Northern Territory v Griffiths

HIGH COURT OF AUSTRALIA

KIEFEL CJ,
BELL, GAGELER, KEANE, NETTLE, GORDON AND EDELMAN JJ

D1/2018

NORTHERN TERRITORY OF AUSTRALIA   APPELLANT

AND

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

D2/2018

COMMONWEALTH OF AUSTRALIA   APPELLANT

AND

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

D3/2018

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

AND

NORTHERN TERRITORY OF AUSTRALIA &
ANOR  RESPONDENTS

Northern Territory v Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples
Commonwealth of Australia v Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples

Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples v Northern Territory

[2019] HCA 7

13 March 2019

D1/2018, D2/2018 & D3/2018

ORDER

Matter Nos D1/2018 and D2/2018

1. Appeal allowed in part.

2.Set aside Order 2 of the Orders of the Full Court of the Federal Court of Australia made on 9 August 2017 and, in its place, order that:

"(1)Paragraph 3 of the further amended order made by the trial judge dated 24 August 2016 be set aside and, in its place, order:

'The compensation payable to the native title holders by reason of the extinguishment of their non-exclusive native title rights and interests arising from the acts in paragraph 1 above is:

(a)compensation for economic loss in the sum of $320,250;

(b)interest on (a) in the sum of $910,100;

(c)compensation for cultural loss in the sum of $1,300,000;

Total:  $2,530,350.

Note: post-judgment interest is payable on this total under s 52 of the Federal Court of Australia Act 1976 (Cth), accruing from 25 August 2016.'

(2) Delete order 9."

Matter No D3/2018

Appeal dismissed.

On appeal from the Federal Court of Australia

Representation

S L Brownhill SC, Solicitor-General for the Northern Territory, with T J Moses for the Northern Territory of Australia (instructed by Solicitor for the Northern Territory)

S A Glacken QC with G A Hill and L E Hilly for the Ngaliwurru and Nungali Peoples (instructed by Northern Land Council)

S B Lloyd SC with N Kidson for the Commonwealth of Australia (instructed by Australian Government Solicitor)

P J Dunning QC, Solicitor-General of the State of Queensland, with A D Keyes for the Attorney-General of the State of Queensland, intervening (instructed by Crown Solicitor (Qld))

C D Bleby SC, Solicitor-General for the State of South Australia, for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor's Office (SA))

G T W Tannin SC with C I Taggart for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor's Office (WA))

S J Wright SC with M Georgiou for the Central Desert Native Title Services Limited and the Yamatji Marlpa Aboriginal Corporation, intervening (instructed by the Central Desert Native Title Services)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Northern Territory v Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples
Commonwealth of Australia v Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples
Mr A. Griffiths (deceased) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples v Northern Territory

Aboriginals – Native title rights – Assessment of compensation – Where "previous exclusive possession act[s]" within meaning of s 23B in Div 2B of Pt 2 of Native Title Act 1993 (Cth) ("NTA") extinguished non-exclusive native title rights and interests held by Ngaliwurru and Nungali Peoples ("Claim Group") – Where Claim Group entitled to compensation under Div 5 of Pt 2 of NTA – Whether economic loss and cultural loss assessed separately – Principles of assessment for compensation for economic loss – Whether economic value of Claim Group's native title rights and interests equivalent to freehold value of affected land – Whether reduction from freehold value appropriate and how calculated – Whether inalienability of native title rights and interests a relevant discounting factor – Principles of assessment for compensation for cultural loss – Whether trial judge erred in assessment of cultural loss – Whether award manifestly excessive – Whether award met community standards.

Interest – Whether simple or compound interest payable on award for economic loss – Upon what basis simple interest payable.

Words and phrases – "compensable acts", "compensation", "compound interest", "compulsory acquisition", "cultural loss", "discount", "easement", "economic loss", "exclusive native title rights and interests", "extinguishing act", "inalienability", "just terms", "manifestly excessive", "native title", "non-economic loss", "non-exclusive native title rights and interests", "objective economic value", "percentage reduction from full exclusive native title", "previous exclusive possession act", "simple interest", "solatium".

Constitution, 51(xxxi).
Lands Acquisition Act (NT), Sch 2.
Native Title Act 1993 (Cth), Pts 1, 2, 15.
Racial Discrimination Act 1975 (Cth), s 10.

1. KIEFEL CJ, BELL, KEANE, NETTLE AND GORDON JJ.   These appeals[1] concern the amount of compensation payable by the Northern Territory of Australia to the Ngaliwurru and Nungali Peoples ("the Claim Group")[2], pursuant to Pt 2 of the Native Title Act 1993 (Cth), for loss, diminution, impairment or other effect of certain acts on the Claim Group's native title rights and interests over lands in the area of the township of Timber Creek in the north‑western area of the Northern Territory.

   [1]From a judgment of the Full Court of the Federal Court of Australia (North A‑CJ, Barker and Mortimer JJ):  Northern Territory v Griffiths (2017) 256 FCR 478 allowing in part appeals from a judgment of Mansfield J (Griffiths v Northern Territory [No 3] (2016) 337 ALR 362).

   [2]Griffiths (2016) 337 ALR 362 at 366 [13], 376 [71(4)].

2. The issues are extensive, and in some respects complex, but fundamentally there are three questions:

   (1) how the objective economic value of the affected native title rights and interests is to be ascertained;

   (2) whether and upon what basis interest is payable on or as part of the compensation for economic loss; and

   (3) how the Claim Group's sense of loss of traditional attachment to the land or connection to country is to be reflected in the award of compensation.

3. For the reasons which follow, those questions should be answered thus:

   (1) the objective economic value of exclusive native title rights to and interests in land, in general, equates to the objective economic value of an unencumbered freehold estate in that land.  In these appeals, the objective economic value of the non-exclusive native title rights and interests of the Claim Group is 50 per cent of the freehold value of the land;

   (2)interest is payable on the compensation for economic loss, and in the circumstances of this case, on a simple interest basis, at a rate sufficient to compensate the Claim Group for being deprived of the use of the amount of compensation between the date at which compensation was assessed and the date of judgment; and

   (3)the compensation for loss or diminution of traditional attachment to the land or connection to country and for loss of rights to gain spiritual sustenance from the land[3] is the amount which society would rightly regard as an appropriate award for the loss.  The appropriate award for the cultural loss in these appeals is $1.3 million.

   [3]Referred to as "non-economic loss" or "solatium" in the courts below and by the parties in their appeal grounds but, for reasons to be explained later in this judgment, better expressed as "cultural loss".

4. These reasons are in seven parts:  facts[4]; claim for compensation[5]; legislative framework[6]; economic loss claim[7]; interest on the economic loss claim[8]; cultural loss[9]; and orders[10].

   A        Facts

   [4]Part A, paras [5]-[10].

   [5]Part B, paras [11]-[18].

   [6]Part C, paras [19]-[54].

   [7]Part D, paras [55]-[107].

   [8]Part E, paras [108]-[151].

   [9]Part F, paras [152]-[237].

   [10]Part G, paras [238]-[239].

5. Timber Creek is a tributary of the Victoria River situated in the north-western corner of the Northern Territory.  The area was first explored by non-Aboriginal people in the mid-nineteenth century and, around the end of that century, a number of pastoral leases were granted in the Victoria River district[11], including one pastoral lease granted in 1882 over the area that now comprises the town of Timber Creek[12].  The town, which was proclaimed as such in 1975, is located on the Victoria Highway about halfway between Katherine and Kununurra[13] and covers an area of approximately 2,362 hectares[14].  It is bounded on the north by the Victoria River and on the east, south and west by Aboriginal land granted under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). It has a population of approximately 230 people, some two thirds of whom identify as Aboriginal; principally, native title holders. The principal buildings, apart from houses, are a road-house and general store, a hotel and caravan park, local council offices, a police station, a primary school, and a health clinic. The town's economy is centred on tourism and associated services and regional service delivery[15]. 

   [11]Griffiths (2016) 337 ALR 362 at 368 [23]-[24].

   [12]Griffiths v Northern Territory [2014] FCA 256 at [41]-[42].

   [13]Northern Territory v Griffiths (2017) 256 FCR 478 at 484 [7].

   [14]Griffiths (2016) 337 ALR 362 at 370 [33].

   [15]Griffiths (2016) 337 ALR 362 at 369 [29], [32].

   Compensable acts

6. Between 1980 and 17 December 1996, the Northern Territory was responsible for 53 acts, on 39 lots and four roads within the town, comprising various grants of tenure and the construction of public works, which were later held to have impaired or extinguished native title rights and interests and which give rise to the Claim Group's entitlement to compensation under Pt 2 of the Native Title Act ("the compensable acts").  Twenty-two of the compensable acts were grants of development leases incorporating covenants to effect improvements in exchange for freehold title.  The remainder of the acts consisted of a grant of a Crown lease, freehold grants to government authorities on which, in some cases, public works were later constructed, and public works constructed without any underlying tenure[16].  The total area of land affected by the compensable acts was approximately 127 hectares ("the application area"), comprising just over 6 per cent of the area previously determined to be land in relation to which native title exists. 

   [16]Northern Territory v Griffiths (2017) 256 FCR 478 at 485-488 [10]-[11].

   History of claims

7. In 1999 and 2000, the Claim Group[17] instituted three proceedings under the Native Title Act for determination of native title to land within the boundaries of the town[18].  The trial judge (Weinberg J) held[19] that the Claim Group had native title rights and interests comprised of non-exclusive rights to use and enjoy the land and waters to which s 47B of the Native Title Act applied in accordance with their traditional laws and customs.  On appeal, the Full Court of the Federal Court (French, Branson and Sundberg JJ) varied[20] his Honour's determination, holding in relation to those parts of the determination area to which s 47B applied that the Claim Group's native title rights and interests comprised a right to exclusive possession, use and occupation, but otherwise affirmed Weinberg J's determination. The total area of land determined to be subject to exclusive native title was approximately 2,053 hectares.

   [17]The claimant group found to have held native title is now the compensation Claim Group:  Griffiths (2016) 337 ALR 362 at 366 [13]; see also at 376 [71(4)].

   [18]Griffiths v Northern Territory (2006) 165 FCR 300 at 305 [8]‑[10].

   [19]Griffiths v Northern Territory (2006) 165 FCR 300 at 369 [703]‑[705], 370 [716], 375 [797].

   [20]Griffiths v Northern Territory (2007) 165 FCR 391 at 428 [125], 429 [128].

8. On 2 August 2011, the Claim Group instituted a claim for compensation under s 61(1) of the Native Title Act in respect of the compensable acts[21].  The compensation application concerned an area wider than that the subject of the determination, and included specified areas within the town where there had been no determination that native title existed.  The parties were agreed, however, that native title existed in relation to the application area at the time of the act or acts for which compensation was claimed[22].  By a statement of agreed facts, the parties adopted the terms of the Full Court's native title determination as a description of the native title potentially affected by the compensable acts[23]. 

   [21]Griffiths (2016) 337 ALR 362 at 366 [7], 370 [37]-[40].

   [22]Griffiths [2014] FCA 256 at [11]-[12], [16].

   [23]Griffiths (2016) 337 ALR 362 at 367 [18].

9. As a preliminary issue, the trial judge (Mansfield J) determined that the historic grant of pastoral leases was effective at common law to partially extinguish native title to the application area and that, in compensation proceedings as opposed to the proceedings for the determination of native title, s 47B of the Native Title Act, being inapplicable, did not permit the common law extinguishment of exclusive native title to be disregarded[24]. 

   [24]Griffiths [2014] FCA 256 at [43], [46], [67].

   Native title rights and interests

10. Accordingly, Mansfield J found[25] that the native title rights and interests affected by the compensable acts consisted of the following non-exclusive rights exercisable in accordance with traditional laws and customs of the Claim Group:

    [25]Griffiths (2016) 337 ALR 362 at 376 [71(3)].

    (1)the right to travel over, move about and have access to the application area;

    (2)the right to hunt, fish and forage on the application area;

    (3)the right to gather and use the natural resources of the land such as food, medicinal plants, wild tobacco, timber, stone and resin;

    (4)the right to have access to and use the natural water of the application area;

    (5)the right to live on the land, to camp, and to erect shelters and structures;

    (6)the right to engage in cultural activities, to conduct ceremonies, to hold meetings, to teach the physical and spiritual attributes of places and areas of importance on or in the land and waters, and to participate in cultural practices related to birth and death, including burial rights;

    (7)the right to have access to, maintain and protect sites of significance on the application area; and

    (8)the right to share or exchange subsistence and other traditional resources obtained on or from the land and waters (but not for commercial purposes).

    B        Claim for compensation

11. The claim for compensation was framed, pursuant to s 51(4) of the Native Title Act, in terms that compensation for loss, diminution, impairment or other effect on native title of the compensable acts should consist of the following elements:

    (1)compensation for economic loss of the native title rights and interests to be determined as if the effect of each compensable act was equivalent to the compulsory acquisition of an unencumbered freehold estate in the subject land;

    (2)compound interest at the superannuation rate or alternatively on a compound "risk free rate" of yields on long-term (10 year) government bonds or alternatively simple interest at the Pre‑Judgment Interest Rate fixed by the Federal Court of Australia Practice Note CM16 ("the Practice Note rate") on the amount of compensation awarded for economic loss to be computed from the date as at which the compensation is assessed until judgment or payment; and

    (3)compensation for loss or diminution of connection or traditional attachment to land and intangible disadvantages of loss of rights to live on and gain spiritual and material sustenance from the land, to be assessed by adaptation of the criteria in Sch 2 rr 2(b) (special value) and 9 (intangible disadvantage) of the Lands Acquisition Act (NT), to be assessed as at the time of trial.

    Trial judge

12. The trial judge assessed[26] compensation in the amount of $3,300,661 comprised as follows:

    (1)compensation for economic loss to be assessed at the date at which native title is taken to have been extinguished under the Native Title Act and assessed as being 80 per cent of the unencumbered freehold value of the affected land, namely, $512,400[27];

    (2)interest payable as part of compensation for economic loss on a simple interest basis calculated at the Practice Note rate from time to time and computed from the date of extinguishment of native title until judgment, being a sum of $1,488,261[28]; and

    (3)compensation for non-economic loss payable in the amount of $1.3 million[29].

    [26]Griffiths (2016) 337 ALR 362 at 446 [466].

    [27]Griffiths (2016) 337 ALR 362 at 395-396 [172], 404-405 [232], 446 [466].

    [28]Griffiths (2016) 337 ALR 362 at 407 [246], 408-409 [254], 413 [279], 446 [466].

    [29]Griffiths (2016) 337 ALR 362 at 416-417 [298]-[300], 433 [383], 446 [466].

    Full Court

13. The Full Court varied[30] the trial judge's assessment of economic loss from 80 per cent of the unencumbered freehold value of the affected land as at the date of extinguishment to 65 per cent of the unencumbered freehold value as at that date but otherwise, relevantly, affirmed the trial judge's decision.  Accordingly, the orders of the trial judge were varied to award the Claim Group $416,325 for economic loss and $1,183,121 in interest on that sum, with the total compensation award being $2,899,446.

    [30]Northern Territory v Griffiths (2017) 256 FCR 478 at 520 [139], 590 [468].

    Appeals to this Court

14. By grants of special leave, the Claim Group, the Northern Territory and the Commonwealth each appeal to this Court.

15. The Claim Group appeal on two grounds, being in substance that:

    (1)the Full Court erred in assessing the Claim Group's economic loss at 65 per cent of the freehold value of the subject land and should have assessed it as being the freehold value of the land without reduction; and

    (2)the Full Court erred in awarding interest only on a simple interest basis computed at the Practice Note rate and should have allowed interest on a compound basis computed at the risk free rate.

16. The Northern Territory appeals on grounds in substance that:

    (1)the Full Court erred in rejecting the valuation methodology advocated by one of the valuers who gave evidence, Mr Wayne Lonergan, or alternatively, in assessing the Claim Group's economic loss at any more than 50 per cent of the unencumbered freehold value as at the date of extinguishment; and

    (2)the Full Court erred in affirming the trial judge's assessment of compensation for non-economic loss in the amount of $1.3 million by:

    (a)failing to approach the assessment as an award given as consolation or solace for distress consequent upon a loss for which no monetary value can be put;

    (b)upholding the trial judge's erroneous reliance on the effects of one compensable act on a nearby ritual ground to support a finding that some other, unidentified compensable acts had a collateral detrimental effect on native title beyond the land on which those other, unidentified compensable acts occurred;

    (c)failing to apply a causation analysis consistent with ss 23J and 51(1) of the Native Title Act, by upholding the trial judge's erroneous reliance on the compensable acts as part of an overall erosion of connection to country; and

    (d)failing to find that the award for non-economic loss was manifestly excessive.

17. And the Commonwealth appeals on grounds in substance that:

    (1)the Full Court's assessment of the Claim Group's economic loss at 65 per cent of the freehold value of the subject land was erroneous or manifestly excessive and should not have exceeded 50 per cent;

    (2)the Full Court erred in not holding that the trial judge was in error in awarding interest under s 51(1) of the Native Title Act as part of compensation rather than as interest on compensation;

    (3)the Full Court erred in upholding the trial judge's assessment of non-economic loss in the amount of $1.3 million because they:

    (a)included a component relating to the capacity to conduct rituals on adjacent land not the subject of compensable acts despite the fact that on the facts as found by the trial judge there was no effect on that capacity which was an "effect of" a compensable act within the meaning of s 51(1) of the Native Title Act;

    (b)included a component for a "sense of failed responsibility for the obligation under traditional laws and customs to have cared for and looked after the land" despite there being no evidence that the Claim Group experienced any such feelings over all of the land the subject of the compensable acts and, to the extent that there was evidence that they did experience such feelings, their feelings were the result of a pre-existing absence of a recognised right to control access to the land rather than the "effect of" the compensable acts within the meaning of s 51(1) of the Native Title Act;

    (c)included a component for the purported effect of compensable acts on future descendants of the Claim Group despite the Native Title Act not conferring an entitlement to compensation on persons who would have become members of the Claim Group only after native title had been extinguished;

    (d)failed to find that the trial judge did not consider the geographical extent of the areas of land over which the compensable acts took place in comparison to the overall area of land available to the Claim Group to exercise and enjoy their rights as "native title holders" within the meaning of the Native Title Act and as "traditional owners" under the Aboriginal Land Rights (Northern Territory) Act; and

    (e)found that commercial agreements entered into by the Claim Group, which contained agreed, minimum, solatium-type payments for damage to or destruction of sacred sites, had no relevance to the assessment of compensation; and

    (4)the Full Court erred in failing to hold that the assessment of $1.3 million was manifestly excessive, because they:

    (a)applied the wrong test by asking whether the sum was substantially beyond the highest figure which could reasonably have been awarded, when the correct test was to ask whether the sum was a wholly erroneous estimate of compensation;

    (b)failed to consider the upper limit of a sound discretionary judgment for an award of compensation for non‑economic loss;

    (c)wrongly had regard to decisions of the Inter-American Court of Human Rights in breach of the rules of natural justice and erroneously found that those decisions validated the sum awarded when they were incapable of doing so; and

    (d)wrongly had regard to a 2002 discussion paper entitled "How Can Judges Calculate Native Title Compensation?", in breach of the rules of natural justice.

    The Commonwealth contended that the sum awarded for non‑economic loss should have been in the order of $230,000.

18. The Attorneys-General for the States of South Australia, Queensland, and Western Australia, and the Central Desert Native Title Services Limited and the Yamatji Marlpa Aboriginal Corporation were each granted leave to intervene.

    C        Legislative framework

19. It is necessary to begin by examining and considering the provisions of the Native Title Act[31].The Native Title Act recognises, and protects, native title[32] and provides that native title is not able to be extinguished contrary to the Native Title Act[33]; any extinction or impairment of native title can only be in accordance with the specific and detailed exceptions which the Native Title Act prescribes or permits[34]. 

    [31]Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422 at 440 [32]; [2002] HCA 58, citing TheCommonwealth v Yarmirr (2001) 208 CLR 1 at 35 [7]; [2001] HCA 56 and Western Australia v Ward (2002) 213 CLR 1 at 65-66 [16]; [2002] HCA 28.

    [32]Native Title Act, s 10.

    [33]Native Title Act, s 11(1).

    [34]Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 463; [1995] HCA 47.

20. The scheme of the Native Title Act reflects the context in which it was enacted – it operates upon native title rights and interests defeasible at common law but substantially protected against extinguishment, from 31 October 1975, by the Racial Discrimination Act 1975 (Cth)[35] and, in particular, s 10(1) of that Act[36].

    [35]Native Title Act Case (1995) 183 CLR 373 at 453.

    [36]Section 10(1) of the Racial Discrimination Act provides that "[i]f, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first‑mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin."

21. "Native title" or "native title rights and interests", elaborately defined in s 223[37], comprise a number of elements, all of which must be given effect[38]. Section 223(1) provides that the expression "native title" or "native title rights and interests" means:

    "the communal, group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where:

    (a)the rights and interests are possessed under the traditional laws acknowledged, and the traditional customs observed, by the Aboriginal peoples or Torres Strait Islanders; and

    (b)the Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters; and

    (c)the rights and interests are recognised by the common law of Australia."

    [37]Ward (2002) 213 CLR 1 at 65 [15].

    [38]Yorta Yorta (2002) 214 CLR 422 at 440 [33].

22. As that definition provides, the rights and interests of Aboriginal peoples[39] may be "communal, group or individual".  The rights and interests must be "in relation to land or waters" and have three characteristics:  that they be possessed under the traditional laws acknowledged and the traditional customs observed by the Aboriginal peoples concerned[40]; that, by those traditional laws and traditional customs observed by those Aboriginal peoples, those peoples have a connection with the land or waters[41]; and that the rights and interests be recognised by the common law of Australia[42].

    [39]The definitions of "native title" and "native title rights and interests" relate to the rights and interests of both Aboriginal peoples and Torres Strait Islanders:  see Native Title Act, s 223(1).

    [40]Native Title Act, s 223(1)(a).

    [41]Native Title Act, s 223(1)(b).

    [42]Native Title Act, s 223(1)(c).

23. The first and second of those characteristics – that native title is a bundle of rights and interests possessed under traditional laws and customs and that, by those laws and customs, Aboriginal peoples have a connection with the land or waters – reflect that native title rights and interests have a physical or material aspect (the right to do something in relation to land or waters) and a cultural or spiritual aspect (the connection with the land or waters). 

24. As the plurality in this Court said in Western Australia v Ward[43]:

    "The question in a given case whether [s 223(1)](a) is satisfied presents a question of fact.  It requires not only the identification of the laws and customs said to be traditional laws and customs, but, no less importantly, the identification of the rights and interests in relation to land or waters which are possessed under those laws or customs. These inquiries may well depend upon the same evidence as is used to establish connection of the relevant peoples with the land or waters. This is because the connection that is required by par (b) of s 223(1) is a connection with the land or waters 'by those laws and customs'. Nevertheless, it is important to notice that there are two inquiries required by the statutory definition: in the one case for the rights and interests possessed under traditional laws and customs and, in the other, for connection with land or waters by those laws and customs." (emphasis in original)

    [43](2002) 213 CLR 1 at 66 [18].

25. Not only is native title recognised and protected in accordance with the Native Title Act[44] and not able to be extinguished contrary to the Native Title Act[45], but if native title is extinguished, then the Native Title Act provides for compensation. 

    [44]Native Title Act, s 10.

    [45]Native Title Act, s 11(1).

26. As the Preamble to the Native Title Act records[46], Aboriginal peoples and Torres Strait Islanders have been progressively dispossessed of their lands, largely without compensation, and the enactment of the Native Title Act was intended to rectify the consequences of past injustices.  The provisions of the Native Title Act are intended to secure the adequate advancement and protection of Aboriginal peoples and Torres Strait Islanders and to ensure that they receive the full recognition and status within the Australian nation to which history, their prior rights and interests, and their rich and diverse culture, fully entitle them to aspire.  The Preamble goes on to state:  "[j]ustice requires that, if acts that extinguish native title are to be validated or to be allowed, compensation on just terms … must be provided to the holders of the native title".

    [46]See also Acts Interpretation Act 1901 (Cth), s 13(2)(b).

27. The system established by the Native Title Act to address, in a practical way, the consequences of acts impacting native title rights and interests is complex.  That complexity arises because the Act seeks to deal with concepts and ideas which are both ancient and new; developed but also developing; retrospective but also prospective.  It arises because the Native Title Act requires the just and proper ascertainment and recognition of native title rights and interests; that certain acts that extinguish native title rights and interests are to be validated or allowed; that, where appropriate, native title should not be extinguished, but should be revived after a validated act ceases; and that, where native title rights and interests are extinguished, compensation on just terms is to be provided. 

28. As has been seen, there are different categories of compensable acts in issue, and those acts took place at different times. The statutory source of the entitlement to compensation, and the consequences that flow from validation of an act, depend on the category of act, and whether the act was a past act, an intermediate period act or a previous exclusive possession act within the scope of Divs 2, 2A and 2B of Pt 2 of the Native Title Act.  Hence, the categorisation of the act and the timing of the act are both relevant.

29. Turning first to past acts, they are addressed in Div 2 of Pt 2 of the Native Title Act.  A past act is, relevantly, an act which occurred before 1 January 1994[47] when native title existed in relation to particular land, which act was invalid (apart from the Native Title Act) to any extent but would have been valid to that extent if native title did not exist[48].  In short, a past act is a pre‑January 1994 act which is invalid because of the existence of native title.

    [47]The commencement date of the Native Title Act:  see Native Title Act, s 4(3)(a).

    [48]Native Title Act, s 228.

30. There are four categories of past act.  A category A past act relates to a grant of certain freehold estates, a grant of certain leases and the construction of certain public works[49].  A category B past act relates to a grant of certain leases[50].  A category C past act relates to the grant of mining leases[51] and a category D past act is one that is not a category A, B or C past act[52]. 

    [49]Native Title Act, s 229.

    [50]Native Title Act, s 230.

    [51]Native Title Act, s 231.

    [52]Native Title Act, s 232.

31. The classification of an act affects the impact of the act on native title.  Category A past acts, relevantly, extinguish native title and category B past acts extinguish any native title to the extent of any inconsistency[53].  The non‑extinguishment principle applies to category C and D past acts[54].  Where the non‑extinguishment principle applies, the Native Title Act does not extinguish native title but native title may be suspended wholly or in part to take account of the act[55]. 

    [53]Native Title Act, s 15(1)(a)-(c).

    [54]Native Title Act, s 15(1)(d).

    [55]Native Title Act, s 238.

32. Putting the categories aside, the classification of an act as a "past act" determines the validation mechanism in respect of that act. In the present appeals, all but five of the acts were past acts within the meaning of s 228 of the Native Title Act.  Those past acts were attributed to the Northern Territory[56] and were validated on 10 March 1994 by s 19 in Div 2 of Pt 2 of the Native Title Act and s 4 of the Validation (Native Title) Act (NT). Both of those provisions, in their terms, provide that a past act is valid and is taken always to have been valid. That validation perfected, or made absolute, the compensable acts and removed any restriction by which the acts had no validity as against the native title holders. In short, validation effected a clearing of the native title rights and interests from the freehold title[57]. 

    [56]See also Native Title Act, s 239.

    [57]cf Griffiths v Minister for Lands, Planning and Environment (2008) 235 CLR 232 at 283-284 [181]; [2008] HCA 20.

33. Separate to past acts are "intermediate period acts".  In these appeals, the remaining five acts were intermediate period acts.  Intermediate period acts[58] are acts which, relevantly, occurred between 1 January 1994 and 23 December 1996, where native title existed in relation to particular land, which acts were invalid (apart from the Native Title Act) to any extent but would have been valid to that extent if native title did not exist. Division 2A of Pt 2 of the Native Title Act deals with validation of intermediate period acts[59]. The intermediate period acts were validated on 1 October 1998 by s 22F in Div 2A of Pt 2 of the Native Title Act and s 4A of the Validation (Native Title) Act (NT).

    [58]Native Title Act, s 232A. Intermediate period acts are also classified into four categories – category A, B, C and D: Native Title Act, ss 232B-232E.

    [59]Inserted into the Native Title Act following Wik Peoples v Queensland (1996) 187 CLR 1; [1996] HCA 40, handed down on 23 December 1996. See Native Title Amendment Act 1998 (Cth), Sch 1, item 9.

34. There is a further relevant category of acts, being "previous exclusive possession acts". Division 2B of Pt 2 of the Native Title Act, headed "[c]onfirmation of past extinguishment of native title by certain valid or validated acts", deals with previous exclusive possession acts. Section 23B of the Native Title Act provides that a previous exclusive possession act is, relevantly, a grant made before 23 December 1996 which was validated under Div 2 or Div 2A of Pt 2 of the Native Title Act (thereby confirming that certain validated past acts and intermediate period acts were validated).  Thus, both past acts and intermediate period acts may be previous exclusive possession acts.  The important distinction to bear in mind is that acts to which the non-extinguishment principle applies are not previous exclusive possession acts[60], a point to which it will be necessary to return.

    [60]Native Title Act, s 23B(9B).

35. The majority of the compensable acts in these appeals[61] were previous exclusive possession acts within the meaning of s 23B of the Native Title Act.  Validation of a previous exclusive possession act results in extinguishment of native title[62].  The previous exclusive possession acts in these appeals, attributable to the Northern Territory, extinguished native title[63].   

    [61]Except for acts 1, 3, 15, 17, 19, 21, 23, 25, 27, 29, 36 and 41.  As to the nature of each of the compensable acts, described by reference to act numbers, see Northern Territory v Griffiths (2017) 256 FCR 478 at 485-487 [10].

    [62]Native Title Act, s 23E.

    [63]Native Title Act, s 23E and Validation (Native Title) Act (NT), ss 9H and 9J.

36. The exceptions were category D past acts within the meaning of s 232 of the Native Title Act.  These acts were not previous exclusive possession acts, because the non-extinguishment principle applied to these acts[64].  However, all but three of the category D past acts[65] were followed by subsequent previous exclusive possession acts affecting the same lots which extinguished native title over those lots[66]. 

    [64]See [31] above.

    [65]Acts 1, 36 and 41 remained category D past acts to which the non‑extinguishment principle continued to apply. 

    [66]By operation of Native Title Act, s 23E and Validation (Native Title) Act (NT), ss 9H and 9J.

37. Section 23J in Div 2B of Pt 2 of the Native Title Act provides that native title holders are entitled to compensation in accordance with Div 5 for any extinguishment under Div 2B of their native title rights and interests. Accordingly, by operation of s 23J in Div 2B, in relation to the compensable acts which were previous exclusive possession acts[67], the native title holders were entitled to compensation in accordance with Div 5 for the extinguishment of their native title rights and interests by each act.

    [67]All acts except for acts 1, 36 and 41.

38. For the category D past acts which were not followed by subsequent previous exclusive possession acts[68], the native title holders were entitled to compensation under s 20 in Div 2 of Pt 2 of the Native Title Act, which, in turn, provides that they are entitled to compensation under s 17(1) or (2) on the assumption that s 17 applied to those category D past acts. Section 17, by its terms, applies only to acts attributable to the Commonwealth. However, when read with s 20(1), s 17 is to be read and applied as if it covered acts attributable to the Northern Territory. Relevantly for the purposes of these appeals, s 17(2) provides, under the heading "[n]on-extinguishment case":

    "If it is any other past act [other than a category A or category B past act], the native title holders are entitled to compensation for the act if:

    (a)the native title concerned is to some extent in relation to an onshore place and the act could not have been validly done on the assumption that the native title holders instead held ordinary title to:

    (i)       any land concerned; and

    (ii)the land adjoining, or surrounding, any waters concerned; or

    ..."  (emphasis added)

    [68]Namely, acts 1, 36 and 41.

39. These appeals were conducted on the basis that the date of validation of all acts was 10 March 1994. 

40. After an entitlement to compensation has been established, the compensation payable under Div 2, 2A, 2B, 3 or 4 of Pt 2 of the Native Title Act in relation to an act is payable only in accordance with Div 5[69]. As has been seen, the compensation payable to the Claim Group arises under either Div 2 or Div 2B of Pt 2 of the Native Title Act, and accordingly, s 51(1) applies in relation to determining the compensation claims in these appeals.

    [69]Native Title Act, s 48.

41. Section 51(1) is the core provision. It provides that:

    "Subject to subsection (3), the entitlement to compensation under Division 2, 2A, 2B, 3 or 4 is an entitlement on just terms to compensate the native title holders for any loss, diminution, impairment or other effect of the act on their native title rights and interests."  (emphasis added)

42. Specific aspects of s 51(1) must be recognised at the outset. It is the native title holders – relevantly, the person or persons who hold the native title[70] – who are entitled to compensation on just terms.  And those native title holders are entitled to compensation for any loss, diminution, impairment or other effect of the act on their native title rights and interests.  Relevantly, an act[71] is an "[a]ct affecting native title"[72] if it extinguishes the native title rights and interests. 

    [70]Native Title Act, s 224.

    [71]Defined in Native Title Act, s 226.

    [72]Defined in Native Title Act, s 227.

43. The Native Title Act does not expressly provide the date upon which the entitlement to compensation arises, or the date on which the value of the native title right and interest being extinguished is to be determined.  However, as the entitlement to compensation is for the "act" itself[73] and the validation provisions deem the extinguishing act to be valid and always to have been valid from the time of the act[74], the date for the assessment of the compensation is the date of the act. 

    [73]Native Title Act, s 51(1).

    [74]Native Title Act, ss 19 and 22F and Validation (Native Title) Act (NT), ss 4 and 4A.

44. Next, s 51(1), in its terms, recognises the existence of the two aspects of native title rights and interests identified in s 223(1) to which reference has already been made – the physical or material aspect (the right to do something in relation to land) and the cultural or spiritual aspect (the connection with the land) – as well as the fact that the manner in which each aspect may be affected by a compensable act may be different.   

45. Both aspects are addressed in terms by s 51(1) providing for an entitlement on just terms to compensation to the native title holders for "any loss, diminution, impairment or other effect of the act on their native title rights and interests" (emphasis added). 

46. Section 51(1) thus recognises that the consequences of a compensable act are not and cannot be uniform. The act and the effect of the act must be considered. The sub-section also recognises not only that each compensable act will be fact specific but that the manner in which the native title rights and interests are affected by the act will vary according to what rights and interests are affected and according also to the native title holders' identity and connection to the affected land. As the trial judge held, s 51(1) does not in its terms require that the consequence directly arise from the compensable act. The court's task of assessment under s 51(1) is to be undertaken in the particular context of the Native Title Act, the particular compensable acts and the evidence as a whole.

47. Section 51(2) then addresses acquisition of native title rights and interests under compulsory acquisition law. Section 51(3) deals with an act which is not the compulsory acquisition of all or any of the native title rights and interests of the native title holders but which satisfies the "similar compensable interest test". That test is satisfied if, in relation to a past act, an intermediate period act, or a future act, the native title concerned relates to an onshore place and the compensation would, apart from the Native Title Act, be payable under any law for the act on the assumption that the native title holders instead held ordinary title to any land or waters concerned and to the land adjoining, or surrounding, any waters concerned[75]. None of the compensable acts in these appeals falls within either s 51(2) or (3). Where neither s 51(2) nor (3) applies, s 51(4) provides that if there is a compulsory acquisition law for the Commonwealth (if the act giving rise to the entitlement is attributable to the Commonwealth) or for the State or Territory to which the act is attributable, the court, person or body making the determination of just terms may, subject to s 51(5)‑(8)[76], in doing so have regard to any principles or criteria set out in that law for determining compensation.  Here, there was such a law – the Lands Acquisition Act (NT).

    [75]Native Title Act, s 240.

    [76]Subject to a request for non-monetary compensation, the compensation may only consist of the payment of money: s 51(5) and (6).

48. Section 51A provides that, subject to s 53, the total compensation payable under Div 5 for an act that extinguishes all native title in relation to any particular land or waters must not exceed the amount that would be payable if the act were instead a compulsory acquisition of a freehold estate in the land or waters.

49. Section 53 provides that where the application of any of the provisions of the Native Title Act in any particular case would result in a s 51(xxxi) acquisition of property of a person other than on s 51(xxxi) just terms, the person is entitled to compensation as is necessary to ensure that the acquisition is on just terms. Section 53 is a shipwrecks clause[77]. 

    [77]A clause directed to ensuring the constitutional validity of the compensation provisions in Div 5: see, eg, Cunningham v The Commonwealth (2016) 259 CLR 536 at 552 [29]; [2016] HCA 39.

50. Section 51A provides a cap on compensation by providing that the total compensation payable under Div 5 for an act that extinguishes all native title in relation to particular land or waters must not exceed the amount that would be payable if the act were instead a compulsory acquisition of a freehold estate in the land or waters. The statutory recognition in s 51(1) that the two aspects of native title rights and interests – the economic value of the native title rights and interests and the non-economic value of those rights and interests – are to be compensated assists in understanding the work to be done by s 51A of the Native Title Act.  As the Commonwealth submitted, those two aspects of native title rights and interests inform the operation of s 51A. 

51. When introducing s 51A as part of the 1998 amendments to the Native Title Act following this Court's decision in Wik Peoples v Queensland[78], Senator Minchin said[79] that the "underlying premise of the Native Title Act is to equate native title with freehold for the purposes of dealing with native title" and the cap "should reflect the compensation payable if native title amounted to freehold". Under the general law, the compensation for the compulsory acquisition of land comprises the freehold value of the land as well as compensation for severance, injurious affection, disturbance, special value, solatium or other non-economic loss[80].

    [78](1996) 187 CLR 1.

    [79]Australia, Senate, Parliamentary Debates (Hansard), 3 December 1997 at 10231.

    [80]See, eg, March v City of Frankston [1969] VR 350 at 355-356; Marshall v Director General, Department of Transport (2001) 205 CLR 603 at 622 [33]-[34]; [2001] HCA 37.

52. Consistent with equating native title rights and interests with freehold for the purposes of compensation, s 51(2) and (4) of the Native Title Act refer to the fact that the court, person or body making the determination of compensation on just terms may have regard to any principles or criteria set out in a compulsory acquisition law for the Commonwealth, or for the State or Territory to which the act is attributable[81].  Those various acquisition laws address the non‑economic aspect of the compensation in different terms. 

    [81]See generally Lands Acquisition Act 1994 (ACT), s 45; Lands Acquisition Act 1989 (Cth), s 55; Land Acquisition (Just Terms Compensation) Act 1991 (NSW), s 55; Lands Acquisition Act (NT), Sch 2; Acquisition of Land Act 1967 (Qld), s 20; Land Acquisition Act 1969 (SA), s 25; Land Acquisition Act 1993 (Tas), s 27; Land Acquisition and Compensation Act 1986 (Vic), s 41; Land Administration Act 1997 (WA), s 241.

53. It is important, however, not to allow words like "solatium" in land acquisition statutes, or cases about those statutes, to deflect attention from the nature of the rights and interests that have been acquired and the compensation that must be assessed to provide just terms for their acquisition.  Asking what would be allowed as "solatium" on the acquisition of rights that owe their origin and nature to English common law distracts attention from the relevant statutory task of assessing just terms for the acquisition of native title rights and interests that arise under traditional laws and customs which owe their origins and nature to a different belief system. 

54. The label "solatium" is also distracting in another way.  What the Native Title Act requires to be compensated is the cultural loss arising on and from the extinguishment of native title rights and interests.  Given that the Native Title Act is a Commonwealth Act which, under Div 5, equates native title rights and interests to freehold for the purposes of dealing with native title, and is intended to provide compensation for the extinguishment of those rights and interests on just terms to all native title holders affected by a compensable act, ss 51 and 51A are to be read as providing that the compensation payable to the native title holders is to be measured by reference to, and capped at, the freehold value of the land together with compensation for cultural loss. Principles or criteria set out in a compulsory acquisition law for the Commonwealth, or for the State or Territory to which the compensable act is attributable, may be of assistance but they are not determinative of the issues arising under s 51(1).

    D        Economic loss claim

55. The Claim Group are entitled to compensation on just terms for any loss, diminution, impairment or other effect of a compensable act on their native title rights and interests.  In order to assess the value of the affected native title rights and interests, it is necessary first to identify the date on which the value is to be assessed and then the nature of the affected native title rights and interests. 

56. The date on which the value is to be assessed was not in dispute before this Court.  Following a relevant holding from the trial judge[82], the matter was conducted on the basis that the economic value of the Claim Group's native title in the application area fell to be determined according to the rights and interests actually held by the Claim Group as at the date that their native title to the land was taken to have been extinguished by the compensable acts. 

    [82]Griffiths (2016) 337 ALR 362 at 395-396 [172].

57. The reason for adopting that approach was that, under the "rules for the assessment of compensation" for compulsory acquisition of land in Sch 2 to the Lands Acquisition Act (NT), each person having an estate or interest in land which is compulsorily acquired has a separate and independent claim to compensation for the value of the interest that is taken from him or her by the acquiring authority[83]. As was earlier observed, s 51(4) of the Native Title Act provides that the court, person or body making the determination of compensation on just terms may have regard to such rules or principles. 

    [83]Lands Acquisition Act (NT), s 59. See Rosenbaum v The Minister (1965) 114 CLR 424 at 430-432; [1965] HCA 65.

58. In identifying the nature of the Claim Group's native title rights and interests it assists to begin with the approaches adopted by the trial judge and the Full Court.

    Trial judge

59. As has been noticed, the trial judge assessed the economic value of the native title rights and interests as being 80 per cent of freehold value.  His Honour described[84] that assessment as an "intuitive decision, focusing on the nature of the rights held by the [C]laim [G]roup which had been either extinguished or impaired by reason of the [compensable] acts in the particular circumstances" and which reflected "a focus on the entitlement to just compensation for the impairment of those particular native title rights and interests".  As it appears from the trial judge's reasons for judgment, there were four principal considerations that informed his conclusion.  

    [84]Griffiths (2016) 337 ALR 362 at 405 [233].

60. The first was that, in his Honour's view[85], it was artificial to focus on the amount which a willing but not anxious purchaser would have been prepared to pay for the native title rights and interests which were affected by the compensable acts, because the native title rights and interests were incapable of alienation and thus could not be sold or transferred to anyone other than the Northern Territory or, possibly, the Commonwealth.  Likewise, in his Honour's view, it was artificial to focus on the amount for which the Claim Group would have been willing to sell the native title rights and interests.  It followed, according to his Honour, that the "conventional valuation approach expressed in Spencer^[[86]] ... seems inappropriate". 

    [85]Griffiths (2016) 337 ALR 362 at 402 [211].

    [86]Spencer v The Commonwealth (1907) 5 CLR 418; [1907] HCA 82.

61. The second was that, in his Honour's view[87], it was inappropriate "simply to proceed on the basis of a comparison of the bundle of rights held by the [Claim Group], remote from their true character, for the purposes of assessing the extent to which they might equate to, or partially equate to, the bundle of rights held by a freehold or other owner or person having an interest in land" –  although his Honour added[88] that he was careful in making his assessment not to include any allowance for the elements related to the cultural or ceremonial significance of the land or the Claim Group's attachment to the land, which fell to be assessed separately.

    [87]Griffiths (2016) 337 ALR 362 at 402 [212].

    [88]Griffiths (2016) 337 ALR 362 at 405 [234].

62. The third was that, having regard to the express purposes of the Native Title Act and the recognition of Aboriginal peoples as the original inhabitants of Australia, his Honour considered[89] that it would be wrong to treat native title rights and interests in land as other than the equivalent of freehold, at least in the case of exclusive native title rights and interests, or to treat the economic value of exclusive native title rights and interests as other than equivalent to the economic value of freehold interests.  In his Honour's view, the inalienability of the native title rights and interests did not constitute a significant discounting factor.  For as his Honour conceived of it, that appeared to be "the undebated premise" in Amodu Tijani v Secretary, Southern Nigeria[90] and Geita Sebea v Territory of Papua[91].

    [89]Griffiths (2016) 337 ALR 362 at 402 [213]-[214].

    [90][1921] 2 AC 399.

    [91](1941) 67 CLR 544; [1941] HCA 37.

63. The fourth was that, although the subject native title rights and interests were inalienable and so not transferable, the trial judge considered[92] that they existed as a real impediment to any further grants of interest in the land, and, more generally, were in a practical sense "very substantial" and "exercisable in such a way as to prevent any further activity on the land, subject to the existing tenures".  The trial judge, however, rejected the Claim Group's contention that their non-exclusive rights and interests should be valued as if they were exclusive.  His Honour also rejected the notion that compensation on just terms for the extinguishment of non-exclusive native title rights and interests should be assessed on the basis that upon extinguishment the Crown acquired radical or freehold title unencumbered by native title, and thus that freehold value was the appropriate measure of the compensation.  His Honour stated that it was necessary to arrive at a value which was less than freehold value and which recognised and gave effect to the nature of the native title rights and interests.  

    [92]Griffiths (2016) 337 ALR 362 at 403-405 [224], [227]-[228], [231]-[232].

    Full Court

64. To some extent, the Full Court reasoned differently.  Like the trial judge, their Honours took the view[93] that the starting point for the calculation of the economic value of the Claim Group's native title rights and interests should be the freehold value of the land and that it should be adjusted to take account of the restrictions and limitations applicable to the non-exclusivity of those rights and interests.  But the Full Court considered[94] that the trial judge had erred in holding that those rights and interests constituted a real impediment to any further grants of interest in the land and, in a practical sense, were exercisable in such a way as to prevent any further activity on the land subject only to existing tenures.  In the Full Court's view[95], the trial judge had also erred in holding, in effect, that the loss to the Claim Group was to be calculated by reference to the benefit to the Northern Territory of acquiring the rights and interests, and that his Honour had thereby improperly inflated the figure for compensation.  Further, in the Full Court's view[96], the trial judge had erred in failing to discount the value of the Claim Group's native title rights and interests to allow for the fact that they were inalienable and also by rejecting the Spencer test of what a willing but not anxious purchaser would have been prepared to pay to a willing but not anxious vendor to secure the extinguishment of those rights and interests.  The Full Court, however, rejected[97] the Commonwealth's contention that the economic value of the Claim Group's native title rights and interests was no more than 50 per cent of freehold value.  In the Full Court's view, they were worth 65 per cent of freehold value.

    [93]Northern Territory v Griffiths (2017) 256 FCR 478 at 519-520 [134].

    [94]Northern Territory v Griffiths (2017) 256 FCR 478 at 508 [78]‑[80].

    [95]Northern Territory v Griffiths (2017) 256 FCR 478 at 510-511 [89]‑[92].

    [96]Northern Territory v Griffiths (2017) 256 FCR 478 at 515-516 [119], 517 [122].

    [97]Northern Territory v Griffiths (2017) 256 FCR 478 at 520 [139].

65. At this stage, one further matter should be mentioned.  The trial judge assessed[98] the economic value of the native title rights and interests on the basis of the market value of freehold estates in various lots the subject of the compensable acts as valued by Mr Ross Copland, an expert land valuer called on behalf of the Commonwealth.  On appeal to the Full Court[99], the Northern Territory unsuccessfully challenged the trial judge's adoption of Mr Copland's valuations in respect of certain lots.  Before this Court, the parties were agreed that Mr Copland's valuations should form the basis of the assessment of compensation save with respect to lot 16, in relation to which the Northern Territory urged this Court to adopt the valuation provided by its expert, Mr Wayne Wotton.  That contention was put on the basis that Mr Lonergan's methodology for valuing native title rights and interests should be accepted.  For reasons to be explained later in this judgment, Mr Lonergan's methodology is rejected.

    [98]Griffiths (2016) 337 ALR 362 at 438 [414], 445-446 [463].

    [99]Northern Territory v Griffiths (2017) 256 FCR 478 at 522-523 [145], 524-525 [155], [159]-[160].

    Criteria of valuation

66. In this Court, all parties accepted that the economic value of the native title rights and interests should be determined by application of conventional economic principles and tools of analysis, and, in particular, by application of the Spencer test adapted as necessary to accommodate the unique character of native title rights and interests and the statutory context.  The difference between the parties was as to how the Spencer test should be applied.

67. The Full Court were right to begin their ascertainment of the economic value of the native title rights and interests with the identification of those rights and interests[100].  At common law, freehold ownership or, more precisely, an estate in fee simple is the most ample estate which can exist in land[101].  As such, it confers the greatest rights in relation to land and the greatest degree of power that can be exercised over the land[102]; and, for that reason, it ordinarily has the greatest economic value of any estate in land.  Lesser estates in land confer lesser rights in relation to land and, therefore, a lesser degree of power exercisable over the land; and, for that reason, they ordinarily have a lesser economic value than a fee simple interest in land. 

    [100]See Western Australia v Brown (2014) 253 CLR 507 at 521 [34]; [2014] HCA 8. See also Mabo v Queensland [No 2] (1992) 175 CLR 1 at 58; [1992] HCA 23.

    [101]See Amodu Tijani [1921] 2 AC 399 at 403; Royal Sydney Golf Club v Federal Commissioner of Taxation (1955) 91 CLR 610 at 623; [1955] HCA 13; Megarry and Wade, The Law of Real Property, 8th ed (2012) at 52; Honoré, "Ownership" in Guest (ed), Oxford Essays in Jurisprudence (1961) 107.  See also Fejo v Northern Territory (1998) 195 CLR 96 at 151-152 [107]; [1998] HCA 58.

    [102]See The Commonwealth v New South Wales (1923) 33 CLR 1 at 42, 45; [1923] HCA 34; Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 285; [1944] HCA 4. See also Yanner v Eaton (1999) 201 CLR 351 at 365‑366 [17]; [1999] HCA 53.

68. Similar considerations apply to native title.  Native title rights and interests are not the same as common law proprietary rights and interests but the common law's conception of property as comprised of a "bundle of rights" is translatable to native title[103], and, as has been held[104], draws attention to the fact that, under traditional law and custom, some but not all native title rights and interests are capable of full or accurate expression as rights to control what others may do on or with the land.  So, therefore, just as it is necessary to determine the nature and extent of common law proprietary rights and interests as a first step in their valuation, it is necessary to identify the native title rights and interests in question as the first step in their valuation.

    [103]See Ward (2002) 213 CLR 1 at 95 [94]-[95], 262-264 [615]‑[618]; Yorta Yorta (2002) 214 CLR 422 at 492-493 [186]; Akiba v The Commonwealth (2013) 250 CLR 209 at 239 [59]; [2013] HCA 33.

    [104]See Ward (2002) 213 CLR 1 at 95 [94]-[95].

69. As the trial judge found, the Claim Group's rights and interests were essentially usufructuary[105], ceremonial and non-exclusive.  The Claim Group's rights and interests were perpetual and objectively valuable in that they entitled the Claim Group to live upon the land and exploit it for non-commercial purposes.  But they were limited.  As earlier mentioned, the historic grant of the pastoral leases extinguished the Claim Group's traditional right to control access to the land and to decide how the land should be used[106]; and, once so extinguished, the right did not revive[107].  Thereafter, the Claim Group had no entitlement to exclude others from entering onto the land and no right to control the conduct of others on the land.  Nor did the Claim Group have the right to grant co-existing rights and interests in the land.  And because the Claim Group's native title rights and interests were non-exclusive, it was also open to the Northern Territory to grant additional co-existent rights and interests in and over the land, including grazing licences, usufructuary licences of up to five years' duration and licences to take various things from the land[108]. 

    [105]See and compare Akiba (2013) 250 CLR 209 at 219 [9], 228 [28].

    [106]See Ward (2002) 213 CLR 1 at 82-83 [52], 131 [192], 138 [219], 196 [417].

    [107]Griffiths [2014] FCA 256 at [43], [46]; Northern Territory v Griffiths (2017) 256 FCR 478 at 508 [80]. See also Native Title Act, s 237A; Wik (1996) 187 CLR 1 at 169; Yarmirr (2001) 208 CLR 1 at 68 [98]; Ward (2002) 213 CLR 1 at 82‑83 [52], 131 [192], 138 [219]; Northern Territory v Alyawarr (2005) 145 FCR 442 at 485‑486 [147]-[148].

    [108]Northern Territory v Griffiths (2017) 256 FCR 478 at 508-509 [80]‑[82]; Crown Lands Ordinance (NT), ss 107, 108, 109; Crown Lands Act (NT), ss 88, 90, 91.

70. The economic value of the Claim Group's native title rights and interests fell to be valued accordingly.  The task required an evaluative judgment to be made of the percentage reduction from full exclusive native title which properly represented the comparative limitations of the Claim Group's rights and interests relative to full exclusive native title and then the application of that percentage reduction to full freehold value as proxy for the economic value of full exclusive native title. 

71. The Claim Group contended that so to proceed offended the Racial Discrimination Act in two respects.  The first was said to be that, because the Full Court did not equate the measure of compensation payable to native title holders to the compensation payable to the holders of other forms of title, the Full Court's reasoning was ex facie inconsistent with the protection afforded by s 10(1) of the Racial Discrimination Act.  So much plainly followed, it was said, from the following observations of Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ in Western Australia v The Commonwealth (Native Title Act Case)[109]:

    "Security in the right to own property carries immunity from arbitrary deprivation of the property. Section 10(1) thus protects the enjoyment of traditional interests in land recognised by the common law. However, it has a further operation.

    If a law of a State provides that property held by members of the community generally may not be expropriated except for prescribed purposes or on prescribed conditions (including the payment of compensation), a State law which purports to authorise expropriation of property characteristically held by the 'persons of a particular race' for purposes additional to those generally justifying expropriation or on less stringent conditions (including lesser compensation) is inconsistent with s 10(1) of the Racial Discrimination Act."  (footnote omitted)

    [109](1995) 183 CLR 373 at 437.

72. In that connection, the Claim Group also relied on the observation of Gleeson CJ, Gaudron, Gummow and Hayne JJ in Ward[110] that:

    "the [Racial Discrimination Act] must be taken to proceed on the basis that different characteristics attaching to the ownership or inheritance of property by persons of a particular race are irrelevant to the question whether the right of persons of that race to own or inherit property is a right of the same kind as the right to own or inherit property enjoyed by persons of another race."

    [110](2002) 213 CLR 1 at 105 [121].

73. In the Claim Group's submission, it followed that s 10(1) of the Racial Discrimination Act required that the Claim Group's non‑exclusive native title rights and interests be valued in no different fashion from exclusive native title rights and interests, and, therefore, at not less than freehold value.

74. Those contentions must be rejected.  Whether or not the value of any given native title is to be equated to freehold value for the purposes of assessing just compensation must depend on the exact incidents of the native title rights and interests.  If the native title rights and interests amount or come close to a full exclusive title, it is naturally to be expected that the native title rights and interests will have an objective economic value similar to freehold value.  By contrast, if the native title rights and interests are significantly less than a full exclusive title, it is only to be expected that they will have an objective economic value significantly less than freehold value.  There is nothing discriminatory about treating non-exclusive native title as a lesser interest in land than a full exclusive native title or, for that reason, as having a lesser economic value than a freehold estate.  To the contrary, it is to treat like as like.

75. The point made in both the Native Title Act Case and Ward was that, although native title rights and interests have different characteristics from common law land title rights and interests, and derive from a different source, native title holders are not to be deprived of their native title rights and interests without the payment of just compensation any more than the holders of common law land title are not to be deprived of their rights and interests without the payment of just compensation.  Equally, native title rights and interests cannot be impaired to a point short of extinguishment without payment of just compensation on terms comparable to the compensation payable to the holders of common law land title whose rights and interests may be impaired short of extinguishment.  There was no suggestion in either the Native Title Act Case or Ward that the nature and incidents of particular native title rights and interests are irrelevant to their economic worth or to the determination of just compensation for extinguishment or impairment.  To the contrary, it is plain from the holding[111] in Ward that, because the non-exclusive native title rights and interests in that case did not amount to having "lawful control and management" of the land, the native title holders were not to be assimilated to "owners" but could at best be regarded as "occupiers" and thus could be compensated only at the lesser rate applicable to occupiers.  As Gleeson CJ, Gaudron, Gummow and Hayne JJ stated[112]:

    "This result is no different from that which would obtain in respect of any holder of rights and interests that did not amount to the 'lawful control and management' of the land.  The [Racial Discrimination Act] is therefore not engaged on this basis."

    [111](2002) 213 CLR 1 at 168-170 [317]-[321].

    [112](2002) 213 CLR 1 at 169 [317].

76. In sum, what the Racial Discrimination Act requires in its application to native title is parity of treatment and there is no disparity of treatment if the economic value of native title rights and interests is assessed in accordance with conventional tools of economic valuation adapted as necessary to accommodate the unique character of native title rights and interests and the statutory context.  To argue, as the Claim Group did, that there is disparity because their native title rights and interests have a lesser economic value than the economic value of an estate in fee simple is to ignore that the Claim Group's native title rights and interests were comparatively limited and considerably less extensive than full exclusive native title.  Thus, as has already been emphasised, the proper comparison was not between the native title rights and interests and the rights and interests which comprise an estate in fee simple, but between the native title rights and interests and the rights and interests of a full exclusive native title.

77. The second respect in which it was contended that the Full Court's analysis offended the Racial Discrimination Act was that the Full Court took into account that the Claim Group's native title was vulnerable to diminution by the grant by the Northern Territory of lesser co-existing titles. The Claim Group contended that the operation of s 10(1) of the Racial Discrimination Act precluded the Northern Territory from granting any further interest in the land unless the same interest could have been granted over freehold or leasehold land under the Crown Lands Ordinance (NT) or the Crown Lands Act (NT), and thus that the Northern Territory would have been prevented from granting rights and interests over the land even if those grants were not inconsistent with the continued existence of the Claim Group's non‑exclusive native title rights and interests. Alternatively, it was contended that, even if it had been open to the Northern Territory to grant such further interests, on the facts of this case the Northern Territory would not realistically have done so.

78. Those contentions must also be rejected.  It is necessary to consider the treatment of pastoral leases under the relevant legislation.  Pastoral leases, before the determination in Wik[113], satisfied the definition of a category A past act in the Native Title Act (an act which wholly extinguished native title if still in existence on 1 January 1994)[114].  In Wik[115], this Court held that a pastoral lease was not necessarily inconsistent with all native title rights and interests.  The Native Title Act was subsequently amended[116] by the inclusion of a definition of previous non‑exclusive possession act[117], and by prescription of the effect of a previous non‑exclusive possession act on native title[118]. 

    [113](1996) 187 CLR 1.

    [114]Native Title Act, ss 15(1)(a), 229(3)(a), (c).

    [115](1996) 187 CLR 1 at 122, 126-127, 130, 154‑155, 203-204, 242-243.

    [116]See Native Title Amendment Act 1998 (Cth).

    [117]Native Title Act, s 23F.

    [118]Native Title Act, s 23G.

79. Whilst that amendment acknowledged there could be a grant of a non‑exclusive pastoral lease, there was no reversal of total extinguishment of native title by previous exclusive possession acts as had already occurred under the Native Title Act (as first enacted)[119].  Accordingly, if an exclusive pastoral lease[120] granted after the enactment of the Racial Discrimination Act were still in force on 1 January 1994 that lease would be classified as a category A past act which wholly extinguished native title[121].  If, however, a non-exclusive pastoral lease[122] were to some extent not inconsistent with native title, the grant was not classified as a past act but rather as a previous non-exclusive possession act and thus, native title was extinguished only to the extent of any inconsistency with native title[123]. 

    [119]Native Title Act, s 23C.

    [120]Native Title Act, s 248A.

    [121]Native Title Act, ss 15(1), 23B, 23E, 23G(2), 228, 229(3).

    [122]Native Title Act, s 248B.

    [123]Native Title Act, s 23G(1)(b).

80. According to the Claim Group's argument, every pastoral lease enacted after the commencement of the Racial Discrimination Act that was still in force on 1 January 1994 would have been invalid. But if that were so, it would mean that, perforce of ss 23G(2) and 15(1) of the Native Title Act, every such pastoral lease would be taken wholly to have extinguished native title.  Contrary to the Claim Group's submissions, it has consistently been held that the question of validity of pastoral leases enacted after the commencement of the Racial Discrimination Act is to be determined according to whether the grant of a pastoral lease had any further extinguishing effect on native title[124].  Provided such further rights and interests were not inconsistent with the continued existence of native title, they did not detract from the native title holders' rights and interests and so did not discriminate against them[125].

    [124]See De Rose v South Australia (2003) 133 FCR 325 at 432 [381], 433 [387], 436 [402], [405]; Moses v Western Australia (2007) 160 FCR 148 at 162‑163 [53]‑[56], 164 [65], 165 [74], 171 [101], 174-175 [113]; Neowarra v Western Australia [2003] FCA 1402 at [526], [532]. See also Ward (2002) 213 CLR 1 at 103 [114], 110-111 [135]-[139], 129-131 [187]‑[194], 165-166 [308]-[309], 196 [418], 198 [425].

    [125]cf Ward (2002) 213 CLR 1 at 106 [123].

81. The Claim Group's contention as to the improbability of the Northern Territory granting further interests in the land is beside the point.  The contention as advanced focused on pastoral leases alone.  It is plain, however, that the Full Court had in mind a variety of other interests, including grazing licences, usufructuary licences and licences to take things from the land.  Furthermore, even if the likelihood of grants of further interests was slight, and none were in fact granted, it was the possibility of or potential for such grants that was relevant to economic value.  For reasons already given and which will be discussed in more detail later in these reasons, it is the incidents of native title rights and interests and not the way in which they might be or not be exercised that is determinative of their nature and thus their economic value.  The way that native title rights and interests are used and enjoyed may affect their non-economic or cultural value, which is dealt with separately, later in these reasons.

82. The Claim Group argued that, even if that were so, the native title rights and interests were not concurrent with other rights and interests, because no other person held any rights or interests in the subject land that were valid against the native title rights and interests; that the recognition of native title rights and interests by the common law meant that those rights and interests could have been protected by legal and equitable remedies as if they were common law interests in land; and that the historic extinguishment of the Claim Group's right of exclusive possession did not in fact lessen the ability of the Claim Group to determine the use of their country by others through their power to surrender native title so as to enable the conferral of valid rights on others.

83. Those arguments must also be rejected.  The fact that the Claim Group may have had use and enjoyment of the subject land says nothing directly as to the nature of their native title rights and interests in the land and therefore nothing directly as to the entitlement of the Northern Territory to grant co‑existing titles.  Equally, the fact that infringement of the Claim Group's native title rights and interests might have been prevented by legal or equitable remedies[126] says nothing against the entitlement of the Northern Territory to grant co-existing titles.  And to the extent that the argument should be understood as being that the Claim Group had some sort of qualified right otherwise to control access to land, it is precluded by analogy with the holding in Ward that the grants of pastoral leases in that case were inconsistent with the continued existence of the native title right to control access to land and make decisions as to how the land could lawfully be used by others.

    [126]See and compare Mabo [No 2] (1992) 175 CLR 1 at 61; Ward (2002) 213 CLR 1 at 67 [21].

    Bifurcated approach to valuation

84. The parties were agreed before the trial judge and the Full Court that the approach to the assessment of just compensation should proceed according to what was described as the bifurcated approach of first determining the economic value of the native title rights and interests that had been extinguished and then estimating the additional, non-economic or cultural loss occasioned by the consequent diminution in the Claim Group's connection to country.  That was an appropriate way to proceed.  Just as compensation for the infringement of common law land title rights and interests is ordinarily comprised of both a component for the objective or economic effects of the infringement (being, in effect, the sum which a willing but not anxious purchaser would be prepared to pay to a willing but not anxious vendor to achieve the latter's assent to the infringement[127]) and a subjective or non‑economic component (perhaps the most common instance of which is an allowance for special value[128]), the equality of treatment mandated by s 10(1) of the Racial Discrimination Act, as reflected in s 51 of the Native Title Act, necessitates that the assessment of just compensation for the infringement of native title rights and interests in land include both a component for the objective or economic effects of the infringement (being, in effect, the sum which a willing but not anxious purchaser would have been prepared to pay to a willing but not anxious vendor to obtain the latter's assent to the infringement, or, to put it another way, what the Claim Group could fairly and justly have demanded for their assent to the infringement) and a component for non-economic or cultural loss (being a fair and just assessment, in monetary terms, of the sense of loss of connection to country suffered by the Claim Group by reason of the infringement).

    [127]Spencer (1907) 5 CLR 418 at 432, 440-441; Kenny & Good Pty Ltd v MGICA(1992) Ltd (1999) 199 CLR 413 at 436 [49]‑[50]; [1999] HCA 25; Walker Corporation Pty Ltd v Sydney HarbourForeshore Authority (2008) 233 CLR 259 at 276-277 [51]; [2008] HCA 5.

    [128]Minister for Public Works v Thistlethwayte [1954] AC 475 at 491; The Commonwealth v Reeve (1949) 78 CLR 410 at 418‑420, 428-429, 435; [1949] HCA 22; Turner v Minister of Public Instruction (1956) 95 CLR 245 at 267, 280; [1956] HCA 7; Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209 at 225-226 [80]-[83], cf at 269-270 [292]-[294]; 167 ALR 575 at 596-597, cf at 654-655; [1999] HCA 64.

339. Since s 51 is concerned only with awards of compensation it is unnecessary on these appeals to consider whether there exists any generalised principle, whether or not it could be described as "free standing"[421], permitting compound interest as part of an award of restitution.  Compound interest as a restitutionary award would not be concerned with loss and would not be compensatory[422].  Further, difficult issues, not addressed in submissions in this case, would need to be considered before that possibility is entertained.  One issue is whether a claim for restitution of unjust enrichment should rationally be confined to the value immediately transferred to the defendant[423].  A second, related, issue is the value of analogies between, on the one hand, the benefit of an opportunity to use money and, on the other hand, the benefit of an opportunity to use other property[424] or the benefit of the opportunity to use money unlawfully obtained[425].  A third issue is any incongruity that would arise by, on the one hand, not subjecting the defendant to a prima facie obligation to restore the value of the opportunity to profit from the use of money received by unjust enrichment yet, on the other hand, recognising a defence to the extent that the money is used unprofitably[426].  A fourth issue is the status and nature of authorities, discussed below, awarding interest at common law where a judgment is set aside.

     [421]The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 316-317 [72]-[75]; [1998] HCA 20.

     [422]Sempra Metals Ltd v Inland Revenue Commissioners [2008] AC 561 at 585 [28], 585-586 [30]-[31], 606 [116], [119], 615 [144], 618 [154], 649-650 [231]; Burrows, The Law of Restitution, 3rd ed (2011) at 64-65.

     [423]Prudential Assurance Co Ltd v Revenue and Customs Commissioners [2018] 3 WLR 652 at 678-680 [68]-[75]. Compare Menelaou v Bank of Cyprus plc [2016] AC 176 at 188 [24]; Moore v Sweet 2018 SCC 52 at [43]-[44]; Mitchell, Mitchell and Watterson, Goff & Jones:  The Law of Unjust Enrichment, 9th ed (2016) at 156-160 [6-17]-[6-29]; Burrows, The Law of Restitution, 3rd ed (2011) at 66-69.

     [424]See Clode, The Law and Practice of Petition of Right (1887) at 96, cited in National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd (1997) 217 ALR 365 at 369; Heydon v NRMA Ltd [No 2] (2001) 53 NSWLR 600 at 605 [15]. See also Dimond v Lovell [2002] 1 AC 384 at 397.

     [425]Nelson v Nelson (1995) 184 CLR 538 at 571-572, 617-618; [1995] HCA 25.

     [426]Bant, The Change of Position Defence (2009) at 129-130.

340. It is equally unnecessary to consider whether there should be a generalised principle permitting compound interest as part of an award of disgorgement of profits, beyond cases of breach of fiduciary duty and, despite some doubts[427], fraud[428].  Even if such a generalised principle were recognised to require disgorgement of compound interest for wrongdoing beyond these categories[429], and generalised to include investment profits made by the wilful wrongdoing of a defendant who is liable to account[430], the principle would not be relevant to s 51 of the Native Title Act because disgorgement of compound interest profits made by a defendant is not "compensation"[431].

     [427]Clef Aquitaine SARL v Laporte Materials (Barrow) Ltd [2001] QB 488 at 505, considering Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 700-701; which I discuss and criticise in McGregor on Damages, 20th ed (2018) at 492-494 [15-039]-[15-044], 639 [19‑068].

     [428]President of India v La Pintada Compania Navigacion SA [1985] AC 104 at 116; Hungerfords v Walker (1989) 171 CLR 125 at 148; [1989] HCA 8; The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 316 [74].

     [429]See, eg, Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 692-693, 696-697, 735; Sempra Metals Ltd v Inland Revenue Commissioners [2008] AC 561 at 586 [32].

     [430]American Law Institute, Restatement of the Law of Restitution:  Quasi Contracts and Constructive Trusts (1937), §149 at 595-596; American Law Institute, Restatement of the Law Third:  Restitution and Unjust Enrichment (2011), §49 at 184.

     [431]Elliott, "Rethinking interest on withheld and misapplied trust money" [2001] The Conveyancer and Property Lawyer 313 at 321.

341. In order for an award of interest, including compound interest, to be made as part of a compensation award, the Claim Group would need to prove that they suffered a loss.  That loss could be proved by showing that if the value of the native title rights had been paid to the Claim Group at the date of extinguishment, then they would have invested that money and would have earned interest on it[432].  The further question would then arise as to whether that loss from the failure to invest was an "effect of the act on their native title rights and interests"[433].

     [432]Hungerfords v Walker (1989) 171 CLR 125 at 143, 149-150, 152.

     [433]Native Title Act, s 51(1).

342. These issues do not arise.  The primary judge was not satisfied that the Claim Group would have invested any payment made at the time of extinguishment to earn interest.  As he explained, "on previous occasions where the Claim Group had collectively considered how funds should be applied, they had elected to distribute the funds for individuals or families to use"[434].

     [434]Griffiths (2016) 337 ALR 362 at 413 [275].

     The power to award interest on compensation

343. Whatever may be the position in the interpretation of different legislative provisions[435], interest that arises only because of a delay in paying the compensation assessed under s 51 of the Native Title Act cannot be part of the award of compensation.  It is not part of the compensation because it is not "for" an effect of the acts in extinguishing native title.  Instead, interest for delay in the payment of compensation can only be interest on the compensation.

     [435]See Swift & Co v Board of Trade [1925] AC 520; The Commonwealth v Huon Transport Pty Ltd (1945) 70 CLR 293; [1945] HCA 5; Marine Board of Launceston v Minister of State for the Navy (1945) 70 CLR 518; [1945] HCA 42; Bank of NSW v The Commonwealth (1948) 76 CLR 1; [1948] HCA 7.

344. Although interest for a delay in paying compensation is on compensation, the better view is that it is still within the terms of s 51 of the Native Title Act, which requires the compensation to be paid on "just terms". Again, this is a question of interpretation of the particular statute. The context of s 51(1) illustrates that the "just terms" of the obligation to compensate includes the power to order interest on that compensation.

345. As Dixon J said in Marine Board of Launceston v Minister of State for the Navy[436], the jurisdiction of a court to award compensation "may be readily interpreted as extending to what is consequential upon or incidental to the award". The reference in s 51 to the "just terms" upon which the obligation to compensate must be fulfilled reiterates the reach of the obligation to matters, such as interest, that are incidental to the award of compensation. Even assuming that s 51(xxxi) of the Constitution does not necessarily require the payment of interest for a delay in paying compensation for a compulsory acquisition[437], the justice of the terms of payment of compensation must be understood against the background of the equitable rule that required the payment of interest upon unpaid purchase money and the analogy with that rule that had been drawn in cases of compulsory purchase of property.  The principles and concerns revealed by that history demonstrate that the obligation to compensate on "just terms" will generally require interest on compensation but will not require compound interest.

     [436](1945) 70 CLR 518 at 533.

     [437]The Commonwealth v Huon Transport Pty Ltd (1945) 70 CLR 293 at 326; Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 300-301.

     The history of an award of interest on compensation

     1.        Common law

346. Prior to 1829, there had been some argument at common law that the "constant practice"[438] of ordering payment of interest where it had been agreed should, in justice, apply also to cases where there had been no agreement to pay interest[439].  However, long-established practice was to the contrary.  In Calton v Bragg[440], Lord Ellenborough CJ, Grose and Bayley JJ had said that interest on a "mere simple contract of lending" was never awarded without agreement.

     [438]Craven v Tickell (1789) 1 Ves Jun 60 at 63 [30 ER 230 at 231].

     [439]Arnott v Redfern (1826) 3 Bing 353 at 360 [130 ER 549 at 552].

     [440](1812) 15 East 223 at 226-227 [104 ER 828 at 830].

347. The restrictive rule was settled at common law in 1829 in Page v Newman[441].  Lord Tenterden CJ put the rule upon a curious premise.  He said that to adopt a rule that allowed interest without agreement would require proof of a proper attempt by the plaintiff to obtain payment and that insistence upon such proof would be "productive of great inconvenience" in jury trials[442].  Nevertheless, the general rule at common law was adopted in Australia with the effect that, in the absence of agreement, interest was not payable for a delay in payment of money that was due[443].

     [441](1829) 9 B & C 378 [109 ER 140].

     [442](1829) 9 B & C 378 at 380-381 [109 ER 140 at 141].

     [443]Marine Board of Launceston v Minister of State for the Navy (1945) 70 CLR 518 at 525; Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd (1984) 157 CLR 149 at 162; [1984] HCA 59.

348. The general rule at common law was not absolute.  One exception was in cases of money obtained and retained by fraud[444].  Another, and perhaps the best known common law exception, involved interest on an award of restitution rather than compensation.  In Rodger v The Comptoir d'Escompte de Paris[445], in an approach adopted in Australia[446], the Privy Council held that interest was payable upon an order for restitution of money paid under a judgment that was set aside.  The interest was ordered because "the perfect judicial determination which it must be the object of all Courts to arrive at, will not have been arrived at unless the persons who have had their money improperly taken from them have the money restored to them, with interest, during the time that the money has been withheld"[447]. 

     2.        Equity

     [444]Johnson v The King [1904] AC 817 at 822.

     [445](1871) LR 3 PC 465.

     [446]Heavener v Loomes (1924) 34 CLR 306 at 323-324; [1924] HCA 10; TheCommonwealth v McCormack (1984) 155 CLR 273 at 276-277; [1984] HCA 57.

     [447]Rodger v The Comptoir d'Escompte de Paris (1871) LR 3 PC 465 at 475-476.

349. In contrast with the restrictive approach at common law, in cases involving a sale of land equity recognised that a purchaser in possession must pay interest to the unpaid vendor from the date of taking possession, or the date when the purchaser might reasonably have taken possession, until the date of the decree[448].  An early, but fictitious, rationale given by Sir William Grant was that the act of taking possession was "an implied agreement to pay interest"[449].  A more sophisticated rationale that emerged was that the defaulting purchaser in possession who retained the purchase money was the "trustee" of it for the vendor, at least to the extent that equity would decree specific performance, and must therefore account for the purchase money and interest[450].  Although the trustee analogy might now be doubted[451], the obligation to pay interest was extended in equity by analogy from cases of sale of land to cases of compulsory acquisition of property under the Land Clauses Consolidation Act 1845 (UK)[452].  This extension was justified in that case because the "notice to treat under the statute [was] treated in equity as creating the relation of vendor and purchaser" of land[453].

     [448]Esdaile v Stephenson (1822) 1 Sim & St 122 at 123 [57 ER 49 at 50].

     [449]Fludyer v Cocker (1805) 12 Ves Jun 25 at 27-28 [33 ER 10 at 11]. See also Swift & Co v Board of Trade [1925] AC 520 at 532; Lawrence v Broderick (1974) 1 BPR [97004] at 9117.

     [450]Birch v Joy (1852) 3 HLC 565 at 590-591 [10 ER 222 at 233]; International Railway Co v Niagara Parks Commission [1941] AC 328 at 345; In re Priestley's Contract [1947] Ch 469 at 479-480; Sugden, A Practical Treatise of the Law of Vendors and Purchasers of Estates, 3rd ed (1808) at 353-356.

     [451]Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 332-333 [53]; [2003] HCA 57; Swadling, "The Fiction of the Constructive Trust" (2011) 64 Current Legal Problems 399.

     [452]In re Pigott and the Great Western Railway Co (1881) 18 Ch D 146 at 150. See also Fletcher v Lancashire and Yorkshire Railway Co [1902] 1 Ch 901 at 909.

     [453]Swift & Co v Board of Trade [1925] AC 520 at 532.

350. The need for a relationship of vendor and purchaser was eventually abandoned by equity and the power to award interest was recognised by the Privy Council in all cases of compulsory "acquisition" of land[454].  Although the earlier rationale based upon the trust that arose in a sale of land was a reason why the courts did not further extend the equitable rule to the compulsory acquisition of goods[455], in 1945 the equitable rule was used in Australia to justify the award of interest on statutory compensation for the compulsory acquisition of a ship where a contract for its sale could have been the subject of specific performance[456].  However, Dixon J decided the case on the broader footing of the power being a matter of statutory construction without necessarily confining the power to the availability of specific performance of a contract for the sale of the subject matter[457]. 

     3.        Admiralty

     [454]Inglewood Pulp and Paper Co v New Brunswick Electric Power Commission [1928] AC 492 at 498-499.

     [455]Swift & Co v Board of Trade [1925] AC 520 at 532.

     [456]Marine Board of Launceston v Minister of State for the Navy (1945) 70 CLR 518 at 527, 534-535, 537-538; Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 278-279.

     [457]Marine Board of Launceston v Minister of State for the Navy (1945) 70 CLR 518 at 532-533.

351. Admiralty took the same approach as equity, at about the same time, but without the need for a rationale based upon a trust.  In Shaw Savill and Albion Co Ltd v The Commonwealth[458], Dixon CJ quoted from Dr Lushington[459], saying:

     "Upon what grounds, then, was interest given?  Interest was not given by reason of indemnification for the loss, for the loss was the damage which had accrued; but interest was given for this reason, namely, that the loss was not paid at the proper time.  If a man is kept out of his money, it is a loss in the common sense of the word, but a loss of a totally different description, and clearly to be distinguished from a loss which has occurred by damage done at the moment of collision".

     [458](1953) 88 CLR 164 at 166-167; [1953] HCA 24.

     [459]The Amalia (1864) 5 New Rep 164n.

352. With the exception of limited circumstances, such as delay by the plaintiff, an award of pre-judgment interest in Admiralty became "well-nigh automatic"[460].  In President of India v La Pintada Compania Navigacion SA[461] Lord Brandon of Oakbrook said that the interest awarded in damage actions should be extended to salvage actions but emphasised that the award of interest "does not involve, and never has involved, the award of compound interest, and again there is no authority in any reported Admiralty case for the award of interest of that kind".  Such an award would never have occurred to any experienced Admiralty lawyer[462].

     4.        Statute

     [460]Masters v Transworld Drilling Co (1982) 688 F 2d 1013 at 1014.

     [461][1985] AC 104 at 120. See also Polish Steam Ship Co v Atlantic Maritime Co [1985] QB 41 at 50-51.

     [462][1985] AC 104 at 121.

353. At the same time as equity and Admiralty were developing awards of interest on compensation, the same approach was being taken in legislation.  The first law was a limited power in s 28 of the Civil Procedure Act 1833 (UK)[463] to award interest on judgment debts or awards of damages.  Statutory interest was generalised on a wide scale in England with the enactment of the Law Reform (Miscellaneous Provisions) Act 1934 (UK) following the report of the Law Revision Committee presented to Parliament in that year.  In the published report, the Committee observed[464]:

     "In practically every case a judgment against the defendant means that he should have admitted the claim when it was made and have paid the appropriate sum for damages.  There are of course some cases where it is reasonable that he should have had a certain time for investigation, and in those cases the Court might well award interest only from the date when such reasonable time had expired.  This is often done at present in claims under insurance policies.  There is no doubt that the present state of the law provides a direct financial motive to defendants to delay proceedings."

     [463]3 & 4 Will 4 c 42.

     [464]Great Britain, Law Revision Committee, Second Interim Report (1936) Cmd 4546 at 5.

354. In Australia, general statutory interest provisions now exist in State, Territory and federal courts legislation which generally provide for the award of interest upon judgment debts and damages[465].  The rationale for the statutory interest was explained by Lord Wright, a member of the Law Revision Committee that had generalised the provision for statutory interest, in Riches v Westminster Bank Ltd[466]:

     "The general idea is that he is entitled to compensation for the deprivation.  From that point of view it would seem immaterial whether the money was due to him under a contract express or implied or a statute or whether the money was due for any other reason in law.  In either case the money was due to him and was not paid, or in other words was withheld from him by the debtor after the time when payment should have been made, in breach of his legal rights, and interest was a compensation, whether the compensation was liquidated under an agreement or statute, as for instance under s 57 of the Bills of Exchange Act, 1882, or was unliquidated and claimable under the Act as in the present case."

     [465]Federal Court of Australia Act 1976 (Cth), s 51A; Civil Procedure Act 2005 (NSW), s 100; Supreme Court Act 1986 (Vic), ss 58‑60; Supreme Court Act 1935 (SA), s 30C; Civil Proceedings Act 2011 (Qld), s 58; Supreme Court Act 1935 (WA), s 32; Supreme Court Act (NT), s 84; Court Procedures Act 2004 (ACT), s 7, Sch 1, item 20; Court Procedures Rules 2006 (ACT), r 1619. Compare Supreme Court Civil Procedure Act 1932 (Tas), ss 34-35.

     [466][1947] AC 390 at 400. See also Prudential Assurance Co Ltd v Revenue and Customs Commissioners [2018] 3 WLR 652 at 680 [76]; [2019] 1 All ER 308 at 335.

     The rationale in equity, in Admiralty, and under statute

355. In all of the instances discussed above involving interest on compensation at common law, in equity, in Admiralty, and under statute, the interest was not awarded for a proved loss.  A claim for interest based upon proved losses from the failure to obtain money would be interest as part of the compensation award[467].  This type of claim for interest is "a loss like any other"[468] and could attract compound interest if that is what was lost.  In contrast, the award of interest on compensation or interest on a debt "is no part of the debt or damages claimed, but something apart on its own"[469].

     [467]Hungerfords v Walker (1989) 171 CLR 125.

     [468]BritNed Development Ltd v ABB AB [2018] 5 CMLR 37 at 1693 [545].

     [469]Jefford v Gee [1970] 2 QB 130 at 149.

356. The reason why interest is awarded, as "something apart", on the amount that would otherwise be due as compensation is that the plaintiff has been kept out of the money for a period of time.  The cases, and the rationale of the legislation, emphasise the concern that the plaintiff be compensated for being deprived for a period of time of the payment that should have been received.  However, the period is only a single period.  The plaintiff has not been kept out of money for a period of time, then kept out of the money and interest for a further period, then the money and the interest and interest on the interest for a further period, and so on.  This is why the interest awarded in Admiralty, or on default of payment by a purchaser of land, or under the various statutes, was never compound interest.

357. There may, however, be some tension between, on the one hand, recognising that there is only one period of deprivation and, on the other hand, recognising that simple interest over that period does not fully reflect the extent of the deprivation as measured in commercial terms.  That conflict was generally resolved by generous assumptions made by legislatures and the common law in the rate of interest.  Those assumptions often used a single rate for clarity.

358. In Calton v Bragg[470], Lord Ellenborough CJ said that "[i]t is not only from decided cases, where the point has been raised upon argument, but also from the long continued practice of the Courts, without objection made, that we collect rules of law".  The long-established conservatism was not limited to an insistence that the interest be for a single period.  It also extended to a strong reluctance to depart from the rate of interest.  For instance, the interest awarded by the Admiralty courts in England and Australia in limited liability actions[471] was set at 4 per cent for more than a century[472].  More recently, in England the rate has generally been set at a market borrowing rate of base rate plus 1 per cent following the practice, under statute[473], of the Commercial Court[474].  In Asiatic Steam Navigation Co Ltd v The Commonwealth[475], this Court refused to depart from a rate of 4 per cent, although acknowledging that the rate of interest upon a judgment was 5 per cent, and that the 4 per cent rate was low according to the economic conditions.  The Court referred to the lack of change in the rate for more than a century and reiterated the reason given by Dixon J for refusing to change the 4 per cent rate when awarding interest in equity for the purpose of adjusting rights on legacies[476].  That reason was stability:  marked fluctuations in interest rates over time have "rather confirmed the policy of the court in fixing for its purposes a rate which over a long period represents a fair or mean rate of return for money"[477].

     [470](1812) 15 East 223 at 226 [104 ER 828 at 830].

     [471]Compare The Mecca [1968] P 665 at 673; Roscoe and Hutchinson, The Admiralty Jurisdiction and Practice of the High Court of Justice, 5th ed (1931) at 364-365.

     [472]The Theems [1938] P 197 at 201; Asiatic Steam Navigation Co Ltd v The Commonwealth (1956) 96 CLR 397 at 421; [1956] HCA 82; The Abadesa [No 2] [1968] P 656 at 664.

     [473]Law Reform (Miscellaneous Provisions) Act 1934 (UK), s 3.

     [474]Cremer v General Carriers SA [1974] 1 WLR 341 at 355-356; [1974] 1 All ER 1 at 14-15; Polish Steam Ship Co v Atlantic Maritime Co [1985] QB 41 at 67.

     [475](1956) 96 CLR 397 at 420-421.

     [476](1956) 96 CLR 397 at 421.

     [477]In re Tennant; Mortlock v Hawker (1942) 65 CLR 473 at 507-508; [1942] HCA 3, cited in Asiatic Steam Navigation Co Ltd v The Commonwealth (1956) 96 CLR 397 at 421.

359. Stability can be achieved now, without the sacrifice of a fair rate, by adopting the rate, as was common ground, from the Federal Court Practice Note. To depart now from the practice of equity, Admiralty, or statute established for centuries would be a significant sacrifice of the stability of the law in circumstances where the underlying principle for the award of interest in all of these areas, over the entire course of their development, has been that the claimant is deprived of money for a single period. Although the "just terms" that are required for the award of compensation in s 51 import a power to award interest, that power cannot be extended to compound interest "on" an award of compensation.

     Conclusion

360. I agree with the orders proposed in the joint judgment.  In particular, I agree that the award of interest upon the "economic loss" of $320,250, as rounded, should be $910,100.  This award of interest employs an rt (rate multiplied by time) multiplier of 2.84182, which is the multiplier used by the Full Court.  Although different rt multipliers were adopted by the parties in spreadsheets handed up during these appeals, there was no challenge in this Court to the rt multiplier used by the Full Court, which, as explained earlier in these reasons, varied the rt multiplier used by the primary judge consequent upon allowing the Commonwealth's appeal ground concerning lot 47.