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26 Nov 12
Mining lease does not extinguish native title

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By a majority of two to one, in Brown v State of Western Australia [2012] FCAFC154 (Brown), the Full Federal Court has ruled that the grant of a mining lease does not extinguish native title in that part of the lease area the lease holder has developed as part of its mining operations.

In doing so, the Court has overturned the earlier decision in De Rose v South Australia (No. 2) [2005] SCAFC 110 (De Rose #2). In that case, the Full Federal Court found that some mining activities extinguished native title when, and in the area, the mining activities occurred.

As a result of Brown, the Court has opened the door for a likely High Court challenge. Importantly, the decision has no effect on the rights of current lease holders, or the rights of holders of validly granted leases in the future, but it does change the understanding of the extinguishing effects of activities under certain leases, including mining, pastoral and agricultural leases.

In Brown, the Federal Court was asked to consider if arrangements, including the grant of two mining leases, granted exclusive possession and, therefore, extinguished the Ngarla People’s native title over the whole of the lease areas or, alternatively, that the grants extinguished native title in those areas developed as part of the mining operations. The operations included open-cut mining, conducting crushing and screening, and undertaking improvements such as railways and roads, amongst other things. As the State had granted the leases before 1975, the Court considered the extinguishing effects of the grants under the common law (the grants falling outside of the extinguishment regime under the Native Title Act 1993 (Cth)) (NTA).

Extinguishment occurs as a result of legislative or executive acts that result in the grant of rights that are inconsistent with native title rights: if the validly created rights are inconsistent with native title rights, the native title rights will be extinguished to the extent of the inconsistency. In Brown, despite finding that the joint-venturers’ rights under the mining leases were inconsistent with native title, Justice Greenwood found that the leases’ temporality meant that the rights under the leases were only inconsistent to the extent the joint venturers carried on the activities contemplated by them; if the joint venturers stopped performing activities under the leases, or the leases came to an end, the Ngarla People could again exercise their native title rights.

Justice Barker reached the same conclusion, but placed more reliance on the majority finding in The Wik Peoples v State of Queensland (1996) 187 CLR 1 (Wik) that the grant of various pastoral leases did not evince an intention to grant exclusive possession. Where there is no grant of exclusive possession, and there was otherwise no inconsistency in rights (that is, the rights of the pastoralist could co-exist with the native title holders), the performance of a right giving rise to a conflict between native title and the rights of the lease holder (for example, the construction of improvements and the development of a mine) will result in the native title rights yielding for the period of the conflict.

Both majority judgments in Brown acknowledged that native title in the area of the leases were prevented from being exercised, and would yield to the rights of the lease holder, for the term of the lease. However, Justice Greenwood appears to suggest the grant of a mining lease has no extinguishing effect at all – even on the native title right to exclude people from the area of the mining lease. Rather, despite finding the Mt Goldsworthy leases wholly inconsistent with native title, according to Justice Greenwood the grant of a lease would appear to have the same effect on the native title right to exclusive possession as with all other native title rights: to the extent there is a conflict between the right to exclusive possession and the right of the lease holder under the mining lease, the native title right would yield to the extent of the conflict, but otherwise resume in full once the lease activities, or the lease itself, came to an end.

Justice Barker on the other hand appeared to accept that the grant of a pastoral lease (and by extension a mining lease) would extinguish the native title right to exclude others from the area of the lease. Nevertheless, the majority judgments throw immediate doubt on the extinguishing effects of improvements on pastoral leases and mining leases, and possibly other tenures. For all mining leases granted before the advent of the Racial Discrimination Act 1975 (Cth), and for all non-exclusive pastoral and agricultural leases granted before 1 December 1996 and that are non-exclusive possession acts under the NTA (and that are not category A past acts), the extinguishing effects of the grants are determined by reference to the common law. 

As a result of Brown, these extinguishing effects are now left to be determined by two conflicting Full Federal Court judgments (De Rose #2 and Brown). Brown also throws doubt on the terms of past native title determinations, many of which the Federal Court has made reflecting the decision in De Rose #2 by noting extinguishment in developed areas. To that extent, if the decision in Brown holds, there may be scope for native title holders to apply to vary approved determinations of native title under section 13 of the NTA.

 

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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