Posted on March 24, 2025 by Frances Tse and Lindsay Taylor 10

High Court Confirms Native Title is a Proprietary Right & Subject to Constitutional Guarantee of Just Terms Compensation

Aboriginal and Torres Strait Islander readers are advised this article contains the name of a deceased person.

On 12 March 2025, the High Court handed down its landmark decision in the much-awaited native title case of Commonwealth of Australia v Yunupingu [2025] HCA 6. The  Court confirmed the status of native title as a proprietary right and that the constitutional requirement for the Commonwealth to acquire property on just terms applies to native title.

Background

The Gumatj Clan or Estate Group of the Yolngu People (‘the Gumatj Clan‘) made an application to the Federal Court seeking compensation from the Commonwealth of Australia under the Native Title Act 1993 (Cth) (‘NT Act‘) in respect of the acquisition of land and minerals in the Gove Peninsula in the Northern Territory.

The Northern Territory became a territory of the Commonwealth in 1911. Until self-government was granted with the passing of the Northern Territory (Self-Government) Act 1978 (Cth), the Commonwealth relied on its powers under s122 of the Constitution to make laws for the government of the Northern Territory, including the Northern Territory (Administration) Act 1910 (Cth). Various leases were granted, and Ordinances which appropriated minerals and metals to the Commonwealth were enacted, under the laws made by the Commonwealth.

Under the NT Act, compensation is payable to native title holders in respect of certain acts defined as ‘past acts’. Relevantly, a ‘past act’ must have been an act that, but for the operation of the NT Act, was invalid to any extent by reason of the existence of native title rights and interests.

The Gumatj Clan raised two preliminary constitutional questions which needed to be answered in order for the Federal Court to determine whether the granting of the leases and the enactment of the Ordinances might have been invalid by reason of the existence of native title rights and interests and therefore might constitute ‘past acts’ for which compensation is payable. The two questions were:

1. whether the enactment of a law for the government of a territory pursuant to s122 of the Constitution is subject to the requirement in s51(xxxi) of the Constitution for compensation on just terms, and
2. whether extinguishment of native title by or under a law of the Commonwealth before the commencement of the NT Act constituted an ‘acquisition of property’ within the meaning of s51(xxxi) of the Constitution. 

The Full Court of the Federal Court determined the two constitutional questions in favour of the Gumatj Clan, and the Commonwealth appealed the decision to the High Court.

The two constitution questions were considered by the High Court in Yunupingu.

Decision

The High Court dismissed the appeal and held that the Full Court was correct to accept the Gumatj Clan’s arguments on the two constitutional issues.

Is the enactment of a law of a territory pursuant to s122 of the Constitution for acquisition of property subject to the s51(xxxi) requirement for compensation on just terms? 

Prior to the High Court’s consideration of the Gumatj Clan’s claim, it had in Teori Tau v The Commonwealth [1969] HCA 62 (‘Teori Tau‘) unanimously held that s122 of the Constitution was “general and unqualified’, and as such the power to make laws for the acquisition of property in a territory was not limited to the making of laws that require just terms for the acquisition of property pursuant to s51(xxxi) of the Constitution.

The High Court in Yunupingu has now formally overruled the precedent in Teori Tau, changing the relationship between ss51(xxxi) and 122 of the Constitution so that the requirement for just terms compensation now extends to laws made by the Commonwealth in respect of acquisitions of property in the territories. The majority of the High Court stated:

“The time has come for it to be finally and authoritatively declared that the power conferred on the Commonwealth Parliament by s122 of the Constitution to make laws for the government of a territory does not extend to making a law with respect to an acquisition or property otherwise than on just terms within the meaning of s51(xxxi) of the Constitution.“

Is extinguishment of native title rights and interests under a law of the Commonweath an ‘acquisition of property’? 

The Commonwealth argued in Yunupingu that extinguishment of native title rights or interests recognized at common law is not an acquisition of property within the meaning of s51(xxxi) of the Constitution because native title rights are inherently defeasible by way of its susceptibility to variation through extinguishment.

The High Court did not accept the Commonwealth’s argument. The High Court recognized that while native title rights could be extinguished by valid statutes or the exercise of executive power this did not make it inherently defeasible because native title rights and interests in common law continues to exist under traditional laws and customs.

Native title rights and interests were confirmed in Yunupingu to be proprietary in nature and constitute ‘property’ for the purposes of s51(xxxi) of the Constitution. In doing so the High Court sought to uphold the underlying rationale of the decision in Mabo v Queensland (No 2) [1992] HCA 23 that “all persons, including native title holders, are equal before the law in the enjoyment of their human right to own and inherit property.”

The effect of this conclusion is that the extinguishment of native title rights and interests by or under a law of the Commonwealth would trigger the requirement in s51(xxxi) for compensation on just terms.

Implications

The High Court’s decision in Yunupingu affirms key findings that support the Gumatj Clan’s claim to compensation under the NT Act and the claim will now return to the Federal Court for determination.

More broadly, the decision in Yunupingu opens the door for native title holders to potentially seek compensation for historical extinguishment or impact on native title arising from compulsorily acquisition or appropriation of land or minerals pursuant to laws for territories made under s122 of the Constitution if it was not done on just terms. In NSW, the High Court’s decision may also have implications for the Commonwealth’s administration of the Jervis Bay area since the territory was brought under the governance framework of s122 of the Constitution by way of the Jervis Bay Territory Acceptance Act 1915. 

In addition, the High Court’s decision confirms that native title is a proprietary right subject to protection under constitutional guarantees against exercises of power giving rights to appropriation of property without adequate compensation. This emphasizes that while native title rights are susceptible to extinguishment it is not a lesser form of property in relation to other common law proprietary rights.

The High Court decision can be read in full here.

If you have any questions regarding this article please leave a comment below or contact Lindsay Taylor, Frances Tse or Taylor Finnegan on 02 8235 9700.