FEDERAL COURT OF AUSTRALIA

Ward v State of Western Australia [2013] FCA 281

THE COURT ORDERS THAT:

1.    The interlocutory application of the respondent filed 15 February 2013 be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

OVERVIEW

1    By interlocutory application filed 15 February 2013, the respondent (State) seeks to strike out:

    paragraphs [41], [42], [45A] and [53] of the applicant’s further amended compensation application (form 4) filed 10 December 2012 (compensation application); and

    paragraphs [9.2], [12.1(e)], [13.2] and [13.8] of the applicant’s further amended statement of facts, issues and contentions filed 10 December 2012 (statement of facts, issues and contentions).

2    The hearing of the strike out application was scheduled for 15 March 2013. The parties then agreed that the Court should determine the application having regard to the written submissions filed by the parties.

3    Put broadly at the outset, the applicant’s position on the strike out application is that it recognises, based on existing High Court authority, that there exist serious impediments to the maintenance of the compensation application on the impugned grounds, but wishes to have the opportunity to contend that currently limiting High Court authority should be reviewed. To facilitate a course of proceedings, including subsequent appeals in the current proceeding – which the applicant says the State recognises as a “test case” in relation to a compensation application under the Native Title Act 1993 (Cth) (NTA) – the applicant submits the impugned paragraphs should not be struck out.

4    Having regarded the parties’ submissions the Court considers the course of action proposed by the applicant is appropriate in the very particular circumstances of this proceeding and so dismisses the strike out application.

statutory context

5    By the compensation application:

    The applicant applies for compensation under s 61(1) of the NTA.

    The applicant pleads that those persons comprising the applicant are members of the compensation claim group, which group is identified by the application.

    The boundaries of the area covered by the application and in respect of which compensation is claimed are identified in Sch B to the application and include Gibson Desert Nature Reserve (Reserve 34606).

    Schedule E to the application provides a description of the native title rights and interests in relation to the area for which compensation is claimed.

    Schedule I to the application provides details of the acts which it is claimed extinguished or affected native title rights and interests for which compensation is claimed.

    By [40], the applicant states that:

The acts which extinguished or affected native title rights and interests were:

(i)    the reservation of the land as Reserve 34606, for the purpose of the conservation of fauna and flora, under s.29 of the Land Act 1933 (WA); and

(ii)    the vesting of Reserve 34606 in the Western Australian Wildlife Authority on 22 April 1977 for the reserve purpose under s.33 of the Land Act 1933 (WA).

6    It is in this context that the impugned paragraphs [41], [42], [45A] and [53] of the compensation application then state:

41.    Each of the acts specified in [40] have been validated as category D past acts under s.19 of the Act and s.5 of the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 (WA) (Titles Validation Act).

42.    If, contrary to what is said in paragraph 41, the vesting of Reserve 34606 is not a category D past act then either:

(i)    it was an act which validly extinguished native title rights and interests in the Application Area and did not need to be validated; or

(ii)    it is a previous exclusive possession act, and s.12I of the Titles (Validation) Act would apply to validate the extinguishment of native title rights and interests.

    …

45A.     The provisions of Act which deal with the compensation entitlement are as follows:

(a)     if, as the Applicant maintains, both the reservation of the land as Reserve 34606 under s.29 of the Land Act 1933 and the vesting of Reserve 34606 in the Western Australian Wildlife Authority under s.33 of the Land Act 1933, are category D past acts, the Compensation Claim Group are entitled to compensation under ss.17(2) and 20(1) of the Act;

(b)     if, on the other hand, the reservation of the land as Reserve 34606 under s.29 of the Land Act 1933 was a category D past act but the vesting of the Reserve under s.33 was always valid, the Compensation Claim Group are entitled to compensation under ss.17(2) and 20(1) of the Act in respect of the reservation of the land as Reserve 34606 and under s.45 of the Act in respect of the vesting of the Reserve;

(c)     alternatively, if the reservation of the land as Reserve 34606 under s.29 of the Land Act 1933 was a category D past act and the vesting of the Reserve under s.33 was a previous exclusive possession act, the Compensation Claim Group are entitled to compensation under ss.17(2) and 20(1) of the Act in respect of the reservation of the land as Reserve 34606 and under s.23J of the Act in respect of the vesting of the Reserve.

…

53.     The Applicant seeks to have Reserve 34606 cancelled so that the native title rights and interests of the members of the Compensation Claim Group will again have full effect: NTA s.238(6). In the alternative an alternative form of tenure may be created that is vested in a corporation established to hold the title on behalf of the members of the Compensation Claim Group. This tenure could take the form of the Indigenous Conservation Title proposed in 2009 in the Indigenous Conservation Title Bill 2007, minus the requirement for a 99-year lease back to the [Department of Environment and Conservation of Western Australia]. The Compensation Claim Group will consider a joint management arrangement with DEC if that arrangement:

(a)     will ensure that the land and the waters of the Application Area are properly cared for and protected;

(b)     will provide the members of the Compensation Claim Group with significant funding, training, employment and business opportunities on their traditional lands; and

(c)     will ensure that the Compensation Claim Group have control of any decision making processes in relation to the land and waters of the Application Area.

7    In its statement of facts, issues and contentions at [9.2], the applicant refines these claims into the following contentions, namely that the compensation claim group are entitled to compensation on alternative bases:

(a)    that both the reservation of the land as Reserve 34606 under s 29 of the Land Act 1933 (WA) and the vesting of Reserve 34606 in the Western Australian Wildlife Authority under s 33 of the Land Act 1933 (WA), are category D past acts, for which the compensation claim group are entitled to compensation under s 17(2) and s 20(1) of the NTA;

(b)    if, on the other hand, the reservation of the land as Reserve 34606 was a category D past act, but the vesting of Reserve 34606 was always valid, the compensation claim group are entitled to compensation under the NTA in respect of the reservation of the land as Reserve 34606 and under s 45 of the NTA in respect of the vesting of the Reserve;

(c)    alternatively, if the reservation of the land as Reserve 34606 was a category D past act and the vesting was a previous exclusive possession act, the compensation claim group are entitled to compensation under the NTA in respect of the reservation of the land as Reserve 34606 and under s 23J of the NTA in respect of the vesting of the reserve.

8    Sections 17, 20, 23J, 45 and 51 of the NTA are relevant to the compensation claim advanced and the submissions of the parties on the strike out application and provide as follows:

17     Entitlement to compensation

Extinguishment case

(1)     If the act attributable to the Commonwealth is a category A past act or a category B past act, the native title holders are entitled to compensation for the act.

Non-extinguishment case

(2)     If it is any other 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

(b)     the native title concerned is to some extent in relation to an offshore place; or

(c)     the native title concerned relates either to land or to waters and the similar compensable interest test is satisfied in relation to the act.

Compensation for partial effect of act

(3)     If the entitlement arises only because one, but not both, of paragraphs (2)(a) and (b) are satisfied, it is only an entitlement for the effect of the act on the native title in relation to the onshore place, or the offshore place, mentioned in the relevant paragraph.

Who pays compensation

(4)    The compensation is payable by the Commonwealth.

…

20    Entitlement to compensation

Compensation where validation

(1)    If a law of a State or Territory validates a past act attributable to the State or Territory in accordance with section 19, the native title holders are entitled to compensation if they would be so entitled under subsection 17(1) or (2) on the assumption that section 17 applied to acts attributable to the State or Territory.

Compensation where no validation

(2)    Native title holders are entitled to compensation for the past act attributable to a State or Territory that, at the time when the claim for compensation is determined, has not been validated by the State or Territory in accordance with section 19.

Recovery of compensation

(3)    The native title holders may recover the compensation from the State or Territory.

States or Territories may create compensation entitlement

(4)    This section does not prevent a law of a State or Territory from creating an entitlement to compensation for a past act or for the validation of a past act.

Note:    Paragraph 49(b) deals with the situation where there are multiple rights to compensation under Commonwealth, State and Territory laws.

…

23J    Compensation

Entitlement

(1)    The native title holders are entitled to compensation in accordance with Division 5 for any extinguishment under this Division of their native title rights and interests by an act, but only to the extent (if any) that the native title rights and interests were not extinguished otherwise than under this Act.

Commonwealth acts

(2)    If the act is attributable to the Commonwealth, the compensation is payable by the Commonwealth.

State and Territory acts

(3)    If the act is attributable to a State or Territory, the compensation is payable by the State or Territory.

…

45     RDA compensation to be determined under this Act

(1)    If the Racial Discrimination Act 1975 has the effect that compensation is payable to native title holders in respect of an act that validly affects native title to any extent, the compensation, in so far as it relates to the effect on native title, is to be determined in accordance with section 50 as if the entitlement arose under this Act.

Recovery of compensation

(2)    If the act took place before 1 January 1994 and is attributable to the Commonwealth, a State or a Territory, the native title holders may recover the compensation from the Commonwealth, the State or the Territory, as the case requires.

…

51     Criteria for determining compensation

Just compensation

(1)    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.

Acquisition under compulsory acquisition law

(2)    If the act is the compulsory acquisition of all or any of the native title rights and interests of the native title holders, the court, person or body making the determination of compensation on just terms may, subject to subsections (5) to (8), in doing so have regard to any principles or criteria for determining compensation set out in the law under which the compulsory acquisition takes place.

Compensation where similar compensable interest test satisfied

(3)    If:

(a)    the act is not the compulsory acquisition of all or any of the native title rights and interests; and

(b)    the similar compensable interest test is satisfied in relation to the act;

the court, person or body making the determination of compensation must, subject to subsections (5) to (8), in doing so apply any principles or criteria for determining compensation (whether or not on just terms) set out in the law mentioned in section 240 (which defines similar compensable interest test).

Compensation not covered by subsection (2) or (3)

(4)    If:

(a)    neither subsection (2) nor (3) applies; and

(b)    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 compensation on just terms may, subject to subsections (5) to (8), in doing so have regard to any principles or criteria set out in that law for determining compensation.

Monetary compensation

(5)    Subject to subsection (6), the compensation may only consist of the payment of money.

Requests for non monetary compensation

(6)    If the person claiming to be entitled to the compensation requests that the whole or part of the compensation should consist of the transfer of property or the provision of goods or services, the court, person or body:

(a)    must consider the request; and

(b)    may, instead of determining the whole or any part of the compensation, recommend that the person liable to give the compensation should, within a specified period, transfer property or provide goods or services in accordance with the recommendation.

Where recommendation not complied with

(7)    If the person does not transfer the property or provide the goods or services in accordance with the recommendation, the person claiming to be entitled to the compensation may request the court, person or body to determine instead that the whole or the part of the compensation concerned is to consist of the payment of money.

Where recommendation complied with

(8)    If the person does transfer the property or provide the goods or services in accordance with the recommendation, the transfer of the property or provision of the goods or services constitutes full compensation for the act, and the entitlement to it is taken to have been determined in accordance with this Division.

9    It is no understatement to state that the NTA is a complex piece of legislation and that some of its provisions require careful study in order to appreciate when they apply and the effects of their application. This is particularly so in relation to acts done in the past that affect or may have affected native title, being acts that affect a person’s right to claim compensation particularly under ss 17 and 20 of the NTA.

10    In this regard, the overview of the NTA at s 4 relevantly states:

Consequences of past acts and future acts

(4)     For past acts and future acts, this Act deals with the following matters:

(a)     their validity;

(b)     their effect on native title;

(c)     compensation for the acts.

    Intermediate period acts

(5)     However, for certain acts (called intermediate period acts) done mainly before the judgment of the High Court in Wik Peoples v Queensland (1996) 187 CLR 1, that would be invalid because they fail to pass any of the future act tests in Division 3 of Part 2, or for any other reason because of native title, this Act provides for similar consequences to past acts.

Confirmation of extinguishment of native title

(6)     This Act also confirms that many acts done before the High Court’s judgment, that were either valid, or have been validated under the past act or intermediate period act provisions, will have extinguished native title. If the acts are previous exclusive possession acts (see section 23B), the extinguishment is complete; if the acts are previous non-exclusive possession acts (see section 23F), the extinguishment is to the extent of any inconsistency.

11    It may also be noted that, in the Preamble to the NTA, following the observation that it is important to provide for the validation of certain acts, it is stated:

Justice requires that, if acts that extinguish native title are to be validated or to be allowed, compensation on just terms, and with a special right to negotiate its form, must be provided to the holders of the native title. However, where appropriate, the native title should not be extinguished but revive after a validated act ceases to have effect.

12    The validation of past acts is provided for by Div 2 of Pt 2 of the NTA. A “past act” is defined by s 228. Section 13A, however, by way of overview, states in subs (1) that, in summary, Div 2 validates or allows States and Territories to validate certain acts that:

(a)     took place before 1 January 1994; and

(b)     would otherwise be invalid because of native title.

This Division also covers certain acts done after that day consisting of an extension or renewal etc. of an act done before that day.

13    Division 2A of Pt 2 of the NTA deals with validation of intermediate period acts. The expression “intermediate period act” is defined by s 232A. In the s 21 overview, it is stated in subs (1) that, in summary, Div 2A validates or allows States and Territories to validate certain acts that:

(a)     took place on or after 1 January 1994 but on or before 23 December 1996; and

(b)     would otherwise be invalid to any extent because they fail to pass any of the future act tests in Division 3 of Part 2 or for any other reason because of native title.

14    In relation to past acts, there are four categories: category A past acts; category B past acts; category C past acts; and category D past acts. “A category D past act” is defined by s 232 as:

…is any past act that is not a category A past act, a category B past act or a category C past act.

15    Different extinguishment rules apply depending on the category of past act and also depending on whether the relevant act is attributable to the Commonwealth or a State or Territory.

16    Additionally, depending on the category of a validated past act, the non-extinguishment principle may or may not apply to that act.

17    Division 2B of Pt 2 deals with confirmation of past extinguishment of native title by what are called “previous exclusive possession acts”, which acts are defined by s 23B. In the s 23A overview of Div 2B, it is stated in subs (1) that the Division provides that certain acts attributable to the Commonwealth that were done on or before 23 December 1996 will have completely or partially extinguished native title. Provision is also made in Div 2B in respect of what are called “previous non-exclusive possession acts”.

18    The NTA in each relevant Division concerning past acts, intermediate period acts and previous exclusive possession acts and previous non-exclusive possession acts makes provision concerning entitlement to compensation.

The State’s submissions

19    In this case, as noted above, in issue in the compensation application is Reserve 34606, which was both reserved and vested under the Land Act 1933 (WA) (Land Act).

20    As a matter of first principle it becomes necessary to determine whether the reservation of the land and the vesting of the land were past acts. On the face of it, each was a past act because, in each case, it took place before 1 January 1994. The additional question is raised, however, whether each would otherwise be invalid because of native title, this being a necessary component of the NTA definition of “past act”. Because each of the acts of reservation and the act of vesting occurred in 1977, following commencement of the operation of the Racial Discrimination Act 1975 (Cth) (RDA) in 1975, there is a question whether the act of reservation and/or the act of vesting contravened the RDA because of native title and so was invalid.

21    By the impugned paragraphs of the compensation application, starting with [41], the applicant claims that each of the reservation and the vesting have been validated as category D past acts under s 5 of the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 (WA) (State Validation Act).

22    The State rejects these propositions, relying on Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1 (Ward).

23    It is appropriate to regard, first, the applicant’s contention advanced in [9.2(a)] set out above, namely:

(a)    that both the reservation of the land as Reserve 34606 under s 29 of the Land Act 1933 (WA) and the vesting of Reserve 34606 in the Western Australian Wildlife Authority under s 33 of the Land Act 1933 (WA), are category D past acts, for which the compensation claim group are entitled to compensation under s 17(2) and s 20(1) of the NTA.

24    The State contends it is uncontroversial that, if native title existed at the time of reservation, the reservation or creation of Reserve 34606 was a category D past act. The State says this is because it was an act in terms of s 226(2)(e) in that it “affects native title”. The State draws attention to what was said in Ward at [222].

25    In this regard, in Ward at [219], in the joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ, their Honours observed the act of designating land as a reserve for a public purpose, did not involve a step that was “necessarily inconsistent” with the native title holders continuing to use the land in whatever way they had, according to traditional laws and customs, been entitled to use it before its reservation, but that the exercise of the power of reservation “was inconsistent with any continued exercise of power by native title holders to decide how the land could or could not be used”.

26    Then, at [222], their Honours stated (footnotes omitted):

However, in the case of reserves created after 31 October 1975, account must be taken of Div 2 of Pt 2 of the NTA. Creation of a reserve, being the exercise of executive power of the Crown (in this case, in right of Western Australia and pursuant to legislative authority in that regard) fell within the definition of “act” in the NTA (s 226(2)(e)). Because it was inconsistent with the continued existence of the native title right to control the use of or access to land, it was an act which could have affected native title (s 227). Questions of the operation of the RDA could then arise. The considerations differ according to whether the reservation was of land that was then or had at any time been held under a pastoral lease or of land that was always vacant Crown land. In the case of land that was, or had been, held under a pastoral lease any right which native title holders may once have had to control the use of or access to the land would have been extinguished by the grant of the pastoral lease. The subsequent reservation of the land could not affect that right and no question would then arise under the RDA. In the case of reservation of land not earlier held under a pastoral lease, reservation, being inconsistent with the continued existence of a native title right to control the use of or access to the land, would extinguish that right and, by hypothesis, it would affect only that native title right. It follows from what was held in Mabo [No 1] and the Native Title Act Case [(1995) 183 CLR 373 at 449-451] that, because the practical operation and effect of the Land Act 1933 was to provide for the uncompensated destruction of native title rights and interests, there was an “arbitrary deprivation of property” and that the case is to be understood as being of the second kind identified by Mason J in Gerhardy [(1985) 159 CLR 70 at 98-99]. Further, this understanding of the operation of the RDA is consistent with the way in which the NTA is framed, with its frequent reference to acts taken under State or Territory legislation as being acts that are, or are not, valid. The Land Act 1933 was, therefore, to that extent, inconsistent with the RDA and the reservation invalid. Nevertheless, if it took place before 1 January 1994 it was a “past act” and validated by s 19 of the NTA and s 5 of the State Validation Act. As a category D past act the non-extinguishment principle would apply and native title rights would, in effect, be suspended for so long as the reservation remained.

27    It follows that in the joint judgment their Honours considered that, in the case of a reservation, such as Reserve 34606, which had not previously been a pastoral lease (or instrument having a like prior extinguishing effect), the reservation itself extinguished the right to control the use of or access to the land and so, by hypothesis, it would effect only that native title right. On the view expressed in the joint judgment, the Land Act was therefore, to that extent, inconsistent with the RDA and the reservation made invalid. Because the reservation took place before 1 January 1994, it was a “past act” as defined and validated by s 19 of the NTA and s 5 of the State Validation Act. It was also a category D past act and so the non-extinguishment principle applies and native title rights are, in effect, suspended for so long as the reservation remains.

28    Accordingly, the State accepts that to the extent the applicant contends that the creation of Reserve 34606 here was a category D past act, then such a contention is open.

29    It is with the further contention made on behalf of the applicant – that the vesting of Reserve 34606, which occurred at a point in time immediately after the reservation of the land under the Land Act, was also a category D past act – that the State takes particular exception.

30    The State draws attention to what their Honours said in the joint judgment in Ward, at [252], that, at the time of vesting of a reserve, “the only interests in the land which could be affected by the vesting and the holder of which would not be entitled to compensation would be native title rights and interests”.

31    The State notes that at [253], in the joint judgment, their Honours stated (footnotes omitted):

This analysis reveals that the provisions of the Land Act 1933 providing for the vesting of reserves are provisions of State law of the first kind identified by Mason J in Gerhardy and referred to earlier in these reasons. The vesting of a reserve effected pursuant to those provisions, after 31 October 1975, would be valid, but the RDA would supply to native title holders a right of compensation for that which is lost upon vesting. Because no question about compensation arises in this Court it is convenient to do no more at this point than to refer generally to what is said on that subject later in these reasons in connection with mining interests. For present purposes it is, however, necessary to notice other consequences of the conclusion that the relevant provisions of the Land Act 1933 are not inconsistent with the RDA.

(The reference to Gerhardy is a reference to Gerhardy v Brown [1985] HCA 11; (1985) 159 CLR 70 (Gerhardy).)

32    The State then draws attention to what is stated in the joint judgment at [254] (footnotes omitted):

Because the vesting of a reserve after 31 October 1975 was not invalid, it is not a “past act” under Div 2 of Pt 2 of the NTA. It becomes necessary, then, to consider the operation of Div 2B of Pt 2 of the NTA and Pt 2B of the State Validation Act.

33    The point to be made from this analysis, on the State’s contention, is that, because a right to compensation arose under the RDA on the vesting of the reserve, the vesting was not itself invalid because of native title and so was not a past act as defined by s 228.

34    The State, however, accepts that the contention advanced by the applicant in [9.2(b)] is open. This is the contention that if the reservation was a category D past act, but the vesting was always valid, then compensation is available under s 17(2) and s 20(1) of the NTA in respect of the reservation and under s 45 of the NTA in respect of the vesting of the reserve.

35    The State, while accepting that this contention is open, draws attention to the discussion in the joint judgment in Ward at [253] and other discussions in the joint judgment concerning the two kinds of circumstances in which Gerhardy applies, in advancing a proposition that, in essence, the effect of s 45(1) of the NTA is that a right to compensation under the RDA transmutes into a claim for compensation under the NTA, and the assessment is undertaken having regard to s 51 of the NTA, which would not otherwise be relevant to the assessment of compensation under the RDA.

36    As to the alternative contention advanced by the applicant in [9.2(c)] – that the reservation is a category D past act and the vesting is a previous exclusive possession act – the State, while again accepting the first part of the contention, says that the vesting is not a previous exclusive possession act because of s 23B(9A) of the NTA, in that similar vested reserves were considered in Ward at [258] to this effect. As a result the State submits this part of the claim now made by the applicant is not open and should be struck out.

37    The State then contends there is what they call a second problem with the contentions advanced at [9.1] by the applicant deriving from the application of the non-extinguishment principle.

38    The State notes that the non-extinguishment principle applies to category D past acts under s 15(1)(d) of the NTA. The State accepts it is open to the applicant to contend, as they have done at [9.2(b)], that the reservation is a category D past act and the vesting, being valid, gives rise to compensation under s 45. The State submits, however, that the vesting clearly extinguished native title and extinguished it as at the date of the vesting. So, even though the non-extinguishment principle applied to the reservation (because it was a category D past act), the vesting actually extinguished native title.

39    Accordingly, in the submission of the State, where vesting immediately followed reservation, as in this case, compensation can only be assessed on the basis that native title was extinguished at vesting on 22 April 1977; a cyber-second, so to speak, after the act of reservation.

40    The State notes that the applicant contends at [9.2(a)] that the reservation and the vesting were both category D past acts, to which the non-extinguishment principle applies. The State assumes that, in [9.1], the contention that native title has been “diminished or impaired” is the particular plea being advanced. The State says there can be no doubt that assessing compensation for native title that was extinguished in 1977 is an entirely different process than assessing compensation for native title that has been “diminished or impaired” since 1977. The State submits that, as the latter is not open, that issue should not proceed to trial.

the applicant’s submissions

41    The applicant accepts that the passages relied upon by the State do not support and indeed count against the arguments it wishes to advance in [9.2(a)] and [9.2(c)] of the statement of facts, issues and contentions. Despite this, the applicant submits it should be allowed to advance alternative arguments on the basis that:

    this proceeding has been described by the State as a “test case” on compensation applications under the NTA;

    in Ward, the Court was dealing with a very large number of issues under the NTA and, as acknowledged in the joint judgment at [253], “no question of compensation” arose for consideration in that case;

    accordingly, it is unlikely that the particular argument which the applicant now wishes to advance was considered by the High Court;

    the Court is not bound by its previous decisions although it will ordinarily follow those unless there is some special reason for entering upon a reconsideration, as explained in Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 at 369 (Mason J).

42    It is appropriate to note exactly how the applicant would propose putting the contentions it advances in [9.2(a)] and [9.2(c)] in the face of the authority of Ward.

43    As to [9.2(a)], the applicant agrees with the State that it is uncontroversial that, if native title existed at the time of the reservation, the reservation was a category D past act. It says the issue then arises as to how to characterise the subsequent vesting of the land. In this regard, the applicant says the starting point is the statute, in particular s 29 and s 33 of the Land Act.

44    In order to understand the argument that the applicant wishes to press it is appropriate to note the full text of these two provisions:

29.     Governor may make reserves

(1)     The Governor may, subject to such conditions and limitations as he thinks fit, reserve to Her Majesty, or dispose of in such manner as for the public interest may seem fit, any lands vested in the Crown and the purpose for which any such lands are so reserved or disposed of shall be specified in the reservation or disposition.

(2)     Notwithstanding any other provision in this or any other Act, the Governor may, for such price and subject to such terms and conditions as he may determine, dispose of an estate in fee simple, free of all trusts, in any lands reserved under subsection (1) for the use and requirements of the Government or of any Crown instrumentality or of any local government, whether they were so reserved before or after the coming into operation of Part 11 of the Acts Amendment (Reserves) Act 1982.

[(3) repealed]

[Section 29 amended by No.58 of 1950 s.8; No.36 of'1958 s.2; No.73 of 1977s.6; No. 77 of 1982s.6; No.14 of 1996 s.4.]

…

33.     Vesting leasing, etc. of reserves

(1)    In this section, unless the contrary intention appears –

‘land’ means land reserved under this Act;

‘the designated purpose’ means the purpose for which land is reserved under this Act and any purpose ancillary, and beneficial, to that purpose.

(1a)     An order made under this section shall –

(a)     describe the land affected by that order;

(b)     specify the purpose for which the land affected by that order is reserved under this Act, or may be leased or granted in fee simple;

(c)     name the person –

(i)     in whom the land affected by that order is directed to be vested; or

(ii)     to whom a lease of, or the fee simple in, the land affected by that order is directed to be granted,

by that order; and

(d)     specify the conditions and limitations subject to which the Governor by that order –

(i)     directs the vesting of the land affected by that order or the grant of a lease of, or the fee simple in, that land; or

(ii)     confers any power to lease or sub-lease the land affected by that order.

(2)     By Order the Governor may direct that any land shall vest in and be held by any person for the designated purpose, subject to such conditions and limitations as the Governor shall deem necessary to ensure that the land is used for the designated purpose, and by the same or any subsequent Order the Governor may, subject to such conditions and limitations as the Governor shall deem necessary to ensure that the land is used for the designated purpose, confer upon that person, power to lease for the designated purpose the whole or any part of the land.

(3) (a) By Order the Governor may direct that any land shall be leased for the designated purpose, by instrument of lease in accordance with the prescribed form to any person.

(3a)     The person to whom the land is leased under subsection (3) may, with the consent of the Governor, sublet, for the designated purpose, the whole or part of the land, or mortgage for the designated purpose, the whole of the land.

(ii)     The consent of the Governor may be given under subsection (3)(a) subject to such conditions and limitations as the Governor shall deem necessary to ensure that the land is used for the designated purpose and the consent shall be endorsed on the instrument of sub-lease or mortgage, as the case may be.

(4) (a) By Order the Governor may direct that any land shall be granted in fee simple to any person subject to the condition that the person shall not lease or mortgage the whole or any part of the land without the consent of the Governor and subject to such other conditions and limitations as the Governor shall deem necessary to ensure that the land is used for the designated purpose.

    (b) The consent of the Governor may be given subject to such conditions and limitations as the Governor shall deem necessary to ensure that the land is used for the designated purpose.

(5)     When the mortgagee of any land mortgaged with the consent of the Governor, whether before or after the commencement of the Land Act Amendment Act 1948, completes the exercise of the power of sale or foreclosure pursuant to the mortgage, the land shall by force of this enactment be freed from any trust, condition, limitation, or other restriction, created or imposed in relation to the designated purpose.

(6)     The provisions of this section shall apply in respect of all land reserved pursuant to the provisions of this Act prior to or after the commencement of the Land Act Amendment Act 1948.

[Section 33 inserted by No.53 of 1948 s.5; amended by No. 77 of 1982 s. 8; No. 126 of 1987 s. 60.]

45    The applicant wishes to develop the following argument. Because “land” is defined in s 33(1) as “land reserved under this Act”, the valid creation of the reserve is a necessary precondition to the vesting of that reserve. If native title existed at the time the reserve was purportedly created, then were it not for the operation of the NTA in subsequently validating the creation of the reserve, there would have been no reserved land to vest. It thus follows that the vesting, like the anterior reservation, was a “past act” as defined in s 228 of the NTA. This is because it was invalid “apart from” the operation of the NTA: see s 228(2)(b). If the vesting of the reserve is a past act, it must be a category D past act, because it is not a category A, category B or category C past act.

46    The applicant wishes to further develop its argument by pointing to s 15(1)(d) of the NTA, which provides that the “non-extinguishment principle” applies to a category D past act. The effect, it says, of characterising the vesting of the reserve as a category D past act, is that the rights and interests of the native title holders are suppressed, rather than extinguished.

47    The applicant would then draw attention to that part of the preamble to the NTA, set out above, that states that justice requires that compensation on just terms must be provided to the holders of native title if acts that extinguish native title are to be validated. The applicant would argue that the NTA should be interpreted liberally in order to protect native title. Any ambiguity should be resolved in favour of the intended beneficiary. Thus, the applicant would submit:

The approach to the construction of the relevant provisions of the NTA which the Applicants wish to take in this case as set out in [9.2(a)] of the Further Amended Statement of Facts, Issues and Contentions, would result in the suppression rather than the extinguishment of the relevant native title rights and interests. This would clearly be a more beneficial outcome for the native title holders than the construction which is urged by the Respondent…

48    As to the contention advanced in [9.2(c)] the applicant notes that, in the original form 4 compensation application, it only pleaded the case that is now pleaded, in the alternative, in [9.2(c)] of the statement of facts, issues and contentions. That is, if the vesting of the reserve was a previous exclusive possession act, then the compensation claim group are entitled to compensation under s 23J of the NTA. The applicant notes that while that application form was filed on 29 March 2012, it has taken the State approximately 11 months to decide that this now alternative claim should be summarily dismissed and provides no explanation for its delay in seeking to have that part of the claim dismissed.

49    Nonetheless the applicant accepts that the decision in Ward, particularly at [258], is against this alternative argument. However, it again submits that if its compensation application may become a test case there is every likelihood that the legal issues raised will ultimately progress to the High Court and, if it does, it would be open to the High Court to reconsider its decision in Ward in this respect. It is on that basis that the applicant says its alternative argument in [9.2(c)] has been included “for the sake of completeness”.

50    The applicant, in respect of the State’s further contentions, that the State identifies as the second problem with [9.1], notes that the State contends that the reservation of the land took place before the vesting, albeit that both occurred on the same day; and that the State also accepts that the reservation land was inconsistent with the continued existence of a native title right to control the use of or access to the land and was a category D past act validated by s 19 of the NTA and s 5 of the State Validation Act; and that the reservation was subject to the non-extinguishment principle.

51    The applicant wishes to submit that in those circumstances, if native title existed at that time, the native title holders have an entitlement to compensation under s 17(2) of the NTA in respect of that “act”. The entitlement to compensation under s 51 of the NTA 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”. The applicant would argue that the reservation of the land necessarily caused “loss, diminution [and] impairment” because it suppressed any native title right to control the use of or access to the land and made the native title holders’ rights and interests susceptible to extinguishment through the “subsequent” vesting of the land.

52    The applicant submits that if, as the State maintains, the vesting of the reserve validly extinguished (as opposed to suspended), any existing native title rights and interests, the native title holders are entitled to compensation under the RDA. However, the effect of s 45 of the NTA is to provide that the assessment of that compensation is to be undertaken having regard to s 51 of the NTA. Accordingly, the applicant submits the native title holders would have a further entitlement, on just terms, to compensation for this further “loss, diminution, impairment or other effect” of the vesting on their native title rights and interests.

consideration

53    There is no contest between the parties that the applicant’s contention identified in [9.2(b)] is open to be made by the applicant. The matters in issue as identified by the parties relate to the contentions sought to be advanced in [9.2(a)] and [9.2(c)].

54    The applicant frankly acknowledges that the contention it identifies in [9.2(c)] is an alternative to those advanced in [9.2(a)] and [9.2(b)] and is advanced for the sake of “completeness”. In that regard the alternative contention in [9.2(c)] is of secondary importance in considering the strike out application. The contention of primary significance is that advanced in [9.2(a)].

55    In that regard, there is no dispute by the applicant with the State’s proposition that relevant passages, as set out above, in the joint judgment in Ward do not permit the applicant to frame its compensation claim in the way identified in [9.2(a)]. What is put on behalf of the applicant is that it should be permitted the opportunity to advance an alternative case, in this regard, on the basis that the proceeding is acknowledged to be a “test case” by the State and given the clear cut nature of the legal analyses at stake, should be permitted to be in a position where, if the matter proceeds to the High Court through an appeal process, it is able to invite the High Court to reconsider the analysis of the relevant legal issues provided in the joint judgment in Ward.

56    In support of that general proposition, the applicant notes that in Ward the High Court dealt with many issues and, while it made the relevant findings identified by the State, it did so in the course of dealing with particular extinguishment issues, and it did not have before it a compensation claim made under the relevant provisions of the NTA. In other words, the applicant advances a submission that, when faced with extinguishment issues raised in the context of this case, the High Court might be amenable to re-visit its consideration of the relevant extinguishment issues.

57    What is tolerably clear, in the present proceeding, is that the State, having raised these issues, can be expected not to deviate from the position identified above, that the contentions identified in [9.2(a)] and [9.2(c)] are simply not available to the applicant.

58    In circumstances where each of the parties accept that the Court (and any intermediate appellant court) would be bound by what has been relevantly stated in Ward, it may be expected that, if the applicant is permitted to maintain its contentions, little time would in fact be expended on the issues in the course of this proceeding, although if the applicant is permitted to do so, there could be a question about the effect this would have on the evidence to be led at trial.

59    So far as the circumstances in which a court should refrain from striking out a pleading or analogous statement of a party’s case are concerned, Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 is apposite. As the headnote to the Commonwealth Law Reports report of the decision states, the owner of a farm commenced proceedings against the Commonwealth in the Federal Court claiming that restrictions imposed on the clearing of vegetation on his farm by State laws constituted an acquisition of property on other than just terms, that the acquisition was made in furtherance of agreements between the State and the Commonwealth, and that the Commonwealth laws authorising those agreements were made for the purpose of an acquisition of property other than on just terms and were invalid by reason of s 51(xxxi) of the Constitution. The proceeding was dismissed by the primary judge of this Court under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) on the application of the Commonwealth, which order was affirmed by the Full Court. The High Court held, however, that the proceeding should not have been dismissed.

60    French CJ and Gummow J, in a joint judgment, stated, at [24], that the exercise of powers to summarily terminate proceedings must always be attended with caution. Their Honours said that this is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. They added that the same applies where such a disposition is sought in a summary judgment application supported by evidence.

61    At [25], their Honours said that s 31A(2) requires a “practical judgment” by the Federal Court as to whether the applicant has more than a “fanciful prospect of success”. Their Honours said that may be a judgement of law or of fact, or of mixed law and fact. They added that where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Their Honours noted that where the success of a proceeding depends upon propositions of law “apparently precluded by existing authority”, that may not always be the end of the matter. Their Honours stated:

Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this [the High] Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.

62    It may be seen by reference to this last quoted portion of their Honours’ judgment, that the fact that the success of a proceeding may be critically dependent upon a proposition of law which would contradict a binding decision of the High Court does not mean that strike out is inevitable; only that it is an important factor that might enable the Court to “justifiably conclude” that the proceeding has no reasonable prospect of success.

63    In the joint judgment of Hayne, Crennan, Keifel and Bell JJ, their Honours, at [56], noted that because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospects of prosecuting an action, it is evident that s 31A is to be understood as requiring a different inquiry from that which had to be made under earlier procedural regimes. Their Honours added that it follows that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” in s 31A by reference to what is said in earlier cases.

64    At [58], their Honours said that no paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is “no reasonable prospect”.

65    At [60], their Honours considered that full weight must be given to the expression as a whole. Their Honours stated:

The Federal Court may exercise power under s 31A if, and only if, satisfied that there is ‘no reasonable prospect’ of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to ‘no reasonable prospect’ can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase ‘just and equitable’ when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.

66    In my view, while, on a logical or strict view of the bases upon which the applicant wishes to claim compensation set out at [9.2(a)] and [9.2(c)], it must be said that the prospects of success are narrow, the fact is that the issues raised are both relatively novel – in that this is a compensation claim under the NTA that has not been raised in like circumstances before – and, by reason of the nature of the proceedings, potentially highly significant to the future administration of the NTA. The way in which the applicant has framed the arguments it wishes to make in support of the contentions it has outlined is not to be dismissed, in my view, to use the old legal epithet, as “fanciful”. Additionally, in the event the applicant’s alternative contentions were ultimately to succeed, there would be a significant advantage, in terms of the savings of time and expense, if the evidence bearing on them had already been taken at a trial of this proceeding rather than at some time in the indefinite future.

67    In all of these circumstances I do not think it is appropriate to strike out the paragraphs of the compensation application or the statement of facts, issues and contentions impugned by the State.

order

68    In these circumstances, the appropriate order is that:

1.    The interlocutory application of the respondent filed 15 February 2013 be dismissed.

Associate:

Dated:    28 March 2013