Legal Practice Briefing No. 32

Number 32

20 May 1997

THE WIK PEOPLES V THE STATE
OF QUEENSLAND

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

Summary of the Decision

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

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

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

The Claim

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

The Pastoral Leases

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

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

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

The Mining Leases

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

Decision by Drummond J

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

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

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

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

The High Court Decision

Did the Leases Confer a Right to Exclusive Possession?

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

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

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

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

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

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

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

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

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

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

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

Validity of the Comalco and Aurukun Agreements and
Mining Leases

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

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

Implications of the Decision

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

Native Title Claims

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

Activities by Pastoralists

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

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

Common Law

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

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

The NTA

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

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

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

The WIK Task Force

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

Notes

1 (1996)
141 ALR 129.

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

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

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

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

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

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

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

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

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

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

12 At
153 and 155.

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

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

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

16 At
155 and 160.

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

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

19 At
161.

20 Per
Brennan CJ at 163.

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

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

23 See
Kirby J at 285.

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

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

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

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

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

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

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

31 See
the Preamble to the NTA.

32 Cf
Gummow J at 247.

33 See
section 234 of the NTA.

34 Section
23 of the NTA.

35 See
section 26 of the NTA.

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

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

Back to Legal Briefing
Index