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Legal Practice Briefing

Number 32

20 May 1997

THE WIK PEOPLES V THE STATE OF QUEENSLAND

On 23 December 1996, the High Court handed down its decision on a number of preliminary questions of law in the matter of The Wik Peoples v The State of Queensland Ors1 ('Wik'). The decision has major implications for the development of the common law relating to native title, the operation of the Native Title Act 1993 (`the NTA'), and land management generally.

Summary of the Decision

A majority of the High Court, comprising Toohey, Gaudron, Gummow and Kirby JJ, held in Wik that the grant of certain pastoral leases by the Crown under the Land Act 1910 (Qld) (`the 1910 Act') and the Land Act 1962-1974 (Qld) (`the 1962 Act') did not confer exclusive possession of the leased areas on the grantees, and therefore did not necessarily extinguish native title rights and interests that may be held by the Wik and/or Thayorre Peoples in respect of those areas.

It follows that, in some cases, native title rights and interests may have survived the grant of pastoral leases like those in Wik and may co-exist with the rights conferred on the grantee by the lease and the Act under which the lease was granted. The majority also held that, where an inconsistency arises between the rights and interests enjoyed by native title holders and the rights and interests conferred upon the grantee, the native title rights and interests must yield, to the extent of the inconsistency, to the rights and interests conferred on the grantee.

The High Court also unanimously affirmed the validity of agreements made, and mining leases granted, under the Commonwealth Aluminium Corporation Pty Limited Agreement Act 1957 (Qld) (`the Comalco Act') and the Aurukun Associates Agreement Act 1975 (Qld) (`the Aurukun Act').

The Claim

The Wik Peoples commenced proceedings in the Federal Court in 1993, prior to the commencement of the NTA, claiming that they hold native title to a large area of land in far north Queensland and over adjoining areas of sea. The Wik Peoples also sought damages and other relief if it was found that their native title rights had been extinguished.2  Another Aboriginal group, the Thayorre People, also claim native title to an area that overlaps part of the area covered by the Wik Peoples' claim.

The Pastoral Leases

Much of the land claimed by the Wik Peoples and Thayorre People is or has been subject to pastoral lease. In particular, the areas claimed include land known as the Mitchellton Pastoral Holding ('the Mitchellton pastoral leases') and the Holroyd River Holding ('the Holroyd pastoral lease').

The first Mitchellton pastoral lease was granted by the Crown under the 1910 Act for a term of thirty years commencing on 1 April 1915. The lease, which covered an area of 535 square miles, was expressed to be 'for pastoral purposes only'. A lease instrument was issued; however, the grantee never entered into possession. The lease was forfeited for non-payment of rent in 1918. A second lease was granted under the same Act, and for the same area of land, for a term of thirty years commencing on
1 January 1919. This lease was also expressed to be 'for pastoral purposes only'. Again, a lease instrument was issued; however, the grantee never entered into possession, and the lease was surrendered in 1921. Neither of the Mitchellton pastoral leases was subject to an express reservation in favour of Aboriginal access and usage rights. Since 1922, the land has been reserved for the benefit of Aborigines, or held for and on their behalf.

The first Holroyd pastoral lease was granted by the Crown under the 1910 Act for a term of thirty years commencing on 1 October 1944. The lease, which covered an area of 2,830 square kilometres, was expressed to be `for pastoral purposes only', and was not subject to any express reservation in favour of Aboriginal access and usage rights. The lease was surrendered on 31 December 1973. A second lease was granted over this area under the 1962 Act for a term of thirty years commencing on 1 January 1974. Although the lease was granted as a 'pastoral holding', it is not expressly limited to pastoral purposes. The lease was also not subject to any express reservation in favour of Aboriginal access and usage rights. However, it is subject to a number of special conditions to the effect that, within five years of the commencement of the lease, the lessees carry out certain improvements, including the construction of buildings, an airstrip, internal and external fencing, and dams.

The Mining Leases

The Wik Peoples' claim also includes land the subject of Special Bauxite Mining Leases granted by the Queensland Government under agreements with Comalco Aluminium Ltd ('Comalco') and Aluminium Pechiney Holdings Pty Ltd ('Pechiney') executed under the Comalco Act and the Aurukun Act respectively.

Decision by Drummond J

In the course of the proceedings before the Federal Court, Drummond J set down a number of preliminary questions of law relating to, amongst other things, the effect of the grant of the Mitchellton and Holroyd pastoral leases upon any native title that may have existed over the land the subject of those grants, and the validity of the agreements between Queensland and Comalco and Pechiney, and the mining leases granted under
those agreements.

Without deciding whether the claimants held native title over the areas the subject of the Mitchellton and Holroyd pastoral leases, his Honour determined,3 among other things, that the pastoral leases conferred a right to exclusive possession upon the grantees, and were not subject to a reservation in favour of native title holders. As such, the pastoral leases conferred rights upon the grantees that were wholly inconsistent with the concurrent and continuing exercise of any native title rights. The grant of the Mitchellton and Holroyd pastoral leases, therefore, necessarily extinguished all incidents of native title that may have been enjoyed by the Wik Peoples and/or Thayorre People over the leased land.

His Honour also held that the decisions by the Queensland Government to enter into agreements with, and grant mining leases to, Comalco and Pechiney are immune from challenge for breach of fiduciary duty and failure to accord natural justice.

The Wik Peoples and Thayorre People appealed from these parts of his Honour's decision to the Full Court of the Federal Court. The appeal was removed to the High Court under section 40(1) of the Judiciary Act 1903.

The High Court Decision

Did the Leases Confer a Right to Exclusive Possession?

In four separate judgments, the majority Justices regarded pastoral leases as a creation of Australian statute and held that the rights and obligations that accompany them do not derive from the common law principles relating to leasehold estates.4  Rather, the rights conferred upon the grantee of a pastoral lease are to be determined by reference to the terms of the particular lease and the relevant statute under which it was granted.

The majority Justices examined the historical development of pastoral tenures in the Australian colonies, the 1910 and 1962 Acts, and the relevant lease instruments, and concluded that there was no legislative intention to confer exclusive possession on the grantees of the Mitchellton and Holroyd pastoral leases.5  In particular, there was nothing in those Acts or instruments that should be taken as intending a total exclusion of indigenous people from the land,6  (there being a strong presumption that a statute is not intended to extinguish native title, or indeed any valuable rights relating to property, unless there are clear and plain indications to the contrary).7  Their Honours also rejected the argument that upon the grant of a pastoral lease the Crown acquires a reversionary interest which precludes the continued existence of native title.8

Accordingly, the rights conferred on the grantees of the Mitchellton and Holroyd pastoral leases did not necessarily extinguish native title. However, particular rights that were granted may be inconsistent with native title; where that is the case, the native title will, to the extent of the inconsistency, be extinguished or have to yield.9 

In his dissenting judgment, Brennan CJ, with whom Dawson and McHugh JJ agreed, relied on the fact that the statutory provisions use the terminology of leases at common law to conclude that the grant of a pastoral lease under those provisions creates an interest analogous to a lease at common law.10  It followed that the grant of a pastoral lease under the 1910 and 1962 Acts vested in the grantees a leasehold estate which carried with it a right to exclusive possession of the leased area, and created a reversionary interest held by the Crown.11 The grant of exclusive possession and the Crown's title to the land on reversion are inconsistent with a continued right to enjoy native title (assuming that access is an essential aspect of the native title rights asserted). Therefore, any native title that may have been held by the Wik and/or Thayorre People in respect of the land the subject of the Mitchellton and Holroyd pastoral leases has been extinguished.12 

Is it the Grant of an Inconsistent Right or the Exercise of that Right that Extinguishes Native Title?

All of the Justices confirm, or at least assume, that native title is extinguished by the grant, rather than the exercise, of a right or interest in land which is inconsistent with the continued existence of native title.13  Although this would suggest that the question of extinguishment should focus on the character of the rights granted, rather than on the evidence surrounding their exercise, some of the majority Justices contemplate circumstances in which the activities of the grantee may be relevant to the extinguishment or impairment of native title.14 

Is Native Title Extinguished or Merely Suspended During the Term of a Lease?

As the majority Justices concluded that none of the
grants necessarily extinguished all incidents of native title, they did not need to examine the Appellants' argument that the 'extinguishment' or 'impairment' of native title by the grant of an inconsistent right is not permanent. That is, they leave unresolved whether native title is merely suspended during the period that the inconsistent rights exist, and can revive in full on the expiry or termination of the inconsistent rights, provided that the traditional connection with the land or waters has been maintained.15

Brennan CJ, however, considers that there can be no occasion for the revival of native title following the grant of a pastoral lease.16 

Does the Crown Hold the Reversion as a Fiduciary for Native Title Holders?

The majority Justices found it unnecessary to consider whether governments owed a general fiduciary duty to native title holders or indigenous people generally.17 Brennan CJ, however, considered and rejected the argument that the vulnerability of native title to an exercise of power by the Crown to extinguish it, and the position of indigenous people vis a vis the Government of a State creates a 'free-standing fiduciary duty'.18  In his Honour's view, the power of alienation conferred upon the Crown by the 1910 and 1962 Acts is inherently inconsistent with a fiduciary duty to exercise that power as an agent for or on behalf of native title holders.19

Validity of the Comalco and Aurukun Agreements and Mining Leases

The High Court unanimously held that the agreements between Queensland and Comalco and Queensland and Pechiney were authorised and given the force of law by the Comalco Act and Aurukun Act respectively. The authorisations were not qualified by any requirement as to the performing of a fiduciary duty or the according of procedural fairness.20  To attack the validity of the agreements on the grounds of an alleged default or impropriety in the steps leading to their execution would be to undermine and frustrate the clear purpose of the Comalco Act and Aurukun Act.21

Once the agreements were executed, the powers conferred by the agreements, in particular the powers to grant mining leases, acquired the force of statutory powers. Whatever consequences flowed to the Wik Peoples from the granting of these leases are not actionable in loss or damages, for those consequences are the result of acts sanctioned by statute.22

Implications of the Decision

The High Court's decision has implications for native title claimants, pastoralists (and possibly other statutory leaseholders)23 , State and Territory Governments (who are responsible for land management generally), the NTA, and for the development of the common law relating to
native title.

Native Title Claims

The finding that the grant of a pastoral lease does not necessarily extinguish native title means that the Wik and Thayorre claims, and other claims over areas of land the subject of a pastoral lease (and possibly other forms of statutory leasehold), may proceed to determination. It also opens the way for fresh claims to be made over pastoral and other Crown lease land.

Activities by Pastoralists

The decision in Wik does not affect the validity of the Mitchellton and Holroyd pastoral leases, nor does the decision of itself affect the exercise of the rights granted thereunder.24  However, the decision makes clear that the lessees' rights are circumscribed by the terms of the statute and the lease; those rights may not be as extensive as previously thought.

There is also considerable uncertainty as to the practical effects of co-existence and the operation of the NTA (see below). The rights of a pastoral lessee must be determined by reference to the terms of the lease and statute under which it was granted.25  However, such rights are not generally set out in any detail in either the lease instrument or the relevant statute.26  Similarly, any co-existing native title rights are undefined. This makes it extremely difficult to ascertain what activities are authorised by a lease and what incidents of native title must yield.

Common Law

Wik provides further elaboration of the general principles governing the law of native title and its extinguishment. Importantly, for the purpose of determining whether native title has been extinguished by the grant of an inconsistent interest in land, the majority Justices suggest that native title rights are not automatically extinguished simply because of the potential for inconsistency between a grantee's rights and the rights of native title holders. Rather, their Honours appear to take the approach that native title rights may (and perhaps even will) survive where they are potentially consistent with the rights of a grantee.27 

There are indications in some of the judgments that suggest there may be qualifications to the generally accepted view that native title is extinguished by the grant of inconsistent rights in land, rather than the exercise of those rights.28  Further, Wik does not resolve the issues of whether native title may revive, and whether governments owe a general fiduciary duty to native title holders.29 

The NTA

The 'future act' regime set up under the NTA restricts and regulates acts which 'affect' native title, ie. acts that extinguish or are otherwise wholly or partly inconsistent with the continued existence, exercise or enjoyment of native title.30  Although the NTA did not purport to pre-empt the High Court's consideration of this issue, the NTA was drafted on the understanding that native title was extinguished by a valid grant of a lease.31  The fact that native title rights may co-exist with the rights of a pastoral lessee means that the 'future act' regime may restrict and regulate many acts by governments and others in relation to land which is or has been subject to pastoral lease.

For example, where the rights of native title holders co-exist with those of a pastoral lessee, there is a risk that activities undertaken by the lessee under their lease (say, the construction of a shed), and permits granted by a government to the lessee or to third parties to undertake activities on the pastoral lease land (say, a permit granted to the lessee to clear land for the purpose of constructing the shed) may 'affect' native title.32  If so, the activity or permit will be invalid under the NTA unless it satisfies the 'freehold test' contained in the NTA (that is, the activity could have been done or the permit could have been granted if the native title holders instead held freehold title) or it is otherwise permissible, for example, as a 'low impact future act'.33 

Even if the activity could be validly undertaken under the NTA, native title holders will be entitled to the same procedural and compensation rights as freeholders.34  Further, the 'right to negotiate' procedures under the NTA may apply to the grant of mining and exploration titles over pastoral lease land, and to certain compulsory acquisitions of pastoral lease land where the purpose of the acquisition is to confer rights on third parties.35  Consequently, mining titles granted by the Crown over pastoral lease land after 1 January 1994 that did not follow the right to negotiate procedure may be invalid.

The WIK Task Force

To develop its response to the Wik decision, the Government has set up the Wik Task Force in the Department of the Prime Minister and Cabinet, and comprising officers of various Commonwealth departments (including the Attorney-General's Department).

Notes

1 (1996) 141 ALR 129.

2 The Wik Peoples subsequently lodged a native title determination application with the National Native Title Tribunal pursuant to the NTA. This application is currently the subject of mediation before the Tribunal.

3 The Wik Peoples v The State of Queensland Ors (1996)
134 ALR 637.

4 Per Toohey J at 174; Gaudron J at 204; Gummow J at 226; and Kirby J at 266 and 279-280.

5 Per Toohey J at 181; and Gaudron J at 208 and 218.

6 Per Toohey J at 181; Gaudron J at 208; and Kirby J at 279
and 284.

7 Per Gaudron J at 208; Gummow J at 233 and Kirby J at 279 and 282-283.

8 Per Toohey J at 187; Gaudron J at 209; and Gummow J at 236-237.

9 Per Toohey J at 185 and 190; and Kirby J at 279 and 284-285.

10 At 145; cf. Gaudron J at 205-206, Gummow J at 242, and Kirby J at 280-281.

11 In his Honour's opinion, the fact that the grantees of the Mitchellton pastoral leases never entered into possession of the land did not prevent the legal estate from vesting in the lessee because section 6 of the 1910 Act alters the common law by providing that an estate vests in a lessee upon a grant being made in the prescribed form (at 150-151).

12 At 153 and 155.

13 Per Brennan CJ at 153; Gaudron J at 193; Gummow J at 226 and 233; and Kirby J at 274-275 and 284.

14 For example, Gaudron and Gummow JJ consider whether the actions of the grantee in satisfying the special conditions placed on the grant of the second Holroyd pastoral lease may as a matter of fact have extinguished or impaired native title rights by preventing their exercise (Gaudron J at 218; Gummow J at 247; and see also Kirby J at 270-271).

15 Per Toohey J at 170, 185, 188 and 190; and Gummow J at 248.

16 At 155 and 160.

17 However, comments by Gummow J, who stated that he approached the case on the assumption that no such fiduciary duty existed, suggest that he considers there to be no such duty (see 220). On the other hand, Kirby J, in the context of examining the Queensland Parliament's intention behind the1910 and 1962 Acts refers to a 'principle protective of the rights of Aboriginal people' that is 'not new to the common law', and the 'duty which the Crown owed, in honour, to native people who were under the Crown's protection'
(at 283).

18 At 160. His Honour does, however, suggest that a discretionary power conferred upon the Crown by statute or otherwise, for the benefit of another, may give rise to fiduciary obligations (at 161).

19 At 161.

20 Per Brennan CJ at 163.

21 Per Kirby J, with whom the other majority Justices agreed on this issue, at 290.

22 Per Brennan CJ at 163; and Kirby J at 290 and 292.

23 See Kirby J at 285.

24 Per Toohey J at 190, in a postscript that was written with the agreement of the other majority Justices.

25 The rights granted under a pastoral lease vary from one jurisdiction to another, and also under the different statutory regimes of each jurisdiction.

26 For a general discussion of the term 'pastoral purposes', see Toohey J at 175 and Gummow J at 245.

27 Per Toohey J at 184; Gummow J at 233 and 247; and Kirby J at 284.

28 See Gaudron J at 218; and Gummow J at 247.

29 The Mitchellton and Holroyd leases contained no express reservation in favour of indigenous access rights, and the effect of such a reservation on native title is also yet to be considered by the High Court.

30 See sections 22, 23, 226, 227, 233, 235 and 236 of the NTA. There is no requirement that an act be substantially inconsistent with the continued existence, exercise or enjoyment of native title rights in order to 'affect'
those rights.

31 See the Preamble to the NTA.

32 Cf Gummow J at 247.

33 See section 234 of the NTA.

34 Section 23 of the NTA.

35 See section 26 of the NTA.

ISSN 1448-4803 (Print)
ISSN 2204-6283 (Online)

The material in this briefing is provided for general information only and should not be relied upon for the purpose of a particualr matter. Please contact the Australian Government Solicitor before any action of decision is taken on the basis of any of the material in this briefing.

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