High Court opens the door to native title compensation in the Northern Territory

The High Court of Australia has rejected the Commonwealth’s arguments made in its appeal of the Gumatj clan’s compensation application for the acquisition of their native title rights, in a landmark decision.¹

The High Court has held that the extinguishment of native title rights and interests is the taking of property, and that the Commonwealth is required to provide compensation on just terms for the acquisition of that property, potentially paving the way for further native title compensation claims in the Northern Territory.

In this article we discuss the decision and its potential impact on the native title landscape.

Aboriginal and Torres Strait Islander readers are advised that the following contains the name of a deceased person.

Background

Dr Djawa Yunupingu (now deceased) made a compensation application on behalf of the Gumatj clan under the Native Title Act 1993 (Cth) (NTA), seeking compensation for the effects of certain executive and legislative acts done between 1911 and 1978 in the Gove Peninsula, in north-eastern Arnhem Land.

The Northern Territory became a territory of the Commonwealth in 1911. Between then and 1978 (being the year in which the Northern Territory Self-Government Act 1978 (Cth) came into force), the Commonwealth relied on its powers under section 122 of the Constitution (commonly referred to as “the Territories Power”) to make laws in the Northern Territory.

The Full Court of the Federal Court determined the matter in favour of Dr Yunupingu, and the Commonwealth appealed the decision to the High Court.

The arguments raised

Dr Yunupingu argued that several ‘compensable acts’ (including the grant of a mission lease and special mineral leases, and the enactment of mining ordinances) by the Commonwealth on Gumatj country between 1911 and 1978 were invalid, because:

• the acts were done under the authority of the Territories Power;
• the acts were a law with respect to the acquisition of property, to the extent that the law purported to appropriate or grant an interest in land; and
• an exercise of the Territories Power is subject to compliance with section 51(xxxi) of the Constitution.

Section 51(xxxi) permits the Commonwealth to make laws for the acquisition of property on just terms (our emphasis).

Dr Yunupingu argued that as just terms were not provided for the acquisition of property (being the Gumatj clan’s claimed native title), each compensable act by the Commonwealth was invalid at the time, making each a ‘past act’ under the NTA. As a result, Dr Yunupingu claimed that the Gumatj clan was entitled to compensation for these compensable acts.

The Commonwealth relied on the previous High Court authority, Teori Tau v Commonwealth,² in arguing that the ‘just terms’ requirement in section 51(xxxi) of the Constitution does not apply to laws enacted under the Territories Power.

The Commonwealth also argued that native title rights are “inherently defeasible” or prone to extinguishment, as the common law must “recognise” native title for it to be enforceable, and this recognition is conditional on the overriding power of the Crown to deal with land or waters. Because of this, the impairment or extinguishment of native title would not be an ‘acquisition of property’ and therefore, section 51(xxxi) would not be relevant.

Both of the Commonwealth’s arguments were rejected by the High Court.

The Court’s decision

In Teori Tau, the High Court held that the Territories Power was unlimited and unqualified, as it was not ‘concerned’ with the distribution of legislative power between the Commonwealth and the States, and accordingly it was not subject to the ‘just terms’ requirement under section 51(xxxi) of the Constitution (or any other paragraphs of section 51). The ruling in Teori Tau has been challenged in later High Court cases, most recently Wurridjal v Commonwealth,³ where four Justices of the High Court commented that Teori Tau should be reopened and overruled.

The Commonwealth argued that Teori Tau was not overruled as these statements did not form a fundamental part of the reasoning for the decision in Wurridjal. The majority of the High Court agreed that Teori Tau was not yet overruled, but noted its authority was significantly weakened following Wurridjal and other challenges.

The majority considered the Commonwealth’s argument that section 51(xxxi) only limits a law with respect to the acquisition of property under the Territories Power if the law is "made" under both the Territories Power and another source of legislative power in section 51 of the Constitution, and not if the law is "made" under the Territories Power alone.

The majority rejected this argument, as drawing a distinction between a law "made" under the Territories Power alone and a law "made" under that and another source of power contradicts the well established principle that that a law relating to a subject within Commonwealth power does not cease to be valid because it touches or affects a topic outside Commonwealth power, and a single law can possess more than one character. The majority also declared that Teori Tau must be overruled, and that the Territories Power is not disjointed from the other provisions of the Constitution, such as the powers under section 51.

The Commonwealth also argued that the extinguishment of native title rights is not the taking of property as native title rights are “inherently defeasible”, and therefore the compensable acts did not amount to an acquisition of property and section 51(xxxi) would not apply.

The majority outlined that native title has its origin in the traditional laws and customs observed by the traditional custodians of that land, and extinguishment at common law does not extinguish native title rights and interests for the purposes of traditional laws and customs, it only means that the rights are no longer enforceable as common law rights.

The majority then considered whether common law recognition of native title was:

• conditional, in that native title is recognised only on the condition that recognition will be withdrawn on an exercise of legislative or executive power; or
• an absolute rule in that native title is recognised, but if a subsequent effective exercise of power is inconsistent with this recognition, recognition will be withdrawn, not as a result of inherent defeasibility, but because of the effect of the exercise of power.

The majority held the latter to be correct, and that while the withdrawal of common law recognition is a ‘taking’ of native title rights, it does not make native title ‘inherently defeasible’ because it continues to exist under traditional laws and customs.

Further, the majority’s view was treating native title as defeasible at common law when it is not defeasible under traditional law and customs would undermine the principle established in Mabo v Queensland (No 2)⁴ that all persons, including native title holders, are equal before the law in the enjoyment of their human right to own and inherit property. Ultimately, it was held that common law recognition of native title rights and interests existing under traditional laws and customs is, and always has been, unconditional recognition.

Further, Justice Gordon stated in her judgment that “[n]ative title is "property"; property which is enduring, substantial and significant.”⁵

As such, the extinguishment of native title is an acquisition of property for the purposes of section 51(xxxi).

What does this mean for native title compensation?

This decision of the High Court is a significant step towards compensation for native title holders in the Northern Territory, as it confirms that:

• Teori Tau is overruled; and
• any acquisition of property (including the extinguishment of native title rights) by the Commonwealth in the Northern Territory between 1911 and 1978 was only valid at the time if it was made on just terms.

Previously, it was assumed that compensation was only available for acts that impaired or extinguished native title after the commencement of the Racial Discrimination Act 1975 (Cth) (RDA), as it was recognised in Mabo v Queensland (No 2) that the introduction of the RDA invalidated acts (such as acquisitions of property) which were done without providing relevant native title parties with the same rights that would have been available to ordinary landowners.

This High Court decision opens the door for native title holders across the Territory to seek compensation for past acts done by the Commonwealth which were previously thought to have validly extinguished their native title. It remains to be seen whether this decision will lead to similar arguments being tested in other Australian jurisdictions under relevant State legislation.

This case also solidifies that the common law recognition of native title is an absolute rule, and clarifies that native title is proprietary in nature. This indicates that courts are becoming more open to giving full recognition and equality of treatment to native title rights and interests.

1.Commonwealth of Australia v Yunupingu [2025] HCA 6.

2. [1969] HCA 62.
3. [2009] HCA 2.
4. (1992) 175 CLR 1.
5. Commonwealth of Australia v Yunupingu [2025] HCA 6 [143].