Native title rights are property, and compensation is payable for extinguishing them pre-1975: High Court

Until this morning, the conventional view has been that Indigenous Australians were not entitled to compensation for the extinguishment of their native title that took place before the Racial Discrimination Act 1975. The High Court has just overturned that view, leading to the possibility of historical compensation claims by native title parties for “acts” on their traditional country that occurred pre-1975 (Commonwealth of Australia v Yunupingu [2025] HCA 6).

We are considering the implications of the decision, which is the most significant and complex native title decision from the High Court since 2019, including whether compensation liability may be passed through to resources companies, agribusiness and others.

Background to the decision

Dr Galarrwuy Yunupingu (on behalf of members of the Gumatj Clan or Estate Group) sought $700 million compensation from the Commonwealth and Northern Territory for the acquisition of their native title rights and interests on the Gove Peninsula in the Northern Territory. The existence of those rights has not yet been determined by a court. While their native title claim is continuing to progress through the courts, the Commonwealth challenged the existence of any right to compensation as an important preliminary question of law. It is this preliminary question that the High Court has now considered.

But first, a bit of history is needed to understand this case. Until 1911, the Northern Territory was part of the State of South Australia, which granted pastoral leases over vast areas of land. In 1911, South Australia handed over its northern part to the Commonwealth, creating the Northern Territory. Between 1911 and 1978, the Commonwealth Government had the exclusive power to make laws for the Northern Territory. Before 1975, it made various ordinances concerning mineral rights, and also granted mining leases over part of the land claimed by the Gumatj Clan.

The Gumatj argued that the appropriation or grant of interests in land over which it held native title rights was an acquisition of property by the Commonwealth, but that the Commonwealth had not done so on "just terms" as required by section 51(xxxi) of the Constitution.

The High Court held this morning:

• the Commonwealth can’t acquire property otherwise than on just terms, including over the Territories;
• when the Commonwealth extinguished native title (which is recognised at common law) before the commencement of the Native Title Act 1993 (Cth) on 1 January 1994, it acquired property within the meaning of section 51(xxxi) of the Constitution. Any such acquisition needed to occur on just terms; and
• the grant of pastoral leases pre-1911 by the South Australian Government did not extinguish any non-exclusive native title rights over minerals on or under the land.

What does this mean for resource companies, project proponents and agribusiness in the Northern Territory? The position on native title compensation is both complex and nuanced. Native title parties need to prove that they hold native title rights and interests to be able to claim compensation, which is a long and arduous process. Additionally, Governments can and do respond to complex issues in this area arising from court decisions with legislative changes, when appropriate.

Having said that, some immediate considerations include:

• future projects may choose to do additional due diligence to investigate the pre-1975 history of underlying land tenure to consider whether any historic compensation risks might arise;
• it may be prudent to review mining and pastoral leases to identify potential extinguishment of native title by acts pre-1975, and any terms that may pass-through compensation liabilities for such extinguishment; and
• the potential for claims for compensation for historic extinguishment of native title to arise in the context of negotiations with native title parties.

Some readers will no doubt have noticed the State grant of a pastoral lease in this case, and wondered what effect this might have on their projects in Australian States. Determining if this decision has implications beyond the Northern Territory is complicated, and the answer at this stage is "maybe". Much depends on the history of the land in question (including if it was acquired from the Commonwealth), and the operation and effect of State laws on both the acquisition of property, and the grant of rights and interests (including freehold, leasehold and other rights, such as mining tenements).

The key thing to understand about this decision is that an already complex area just became more complicated. While the full impact is worked through, proponents will need to consider a longer historical period and the various acts that precede their occupation and use of land, particularly in the Territories (and possibly other parts of the country). It is now even more important to get advice early to assess the native title status of land, and understand whether there is a possible liability for compensation.