High Court rules mining leases do not necessarily extinguish native title

On 12 March 2014 the High Court handed down a unanimous decision in Western Australia v Brown [2014] HCA 8 that mining leases granted pre-1975 do not extinguish native title if the lease does not grant exclusive possession.  The High Court confirmed that mining rights and native title rights can co-exist and, importantly, clarified when native title rights will be extinguished by statutory rights at common law.

Background

The State of Western Australia (WA) entered into an agreement in 1964 with joint venturers to grant two mineral leases to develop iron ore deposits at Mount Goldsworthy (State Agreement).  The State Agreement was made pursuant to section 4(1) Iron Ore (Mount Goldsworthy) Agreement Act 1964 (WA).   Two mineral leases were granted to the joint venturers on 17 February 1966. 

In accordance with the mining leases and the State Agreement, the mining and township infrastructure was built over one-third of the mineral lease area.  The mine was closed in December 1982.  The town was closed 10 years later.

The parties agreed that, subject to extinguishment, the Ngarla People held non-exclusive native title rights over the land (subject to the mineral leases) to access and camp on the land, to take flora, fauna, fish, water and other traditional resources (excluding minerals) from the land, to engage in ritual and ceremony on the land and to care for, maintain and protect from physical harm particular sites and areas of significance.

The State Agreement stipulated that the joint venturers would allow the State and third parties to have access over the mineral lease area provided that such access over shall not unduly prejudice or interfere with the operations.

The questions before the High Court were whether native title had been extinguished as a result of:

• the mineral leases conferring exclusive possession over the land
• the rights under the mineral leases being inconsistent with the native title rights and interests, or
• the joint venture parties exercising their rights to develop and construct mines, a town and associated infrastructure.

The Judgment and the effect of this decision

This High Court decision is relevant for statutory grants made pre-1975.  Leases granted after 1975 are dealt with in accordance with the Racial Discrimination Act 1975 (Cth) and the Native Title Act 1993 (Cth).  Leases granted before 1975 must refer to the common law to determine whether native title has been extinguished.  By addressing the three questions before the Court, this judgment has clarified the test for extinguishment.

Addressing the first of the three questions, the High Court determined that the rights provided under the mineral leases at the time of grant did not give the joint venturers exclusive possession of the land.   On the contrary, the State Agreement provided that both the State and third parties were entitled to access over the land the subject of the leases.  Neither the mineral leases nor the State Agreement expressly provided that the joint venturers were entitled to both possess the land and have the right to exclude any and everyone from the land for any reason or no reason at all. 

With respect to the second question, the High Court ruled that rights granted under the mineral leases were not inconsistent with native title rights.  The court considered whether the existence of the rights granted to the joint venturers necessarily implied that the claimed native title rights and interests could no longer exist.  

The mineral leases did not give the joint venturers a right of exclusive possession.  In this respect, the mineral leases were no different from the pastoral leases considered in Wik Peoples v The State of Queensland (Wik) the mining leases considered in Western Australia v Ward (Ward) or the Argyle mining lease also considered in Ward.  The joint venturers were given limited rights to carry out mining and associated works anywhere on the land without interference by others.  Those rights were not, and are not, inconsistent with the coexistence of the claimed native title rights and interests over the land.

The High Court reasoned that at the time of grant of the mineral leases the native title holders could have exercised all of the rights that are now still claimed on the land without breach of the rights granted to the joint venturers.  Accordingly, there was not then, and is not now, any inconsistency between the rights granted to the joint venturers and the native title rights and interests claimed.

With respect to the third and final question, the High Court overturned the decision of De Rose v South Australia [No 2] (2005) 145 FCR 290 (De Rose).  In the case of De Rose it was held that exercising the right to construct improvements on a pastoral lease was inconsistent with the native title rights and interests claimed.  The construction and improvements on the pastoral lease extinguished native title upon the improved land.  The High Court held that the case of De Rose should not be followed. 

The High Court clarified that although the joint venturers did not have exclusive possession of the land (for reasons discussed above), if the joint venturers were undertaking activities, such as building a house, that was inconsistent with the native title rights and interests, the mining lease rights took priority over the exercise of native title rights.  However, the construction of a house (or any other improvement) will not extinguish the native title rights and once the joint venturers cease to exercise their rights under the mining lease, the native title holders can continue to exercise their rights over the area. 

The extinguishment test

The High Court decision clarified that neither the grant of a mining lease itself nor the construction of improvements (including building houses and towns) on the lease extinguished native title rights.  The holder of the mining lease will need to consider the rights of the mining lease at the time it was granted to determine whether the rights granted extinguish any alleged native title rights and interests (and if so, to what extent).  The court has referred to this as an ‘objective inquiry involving the comparison of rights’.  A determination must be made at the time of grant as to what extent the mining lease rights are inconsistent with native title.  To the extent there is no inconsistency with the rights under the mining lease, the non-exclusive rights can co-exist.

What does this mean for mining companies and pastoralists?

The High Court did not distinguish the mineral leases discussed in this case from the pastoral leases considered in Wik and the mining leases and the Argyle mining lease considered in Ward.  Accordingly, this decision shares practical implications for both mining lease holders and pastoral lease holders. 

This decision has no ramifications for mining or pastoral leases where exclusive possession rights have been granted.  The leaseholder will have exclusive possession where the whole of the land the subject of the mineral lease grant or pastoral lease must be used in a way which would not permit any use of the land by native title holders. 

Importantly, where a mining or pastoral lease does not grant exclusive possession, the leaseholder cannot rely on exercising their rights under the lease as a means of extinguishing native title.  The leaseholders must consider the legal nature and content of the two sets of rights to determine whether they are inconsistent at the time of grant.  There cannot be degrees of inconsistency of rights.  The two sets of rights are either inconsistent or they are not.  To the extent of inconsistency, native title will be extinguished. 

Lyndal Hanrahan, Dominic McGann