Water and infrastructure mining tenure found invalid

The Narrier Federal Court decision, made in December 2016, changes the risk profile of interests granted other than in strict compliance with the correct future act procedures under the Native Title Act.

The decision suggests non-compliance with any applicable future act procedures under the Native Title Act can result in an interest being invalid as against native title interests, contrary to previous decisions which held that only a failure to comply with the “right to negotiate” procedures results in invalidity. The law on this point is now more uncertain, which increases the risk of a challenge to the validity of such an interest.

The decision also provides that “Subdivision H” future act procedures do not apply to miscellaneous licences granted under the WA Mining Act for searching for groundwater. This raises doubt about the validity of such licences granted in accordance with Subdivision H.

Statutory framework

Most acts (such as grant of mining tenements) which affect native title are ‘future acts’ which must comply with the future act provisions of the Native Title Act 1993 (Cth) (NTA).

The future act provisions are in Subdivisions G to P of Division 6, Part 2 of the NTA. Different subdivisions apply depending on the nature and purpose of the act, and each subdivision accords native title holders and registered native title claimants different procedural rights.

For example, the grant of a mining lease generals falls within Subdivision P (right to negotiate). The grant of a mining tenement for the sole purpose of the construction of infrastructure associated with mining generally falls under Subdivision M (right to object). The grant of licence to take water under water regulation legislation generally falls under Subdivision H (right to comment).

The decision

On 16 December 2016, Justice Mortimer handed down her decision in Narrier v State of Western Australia [2016] FCA 1519 (Narrier) about a number of issues in dispute in the Tjiwarl and Tjiwarl #2 native title claims.  It concluded that a determination of native title in favour of the Tjiwarl claim group should be made.

A native title determination must include a declaration of non-native title interests in the area and the relationship between those interests and the determined native title. It was in this context that Mortimer J considered the validity, as against native title rights and interests, of the grant of five miscellaneous licences (MLs) under the Mining Act 1978 (WA) (Mining Act).

Three of the MLs were for purposes relating to powerline, road and pipeline infrastructure. Mortimer J confirmed that Subdivision M rather than Subdivision P applied to the grant of those MLs. There was no evidence that the procedures under section 24MD(6A) or (6B) in Subdivision M had been followed. On the basis of non-compliance with those provisions, she held each of these MLs was invalid as against native title.

This was contrary to comments made by the Full Federal Court in Lardil.¹ In that case, each of the three judges observed that only non-compliance with Subdivision P would invalidate an interest, because only Subdivision P makes compliance with the subdivision as a condition of validity. This point was not a deciding factor in Lardil, so the judges’ comments were not strictly binding in Narrier. However, the Full Court’s comments in Lardil are so clear and persuasive that they have been adopted in several other decisions by single judges of the Federal Court.²

The two other MLs were licences to search for groundwater. Mortimer J found the grant of those MLs did not fall within the scope of Subdivision H because the legislation they were granted under (i.e. the Mining Act) was not legislation relating to the management or regulation of water, contrary to a previous decision of the National Native Title Tribunal.³ As there was no argument that another future act procedure applied, Mortimer J held these MLs were also invalid as against native title.

Implications

Narrier creates uncertainty about whether a failure to comply with future act procedures (other than Subdivision P) can result in invalidity as against native title. It does not overrule the previous decisions mentioned above, and arguably the Full Court’s observations in Lardil remain a correct statement of the law on this point. However, Narrier increases the risk of a native title party challenging the validity of interests which may not have been granted in strict compliance with the correct future act procedures under the Native Title Act. Such a challenge is most likely to arise in the context of a determination (litigated or by consent) of a native title claim overlapping the potentially invalid interest, as a determination must identify non-native title interests in the determination area and the relationship between those interests and the determined native title rights and interests.

Narrier also increases the risk of a native title party challenging the validity of a current miscellaneous licence for the purpose of searching for groundwater (or similar purposes) granted in compliance with Subdivision H. Even if Lardil is accepted as correct, it could be argued that if Subdivision H does not apply then the grant of such a licence must fall within Subdivision P, which does require compliance as a condition of validity.

If an interest is invalid as against native title, the native title holders or claimants may be able to obtain an injunction to prevent or delay works under the interest, and may be entitled to damages for the effect of past works on their native title rights and interests. Such proceedings are more likely to be initiated by determined native title holders, as native title claimants may have difficulty providing sufficient proof of their native title for the purpose of those proceedings.

However, the implications of Narrier will be different if it is appealed and the Full Federal Court decides these issues differently.

What should you do?

1. Identify any interests held by your business which may have been granted other than in compliance with the correct future act procedures (including any water-related mining tenure granted in accordance with Subdivision H) and consider the risk of a challenge to their validity as against native title.
2. Mitigate any such risk by ensuring any native title agreements confirm your interests are valid and prevent the parties from challenging the validity of those interests.
3. If a key interest may have been granted invalidly in native title terms, it can be retrospectively validated under a registered Indigenous Land Use Agreement (ILUA), so long as the State (or other party to which the grant of the interest is attributable) is a party. ILUAs can also provide for future tenure to be granted without needing to comply with the future act regime set out in the Native Title Act. Note: there are proposed amendments to the NTA in relation to ILUAs see here.
4. Join any overlapping native title claims as a respondent party, for an opportunity to ensure your interests are recognised as valid interests which prevail over native title in any determination.

If you have any questions, or would like to know how your business might be affected, phone or email the key contacts below.

Endnotes

1. Lardil, Kaiadilt, Yangkaal & Gangalidda Peoples v State of Queensland [2001] FCA 414.
2. Eg. Daniel v Western Australia [2004] FCA 1388 at [63] (in relation to Subdivision I); CG (decd) obh of Badimia People v State of Western Australia [2015] FCA 204 at [942] (in relation to Subdivision K); Banjima People v State of Western Australia (No 2) (2013) 305 ALR 1 at [986] – [990] (in relation to Subdivision M).
3. FMG Pilbara Pty Ltd / NC (deceased) on behalf of the Yindjibarndi People / Western Australia [2012] NNTTA 103.