects of not being able to use this particular place and its relationship to the ritual.  I mean, it is not to say that it is not part of the continuing tradition.  It is just the disruptive effect, if you like, about not being able to do it in situ, if I can put it that way, which is the subject of Dr Palmer’s evidence.  I just wanted to make that clear.

In terms of the Full Court’s consideration on the matter, it is at page 355 of the core appeal book, and consistent with the submission that we make as to the nature of the finding by the trial judge ‑ so it is 355 of the core appeal book, paragraph 300.  They note that:

Nonetheless, the primary judge found that there was an effect from a later compensable act on the use of the ritual ground.

GORDON J:   I am sorry, where are you reading from?

MR GLACKEN:   Paragraph 300, the second sentence.

GORDON J:   Thank you.

MR GLACKEN:   They reject the argument of the Territory and the Commonwealth.  And then they make the observation about misunderstanding the reasoning of the primary judge, which is the submission that we make as to the nature of the finding, and that was that the reasoning of the primary judge, commencing on the first line:

took into account the effect on the adjacent ritual ground of a compensable act occurring on one of the lots in question was because –

one of the witnesses:

gave evidence as to why the place remains important”.  It was the character of the location of the ritual ground at the time of the compensable act and the effect of that act on the then current status of the ritual ground as a site of importance that caused the primary judge to take the effect into account.

Now, in terms of the evidence to which I have gone, this was treated by the Full Court in the context of a causation argument, as is apparent from paragraph 301, and that is how it was also treated by the trial judge.  Naturally enough, in a line of cases from a different area, for example, Henville v Walker, there can be more than one cause, the question is whether the act which could be liable is a cause of the relevant effect.

NETTLE J:   Is that what the trial judge is speaking about at his 380 ‑ ‑ ‑

MR GLACKEN:   Yes, but bear in mind ‑ ‑ ‑

NETTLE J:   ‑ ‑ ‑ because it does seem that his Honour is there attributing at least some of the effect upon that site to an antecedent uncompensable act.  He says, I considered whether it is legitimate.  That presumably was something before the compensable acts which to some degree at least compromised this site for use for the ceremonies in question.

MR GLACKEN:   Yes, that appears to be his reasoning but not ruling out the effects of compensable acts, and that needs to be understood in the context of his Honour’s approach to causation.

NETTLE J:   Well, sorry, just pause there.  So, the position is it was compromised by an earlier uncompensable act but there was a subsequent compensable act which made it worse.

MR GLACKEN:   That appears to be the burden of his Honour’s reasoning.

NETTLE J:   That is ‑ ‑ ‑

MR GLACKEN:   George Street ‑ ‑ ‑

NETTLE J:   George Street.

MR GLACKEN:   ‑ ‑ ‑ and the lots, lot 62 and 63, the houses.

NETTLE J:   All right, thank you.

EDELMAN J:   The point is it is an indivisible injury, not a divisible injury.

MR GLACKEN:   Yes, that is one way of putting it.  And I was about to say it needs to be looked at in the context that earlier the trial judge, at paragraph 321, appeal book 171, had rejected a test of causation posited by the Northern Territory of requiring direct causation.  And his Honour adopted what was described as a practical test of causation.  I am borrowing from March v Stramere but noting the different context.

NETTLE J:   Mr Glacken, if I may, just persisting once more with 380, this may be too fine a distinction for this area of discourse, but is it correct to say in 380 that accepting that there are, as it were, two causes of the ultimate harm, one compensable, it being the earlier – I beg your pardon, uncompensable, it being the earlier, and a later compensable act, it is only the increment of damage caused by the latter which is compensable, not the total?

MR GLACKEN:   Yes, but the evaluation of what is increment would be ‑ ‑ ‑

NETTLE J:   A pretty broad brush, I understand.  But, in point of principle, that must be right.

MR GLACKEN:   Yes, and a perfectly proper approach.  One says the trial judge, at 321, rejected the notion of direct causation.  In other words, a single act and a single effect.

NETTLE J:   Yes.

MR GLACKEN:   Could I just complete this ‑ ‑ ‑

EDELMAN J:   That would not necessarily be right, would it?  It would not necessarily be right that one would only compensate for the increment if, without the increment, the damage of its nature would have not been suffered?  In other words, the ritual remained possible.

MR GLACKEN:   Yes, and on the supposition put by the Commonwealth that there was the Victoria Highway in 1964 and, on the evidence, there was a conduct at the place in 1974, 1975.  So the way Justice Nettle put it before is that the later acts, if you like, cruelled and ended the possibility.

EDELMAN J:   But that then means the later acts cause the whole of the injury, not just the incremental increase.

MR GLACKEN:   We would say that is classically, in terms of the approach of President Winneke, an evaluation of the trial judge, of his impression of what the witnesses are saying about the effects of the acts.  But either way in terms of notions of causation there may be more than one act, including social events mentioned in the transcript at 358, the question is whether a compensable act is a cause of the claimed effect.  That is the burden of the analysis.

Could I draw an analogy to what has occurred in an earlier case in this Court.  Could I ask the Court to go to Commonwealth v Yarmirr, volume 6 of the authorities, case 42 and it is 208 CLR 1.

GORDON J:   Just before you go to that authority, have we now finished your analysis of the Full Court’s treatment of this ritual ground?

MR GLACKEN:   Yes.  I am still on the same subject in terms of why the Full Court was perfectly correct to reject the complaints made by the government parties by analogy to the similar rejection of a similar complaint in Yarmirr that I mentioned earlier. 

The report starts at page 1 and the relevant page is 61 of the Commonwealth Law Reports.  My guess is that it is 155 PDF.  At paragraph 77 of the judgment, as the heading indicates, there was a “challenge to a finding of fact” by the Commonwealth.  The relevant finding was by the primary judge as to the extent of the Claim Group’s sea country in a:

not that the owner is entitled to damages for all of his loss consequent upon acquisition of his land, but that the value to the acquiring authority is not the measure of compensation.

Secondly, in the Full Court’s reasons at ‑ ‑ ‑

KEANE J:   Sorry, Ms Solicitor, I understand the point you are making but is that the same as saying that evidence of value to the acquirer is not relevant – is of no relevance to the loss to the owner ‑ ‑ ‑

MS BROWNHILL:   No.

KEANE J:   ‑ ‑ ‑ in the sense that the value to the acquirer can be some indication of the value of that which has been acquired – just as a matter of evidence.

MS BROWNHILL:   I do not think I would put it as highly as it not being at all, in any way, relevant.  But the point is that the principle on which the basis on which the compensation is assessed is not in relation to what the acquirer acquires but in relation to what has been – whether it is extinguished or transferred, or whatever it might be. 

Similarly, in relation to that point, in the Full Court’s reasons at 121 they make reference to the decision in Commonwealth v Arklay.  That case involved an acquisition of land and how to assess its value when there were wartime controls which both fixed the price at which the land could be sold and required the consent of the controller, the treasurer, or whoever it was, in order for there to be any sale.  The passage on page 45 of the Court’s reasons – their Honours refer to the Spencer test – essentially:

why value for the purpose of compensation is measured by what an owner prepared to sell would demand and what a buyer desirous of obtaining the land would give is that this ascertains the value in money contained in the land - 

and reference to once there is an authority forbidding the parties or one of them to give so much as they would normally require it ceases to be evidence of value.  They contrast that with – a bit further down in the passage:

On the other hand the existence of a regulation of land sales would be calculated itself to affect what a buyer would be prepared to give.  He himself would be buying an asset of which he could not, if need arose, freely dispose of at the price he would demand from a buyer free to give it. 

So, you could not disregard the regulation of the sales in that way.  It would have to be taken into account because it affects what a buyer would be prepared to give to obtain the land.  So, the restriction on sale would affect the hypothetical price that the purchaser was prepared to pay. 

GAGELER J:   Ms Brownhill, as I understand your argument in‑chief, you embrace the notion that the value to the owner, here, includes an exit value.

MS BROWNHILL:   Yes, your Honour. 

GAGELER J:   Does not embracing that notion necessarily embrace the concept of the native title being hypothesised to be alienable?

MS BROWNHILL:   No.

GAGELER J:   No?

MS BROWNHILL:   In the same way that authorities like the Sydney Sailors’ Home Case where there were restrictions or the land could not be sold without approval ‑ ‑ ‑

EDELMAN J:   Except they are restrictions that apply also to the acquirer.

MS BROWNHILL:   Well, that is what the Court – in the Sydney Sailors’ Home it was a trust deed which applied so that the holder of the land itself had bound itself by a trust deed not to dispose of the land without the consent or approval of the Governor.  I was going to come to that case because the – perhaps we can go to it.  It is in joint book of authorities volume 13, tab 103.  The headnote refers to the appellant having bound itself to hold the land “upon trust” on the condition that it:

not be sold, exchanged, leased, mortgaged, charged or otherwise dealt with without the approval of the Governor -

Then at the bottom of 116 of the report, it is set out that:

The substantial issue between the parties is the extent to which the obligation to obtain the consent of the Crown to any disposition of the land should be taken into account in valuing the land, or did in fact affect the value of the land.

It was argued that the resumption assumed a disposition and therefore consent to the disposition so that the restriction should be disregarded for the purpose of valuation.  But over the page, Justice of Appeal Hope refers to that line of reasoning being inconsistent with the authorities, specifically Corrie v MacDermott.  There is a reference there to, again, land that was held on trust and the deed of grant containing no power of sale at all and:

The High Court held that the value to be assessed was the value to the Society of their interest in the land and not the value to the Crown or to those for whom the Crown was acquiring the land; and that in ascertaining this value the conditions, reservations and restrictions on the use of the land and the right to dispose of it should be taken into consideration.  The decision of the High Court was affirmed by the Privy Council.

There is a reference to a passage there.  In the rest of the judgment, his Honour goes one to consider the decision in Geita Sebea, which I was going to mention shortly, but over the page on page 118 reaches the view that that decision does not cut across the principles affirmed in Corrie v MacDermott but rather is a case about the construction of the three Papuan ordinances.

So we say that the general common law principle is that both inalienability does affect the market value posited by the Spencer test of what the owner has lost and that is contrasted with the idea of the value obtained by reference to what the acquiring authority obtains.

NETTLE J:   Madam Solicitor, do you say Amodu Tijani turns on the statute too?

MS BROWNHILL:   Yes, your Honour.  I am hoping that your Honours’ associates have copies of the statute that was referred to in Amodu Tijani and a copy of the decision itself.  It is not in the bundle, not as far as I could locate it.  My learned friend corrects me, it is in the bundle, but in any event your Honours have it now one way or another.  So, it is in volume 3 apparently.  In the decision in Amodu Tijani your Honours will see in the headnote that the land was:

acquired for public purposes under the Public Lands Ordinance, 1903 –

We have provided a copy of that Public Lands ordinance.  Specifically, reference we make is to section 3 which is the power of the Governor to acquire:

lands required for public purposes for an estate in fee simple, or for a term of years, or for any estate or interest recognised by native title law and custom -

Then, section 6, which provides that:

Where lands required for public purposes are the property of a native community, the Head Chief of such community may sell and convey the same for an estate in fee simple, notwithstanding any native title law or custom to the contrary.

So, the question for the Privy Council in the case was there were two competing ideas about what the valuation of the rights acquired should be based on competing views about the nature of those rights.  The two competing views are set out at page 402.  One was the view of the Chief Justice of the Supreme Court that essentially what the chief had was the “seigneurial right” of control and management as opposed to what the chief was claiming which was:

the full value of the family property and community land –

Their Lordships had to determine which of the two was the true view and that depended on the real character of the native title to the land.  On 404 to 405, at the bottom of 404 and over the page, reference is made to the nature of the native title that was held and I would emphasise particularly that the chief had:

charge of the land, and in loose mode of speech is sometimes called the owner . . . He has control of it, and any member who wants a piece of it to cultivate or build a house upon, goes to him for it . . . He cannot make any important disposition of the land without consulting the elders –

et cetera.  Then, at the bottom of the page about two‑thirds of the way down, the Privy Council, Viscount Haldane, I think it is, said that, therefore, the interpretation of paragraph 6 of the Public Lands Ordinance had the meaning that the chief could transfer the title of the community and that therefore that was the compensation that had to be made for that title in fee simple. 

So, the decision in Amodu Tijani turned on two things:  firstly, that the native title held was equivalent to full ownership but secondly that there was a statutory provision which required any inalienability pursuant to the traditional laws and customs to be ignored.

GAGELER J:   Ms Brownhill, I am sorry, I know that I am asking the same question over and over again, but if you rely on the native title interest being inalienable how do you get to an exit value or a negotiation value?  Can you just talk me through the steps, please?

MS BROWNHILL:   Yes.  Your Honour, what Mr Lonergan did was to recognise that native title rights and interests are, in their nature, inalienable with all of the consequences that that has in terms of differentiating between freehold in the sense of inalienable – I mean, you cannot lease, you cannot licence, you cannot mortgage et cetera – but recognised that the native title rights and interests could be surrendered to the Crown.  And so he posited that the proper hypothetical transaction was in the nature of a surrender rather than in the nature of a transfer, which is how he then came up with the idea of the negotiation value being the difference between the value of the native title rights and interests themselves in their nature and what either the Crown, who is seeking to acquire the land for its own benefit for public purposes or for the benefit of someone else, would be willing to pay in order to put the land to a different use.  So it is ‑ ‑ ‑

GAGELER J:   It is a limited form of alienation.

MS BROWNHILL:   Yes, recognising that the Crown could always compulsorily acquire the land so that, contrary to what the native title party puts, there is some sense of power or veto in the native title holders about what could be done with the land.  That is not so because of the power of compulsory acquisition.  But the capacity to surrender does give rise to the Crown entering into, or the potential for entering into, a negotiation about the price at which it might put the land to a different use.  I hope that answers your Honour’s question.

So Amodu Tijani turned on the effect of the statute and that is why inalienability did not affect value.  Similarly, Geita Sebea – my learned friend took your Honours to it, I do not propose to go back – there was a similar context and a similar conclusion in the sense that, firstly, the native title, as your Honours all observed yesterday, was equivalent to full ownership of the land.  Secondly, the constraint on alienation arose not as a consequence of the incidence of the native title itself but as a consequence of a statutory provision.

And then there was another statutory provision that provided that compensation was payable on the footing that it was a transfer of the fee simple from the native title holders to the Crown.  So there was a statutory inconsistency and that inconsistency was resolved in favour of disregarding the inalienation provision.  So, again, that was why it did not affect value in that case.  So neither Amodu Tijani nor Geita Sebea are authority for the propositions that native title is valued by reference to what the acquirer gets as opposed to what was lost and the acquirer got fee simple, therefore native title equals fee simple value.  Nor are they authority for the proposition that one has to ignore the inalienability of native title when determining its value.

Both the native title party and my learned friend, Mr Wright, relied on the decision in Leichardt Council v Roads & Traffic Authority.  That is in the bundle.  In that case it was held that the principle in Corrie v MacDermott did not apply, nor did the unifying principle of value to the owner, was in the context of – it is volume 8, tab 69 of the authorities. 

So the case concerned again two New South Wales statutes this time.  One was the Land Acquisition (Just Terms Compensation) Act which dealt with acquisitions and then the Local Government Act which had a provision that said community land which is held by a council cannot be sold.  The court held that the community land held by a council which had been acquired was to be valued without reference to the restriction on sale.

If your Honours turn to paragraph 31, his Honour the Chief Justice makes a reference to the object of the Act, which was:

to “guarantee that . . . the amount of compensation will be not less than the market value of the land”.  This guarantee confirms that the terminology of “market value” is not used in the sense [in the common law sense] of “value to the owner”, which was the unifying concept that was applied . . . in Corrie ‑

And then His Honour says that:

once the idea of “value to the owner” is taken away as a unifying concept, as it has been, the foundation of the reasoning in Corrie v MacDermott has also been removed. 

His Honour recognises that:

There are, of course, restrictions on use, eg zoning, which affect all vendors and purchasers in the hypothetical sale.

And that is where his Honour comes to the view that:

Where, however, a restriction affects only the person whose land has been acquired . . . the restriction is not a matter –

to be taken into account.  So, it is only in that statutory context where the ordinary unifying rule about “value to the owner” is removed, that you would reach that conclusion.  His Honour goes on in paragraph 35 to say that:

Matters of valuation turn in large measure on the precise statutory scheme.

And that, we would say, is the consequence of cases like Amodu Tijani and Geita Sebea.

And then from paragraph 45 and onwards, his Honour deals with again what is found which is the competition between two statutes of the same legislator and how they should be dealt with.  His Honour considers the decision in Geita Sebea and says that it is similar to what is faced by the court in that case where there was a statute ‑ this is 51 – sorry, 47 ‑ there was a statute containing the hypothesis:

a statutory intersection . . . where the operation of one statute proceeds on a statutory hypothesis which the second statute denies.

That is paragraph 46. 

GAGELER J:   Is the consequence of your submission that in a case where native title holders have exclusive native title which is extinguished, the economic value for which they are to be compensated is necessarily less than the freehold value of the land?

MS BROWNHILL:   Yes.

GAGELER J:   How much?

MS BROWNHILL:   We do not yet have any evidence before the Court about that sort of quantification.  Mr Lonergan expressed a view about, in this case, the impact that inalienability ‑ he called it lack of marketability but same thing – inalienability would have.  This is in his report which is in the Northern Territory’s bundle of further material, volume 1 at page 336.  He expressed the view, after a comparison between freehold exclusive rights and non‑exclusive rights, at paragraph 65:

There are very significantly greater rights for a freehold owner compared to a non‑exclusive native title rights holder . . . The differences also relate directly to the ability to generate cash flow / benefits from the property.  Accordingly, in my opinion non‑exclusive native title rights are worth markedly less than freehold value.

He has not purported there to express any view about the difference between freehold and exclusive rights, but that is certainly captured in what he has observed there about the difference between the native title rights he was asked to consider and freehold.

The methodology and the negotiation value is - so what Mr Lonergan is theorising is that the typical negotiated bargain in this surrender of native title scenario would see a bargain reached at the midpoint between the usage value and the freehold value.  That is in paragraphs 78 and 79 and 81 of his report and that midpoint is selected because he says in paragraph 71 that the normal potential reference points for where you consider the bargain might be reached where there is a wide negotiating range are not available in this context.  So at 81 he adopts the studies in Behavioural Economics and Game Theory as the reason to select the midpoint.

That opinion was to the effect that the significant lowering of the midpoint from the perspective of the hypothetical purchaser because of inalienability and inability to commercially exploit would be offset by the raising of the midpoint from the perspective of the hypothetical native title holder because of the spiritual connection to country. 

So, in the Lonergan valuation there is essentially already - your Honour Justice Edelman’s idea of the loss of amenity or the objective loss of amenity is already captured in that part of the equation, leaving separately something in the nature of an award for pain and suffering and in

that sense what Mr Lonergan has done, coupled with the award for solatium in this case of $1.3 million does represent something of a double counting which would be another reason, we would say, that the award of $1.3 million is inappropriately high.

Just one other point, your Honours, in relation to - if one were to take the approach that the proper valuation of native title is the value to the acquiring authority, there would be two consequences.  Firstly, the actual nature and incidence of the rights and interests would be irrelevant.  Any earlier extinguishment would effectively be disregarded because you would get fee simple all the time or at least fee simple. 

That seems an unlikely legislative intention, given that the Native Title Act contains specific provisions providing for the partial extinguishment of native title and a compensation consequence for those things and I am referring to sections 23G and 23I.

Secondly, the Native Title Act expressly permits the disregarding of extinguishment of native title, but only in the scenarios involved in sections 47, 47A and 47B.  It would be because the Native Title Act makes no similar provision in relation to compensation; the idea that you would nevertheless just disregard extinguishment does not sit comfortably. 

The other point about that idea is that there could not then be an award for the spiritual attachment component for the loss of material or spiritual sustenance and so on because there would not be any basis in principle for adding that on.  If you are focusing on what the acquirer obtained, the acquirer does not have any of those spiritual associations so the only value would be the value to the acquirer, what the valuer gets:  a fee simple estate. 

We say that there is no foundation in either Amodu Tijani or Geita Sebea to suggest that even where the focus is on what the acquirer got that there is something then to be added on top of that for spiritual attachment or connection.  Those are the submissions.  May it please the Court.

KIEFEL CJ:   Yes, thank you, Ms Solicitor.  The Court reserves its decision in this matter and adjourns to 10.00 am on Monday, 10 September in Canberra.

AT 3.22 PM THE MATTER WAS ADJOURNED