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February
1999 |
John Sheehan |
Calculating the Value of Native Title by John Sheehan
THE PERVASIVE NATURE OF MABO AND WIK The Mabo and Wik decisions have resulted in a reappraisal of Australia's settlement history and suggest that the doctrine of terra nullius would not have persisted for so long had the events of colonial settlement been more accurately reported. Since Mabo there has been a historic re-examination of the underlying principles of Australian real property Then, in 1996 the Wik decision extended the principles of Mabo which had previously only existed on 'waste Crown land', to potentially vast tracts of Crown leaseholds. It remains unclear which specific leaseholds coexist or alternatively extinguish native title, notwithstanding the slew of many newspaper articles since the Wik decision and the Ten Point Plan amendments. Assertions in such articles have often been fiercely misleading to the reader, but have certainly made tabloid hyperbole endemic when dealing with native title matters. In addition, the Ten Point Plan amendments which identify a whole raft of leasehold interests throughout Australia which extinguish native title, have now themselves been clouded by the recent Miriuwung Gajerrong decision which states that native title has survived the grant of certain pastoral and mining interests, and reserves. All of the above is only a reflection of the great intellectual tension first evident in the Mabo decision, and the increasingly pervasive nature of native title in the area of land law and valuation.
Surprisingly, there has been a long history of recognition of indigenous property rights within leasehold interests in Australia. At various times, Imperial, colonial and State governments have all acted to ensure the protection of some elements of native title when Crown land has been leased to private parties. However, the rights of leaseholders can be quite variable, emanating from the terms and conditions of the grant of the leases, and in specific native title determinations such matters will be considered in their fullness. Also, native title as a bundle of property rights remains unclear and this fact will have a large bearing on particular situations where the extinguishment of native title by pastoral or mining interests is problematic. The economic consequences of the recognition of native title co-existence with leasehold interests is driven by the degree of uncertainty perceived, primarily by lenders. The anecdotal evidence thus far suggests that the value of pastoral and mining interests operating within the parameters of the creating document have been almost wholly unaffected by native title claims. Indeed, the paradox of the Ten Point Plan amendments is that the very uncertainty that was sought to be ameliorated through the proposal, may now be arising through features of the legislation or subsequent judicial decisions such as Miriuwung Gajerrong. Organisations such as the Australian Property Institute (formerly the Australian Institute of Valuers and Land Economists) have expressed great concern over the implications of poorly drafted amendments to the Native Title Act, which will do little to assist attempts to achieve administrative efficiency.
The vexed question of how compensation for the extinguishment or impairment of native title rights and interests can be calculated has resulted in an intellectual effort within the Australian Property Institute which is unknown in the long history of the valuation profession. The current attempts to develop a methodology for the calculation of compensation arising from compulsory acquisition is a direct result of the dyschronous (separate in time) land law which now exists post-Mabo. In addition, the belated recognition of native title in Australia has clearly acted as a catalyst for the emergence of an Australian land law rather than an alien transplanted one. Nevertheless, there is a palpable fear that as more information about native title emerges from academic and professional multi-disciplinary research, and judicial decisions, we may not necessarily be provided with the means needed to formulate an appropriate valuation methodology. Indeed, it has been argued that if the Ten Point Plan amendments cannot demonstrate respect for the Constitution's just terms provisions (viz. s.51 (xxxi)) they will be a catalyst for protracted litigation. There are vital qualities of the character of land law and valuation practice which will hopefully transcend the emotionally charged atmosphere within which questions of how much compensation are canvassed. These qualities include a capacity to deliberate, be patient, to observe, gauge cause and effect, and particularly to empathise with the dispossessed native title holder. Native title must be recognised in all its complicated unexpected forms, and the intellectual effort fostered by the Australian Property Institute over recent years is ambitious and confident, and in an important but modest way has attempted to seize an opportunity to rediscover and reconcile with the past. The changes proposed in the Institutes forthcoming Guidance Note is modest, but symbolically very important. The development of a methodology for the assessment of compensation has been driven by the deep seated belief that valuation as a learned profession has external credibility. Unless an intellectually convincing and independent basis for the assessment of compensation of native title compulsorily acquired can be delivered, questions will always arise as to whether the professions public image ought not to be merely dismissed as self-serving. This is an important issue, as there is reason to doubt whether the highly legalistic approach suggested by some legal academics and lawyers of exhaustive judicial examination of each native title claim on a holder by holder basis is feasible. The alternative is for the valuation profession to build upon current land compensation practice, and to access the growing interdisciplinary knowledge base for native title, and to create additional non-land components of a compensation package which reflect the special nature of indigenous life. With a sensitivity to cultural differences coupled with a liberal evidentiary framework, indigenous losses to the degree quantifiable can be understood, and hence compensatable. There is an enormous risk that if the development of a valuation methodology is derailed by well intentioned, but nevertheless destructive legalistic approaches, native title may be misinterpreted and hence undervalued. This could arise primarily because the developing components in the new valuation methodology do not meet the current technical standards or legal rules of evidence. However, it is not suggested that such pioneering intellectual effort should be conducted in a cavalier manner, without regard to the long established heads of consideration currently utilised when compensation is calculated for the compulsory acquisition of more familiar property interests. The development of a new head of consideration which is somewhat analogous to the existing heads of solatium and special value is an attractive approach which both respects current case law and practice, and yet accommodates the special nature of native title. Readers interested in obtaining more information about the above research should consult the following discussion papers by the author published by the Australia Institute:
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