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	Australian Indigenous Law Reporter

Court and Tribunal Decisions – Australia

Anderson v Wilson

Federal Court of Australia (Black CJ, Beaumont and Sackville JJ))

5 April 2000

[2000] 171 ALR705; [2000] FCA 394

Native title — extinguishment — requirement of clear and plain intention to extinguish incidents of native title — inconsistency and requirement of identification of extent of inconsistency — lease in perpetuity the subject of a native title claim — question of whether the Lease gave right to exclude those claiming native title — whether leases conferred right of exclusive possession involves complex questions of law and fact — not appropriate to finally decide questions until facts found — Native Title Act 1993 (Cth) — Western Lands Act 1901 (NSW)

Facts:

Michael Anderson made an application under the Native Title Act 1993 (Cth) and on behalf of the Euahlay-I Dixon Clan for a determination of native title in respect of an area of land in the Western Division of New South Wales. There have been no factual findings as to the existence, or otherwise, of native title over the land which is the subject of the claim.

Mr Anderson’s application is opposed by Douglas Wilson. He is the lessee in perpetuity of the claimed lands, pursuant to a lease (expressed to be for the purpose of grazing) granted under the Western Lands Act 1901 (NSW) (WLA) in 1955. The present proceedings arise from Mr Wilson’s successful application for an order under O 29 r 2 of the Federal Court Rules that several questions be answered in a separate proceeding before Mr Anderson’s native title claim is determined at trial.

The questions in this case essentially ask: did Mr Wilson’s lease confer a right of exclusive possession over the leased land by virtue of the WLA, the regulations thereunder, and the terms and conditions of the lease? And if so, were any potential native title rights over the leased land — including any native title rights which might vest in members of Euahlay-I Dixon Clan — extinguished as a consequence?

Held (Black CJ and Sackville J):

The central issue is not whether Mr Wilson’s lease conferred a right to exclusive possession and thereby extinguished native title. On the authority of Wik, and as confirmed in Commonwealth of Australia v Yarmirr [1999] FCA 1668; (1999) 168 ALR 426, the correct test to apply in determining whether laws and acts creating rights in third parties extinguish native title is the ‘inconsistency of incidence test’. Although the test requires a comparison of the legal rights attaching to the grant of an estate or interest in land as against the relevant native title rights, a factual inquiry is needed to ascertain the content of the native title rights in question. Evidence may also be required to establish whether any native title rights have been extinguished as a result of operational inconsistency, such as a lessee’s performance of a condition of a lease.

In Fejo v Northern Territory of Australia [1998] HCA 58; (1998) 195 CLR 96, an unqualified fee simple estate was found to extinguish all native title rights. However, for essentially the same reasons as those provided by the majority in Wik, neither the pertinent provisions of the WLA nor Mr Wilson’s lease has the same effect. Firstly, the WLA authorised the grant of a perpetual lease for the limited purpose of grazing. Such leases are sui generis forms of statutory title (unknown at common law) and despite their nomenclature, it is not to be assumed that they bear the same rights of exclusion against third parties as common law leases. Secondly, the lease contains a series of significant reservations and conditions. They too strongly suggest that some native title rights may have survived the grant of the lease. Thirdly, while declining to re-evaluate the historical materials referred to in Wik, it is clear from the history of Crown leases legislation in NSW that the WLA emerged as specific response to the prevailing problems in the Western Division. Consequently, it appears that leases under the WLA were not intended to be congruent with common law leases and neither was the WLA itself directed at extinguishing native title rights.

In conclusion, evidence of the content of native title rights (if any) over the leased land, immediately prior to the grant of the lease in 1955, is required to properly resolve the question of extinguishment.

Held Beaumont J:

The first question to dispose of is whether Mr Wilson’s lease confers a right of exclusive possession over the leased land. In Minister for Lands and Forests v McPherson (1991) 22 NSWLR 687 a WLA lessee in perpetuity was regarded as having the equivalent of a common law (exclusive possession) lease for the purpose of seeking relief in equity against forfeiture. That decision is of limited authority here, as it did not encompass a claim of native title. In actuality, Mr Wilson’s possessory title under the lease is by no means exclusive. It is expressly qualified by a wide range of conditions and reservations — most notably, that the lease was granted for the purpose of grazing.

The remaining question is whether the lessee’s right to possession (such as was intended by Parliament and the Executive to be granted) extinguishes any native title rights over the leased land. Given that the issues raised in the present proceedings are similar to, and analogous with, those in Wik, the majority reasoning in that case must be closely followed and squarely applied. The postscript added to Toohey J’s judgment with the concurrence of the other majority judges is critically important to the Wik ratio. It stated that extinguishment of native title can only be determined by reference to such particular rights and interests as may be held to exist. And, where inconsistency is held to exist between the native title rights and the lessees’ rights, the native title rights are extinguished to the extent of the inconsistency.

Judges in Wik and Yanner v Eaton [1999] HCA 53; (1998) 166 ALR 258 have stressed that findings of fact are an indispensable part of the extinguishment test as it is formulated in Toohey J’s postscript. The separate questions, argued here and in Wik, are attempts to reduce to straightforward propositions what are in truth complex issues of fact and law. In the absence of facts Mr Wilson’s lease can only be said to have extinguished such incidents of subsisting native title as were inconsistent with the rights conferred by the lease.^[1]

Black CJ and Sackville J:

Beaumont J has set out the nature of the proceedings in this Court, the questions for separate determination and the agreed facts. His Honour has also outlined the relevant provisions of the Western Lands Act 1901 (NSW) (‘WLA’) at the material time and the terms of the lease granted under the WLA in 1955 (‘the Lease’). We gratefully adopt what his Honour has said on these matters.

For convenience, we reproduce the questions for separate determination:

(a) By virtue only of:

(i) the Western Lands Act 1901 (NSW); and
(ii) the regulations thereunder, as in force at the time of the grant of the lease;
did the Lease confer upon the lessee under the Lease a right to exclusive possession of the leased land?

(b) If the answer to the question (a) is ‘No’, by virtue of:

(i) the Western Lands Act 1901 (NSW);
(ii) the regulations thereunder, as in force at the time of the grant of the Lease; and
(iii) one or more of the terms and conditions of the Lease;

did the Lease confer upon the lessee under the Lease a right to exclusive possession of the leased land?

(c) If the answer to question (a) or question (b) is ‘Yes’, were any native title rights the exercise of which involved the presence on the leased land by the holders of the native title:

(i) extinguished by the grant of the Lease; or alternatively
(ii) suspended upon the grant of the Lease for the duration of the Lease?’

The Lessee’s Submissions

The first respondent (‘the Lessee’) submitted that the Lease conferred a right to exclusive possession of the subject land (‘the Leased Land’) from the date it took effect. (It was common ground that nothing turned on the fact that the Lease was executed on 11 January 1955 but was expressed to take effect as from 31 August 1953.) It was said, therefore, that the Lease extinguished any accessorial native title rights that otherwise might have existed over or in respect of the Leased Land. It followed, according to the Lessee, that either question (a) or (b) and question (c)(i) should be answered: ‘Yes’.

Mr Sullivan QC, who appeared with Mr Emmerig for the Lessee, adverted to the alternative possibility that question (c)(ii) (referring to the suspension of native title rights) might be answered affirmatively. However, it is fair to say that this alternative was not pressed.

The starting point for the Lessee’s argument was the proposition that the power to grant a lease conferred by the WLA must be presumed to refer to an interest having the incidents of a common law lease, including the right to exclusive possession, subject only to modifications required or permitted by the WLA. Mr Sullivan contended that substantial weight should be given to the common law meaning of the word ‘lease’ when used in a statute. Alternatively, he argued that the Lease itself was to be construed as using the word in its common law sense, with the consequence that the original lessee acquired the right to exclusive possession and that any native title rights over the Leased Land were extinguished.

The Lessee recognised that in order to secure an affirmative answer to the questions raised for separate determination, it would be necessary to distinguish the decision of the High Court in Wik Peoples v Queensland [1996] HCA 40; (1996) 187 CLR 1 (Wik). In that case, it will be recalled, a majority of the Court held that the so-called Holroyd River and Mitchellton Pastoral leases granted under Queensland law did not necessarily extinguish all incidents of native title claimed by the Wik and Thayorre Peoples over the leasehold lands.

The Lessee argued that the terms of both the WLA and the Lease were materially different from the legislation and leases considered in Wik. According to Mr Sullivan:

(i) the WLA and the Lease did not include provisions corresponding to those that, according to the majority of the High Court, counted against the Wik leases being held to confer rights of exclusive possession;
(ii) the WLA and the Lease contained no other provisions negating an intention to confer rights of exclusive possession; and
(iii) certain provisions in the WLA and the Lease confirmed that the Lease was intended to confer rights of exclusive possession.

The following matters were said to substantiate the first proposition (although some were also said to be relevant to the other propositions):

• The Land Act 1910 (Qld) (‘the Land Act’), the principal enactment considered in Wik, devoted a separate Division to pastoral leases. This (so it was said) added force to the contention in that case that the pastoral leases were special statutory interests, distinct from common law leases. By contrast, leases under the WLA were granted under a single power, namely that granted by s 23 of the WLA, and were all intended to confer rights of exclusive possession on lessees.
• The Land Act specifically provided that pastoral leases were to vest in the lessees at the time of the grant, thereby displacing the common law rule that a lease vests only upon entry into possession. The WLA contained no equivalent provision.
• The Land Act blurred the distinction between leases and licences, suggesting that in Queensland a pastoral lessee (like a licensee) did not acquire rights of exclusive possession. By contrast, the WLA (reflecting the history of Crown lands legislation in New South Wales) carefully distinguished between leases and licences.
• The Land Act provided for the Crown to take proceedings against persons in unlawful occupation of land subject to a pastoral lease (provisions taken as supporting the proposition that a pastoral lease did not have rights to exclusive possession). The WLA contained no equivalent provisions.
• The forfeiture provisions in the Land Act were different from those in the WLA.
• The reservations specified in the WLA and in the Lease itself in favour of the Crown and third parties were narrower than those applying to the Wik leases. The former were consistent with the grant of a right to exclusive possession; the latter were not.
• The Land Act conferred a positive power to transfer or assign pastoral leases, while the WLA merely assumed that there was such a power (suggesting that Parliament assumed that a lease under the WLA was in the nature of a common law lease).
• The Wik leases were granted over very large areas of land. The Lease, by contrast, was over a smaller area, reflecting the fact that the lessee was obliged to live on and work the Leased Land.

The second and third propositions were said to be supported by the following:

• The Lease (like the Wik leases) contained no reservation of indigenous rights over the Leased Land.
• The Lease was granted in perpetuity, suggesting that any native title rights were extinguished, not merely suspended. In this respect, it differed from the Wik leases which were each for a term of thirty years.
• The WLA, as a matter of construction, was intended to authorise leases conferring rights of exclusive possession. In particular, the WLA provided for detailed developmental and improvement conditions to be included in leases. Provisions of this kind (which were reflected in the conditions in the Lease itself) tended to confirm that the Lease granted rights of exclusive possession. So, too, the statutory requirement that a condition of residence attach to every lease granted under the WLA strongly suggested that the Lease was intended to confer rights of exclusive possession.

...

Form of the Questions

The identification of separate questions for determination pursuant to O 29 r 2 of the Federal Court Rules can be a convenient procedure, and, in some circumstances, can avoid unnecessary delay and expense in the resolution of proceedings. But there are dangers in adopting the procedure, especially where no findings of fact have been made and the questions are capable of different interpretations.

The reason for formulating questions for separate determination in the present case was explained by Mr Sullivan at a directions hearing. At that hearing, the Judge managing the proceedings (Beaumont J) drew to the attention of the parties observations made by Gummow J in Yanner v Eaton [1999] HCA 53; (1999) 166 ALR 258, concerning the importance of factual findings in native title claims. Gummow J said this (at 288-289):

Before turning to whether inconsistency arose in the present appeal, it is important to clarify the utility of factual findings. Factual findings are necessary to establish the ambit of the native title right as defined by the traditional laws and customs of the indigenous community. The ambit of the native title right is a finding of law. This must then be placed against the statutory rights which are said to abrogate it. The question to be asked in each case is whether the statutory right necessarily curtails the exercise of the native title right such that the conclusion of abrogation is compelled, or whether to some extent the title survives, or whether there is no inconsistency at all. Indeed, statute may regulate the exercise of the native title right without in any degree abrogating it.

Beaumont J invited the parties to reconsider the procedure adopted in the present case in view of these comments.

At the directions hearing, Mr Sullivan acknowledged the force of the observations of Gummow J in Yanner, but justified the separate question procedure as a ‘short cut’ designed, depending on the outcome, ‘to obviate the necessity for [a] very complex, lengthy and expensive factual inquiry’. He pointed out that the questions in this case had been framed having regard to the procedure followed in Wik. In that case, the High Court answered questions asked in relation to the effect of the so-called Holroyd River and Mitchellton Leases on the native title rights of the Wik and Thayorre Peoples.

It is true that the questions in the present case follow reasonably closely the form of the questions asked and answered in Wik.

...

First, no findings have as yet been made concerning the content of native title that may exist in respect of the Leased Land. It must be remembered that native title has its origins in the traditional laws and customs observed by indigenous people: Mabo (No 2), at 58, per Brennan J. Native title is recognised by the common law but is neither an institution of the common law nor a form of common law tenure: Fejo, at 128. Consequently, as Gummow J said in Wik, the nature and incidents of native title will vary from case to case (at 169):

It may comprise what are classified as personal or communal usufructuary rights involving access to the area of land in question to hunt for or gather food, or to perform traditional ceremonies. This may leave room for others to use the land either concurrently or from time to time. At the opposite extreme, the degree of attachment to the land may be such as to approximate that which would flow from a legal or equitable estate therein. In all these instances, a conclusion as to the content of native title is to be reached by determination of matters of fact, ascertained by evidence (Footnotes omitted)

In the Croker Island Case (The Commonwealth v Yarmirr [1999] FCA 1668; (1999) 168 ALR 426 (FC)), Beaumont and von Doussa JJ observed, at 435, that native title is ‘highly fact specific’: that is, the existence and content of native title are questions of fact, to be ascertained by evidence as to the laws and customs of the indigenous inhabitants, on a case by case basis. It follows in the present proceedings that an affirmative answer to question (c)(i), which would effectively resolve the proceedings in favour of the Lessee, cannot be given unless all possible native title rights in respect of the Leased Land were extinguished by the grant of the Lease. As Wik demonstrates, this may prove to be a heavy burden for the Lessee to discharge in the absence of evidence as to the content of native title or an act manifestly inconsistent with all native title rights, such as the grant of a fee simple estate.

Secondly, as explained by Toohey and Gummow JJ in Wik, questions framed by reference to rights of exclusive possession are apt to divert attention from the critical question. That question, to adopt the language of the joint judgment in Fejo (at 126) is whether

the rights that are given [by the Lease] are rights that are inconsistent with the native title holders continuing to hold any of the rights or interests which together make up native title.

It is understandable that the separate questions should have been drafted so as to ask whether the Lease conferred a right to exclusive possession on the Lessee’s predecessor in title. The language of exclusive possession is found in Mabo (No 2) at 110, per Deane and Gaudron JJ. Moreover, the questions in Wik were framed by reference to ‘rights to exclusive possession’. Perhaps for this reason, despite the express reservations of Toohey and Gummow JJ and despite the ambiguity inherent in the concept, much of the reasoning in Wik uses the terminology of ‘exclusive possession’. And Parliament has followed suit, incorporating ‘exclusive possession’ into the definitions giving content to the expression ‘previous exclusive possession act’ in s 23B of the NTA. Even so, for the reasons given by Toohey and Gummow JJ, there are dangers in elevating the question whether the Lease conferred a right to exclusive possession into an issue requiring separate determination.

Under the general law, a legal right of exclusive possession connotes a tenancy and is secured by the lessee’s right to maintain ejectment and, after entry, trespass: Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209, at 222, per Windeyer J; Street v Mountfort [1985] UKHL 4; [1985] AC 809, at 827, per Lord Templeman. But it is not necessarily easy or appropriate to apply a concept developed for one purpose (that is, distinguishing between a lease and a licence, usually in the context of commercial disputes) for quite a different purpose (determining whether the rights conferred on the holder of a statutory lease are inconsistent with the continued entitlement of Aboriginal people to native title rights). Particularly is this so when it is remembered that the common law accepts the idea of relative claims to possession, or relativity of titles: Asher v Whitlock (1865) 1 QB 1; Allen v Roughly [1955] HCA 62; (1955) 94 CLR 98; Mabo (No 2), at 207-211, per Toohey J. Under the general law, a person in possession of land can maintain an action against third parties, other than a person having a superior title. In short, exclusive possession of land does not necessarily connote rights good against all the world. It follows that to say a person has rights to exclusive possession does not necessarily demonstrate that that person is able to exclude all third parties from access to his or her land.

Thirdly, as Mr Basten pointed out, it is difficult in any event to see how question (a) can be answered affirmatively. In order to determine whether the rights given to the Lessee’s predecessor in title were inconsistent with the rights claimed by native title holders, it is necessary to have regard not merely to the WLA and the regulations thereunder, but to the terms and conditions of the Lease itself. This is not to say that the provisions of the WLA are irrelevant to the critical question that must be addressed. Far from it. But any assessment of the rights of the Lessee’s predecessor in title must take account of the terms of the Lease itself. We did not understand Mr Sullivan to contend otherwise.

History of Crown Lands Legislation in New South Wales

The Significance of the History

...

The written submissions of the parties canvassed in some depth the history of Crown lands in New South Wales, both before and after 1855. According to the Lessee, the history demonstrated that the legislation in New South Wales, from the 1830s on, had clearly distinguished between leases and licences of Crown land. The former carried with them (and were understood by contemporary commentators to carry) rights of exclusive possession that would prevail against Aborigines seeking to gain access to the lands. Licences, on the other hand, were not intended to confer rights of exclusive possession. This was said to strengthen the contention that grazing leases granted pursuant to the WLA were intended, like their predecessors, to confer rights of exclusive possession on the lessees.

Indeed, the Lessee’s submissions went further. Mr Sullivan criticised the reliance placed by the majority in Wik on the views expressed by Earl Grey. By reference to other contemporary documentation (all of which was before the High Court in Wik), Mr Sullivan submitted that Earl Grey’s opinions had not been shared by local Law Officers of the Crown or even by the Colonial Land and Emigration Office. He pointed, for example, to a letter from the Colonial Land and Emigration Office to the Permanent Under-Secretary (Herman Merivale), dated 17 April 1849, which clearly expressed the view that pastoral leases granted under the 1847 Order in Council gave an exclusive right of possession that would prevail against any third parties ‘whether Native or European’. (The letter was cited by Brennan CJ in his dissenting judgment in Wik, at 81.) Mr Sullivan invited us to take a different view of the significance of the historical material than that accepted by the members of the majority in Wik.

By contrast, the Council’s written submissions contended that the legislative history reinforced the view which prevailed in Wik, namely that the Colonial legislature and successive Governments had created new types of statutory leases, adapted to uniquely Australian conditions. The effect of these interests on native title could not be assessed merely by applying traditional common law principles. The Council endorsed the observations of A C Millard and G W Millard, The Law of Real Property in New South Wales (1905), quoted with approval by Gummow J in Wik, at 174-175:

The whole of the numerous and elaborate provisions of the Acts for the alienation and occupation of Crown lands are examples of the legislation which has been necessary to meet the peculiar conditions and wants of the colony. Nothing corresponding to the body of laws thereby created is found in English law, there being nothing in England analogous to the vast area of unoccupied lands in this colony, of which the Crown is the nominal, and the public the real owner, the settlement of which is necessary to the welfare and progress of the country.

In oral argument, Mr Basten departed from the approach taken in the written submissions on behalf of the Council and contended, in essence, that the history of Crown leases in New South Wales prior to the enactment of the WLA was largely irrelevant to the questions to be addressed in the present proceedings. This submission rested on the proposition that the decision in Wik required a comparison to be made between the terms of the Lease and any incidents of native title that might, but for the Lease, subsist in respect of the Leased Land. The fact that several members of the Court had relied on disputed historical materials in order to reach that conclusion was not to the point.

In our view, it is not necessary and not appropriate to attempt to pass judgment on the use made in Wik of the correspondence involving Earl Grey in order to shed light on the intended effect of pastoral leases on Aboriginal inhabitants of New South Wales. We accept that there has been criticism levelled at the use in Wik of Earl Grey’s views, as expressed in his correspondence with Governor Fitzroy. The historical significance of that correspondence raises complex issues on which professional historians have expressed sharply divergent views. One commentator has argued, for example, that the historical analysis used to support the majority view in Wik was incomplete and at variance with other scholarly accounts or interpretations of the relevant events: J Fulcher, ‘Sui Generis History? The Use of History in Wik’ in G Hiley (ed) The Wik Case: Issues and Implications (Butterworths 1997), at 51-56; cf H Reynolds and J Dalziel, ‘Aborigines and Pastoral Leases — Imperial and Colonial Policy 1826-1855’ (1996) 19(2) UNSWLJ 315.

...

The simple fact is that the majority decision in Wik is binding on this Court. Our task must be to apply the principles enunciated in Wik to the present case and, in particular, to the Lease granted pursuant to the WLA. Even if the criticisms of the use made of Earl Grey’s correspondence by the majority were thought to be well-founded, that would not affect the authority of Wik. We would therefore decline the Lessee’s invitation to re-examine and reassess the historical material before the High Court in Wik.

This conclusion does not mean that the history of Crown leases in New South Wales, in particular the legislation preceding the enactment of the WLA in 1901, should be ignored. At the very least, it sheds light on the scheme introduced by the WLA and the reasons for it. While the account that follows is necessarily sketchy, it reinforces the relevance of the fundamental point made in Wik to leases granted pursuant to the WLA. If ever there were a case of legislation adapted to the ‘peculiar conditions and wants’ of a geographic area, the legislation governing the grant of leases in what ultimately became the Western Division of New South Wales would seem to be it.

Crown Lands Prior to Responsible Government

Until 1831 full power of disposal of lands within the Colony of New South Wales was vested in the Governor, to be exercised in accordance with instructions issued by the Colonial Office: Wik (Drummond J), at 458. In 1826, a scheme was introduced involving the establishment of the so-called ‘limits of location’. Within those limits, the declared boundaries of settlement, persons wishing to select land could do so with official sanction. Beyond those limits (initially comprising nineteen counties) settlers were in theory not permitted to occupy lands: id, at 459. Local regulations, made in 1831 under the prerogative power, introduced a system of disposal of Crown lands by public auction, both by way of lease and sale.

By the 1830s squatters occupied large tracts of land to run cattle and sheep without official sanction. The limits of location were extended, but the problem remained: S H Roberts, History of Australian Land Settlement (1788-1920) (Macmillan, 1924), at 176-177. This prompted the Colonial Government to introduce a system of annual occupation licences for lands outside the limits of location. Legislation enacted in 1836 (Crown Lands Unauthorized Occupation Act 1836 (NSW)), made it unlawful for any person to occupy Crown lands beyond the limits of location without a valid depasturing licence and imposed penalties for the unauthorised occupation of Crown lands within the limits. That legislation was re-enacted in 1838 and 1839.

The new controls did not resolve the difficulties created by the squatters. They demanded greater security of tenure, thrusting the colony into ‘an indescribable ferment’: S H Roberts, at 179. According to Mr Sullivan, the significance of the 1830s legislation lay not in the political controversy it generated, but in the distinction drawn between leases and licences of Crown lands. For example, the Crown Lands Unauthorised Occupation Act 1839 (which established a Border Police force to protect persons lawfully occupying Crown lands beyond the limits allotted for location) rendered unlawful the occupation of Crown Lands without a ‘valid lease or licence’ for depasturing cattle or other animals. The legislation generally imposed ‘fees’ in respect of licences and required ‘rent’ to be paid in respect of leases. The distinction between fees and rent was carried through into the WLA.

Another local enactment, the Crown Lands Unauthorised Occupation Act 1841 (NSW) (‘the 1841 Act’), s 2, provided that no action for trespass could be brought by a person in occupation on sufferance or by virtue of a licence. According to Mr Sullivan, the importance of the 1841 Act lay in its failure to prevent a lessee from bringing an action for trespass against a third party. This, so he argued, tended to confirm that a lessee of Crown lands was intended to have rights of exclusive possession.

The disposal of land in the Australian Colonies became subject to a statutory regime established by the Imperial Parliament with the enactment of the Sale of Waste Lands Act 1842 (Imp). The economic and social objectives of the legislation are referred to in Wik (Drummond J), at 461. The Sale of Waste Lands Act, although establishing a regime for the sale of Crown lands, expressly stated that it was not to prevent the grant of annual occupation licences (s 17). It did not expressly provide, however, for leases of Crown lands.

This omission was rectified by the Sale of Waste Lands Amendment Act 1846 (Imp) (‘the 1846 Act’) which, as Drummond J noted in Wik, was passed following agitation by pastoralists for greater security of tenure (at 465). Section 1 authorised the Crown ‘to demise for any Terms of Years not exceeding Fourteen’ any waste lands of the Crown. Section 6 of the 1846 Act authorised the making of Orders in Council for the purposes of the legislation, including division of the Colony into districts.

An Order in Council under the 1846 Act was made on 9 March 1847. Chapter I classified lands in the Colony of New South Wales as being in the ‘settled’, ‘intermediate’ or ‘unsettled’ districts. Chapter II, which dealt with the unsettled districts, authorised the Governor to grant leases of land, for a term not exceeding fourteen years in duration, for pastoral purposes (Ch II, s 1). The ‘rent’ payable in respect of such leases was to be proportionate to the assessed carrying capacity of the land (Ch II, s 2). The Order in Council reserved to the Governor the power to make grants or sales of land within the limits of lands comprised in a lease for public purposes or disposing of such lands ‘as for the public interest may seem best’, including ‘for the use or benefit of the aboriginal inhabitants of the country’ (Ch II, s 9).

An Order in Council made on 18 July 1849 and proclaimed by Governor FitzRoy on 23 April 1850, empowered the Governor to insert in any future ‘pastoral lease’ such conditions, clauses of forfeiture, exceptions or reservations deemed requisite

for securing the peaceable and effectual occupation of the lands comprised in such leases, and for preventing the abuses and inconveniences incident thereto.

Thereafter, the practice in the Colony was to include a specific reservation in favour of Aboriginal people in leases of unsettled or intermediate land for pastoral purposes. The reservation was in the following form:

We do further Reserve to the Aboriginal Inhabitants of Our said Colony, such free access to the said Run or Parcel of Land hereby demised, or any part thereof, and to the trees and water thereon as will enable them to procure the Animals, Birds, Fish, and other food on which they subsist.

See forms of lease of Crown land in Progress Report from the Select Committee on Crown Lands, Votes and Proceedings, Legislative Council, 9 November 1854.

Crown Lands After Responsible Government

Until responsible government was bestowed on the Colony of New South Wales in 1855, the Imperial Government retained ultimate control and management of the Colony’s waste lands. This situation changed with the enactment of the Constitution Act, s 2 of which vested in the Colonial legislature the management and control of waste lands. Section 1 of the Australian Waste Lands Act 1855 (Imp), enacted at the same time as the Constitution Act, repealed the Sale of Waste Lands Acts of 1842 and 1846.

The first local enactment dealing with leases of Crown lands, following passage of the Constitution Act, was the Crown Lands Occupation Act 1861. The Crown Lands Alienation Act 1861 (NSW), passed on the same day, provided for the alienation of Crown lands in fee. These enactments repealed the earlier Orders in Council.

The Crown Lands Occupation Act 1861 classified Crown lands into the First and Second Class ‘Settled Districts’ and the ‘Unsettled Districts’ (ss 1, 11). Crown lands in the First Class Settled Districts could be ‘demised by lease’ for pastoral purposes for one year (s 11). In other Districts the maximum term for a pastoral lease was five years. Leases could be granted for other specified purposes, including mining (other than for gold), for terms up to fourteen years (s 11). The Governor in Council was empowered to withdraw from any land comprised in a lease areas required ‘for any public purpose whatsoever’ (s 5). Similarly, the Governor in Council could insert in leases a condition enabling land subject to the lease to be resumed without compensation (except for a proportional rebate of rent) for any public purpose (s 13(5)). Leases were subject to rights of access by third parties, such as persons authorised to search for minerals or to remove indigenous timber (s 8). The same Act provided for an offence of occupying or working Crown land otherwise than under a subsisting lease or licence (s 33). The provisions governing the grant of licences required the payment of a licence ‘fee’ (s 31), while those governing the granting of leases required the payment of ‘rent’ (ss 12, 13).

In 1883, the report of a Parliamentary Inquiry into the state of public lands in New South Wales was published: New South Wales Legislative Council, Report of Inquiry: State of the Public Lands and the Operation of the Land Laws (1883) (‘the Public Lands Report’). The Public Lands Report considered the operation of land laws throughout New South Wales and took a good deal of evidence. While it made no recommendations, the report was influential in the framing of the Crown Lands Act 1884 (NSW), described by Professor Lang as

the first systematic Crown land legislation, purporting to set out in some order a series of tenures over Crown land ... See A G Lang, Crown Land in New South Wales (Butterworths, 1973), at 11.

The Public Lands Report divided New South Wales into three parts. Division 1 corresponded to the Old Settled Districts and comprised about 26 million acres, with a population of 506,181. Division II was the central area, the westerly limit of which was an irregular line stretching from the intersection of the Barwon River and the Queensland border to the confluence of the Murrumbidgee and the Murray. It comprised about 86 million acres and had a population of 223,560. Division III, the forerunner of the Western Division, embraced the remainder of the Colony west of the western boundary of Division II. Division III contained 83,779,760 acres and was said to have a population of 18,500 (presumably excluding indigenous inhabitants). Of that population, 6,696 resided in towns and 11,804 in rural districts.

The Public Lands Report’s principal theme was ‘the class contest for the possession of [the Colony’s] lands’ (at 28). By this colourful description the authors meant to refer to the contest between selectors (including pastoral lessees) and squatters, a contest which had been exacerbated by the practice of offering for sale to one class of occupants land simultaneously assigned under lease to another (at 13). The situation had led to ‘discord and chicanery’, to the detriment of the beneficial management of Crown lands. The Public Lands Report did not address the effect of the class contest, or of the land laws, on the Aboriginal inhabitants of the Colony.

According to the Public Lands Report, the antagonism between lessees and selectors had not been as disastrous in Division III as in Division II. This was because in Division III (at 23)

... nature has presented an obstructive barrier to the beneficial occupation of the land in small areas. The sparse vegetation, the arid soil, and the waterless character of the country, consequent on the deficient rainfall, have protected the Crown lessees to a great extent from invasion by conditional purchasers, even for the purposes of blackmailing, but it depends on time only, if the present Land Laws remain on the Statute-book, when the bitter strife and terrible waste of human energy which are the characteristics of settlement in the inner division will commence in full force.

In its Synopsis of Evidence, the Public Lands Report described the state of land settlement in the Warrego District (an area which includes the land subject to the Lease) (at 65):

The occupation of the country is mainly by the pastoral tenants. The average size of the stations is fully 400 square miles, or about 250,000 acres. Most of these leaseholds are partly stocked, some are waiting the completion of works for water supply. There are few cattle; the universal stock consists of sheep, and the district is much understocked yet. The lessees have reclaimed large tracts by substantial works, especially dams and tanks. The runs as watered have been enclosed, subdivided by substantial fencing, and home stations constructed, all these improvements being directed to the remunerative occupation of the country.
... water is the key to the successful occupation of this country, and the reclamation of this great and valuable tract by the Crown tenants on the basis of their leasehold tenure presents a problem that demands much consideration. The privilege held by the conditional purchaser of appropriating leasehold land though watered by the lessee’s outlay and exertion, involves peril for public as well as private interests.

The principles underlying the Crown Lands Act 1884 (NSW) (the ‘1884 Act’), in its application to the Western Division (as the equivalent to Division III became known), were stated by the Secretary for Lands as follows (New South Wales, Parliamentary Debates, Legislative Assembly, 11 October 1883, at 43-44; 7 November 1883, at 351-353):

• all previous Crown leases legislation was to be repealed;
• the Colony was to be divided into three parts: the Western, Central and Eastern divisions;
• the Western Division was to be purely pastoral and would be subject only to leases;
• half of the existing runs would be resumed and open to conditional leasehold or homestead leasehold (the latter having a maximum area of 10,280 acres) in order to provide an opportunity for ‘young men ... to settle upon the land, and to make a sheep farm’;
• a current lessee would be able to retain a lease over half of the run (and to secure an extension of the term of the lease) and to occupy the remaining half under licence until it was leased; and
• the administration of the legislation was to be decentralised by devolving authority to local land boards.

The 1884 Act gave effect to those principles. It is not necessary to examine the legislation in detail. However, some features should be noted.

First, the 1884 Act created new forms of tenure in addition to those recognised under the earlier law. For example, the Act created homestead leases (ss 82-84), annual leases for pastoral purposes (s 85) and scrub land leases (s 87). Amending legislation introduced yet further variations, such as inferior lands leases (Crown Lands Act 1889 (NSW), s 37) and improvement leases in respect of lands not suitable for settlement until improved (Crown Lands Act 1895 (NSW), s 26).

Secondly, the 1884 Act specified the conditions to which particular leases were to be subject. Pastoral leases in the Western Division, for example, were to be for a term of fifteen years from the date of determination of the existing lease; rental was to be assessed by a local land board; pastoral lessees were to be entitled to an additional term of the lease, subject to a contrary determination by the Minister; and the Governor could withdraw from a lease land required for any public purpose (s 78). Homestead leases in the Western Division were to be between 5,760 and 10,240 acres (between nine and sixteen square miles); they were to have a term of fifteen years, with the same rights of extension as pastoral leases; they were subject to the same provisions as to rent, forfeiture and surrender as pastoral leases; and a homestead lessee was to reside on the land for at least six months during each of the first five years of the lease (a provision designed to avoid the practice of ‘dummying’) (s 82).

Thirdly, the 1884 Act set out general provisions affecting leases. Thus, every lease was liable to forfeiture for non-payment of rent or breach of any condition annexed to the lease (s 96). Some provisions, such as that denying power to prevent the entry and removal of material by authorised persons, applied both to leases and licences (s 98). The Governor retained a general power to withdraw from lease or licence any land required for any public purpose (s 108).

Western Lands Act

Beaumont J has explained the background to the enactment of the WLA in 1901, including the work of the Royal Commission to Inquire into the Condition of Crown Tenants (Western Division of New South Wales). His Honour has also explained the background to the principal amendments to the WLA effected in 1932 and 1934. There is no need for us to repeat this material.

Reasoning

The Principles

We have referred earlier to the difficulties created by the form of the questions in the present case. As we have explained, the difficulties stem from the fact that the critical question is not whether, as an abstract proposition, the Lease conferred exclusive possession on the original lessee. It is whether the rights conferred on the lessee were inconsistent with any and all of the rights and interests which together make up such native title rights as may exist over the land. Thus in Fejo, the reason why native title was extinguished by the grant of the fee simple estate was that the holder of the fee simple estate was able to ‘use the land as he or she [saw] fit and [to] exclude any and everyone from access to the land’. In the absence of any qualification on the grant, it was inconsistent with the existence of any rights of native title over the land: Fejo, at 128.

Sovereignty carries with it the power to extinguish rights and interests in land within the sovereign’s territory, including native title: Mabo, at 53-64, per Brennan J. Whether or not the rights conferred by native title can be described as interests in land (cf Mabo (No 2), at 110, per Deane and Gaudron JJ), those rights can be terminated by inconsistent dealings with the land by the Crown. It is for this reason that the enjoyment of native title is said to be ‘precarious’ under the common law (Native Title Act Case, at 452 (joint judgment)) or ‘inherently fragile’ (Fejo, at 151, per Kirby J)).

Brennan CJ, in his dissenting judgment in Wik, identified three categories of laws or executive acts by which native title rights might be extinguished (at 84-85):

(i) laws or acts which simply extinguish native title;
(ii) laws or acts which create rights in third parties in respect of a parcel of land subject to native title which are inconsistent with the continued right to enjoy native title; and
(iii) laws or acts by which the Crown acquires full beneficial ownership of land subject to native title rights.

So far as the first category is concerned, a law or executive act which, although creating no rights inconsistent with native title, is claimed to extinguish native title, will not have that effect ‘unless there be a clear and plain intention to do so’: Wik at 85, per Brennan CJ, citing Mabo (No 2), at 64, 111, 196. Hence Toohey J in Mabo (No 2) observed (at 111) that general waste lands or Crown lands legislation is not to be construed, in the absence of clear and unambiguous words, as intended to apply in a way which will extinguish or diminish rights under native title. His Honour founded this observation on the principle that clear and unambiguous words must be used before the legislature will be taken to have expropriated or extinguished valuable rights relating to property without fair compensation.

So far as the second category is concerned, Brennan CJ observed (Wik, at 85) that a

law or executive act which creates rights in third parties inconsistent with a continued right to enjoy native title extinguishes native title to the extent of the inconsistency, irrespective of the intention of the legislature or the executive and whether or not the legislature or the executive officer adverted to the existence of native title.

Yet, even in this situation, the exercise of power must be in terms that

clearly, plainly and distinctly authorise [...] activities and other enjoyment of the land which [are] necessarily inconsistent with the continued existence of any of the incidents of native title which could have been subsisting at the time of these grants.

(Wik, at 171 per Gummow J, and see at 203); Yanner, at 289, per Gummow J; Croker Island, at 437, per Beaumont and von Doussa JJ).

In Croker Island, the majority judgment pointed out (at 438) that all members of the Court in Wik were in agreement as to the manner in which inconsistency is to be judged. The question is to be resolved as a matter of law by comparing the legal nature and incidents of the existing right and of the statutory right: Wik, at 185, per Gummow J. Kirby J in Wik (at 221) referred to this as the ‘inconsistency of incidence test’, which he described as follows:

once the Crown’s ultimate or radical title was converted, by the exercise of sovereignty into an estate or interest in land, the question became whether that estate or interest, of its legal character, was inconsistent with the continuance of native title in the land. The question was not whether the estate or interest had been exercised, in fact, in a way that was incompatible with the exercise of native title rights, but whether it was legally capable of being so exercised. The issue was one of legal theory, not detailed evidence.

Of course, a test framed in these terms does not deny the need for a factual inquiry to ascertain the content of native title in a particular case in order to enable the required comparison to be made.

In Ward, Beaumont and von Doussa JJ (at [71]) identified the question to be addressed as follows:

The test requires a comparison between the legal nature and incidents of the existing native title and of the statutory grant. The question is whether the respective incidents are such that the native title rights cannot be exercised without abrogating rights created by the statutory grant. If they cannot, then by necessary implication the native title rights are extinguished. The question is not whether the estate or interest granted had been exercised, in fact, in a way that was incompatible with the exercise of native title rights, but whether it was legally capable of being so exercised ...

Subject to one qualification, what we shall describe as the inconsistency of incidents test enables a determination to be made as to whether inconsistency (and therefore extinguishment) occurs at the time of the grant of an interest: Croker Island, at 439 per Beaumont and von Doussa JJ. The qualification is that where a statute or a grant confers a power or condition to be exercised or performed in the future, the power or condition may have no immediate legal effect in terms of inconsistency. In such a case, extinguishment of native title will not occur unless and until the power is exercised or the condition satisfied: Wik, at 166, per Gaudron J; Croker Island, at 439. Gummow J in Wik held (at 203) that conditions in the pastoral leases which required the construction of earth dams and an airstrip did not of themselves abrogate native title. If extinguishment occurred it would only be by reason of the performance of the conditions. This kind of ‘operational inconsistency’ (Wik at 203, per Gummow J; Croker Island, at 439) presents factual issues for resolution.

Until the recent decision of the Full Court in Ward, the question whether there can be ‘partial extinguishment’ of native title rights had not been authoritatively determined. So far as this Court is concerned, however, Ward resolves the question. The joint judgment of Beaumont and von Doussa JJ reached this conclusion (at [109]):

In our opinion the rights and interests of indigenous people which together make up native title are aptly described as a ‘bundle of rights’. It is possible for some only of those rights to be extinguished by the creation of inconsistent rights by laws or executive acts. Where this happens ‘partial extinguishment’ occurs. In a particular case a bundle of rights that was so extensive as to be in the nature of a proprietary interest, by partial extinguishment may be so reduced that the rights which remain no longer have that character. Further, it is possible that a succession of different grants may have a cumulative effect, such that native title rights and interests that survived one grant that brought about partial extinguishment, may later be extinguished by another grant.

The recognition that there can be partial extinguishment of native title is of some importance to the present case. It follows from what has been said that the Lessee can succeed in these proceedings only if he is able to demonstrate that the Lease, in accordance with the authority conferred by the WLA, granted rights necessarily inconsistent with all ‘species of native title’ (Wik, at 203, per Gummow J) which might exist over the Leased Land. The fact that some native title rights were extinguished by the Lease would not require an affirmative answer to be given to the critical question in this case. Nor would it be enough that the conditions imposed by the Lease or the lessee would, when actually performed, extinguish other (or even all remaining) native title rights. In the absence of evidence that the conditions had been performed in a manner that extinguished remaining native title rights, it could not be concluded that all native title rights in respect of the Leased Land had been extinguished.

In Ward itself, the Court had the benefit of factual findings made by the trial Judge which identified the nature and extent of native title rights and interests in existence at the relevant dates. Beaumont and von Doussa JJ closely examined the extent to which those native title rights and interests were inconsistent with the terms of the various pastoral leases (which included specific reservations in favour of Aboriginal people). Their Honours concluded that, although the grant of pastoral leases had not completely extinguished native title rights and interests over the claimed lands, the leases had effected a partial extinguishment of native title rights and interests. In particular, the grant of pastoral leases had extinguished the exclusivity of native title rights to possess, occupy and use the claimed lands: see Ward, at [310], [329] and [340].

Since no factual findings have been made in the present case, a comparison of the kind undertaken in Ward cannot yet be carried out. The question at this stage of the proceedings is whether any of the claimed native title rights and interests that may have subsisted in relation to the Leased Land could have survived the grant of the Lease.

The Significance of Terminology

As we have pointed out, the starting point for the Lessee’s submissions was the contention that the word ‘lease’, when used in a statute such as the WLA, is presumed to refer to a lease with the incidents of a common law lease, including the right to exclusive possession. It is, however, difficult to reconcile this submission with the approach of the majority in Wik.

Toohey J pointed out (at 117) that the rights and obligations of a person holding an interest under legislation of the kind considered by Wik was ‘not disposed of by nomenclature’. While the authorities pointed to exclusive possession as a normal incident of a lease, they did not exclude ‘an inquiry whether exclusive possession is in truth an incident of every arrangement which bears the title of lease’ (at 118). His Honour distinguished a passage in the judgment of Brennan J in American Dairy Queen (Qld) Pty Ltd v Blue Rio Pty Ltd [1981] HCA 65; (1981) 147 CLR 677, at 686, suggesting the contrary, on the ground that Brennan J’s remarks were made in the context of a purely commercial transaction which did not involve the title of the Crown or native title rights.

Gaudron J was even more emphatic in rejecting the contention that the common law meaning of ‘lease’ or ‘demise for a term of years’ was to be applied to the Queensland legislation, even in a context where a distinction was drawn between a lease and a licence (at 151-152). Her Honour thought that there was ‘no very secure basis for thinking that pastoral leases owe anything to common law concepts’. Rather, they were statutory devices, deriving from the Order in Council of 9 March 1847, designed to suit the peculiar conditions of the Australian colonies. There was nothing to suggest that a right of exclusive possession was either a necessary or convenient feature of pastoral leases in the Colony of New South Wales.

Significantly for present purposes, her Honour considered that it was difficult to apply the principle that a statute should be construed in conformity with the common law in a context in which the word was used to refer to something ‘quite foreign to the common law conception of a lease’ (at 153). Her Honour specifically had in mind the fact that the Land Act (like s 23 of the WLA), authorised the grant of a ‘lease in perpetuity’. This was an expression unknown to the common law and thus one which she considered could not possibly take its meaning from the common law. (At common law a lease must be for a term certain or capable of being rendered certain: Prudential Assurance Co Ltd v London Residuary Body [1991] UKHL 10; [1992] 2 AC 386. Thus there cannot be a lease in perpetuity: see Wik, at 201, per Gummow J.)

Gummow J expressed the view (at 203) that the decision in American Dairy Queen was to be given limited scope. He agreed with Toohey J’s discussion of the case.

Kirby J, too, rejected the contention that the word ‘lease’ and similar expressions in the Land Act were sufficient to import all of the features of a common law lease (at 245). The nature and effect of the lease was to be determined by examining the terms of the statute and the relevant instrument. He accepted that some of the features of an ordinary lease might be imported into the statute. But that fell

a long way short of requiring that the title conferred by a pastoral lease upon the lessee to use the land ‘for pastoral purposes only’ be extended to exclude Aboriginals using the land in the traditional way.

It follows from Wik that the references in the WLA to a ‘lease’ do not necessarily refer to a lease in the common law sense of one conferring a right to exclusive possession, enforceable against all the world including holders of native title rights. A fortiori, this is the case with s 23(1)(a) of the WLA, which confers the power to grant ‘leases in perpetuity’. In applying the inconsistency of incidents test, the rights granted by the Lease are to be ascertained by a process of construction which does not assume that a WLA lease uses the term ‘lease’ in its common law sense. The application of the test depends on an assessment of the rights intended to be created by the lease and a comparison between those rights and native title rights over the land. This is consistent with the approach taken by the majority in Ward at [285]-[288].

There is nothing in Minister for Lands and Forests v McPherson (1991) 22 NSWLR 687, a case strongly relied on by the Lessee, that requires a contrary conclusion. It is true that McPherson is the only decision of an appellate court which has considered the nature of a perpetual lease under the WLA (although there are other appellate decisions dealing with the operation of the WLA in relation to perpetual leases: see, for example, Ex parte Hopkins; Re Cronin (1956) 57 SR(NSW) 554; Ex parte McDougall; Re Tully (1945) 45 SR(NSW) 188). It is also true that there are some observations which suggest, tentatively at least, that such a lease is to be regarded as a common law lease save as provided for in the legislation: McPherson, at 712-713, per Mahoney JA. But these tentative observations were made in a context very different from the present.

The issue in McPherson was whether a lessee under a perpetual WLA lease is precluded from seeking relief in the equitable jurisdiction of the Supreme Court against forfeiture of her lease. The contest was between the Minister, who had forfeited the lease, and the lessee, who had invoked the equitable jurisdiction of the Court to relieve against forfeiture. Native title rights were not involved. Kirby P, with whom Meagher JA agreed, decided the case on the principle that Parliament should be presumed to respect and conform to basic rights, including fundamental rules of equity (at 699-701). In his view, the ‘ancient and beneficial remedy’ of relief against forfeiture could co-exist with the Minister’s statutory powers (at 703). The approach taken by Kirby P is not inconsistent with the conclusion that a perpetual lease does not necessarily confer rights on a lessee that extinguish all native title rights over the leased land: see Wik, at 197-198, per Gummow J; at 245, per Kirby J.

Mahoney J did not express a final opinion as to whether a lease in perpetuity should be regarded as having the incidents of a common law lease. He considered that even if the lease were regarded as a statutory right, deriving its force and content from the legislation, the WLA should be construed as implicitly recognising the applicability of the equitable doctrine (at 713). His judgment therefore does not support the conclusion that a lease in perpetuity under the WLA necessarily extinguishes all native title rights.

That leases under the WLA are not necessarily to be construed as having the same characteristics as common law leases receives support from the history of Crown leases legislation in New South Wales, especially after 1855. The legislation emerged as a response to the uniquely harsh physical and climatic conditions of the Western Division and to the difficulties experienced (and created) by European settlement. These difficulties included disputes between different classes of settlers, although the conflict between lessees and selectors was not as acute in what ultimately became the Western Division as it had been in other settled areas of the Colony. The various statutory interests created by the legislation, including grazing leases under the WLA, were designed to address the specific problems identified, particularly, by the Public Lands Report of 1883 and the Royal Commission report of 1901. Neither of these reports referred to the relationship between lessees and indigenous inhabitants. Whatever the historical reasons for this omission, it is difficult to view the 1884 Act or the WLA itself as directed to the extinguishment of such native title rights as might have existed over the sparsely settled areas of Western New South Wales.

Construction of the WLA

As we understood the Lessee’s argument, it included the contention that the WLA, as a matter of construction, contemplates only the grant of leases that confer on the lessee rights to exclusive possession which will necessarily extinguish any native title rights over the leasehold land. This submission must take account of the principles already discussed, namely:

• legislation is not to be construed as extinguishing or authorising the extinguishment of native title rights unless it clearly, plainly and distinctly has this effect;
• the justification for this principle of construction is that legislation is not lightly to be construed as expropriating or extinguishing rights in or over land recognised by the common law;
• legislation creating or authorising the creation of leasehold interests, such as the WLA is not necessarily to be construed as conferring rights of exclusive possession in the same sense as a common law lease, especially if the economic and social context of the legislation suggests otherwise;
• the law recognises the concept of partial extinguishment of native title rights (and thus acknowledges that the extinguishment of some native title rights does not necessarily entail the extinguishment of all native title rights); and
• the test is whether the legislation authorises the grant of rights that are necessarily capable of being exercised in a manner incompatible with the exercise of any native title rights that may exist in or over the land.

Apart from the matters to which we have referred, there are several powerful indications in the WLA itself that it does not have the effect claimed by the Lessee but that, on the contrary, it contemplates the grant of leases which do not necessarily extinguish all native title rights that may subsist over the Leased Land.

First, although the power to grant leases in perpetuity is expressed in general terms (s 23(1)), the WLA specifically provides for land to be set apart for the purposes of grazing (s 24(2)). It contemplates that leases in perpetuity, like the Lease in the present case, might be granted for the limited purpose of grazing (see s 19B(2)). In Wik, the majority considered that a lease ‘for pastoral purposes’ (if anything, a broader concept than grazing: Wik, at 201, per Gummow J) did not authorise activities necessarily inconsistent with all incidents of native title: Wik, at 122, per Toohey J; at 153, per Gaudron J; at 201, per Gummow J; at 245, per Kirby J.

The WLA plainly contemplates that a wide variety of leasehold interests might be granted in respect of land in the Western Division. In this respect it continues a pattern established earlier by Crown lands legislation in New South Wales, especially the 1884 Act. Special purpose leases under the WLA, for example, might be granted for any declared special purpose (s 28A). Some special purpose leases, such as the lease of a small area for a private school, might create interests and rights not easily reconcilable with exercise of any form of native title rights. Other special purpose leases, such as a lease of a relatively large area for drainage or dairying purposes (both declared special purposes) might well co-exist with certain native title rights entitling the holders, for example, only to infrequent and short-term access to particular sites on the land.

The Lessee sought to make a virtue out of necessity by contending that the WLA must be taken to have intended to confer rights of exclusive possession on all lessees to whom leases are granted under the legislation. But there is no reason to suppose that leases granted pursuant to the WLA must confer uniform rights on the lessees, in particular uniform rights to exclude third parties from access to the land. The legislation provides for different terms and conditions to be included in various categories of lease, depending on the purposes for which the lease would be granted. Even if the WLA authorises particular leases or categories of leases that necessarily extinguish all native title rights (a matter unnecessary to decide), it does not follow that all leases granted under the WLA must have this effect.

Secondly, s 23(1)(a) of the WLA provides for the grant of leases in perpetuity. As has been explained, such leases are unknown to the common law. They are, as Gummow J said in Wik (at 201), ‘a statutory title which is sui generis’. For the reasons given by Gaudron J in Wik, it is not to be assumed that a statutory title sui generis carries with it the same rights of exclusion against third parties, including the holders of native title rights, as a common law lease.

Thirdly, the WLA provides for broad reservations and exemptions to be included in all leases granted under the legislation, or such of them as the Minister deems applicable (s 18). The specified reservation and exemptions include the following:

• an obligation not to obstruct or interfere with any reserves or tracks or the use of them by any person (Sched A, par (e));
• an obligation to permit the Commissioner and all authorised persons to enter and view the leased land (Sched A, par (i));
• a reservation in favour of the Crown in relation to minerals, stone and metals (Sched A, par (k));
• a restriction on the lessee’s power to remove material from the land or to prevent authorised persons removing timber or material or searching for minerals (s 18D(i), (iii)); and
• an unrestricted right to proclaim travelling stock, camping or other reserves and to withdraw any land for the purposes of such reserves (Sched A, par (l)).

In Wik, Gaudron J considered that the ‘strongest indication’ that a pastoral lease granted under the Land Act did not confer rights of exclusive possession was to be found in the rights reserved to third parties to take timber, stone and other material from the land and limitations on the lessee’s power, for example, to remove timber or interfere with stock routes (at 154). Gummow J did not give the same emphasis to these matters, but considered them relevant (at 200-201). Toohey J’s approach was similar (at 122). Kirby J took the view that, although the reservations and exceptions provided by the legislation did not throw much light on the legal character of the interest thereby created, by their number and variety they emphasised that a pastoral lease was a ‘peculiar statutory interest’, not to be regarded as conferring a general right of exclusive possession simply because it was called a lease (at 229, 246-247).

The reservations and exceptions provided by the WLA are not identical to those in the Land Act considered in Wik, but they are similar. It is to be remembered that in the absence of findings as to the nature of any native title rights over the land, the critical question in the present case must be answered adversely to the Lessee if any possible native title rights can exist concurrently with the lessee’s rights. The scope of the reservations and exceptions suggests that the rights of a lessee pursuant to a lease granted under the WLA might well be consistent with native title rights.

An example is provided by par (e) of Schedule A of the WLA. As the Council submitted, par (e) appears to recognise existing rights of third parties to use reserves or tracks on Crown lands. There is authority which suggests that the word ‘track’ has a wide meaning, embracing an actual course or route followed regardless of whether there is a visible path: Yandama Pastoral Company v Mundi Mundi Pastoral Company Ltd [1925] HCA 38; (1925) 36 CLR 340, at 369, per Isaacs J (dissenting, but not on this question). The word ‘reserves’ is also capable of a broad meaning embracing, for example, land set aside for particular uses by Aboriginal people. It is not difficult to envisage certain kinds of native title rights that might be protected by a reservation in the form of Schedule A, par (e). Similarly, the reservation in Schedule A, par (l) might well permit the Minister to proclaim or set aside reserves to protect particular native title rights subsisting over land subject to a perpetual lease.

To counter these indications, the Lessee relied on what were said to be differences between the Land Act and leases considered in Wik and the terms of the WLA and the Lease. While there are undoubtedly differences, in our view they do not justify the conclusion that the WLA authorises only the grant of leases conferring rights of exclusive possession on the lessee.

...

The Effect of the Lease

For the reasons we have given, the WLA should be construed as contemplating the grant of leases that do not necessarily extinguish all native title rights existing in relation to land subject to the leases. This conclusion goes a considerable distance to resolving the effect of the Lease in the present proceedings so far as native title rights are concerned. The reason is that the critical provisions of the Lease, of necessity, reflect the requirements of the WLA. As a matter of construction of the Lease, the rights conferred on the lessee are not necessarily inconsistent with the exercise of every incident of native title that may exist in relation to the Leased Land. To adapt the language used in Ward (see [80] above), the terms of the Lease strongly suggest that some native title rights may be capable of exercise without abrogating the rights conferred on the lessee by the Lease.

The most important provision of the Lease for present purposes is that requiring the lessee not to use, or permit the Leased Land to be used, for any purpose other than grazing (cl 4). Just as the leases for pastoral purposes in Wik were construed as not authorising activities necessarily inconsistent with all incidents of native title, so the Lease does not authorise activities necessarily inconsistent with all native title rights that may exist over the Leased Land. Until the content of any native title rights is determined by reference to the evidence, all that can be said is that there may be inconsistency between some native title rights and the rights conferred by the Lessee. As discussed in Ward, that may lead to the conclusion that native title rights over the Leased Land have been partially extinguished or, perhaps (depending upon the evidence) wholly extinguished. But the material presently before the Court is not such as to allow the questions to be answered in the Lessee’s favour.

Consistently with the terms of s 18F(1) of the WLA, to which we have referred, the Lease obliges the lessee to reside on the Leased Land and to make it his bona fide residence (cl 2). Clause 2 is, however, expressed to be subject to the provisions of the WLA. It follows that the local land boards, during the period after the Lease was granted, were empowered to suspend the residence requirement or to allow it to be satisfied in a manner other than residence on the Leased Land itself (see s 18F(1)(i), (ii)). At this stage of the litigation there is no evidence as to whether the residence requirement was enforced and, if so, in what manner.

In any event, a provision in the form of cl 2, if complied with by the lessee residing on the Leased Land, is not necessarily inconsistent with the exercise of all native title rights that may exist in relation to the Leased Land. It is true that the area of the Leased Land (some forty-five square kilometres) is relatively small in comparison with the leaseholds considered in Wik. But it is still a large area of land compared with most blocks used solely for residential purposes. In these circumstances, the right (and obligation) of the lessee to use the land as his or her residence is not necessarily abrogated or impaired, for example, by a right founded on native title to visit a particular site some kilometres from the homestead, or to follow a particular path across the land a considerable distance from the homestead.

We do not mean to imply by what is said in the previous paragraph that there can be no inconsistency between a lessee’s right and duty under a WLA lease to reside on the leasehold and the exercise of native title rights. The point is that until the nature and incidents of native title rights are ascertained, the possibility that there will be no such inconsistency remains open.

As yet there is also no evidence as to whether the original lessee or his successors in title complied with the condition imposed by cl 23B (to enclose the homestead with a stock-proof fence). In accordance with the reasoning of Gummow J in Wik and of the Full Court in Ward, this would seem to be an example of ‘operational inconsistency’. If the area around the homestead has in fact been enclosed, it may be that the act of enclosure would be sufficient to destroy any native title rights in respect of the enclosed area. But, as Ward illustrates, operational inconsistency to this extent would not necessarily extinguish all native title rights over other areas of the Leased Land. The extent of extinguishment by operational inconsistency will depend on the evidence ultimately adduced in the proceedings.

The Lease contains the fencing condition envisaged by s 18A of the WLA. Clause 5 of the Lease provides that the lessee is to enclose the land with a substantial stock-proof fence within one year of the commencement of the Lease, to the satisfaction of the Commissioner. Again, there is no evidence as to whether cl 5 was enforced or whether the Commissioner chose to exempt the original lessee or his successors in title from the requirement. Even if the fencing requirement were enforced, it would not necessarily mean that the lessee’s occupation of the Leased Land would be inconsistent with all native title rights. The obvious purpose of cl 5 is to ensure that livestock remain within the Leased Land, not that persons legitimately seeking access to the land are kept out. Fences have gates or other entry points. The erection of stock-proof fences around the perimeter of a leasehold property pursuant to an obligation to fence may well not be inconsistent with certain forms of accessorial native title rights.

The reservations and exceptions in the Lease, not surprisingly, mirror the provisions of the WLA. Thus the Lease reserved to the Crown mineral rights and (more importantly for present purposes) the right to proclaim camping and other reserves without compensation to the lessee. The Crown is entitled to resume portions of the Leased Land for any public purpose mentioned in or declared as such under the Crown Lands Consolidation Act 1913 (NSW). The Lease also contains provisions corresponding to the covenants, reservations and exceptions specified in Schedule A to the WLA. In particular, cl 11, which prevents the lessee from obstructing or interfering with any reserves or tracks or the unlawful use thereof, corresponds to par (e) of Schedule A. See also cl 23(c). The Lease includes other restrictions on the rights and power of the Lessee such as limitations on the use of stock (cl 17), a prohibition on the grant of grazing rights over the Leased Land without the Minister’s consent (cl 21) and an obligation not to interfere with the inspection of, or the carrying out of certain works on the Leased Land (cll 12, 22, 23A, 23C, 23D).

For reasons that have been given, these exceptions and reservations are framed sufficiently broadly to make it impossible to conclude that there are no native title rights which are capable of being exercised consistently with the rights of the Lessee as defined (and limited) by the Lease. To put it another way, there may well be particular native title rights that are capable of being exercised consistently with the rights of the Lessee under the Lease. This is sufficient to prevent the questions being answered in the manner sought by the Lessee at this stage of the litigation.

Conclusion

In order for the Lessee to succeed in having the questions, in particular questions (c)(i), answered in the affirmative, he must show that the rights granted under the Lease are necessarily inconsistent with all native title rights that may exist over or in relation to the Leased Land. The Lessee has failed to do so. It will be necessary for evidence to be taken to ascertain the nature and content of the native title rights (if any) that existed immediately prior to the grant of the Lease in 1955. The inconsistency of incidents test will then determine whether any of these rights survived the grant of the Lease.

In our opinion, it is unnecessary to answer questions (a) and (b). In the circumstances, question (c) should be answered as follows:

Strictly unnecessary to answer, but on the materials presently before the Court, it cannot be said that any native title rights, the exercise of which involved the presence on the Leased Land by the holders of the native title, were extinguished by the grant of the Lease or suspended upon the grant of the Lease for the duration of the Lease.

Beaumont J:

Introduction

Before the Full Court for determination are several separate questions. The background to the questions is as follows. In the principal proceedings, an application has been made under the Native Title Act 1993 (Cth) (the NTA) for a determination of native title. The claimant in the application, the applicant, is Michael Anderson, for and on behalf of the Euahlay-I Dixon Clan (‘Mr Anderson’). The Court has jurisdiction to hear and determine applications relating to native title: NTA, s 81; see also s 213(2). The first respondent, Douglas Wilson (‘the lessee’), the lessee in perpetuity of the lands the subject of the native title claim, applied for an order under O 29 r 2 of the Federal Court Rules that there be a decision of several questions (‘the questions’) separately from other questions raised in the principal proceedings. This was ordered, and, pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth), it was further ordered that the questions be heard and determined before a Full Court.

Questions

The questions, similar to those considered by the High Court in Wik Peoples v Queensland [1996] HCA 40; (1996) 187 CLR 1, are as follows:

(a) By virtue only of:

(i) the Western Lands Act 1901 (NSW); and
(ii) the regulations thereunder, as in force at the time of the grant of the lease;

did the Lease confer upon the lessee under the Lease a right to exclusive possession of the leased land?

(b) If the answer to the question (a) is ‘No’, by virtue of:

(i) the Western Lands Act 1901 (NSW);
(ii) the regulations thereunder, as in force at the time of the grant of the Lease; and
(iii) one or more of the terms and conditions of the Lease;

did the Lease confer upon the lessee under the Lease a right to exclusive possession of the leased land?

(c) If the answer to question (a) or question (b) is ‘Yes’, were any native title rights the exercise of which involved the presence on the leased land by the holders of the native title:

(i) extinguished by the grant of the Lease; or alternatively
(ii) suspended upon the grant of the Lease for the duration of the Lease?

Agreed facts

The agreed facts are:

1. Mr Wilson is the lessee of Western Lands Lease 7951 (‘the Lease’).
2. The Lease was validly executed under the Western Lands Act 1901 (NSW) (the WLA) on 11 January 1955, effective from 31 August 1953.
3. A copy of the Lease was annexed to the statement of agreed facts. (Its provisions are described below. The Lease was granted in perpetuity, subject to the provisions of the WLA and Regulations.)
4. Mr Anderson, for and on behalf of the Euahlay-I Dixon Clan, is a claimant under the NTA (‘the Claim’).
5. The land the subject of the Lease (‘the Leased Land’) is subject to the Claim.

Although the agreed facts did not include details of the Leased Land itself, the Status Search Report provided to the Court by the Department of Land and Water Conservation provided the Court with information that was not in dispute, as follows.

The Leased Land is located in what is known as the Western Division of New South Wales and is approximately thirty kilometres south of the Queensland border. The nearest population centres are Lightning Ridge (pop 1,814 in 1996) and Collarenebri (pop 544). The area granted under the Lease was 10,820 acres (approximately 4,378 hectares or forty four square kilometres).

...

As indicated in the Lease itself, the Leased Land was set apart for disposal exclusively for members and discharged members of the armed forces pursuant to s 3 of the War Service Land Settlement Act 1941 (NSW). This occurred by a notification in the Gazette on 16 January 1953. The notification described the ‘class of country’ as follows:

Class of country — Fairly open to open black and grey soil country, with a red sandy ridge in Reserve Paddock, running into patches of heavy black soil in the southern section of the block with a small area of red soil near Myall Tank. The northern parts of both Bottom and Top Myall Paddocks are subject to inundation in high floods. Timbered with box, belah and coolabah, lightly ringbarked, with fair to good edible scrubs in wilga, whitewood, berrigan, nardoo, scattered orange and currentbush. Very well grassed with coolah, blue, mitchell, flinders, neverfail, sugar and umbrella grasses.

...

Average annual rainfall — About 16 inches.

...

Improvements — Fencing, tank and ringbarking. (Privately owned.)

Notification of the grant of the Lease under the WLA, in respect of an area of Crown land set aside for disposal under the War Service Land Settlement Act, was made in the Gazette on 31 July 1953.

Reference should be made to the WLA as a central element in the questions for decision.

Enactment of the Western Lands Act 1901 (NSW)

According to its long title, the WLA provides for the vesting of the management and control of that substantial portion of New South Wales known as the Western Division in the Western Land Board; for the grant of extensions of leases in the Division and tenant-right in certain improvements; and for all necessary and incidental purposes.

The boundaries of the Western Division are specified, along with the boundaries of the State’s Eastern and Central Divisions, in the Schedule of the Crown Lands Consolidation Act 1913 (NSW). The Western Division comprises approximately 43 per cent of the State, embracing nearly eighty million acres (approximately thirty-two million hectares), of which almost seventy seven million acres (over 96 per cent) is held under Western Lands leases (see Minister for Lands and Forests v McPherson (1991) 22 NSWLR 687 per Kirby P at 694; A G Lang, Crown Land in New South Wales (Butterworths, 1973) at 461; I Benecke, ‘Wik, Worry and Woe in the Western Division’ (1997) 35(4) LSJ 54 at 54-55).

Later in these reasons, specific reference will be made to the detail of the relevant provisions of the WLA. They are, as noted, of central importance. For immediate purposes, it is sufficient to note that the Lease was granted under s 23 of the WLA. By s 23(1)(a) it is provided that it is lawful for the Minister to grant leases of Crown lands, inter alia, as ‘leases in perpetuity’.

Lease

The Lease itself is entitled a ‘Western Lands Lease’ and is headed up as an instrument of the (Crown in the right of) State of New South Wales. It is in the form of a document which is printed, but to which several typed provisions have been added, including a reference to its purpose of ‘grazing’. The Lease was executed on 11 January 1955 but was expressed to take effect from 31 August 1953. The Lease, recorded as WLL 7951, was enrolled in the Register of Western Lands Leases on 16 March 1955. The lessee named in the Lease was Ross Patrick Smith. The Lease was subsequently transferred to and by several other lessees. It was transferred to Mr Wilson in 1984.

The document refers, at its commencement, to s 23 of the WLA and to the fact that the Leased Land is a ‘soldier’s block’. It recites the grant of a lease in perpetuity. It is expressed as a grant of the land, of about 10,820 acres, to be held as a Western Lands lease in perpetuity from 31 August 1953.

The recitals to the Lease and its habendum are in the following terms:

Whereas certain Crown Lands in the Western Division ...were duly set apart in accordance with the provisions of the War Service Land Settlement Ac, 1941, for disposal by way of lease exclusively to members of the forces and discharged members of the forces ... for the purpose of grazing ——————————————————————————-under the provisions of the [WLA] ... (hereinafter called the said Acts) AND WHEREAS ROSS PATRICK SMITH of Melrose Street, CONDOBOLIN ——————————————-in Our said State ——————————- did on the SIXTEENTH day of MARCH 1953 make an application under the provisions of the said Acts for a Lease of the land hereinafter mentioned and all things required by law have been done to enable a Lease of such land to be duly granted AND WHEREAS Our Minister for Lands of Our said State has granted to the said ROSS PATRICK SMITH a lease of the land hereinunder mentioned in perpetuity at the rent and upon and subject to the exceptions reservations conditions and provisions hereinafter mentioned NOW KNOW YE that in pursuance of the provisions of the said Acts WE DO HEREBY grant unto the said ROSS PATRICK SMITH (who with his executors administrators and assigns is hereinafter referred to as the lessee) ALL THAT piece or parcel of land being portion numbered WL. 3878 containing ten thousand eight hundred and twenty (10, 820) ———————————————————————————————————————————————————-acres more or less situated in the County of Finch (being Western Lands Lease No. 7951) as delineated in the plan catalogued W.L.C. 6351 ... TOGETHER WITH ALL rights easements and appurtenances to the same belonging ... TO HOLD the said land unto the Lessee as a Western Lands Lease from the thirty-first day of August 1953 in perpetuity subject to the provisions of the said Acts and the Regulations thereunder and to the Reservations Exceptions Conditions and Provisions herein contained YIELDING AND PAYING therefor the yearly rent of two hundred and twenty-five pounds eight shillings and four pence or such other rent as shall be or become payable by reason of the annual rent having been or being fixed or determined in due course of law (whether because of the capital value having been or being re-determined or otherwise) ....)

The Lease is expressed to be subject to the following exceptions and reservations:

... EXCEPTING AND RESERVING unto US OUR HEIRS and SUCCESSORS all minerals as defined in the Mining Act 1906 or any Act amending the same and all metals gems precious stones coal and mineral oils which may be in under or upon the said land together with full power and authority for US OUR HEIRS and SUCCESSORS and for any person lawfully authorised in that behalf to enter upon the said land and search for work win and remove all or any of the said minerals metals gems precious stones coal and mineral oils: AND FURTHER RESERVING unto US OUR HEIRS and SUCCESSORS the unrestricted right to proclaim Travelling Stock Camping or other Reserves within the said land and to withdraw any land for the purposes of Roads Travelling Stock Camping or other Reserves without payment of any compensation therefor: AND FURTHER RESERVING unto US OUR HEIRS and SUCCESSORS all powers and provisions necessary for the resumption as hereinafter provided of the said lands or any part thereof for mining purposes townships or any public purpose mentioned in or declared as such under the provisions of the Crown Lands Consolidated Act 1913 as amended by subsequent Acts ...

The provisions of the Lease declare that —

all conditions and provisions contained in the [WLA] and ... Regulations ... thereunder are in so far as the same are applicable hereto embodied and incorporated with these presents as conditions and provisions of the lease hereby expressed to be granted.

The Lease then sets out a number of conditions and other provisions which regulate the use of the land in substantial respects. The conditions and other provisions can be summarised, in so far as relevant, as follows (the numbers below correspond to the clause numbering in the Lease):

(1) The lessee shall pay the rent reserved annually in advance.
(2) The lessee shall, subject to and in accordance with the provisions of the WLA, ‘reside on the ... land and make it his bona fide residence’.
(3) The lessee shall ‘hold and use the ... land bona fide for his own exclusive benefit and shall graze own stock upon the land to the satisfaction of the Minister’.
(4) The lessee will not ‘use or permit to be used the ... land for any purpose other than grazing and the [l]essee shall improve and develop the ... land for grazing to the satisfaction of the Minister’.
(5) The lessee shall ‘enclose the ... land within one year from the date of commencement of the lease with a substantial stock-proof fence to the satisfaction of the [Western Lands] Commissioner’.
(7) The lessee shall (i) destroy rabbits, dogs, foxes and such other vermin and such weeds declared noxious and keep the land free of such vermin and weeds in accordance with directions given by the Commissioner; and (ii) foster and cultivate such edible shrubs and plants as the Minister for Lands directs and the Commissioner considers can be advantageously and successfully cultivated.
(8) The lessee ‘shall keep and preserve sufficient timber’ on the land for the purposes of providing shade and firebreaks.
(10) The lessee ‘shall not have any property rights’ in the timber on the land and ‘shall not ringbark, cut or otherwise destroy’ any timber or scrub without permission of the Commissioner, ‘provided that the lessee may use, in such manner as the Commissioner may from time to time determine, edible trees or scrub for stock feeding purposes, and may take such timber ... for building and other purposes ... as may reasonably be required by him’.
(11) The lessee ‘shall not obstruct or interfere with any reserves, roads or tracks’ or their lawful use by any person.
(12) The lessee ‘shall maintain and keep in reasonable repair all improvements on the ... land’ and allow the Minister or Commissioner and any person authorised by them to enter and inspect the land, buildings and improvements at all times.
(14) The lessee ‘shall not transfer convey assign or sublet the ... land or any portion thereof or mortgage or charge the same except in conformity with the provisions of the said Acts with the repayment of moneys advanced on the security thereof without having first obtained the written consent of [the] said Minister’.
(15) The lessee ‘shall not overstock, or permit or allow [the demised land] to be overstocked’. The Commissioner’s decision as to what constitutes overstocking is final and the lessee ‘shall comply with any directions of the Commissioner to prevent or discontinue overstocking’.
(16) The lessee ‘shall permit any person duly authorised in that behalf to enter upon the ... land and search for work win and remove all or any minerals metals gems precious stones coal or mineral oils in under or upon the ... land’.
(17) The lessee ‘shall, if the Minister so directs, prevent the use by stock of any part of the ... land for such periods as the Minister considers necessary to permit the natural receding and regeneration of vegetation and for this purpose the [l]essee shall erect within the time appointed by the Minister such fencing as the Minister may consider necessary’.
(18) The lessee shall ‘take all necessary steps to protect the ... land from bush fire’.
(20) The Lease shall not be transferred (except by way of mortgage or discharge of mortgage) for ten years after its commencement, except to a member of the forces, discharged member of the forces or other eligible person under the War Service Land Settlement Act 1941 (NSW); or in the event of the death of the lessee, to the widow, widower, child or children of the lessee, or to a member of the forces, etc.
(21) The lessee ‘shall not grant any grazing rights over any part of the land or graze stock thereon under any stock partnership or agist stock thereon’ without the Minister’s written consent; and if any stock is found depasturing on the lease without such consent, it shall be prima facie evidence of breach.
(22) The lessee ‘shall permit the Minister for Conservation, or any person acting on his behalf, to enter on the land ... for the purpose of any survey or investigation, or of carrying out such work in connection with soil conservation and erosion mitigation as he may consider necessary’.
(23A) The lessee ‘shall not interfere with any telephone line crossing the land and shall allow reasonable access’ for maintenance and repair.
(23B) The lessee ‘shall within three years from the date of the commencement of the lease, enclose with a substantial stock-proof fence an area of about one hundred and sixty acres surrounding the homestead, and shall keep such area free of stock, except that the lessee may graze not more than four head of large domestic stock on such enclosed area’.
(23) It is agreed and declared that:
(a) ‘no transfer or assignment of [the] Lease or any agreement to sublet the land or any part thereof shall affect any forfeiture incurred or any debt or liability accrued’ under this instrument;
(b) no transfer of [the] Lease shall be registered or recognised if any rent payment or other dues to the Crown are in arrear’;
(c) no public rights now existing or hereafter to be created in and over any Travelling Stock Route Reserve or Camping Reserve which may be included within the land shall be affected by the granting of [the] Lease;
(d) it shall be lawful for Our Governor of the said State by notification to be published in the Government Gazette to withdraw from this Lease any lands required for mining purposes townships or any public purpose mentioned in or declared as such under the provisions of the Crown Lands Consolidation Act 1913 or any Act amending the same Provided that upon such publication as aforesaid the [l]essee shall be entitled to such compensation in respect of the land so withdrawn for the unexpired term of those presents and for the improvements owned by the [l]essee upon the land so withdrawn as aforesaid as may be determined by [the] said Minister .....
(24) This instrument is made upon the ‘express condition’ that if the rent payable is more than six months in arrears, or whenever there shall be a breach or non-observance by the lessee of any other condition or provision on the part of the lessee to be observed or performed, it shall be lawful for the Minister, after report from the Commissioner, to declare the Lease cancelled and forfeited and the Minister is then entitled to enter upon the land and expel the lessee, without releasing the lessee from liability.
(25) The applicable conditions and provisions of the Lease are to be read and construed as covenants by the lessee.

Clauses 1-22 and 23-25, summarised above, are printed. Clauses 23A – 23D are typed and have been inserted between cll 22 and 23.

Background to the introduction of the Western Lands Bill

Before reference is made to the relevant provisions of the WLA, mention should be made of the legislative history. A Royal Commission was appointed by the New South Wales Parliament in 1900 to inquire into the difficulties facing Crown tenants in the Western Division. The report, tabled in the following year, provides the background to the enactment of the WLA (see Legislative Assembly, New South Wales, Royal Commission to Inquire into the Condition of the Crown Tenants (Western Division of New South Wales) — Report and Summary of Evidence (1901)). (For an account of the Royal Commission’s report and the scheme introduced in 1901, see C J King, An Outline of Closer Settlement in New South Wales (New South Wales Department of Agriculture, 1957), section 7.) The Royal Commission explained that the pastoral industry in the region had become unprofitable in the preceding decades largely due to a series of environmental misfortunes — frequent periods of drought, a disastrous rabbit plague, sand-storms arising from the destruction of vegetation, and the spread of non-edible shrubs — all of which had contributed to an alarming deterioration in the quality of the land. Additionally, overly optimistic initial estimates of the land’s carrying capacity were blamed for the problem of over-stocking which had further exacerbated the degradation process. Profits had also suffered due to the contemporaneous decline in prices for pastoral products. The arduous conditions in the Western Division had led to the widespread abandonment of pastoral properties and caused the value of pastoral property in the region to fall by 50 to 80 per cent during the fifteen years prior to the Commission’s report (at ix-xii).

...

In formulating its recommendations, the Commission identified a number of defects in the prevailing system of land management, including excessive rents and inadequately sized acreages. It advocated the suitable adjustment of both, as well as the writing down of mortgages. Its key proposal was to extend the pastoralists’ tenure, on the basis that this measure would foster occupation and improvement of the land. The report concluded (at xviii) that:

A longer tenure giving the lessee a promise that he will be secured in the fruits of his labour, would seem to be the only effective encouragement that the State can give.

Particular sympathy was expressed in the report for the plight of the homestead lessee, whom, it was said, (at ix)

laboured under an additional disability, namely, being limited by law to an area insufficient over the greater portion of the Division to afford anything like an adequate means of subsistence.

Recognising this constraint on the viability of the homestead lessee’s operation, the Commission proposed (at xxi) that:

In addition to an extension of the period of homestead leases held bona fide for the sole use and benefit of the lessees, we recommend that wherever practicable the areas be extended to an acreage sufficient to carry not less than 4,000 sheep in the most favoured parts of the Western Division, and up to say from 6000 to 8000 sheep in the more distant and inferior parts.

...

The Commission’s report made no mention of Aboriginal rights or interests in land, presumably because this was not within its terms of reference.

Second Reading Speech 1901

The Second Reading speech for the Western Lands Bill echoed the findings of the Royal Commission, its central themes being the depressed state of the pastoral industry in the Western Division, the decline in productivity and the urgent need to improve the situation by decreasing the landholders’ rent and increasing their tenure. However, it too failed to mention any native title rights and interests in land (see New South Wales, Parliamentary Debates, Legislative Assembly, 21 November 1901 and 3 December 1901). Nor is there anything to suggest that the lessee’s interest in the land would be significantly limited. Rather, the impression created is that the proposed tenures offered pastoralists greater security and more control, together with increased opportunities to obtain finance. These sentiments are reflected in the Secretary for Lands’ observations that

Clause 14 is the one that settles the term of the leases. As I say, that is to be settled by this House of Parliament, and I cannot conceive that forty-two or fifty-two years or any other number of years is a day too long. In fact, with proper power to take back land that is wanted for settlement and assuming we get a reasonable and proper value for our land, it seems to me immaterial whether the period is forty years or 400 years, or a lease in perpetuity. ... Until it is wanted for settlement the man with a long lease has the heart to go into his work and improve the land – spend money upon it and make it more productive ... (New South Wales, Parliamentary Debates, Legislative Assembly, 21 November 1901 at 3777).

Introduction of Leases in Perpetuity — the 1932 Amendments

The WLA was amended in 1932 to allow Western Lands leases to be extended to leases in perpetuity, as long as it was in the public interest to do so and the applicant did not hold lands substantially exceeding a home maintenance area: see s 18E. In the case of land best adapted to grazing, a ‘home maintenance area’ was an area ‘which when reasonably improved will carry in average seasons and conditions a sufficient number of stock to enable the holder to reasonably maintain an average family’ (Western Lands (Amendment) Act 1932, s 3). The concept of a home maintenance area was intended to prevent lessees of large pastoral holdings from obtaining leases in perpetuity. The amendment was introduced when leaseholders were suffering the effects of the Depression.

In his Second Reading speech, the Secretary for Lands explained the Government’s reasons for allowing perpetual leases:

Unless the financial institutions are satisfied that a lessee will get a longer lease, they are not prepared to lend him the money he so urgently requires. But if those who do not hold more than a home maintenance area are given a lease in perpetuity, the financial institutions will be prepared to lend money upon that security. No man in his senses, who has money to lend, would lend it on a lease that expired in ten years’ time, but if the applicant has a lease in perpetuity I am sure every hon. member will admit there is reason for a man to feel quite safe. We make provision that transfer can take place in the future, but they will be restricted to the usual home maintenance conditions. ... in no circumstances will [he] be permitted to dispose of his land to another man who already holds a living area. (New South Wales, Parliamentary Debates, Legislative Assembly, 7 December 1932 at 2661 – 2662.)

1934 Amendments — the Introduction of s 23

By 1934, the position of Western lessees was again serious as a result of a combination of drought and the depression. Most settlers held areas that were home maintenance or less, but a relatively small number of lessees (223) held 57 per cent of the country. The amending legislation introduced a scheme whereby the larger landholders would have portions of their lands withdrawn at the end of their leases. If such leaseholders voluntarily surrendered part of their lands, they would receive an extension of their leases. (See C J King, at 177-179.) It was in this context that s 23 of the WLA (pursuant to which the Lease was granted) was introduced.

In the Second Reading speech for the Western Lands (Amendment) Bill 1934, the Minister for Lands spoke of the Bill (New South Wales, Parliamentary Debates, Legislative Assembly, 17 May 1934 at 401) as ‘a blessing to many who are desperately in need of additional areas and others who are patiently waiting for a change to secure a home in the west’. The Minister said (at 402):

I find the most urgent problems of the Western Division to be — (1) to provide small holders with additional land so that they may be placed in a position to increase their flocks, and consequently their incomes, and thus bring about their sound establishment upon the land, and at the same time (2) to find the best practicable means of achieving this result. The whole matter has received careful and prolonged consideration by the Government. All phases of the problem are directed to the fact that large areas of land are held by a comparatively small number of holders, and that very little vacant Crown land remains to be disposed of in the Western Division. This position immediately gives rise to the proposal of looking to the large holdings for areas to build up the holdings of the small men.

...

Scheme of the WLA and regulations

(a) The WLA as in force on 31 August 1953

As noted, the Lease was granted on 16 March 1955 and was expressed to take effect from 31 August 1953. The parties appeared to accept that the material date for determining the effect of the WLA was the date the lease took effect.

...

Section 18 dealt with terms and conditions of leases, and aspects of forfeiture, relevantly as follows:

18. All leases issued ... under the provisions of this Act ... shall contain the covenants, reservations, and exemptions set out in Schedule A hereto, or such of the same as the Minister may deem applicable ... and no lease shall convey any authority to carry on mining operations thereon. Every such lease shall contain a provision to the satisfaction of the Minister for the destruction of rabbits, and any lease shall, in the discretion of the Minister, after report from the Commissioner, be liable to forfeiture for breach of any of the covenants therein contained or annexed by law thereto:

Whenever in pursuance of the provisions of this Act any holding or any right, title or interest to or in any land, becomes liable to be forfeited, such forfeiture may be declared by the Minister by notification in the Gazette.

...

No forfeiture, cancellation or lapsing shall operate to extinguish any debt to the Crown.

The Minister may, in the recommendation of the Commissioner, waive or reverse, whether provisionally or otherwise, and on such conditions as he may think fit, any such forfeiture, cancellation, or lapsing. Any such reversal shall be notified in the Gazette.

Schedule A, substantially regulating the use of the land along the lines of the conditions and provisions of the Lease, was as follows:

Schedule A
COVENANTS, reservations, and exceptions referred to in section eighteen:—

a) To pay rent annually in advance. To pay any moneys owing to the Crown under the provisions of the Crown Lands Acts.
b) To take, within a specified time, such steps and measures to destroy rabbits, dogs, and other vermin as the Commissioner shall from time to time direct, and to keep the lease free of vermin during the currency of the lessee to the satisfaction of the Commissioner.
c) To destroy such noxious weeds as the Commissioner may from time to time direct.
d) Except for the purpose of building, fencing, or for firewood, not to destroy, or permit the destruction of any timber on the lease without the written consent of the Commissioner.
e) Not to obstruct or interfere with any reserves, roads, or tracks, or the use thereof by any person.
f) To foster and cultivate such edible shrubs and plants, and take such steps in this respect as the Minister may from time to time direct.
g) To furnish such returns or statements as the Commissioner may from time to time require in connection with any lease or license, or freeholds or conditional purchases in the Western Division, or worked in conjunction with any lease or license in the Western Division.
h) To furnish such returns or statements as the Commissioner may from time to time require in connection with any sheep or large stock, cost of improvements, working expenses, or any other matter relative to any holding in the Western Division, or to any of the matters herein mentioned in connection with any property worked in conjunction with any lease or license in the Western Division.
i) To permit the Commissioner and all persons authorised ... to enter and view the whole or any part of the lease or buildings or other improvements thereon.
j) To keep in reasonable repair all improvements on the lease.
k) Reservations in favour of the Crown of all minerals, metals, gems, precious stones, coal, and mineral oils, together with all rights necessary for ingress, egress, search, prosecution, and removal and all incidental rights and powers.
l) The unrestricted right to proclaim travelling stock, camping or other reserves. The unrestricted right to withdraw any land for the purposes of roads or travelling stock, camping or other reserve.
m) The unrestricted right for the Minister, the Commissioner, or any persons duly authorised in that behalf to enter upon and examine such land and the improvements thereon.
n) The right, if the rent or license fee be not paid on the due date, to impose a penalty not exceeding ten per cent per annum on the amount unpaid.
o) A proviso that if rent shall be in arrear for more than six months after due date, or if there has been a breach or non-performance of any of the lessee’s covenants or conditions the Minister may cancel the lease.
p) Provisions for resumption of lands for mining purposes, townships, or any public purpose under the provisions of the Crown Lands Acts; and for compensation for resumption.
q) Reservations in favour of the Crown necessary or proper for giving effect to any Act or regulation for the time being in force.

All leases were to ‘be subject to a condition that the boundaries of the lands leased shall be fenced within such period and with such class of fencing as may be determined by the Commissioner not being a rabbit-proof fence ...’ (s 18A). However, a proviso empowered the Commissioner to exempt, vary or modify this condition.

By section 18D:

(i) No lease other than a special lease for that purpose shall confer any right to remove material from the leased land or to prevent the entry and removal of material by authorised persons.
(ii) A lessee may take from land under lease to him and not comprised within a timber or forest reserve such timber and other material for building and other purposes on the land or on any contiguous land held in the same interest as may reasonably be required by him.
(iii) No lessee shall prevent any ... authorised [persons] from cutting or removing timber or material or from searching for any mineral within the land under lease.
(iv) A lessee shall, if the Minister so directs, prevent the use by stock of any part of the land for such periods as the Minister considers necessary to permit of natural reseeding and regeneration of vegetation; and, for this purpose, the lessee shall erect within the time appointed by the Minister such fencing as the Minister may consider necessary.
(v) A lessee shall not overstock or permit or allow to be overstocked the said land, and the decision of the Commissioner as to what constitutes overstocking shall be final, and the lessee shall comply with any directions of the Commissioner to prevent or discontinue overstocking.
(vi) A lessee shall use iron or steel posts (with wooden strainers) for the erection or repair of all fencing on the land, except that, in special cases, the Commissioner may permit the use of other posts.

Section 18E (inserted in 1932) provides for the extension of a subsisting lease to a lease in perpetuity upon application by the holder.

Section 18F (inserted into the WLA in 1934) made residence a condition of any lease applied for after the commencement of the Western Lands (Amendment) Act 1934:

18F.(1) A condition of residence for a term of five years shall attach to every [such] lease ... in respect of land set apart for disposal by way of lease generally and shall be performed by the lessee or some other person approved by the Commissioner.

Residence shall commence within six months after the commencement of the lease:

Provided that —

(i) The local land board may suspend the condition of residence for such periods and upon such conditions as it may determine; or
(ii) the lessee or such other person may with the permission of the local land board perform such condition by residing anywhere within a reasonable working distance of the lease.

(2)(a) A provision in any instrument of lease or a condition attaching to any [such] lease ...to the effect that the lessee shall occupy the land within the lease during the whole of the term of the lease by the continuous and bona fide residence of himself or some other person approved by the Commissioners of the Western Land Board of New South Wales in writing shall cease to have effect upon the issue by the local land board of a certificate that continuous residence for a period of five years has been performed upon the lease by or on behalf of the lessee or his predecessors in title.

(b) ....

Section 18G dealt with the transfer, conveyance, assignment or mortgage of leases applied for after the 1934 amendments. Except as otherwise provided in the WLA, no transfer, conveyance, assignment, mortgage or other dealing (except a discharge of mortgage) was to be effected unless the consent of the Minister had first been obtained (s 18G(1)). Without limiting the generality of the Minister’s discretion, the Minister was to:

... have regard to the desirability of preventing undue increases in the price of land and its use for speculative or uneconomic purposes, taking into account the circumstances of the particular case and all other relevant considerations including in particular, the following matters:
(i) the amount of the purchase money, rent or other consideration to be paid and the extent to which it exceeds the fair market value of the lease or the rent or other consideration appropriate to that fair market value;
(ii) the terms of the transaction, and the terms of any other transaction in any way related thereto ... (s 18G(1A)(a)).

...

Any lease applied for after the 1934 amendments was liable to forfeiture if the holder sublet the lease or any part thereof, or granted any grazing rights over the lease or any part thereof without having first obtained the written consent of the Minister. If any stock not owned by the holder was found depasturing on the lease or any part thereof without the Minister’s consent, it was to be prima facie evidence of a breach of the subsection (s 18G(4A)).

Where a lease applied for after the 1934 amendments was mortgaged, and the mortgagee entered into possession of the lease under the mortgage, the mortgagee could hold the lease for a period of three years after the date of entry into possession, or for such further period as the Minister, after report by the Commissioner, permitted. The mortgagee could not foreclose the mortgage or transfer the lease, except by way of discharge or mortgage, without the consent of the Minister. If, within the period of three years, the mortgagee did not foreclose the mortgage or transfer the lease, the lease was liable to be forfeited (s 18H(1)).

Any covenant, condition, purpose or provision of a lease could, on the recommendation of the local land board and with the consent of the lessee, be varied, modified or revoked or added to by the Minister to such extent and on such terms as the Minister deemed desirable (s 18J).

The rent of any lease in perpetuity applied for after 30 June 1943 in respect of land set apart for grazing was to be determined by the local land board. The rent so determined was to be payable for a period of ten years commencing from the date of granting the lease. For each separate period of ten years thereafter, the rent payable was to be the rent as redetermined by the local land board (s 19B(a1)). In determining or redetermining the rent of any lease of land held for grazing, the board was to have regard to the productive capacity of the land under fair average seasons, prices and conditions (s 19B(3)). The rent was to be paid annually in advance (s 19B(4)).

Section 23, as previously mentioned, the source of the authority to grant the Lease, conferred upon the Minister the power to grant leases as follows:

23(1) It shall be lawful for the Minister to grant leases of Crown Lands —

(a) as leases in perpetuity; or
(b) ...

Any lease so granted shall except as otherwise provided in this Act be subject to the general provisions of this Act.

(2) Except as otherwise provided in this Act, the Minister shall not grant a lease of any Crown lands unless such have been set apart for disposal by notification in pursuance of section twenty-four of this Act.

(3) The Minister shall not grant a lease in perpetuity to an applicant who holds under any tenure (other than annual lease, preferential occupation license, occupation license or permissive occupancy then having not more than one year to run) an area of land which when added to the land applied for would substantially exceed a home maintenance area.

For the purpose of this subsection lands held by the spouse of the applicant shall be deemed to be lands held by the applicant...

(By a new definition added in 1949, a ‘home maintenance area’ was defined to mean:

an area which when used for the purpose for which it is reasonably fitted, would be sufficient for the maintenance in average seasons and circumstances of an average family. (s 3))

Section 24 gave the Minister the power to declare that any Crown lands be set apart for disposal as follows:

24(1) The Minister, after such inquiry and report as may be deemed expedient, may declare by notification in the Gazette that the Crown lands comprised within any area to be described in the notification shall be set apart for disposal by way of-

(a) lease generally; or
(b) lease exclusively to holders of land under any tenure situated in the Central Division within a reasonable working distance of such lands; or
(c) lease exclusively to holders of land under any tenure situated in the Western Division within a reasonable working distance of such lands; or
(d) lease exclusively to both classes of holders of land as aforesaid.

(2) The Minister shall specify in any such notification that the land is set apart for the purpose of grazing or grazing and agriculture combined or mixed farming, or for any similar purpose or purposes.

...

The Governor was also given power to make regulations for the general purpose of carrying the WLA into effect (s 36).

Section 44(1) gave the Governor the power to withdraw land from lease in certain circumstances as follows:

44(1) The Governor may withdraw the whole or any part of the land comprised in any lease under this Act in any case in which in his opinion such land is required for the purpose of settlement, and in connection with such withdrawal shall acquire any freehold portions owned by the lessee and situated within and used in conjunction with such lease or part ...
The lessee was thereupon entitled to compensation (for complete or partial withdrawal) of the market value of the interest held in the leased land based entirely upon its market value for pastoral or grazing purposes (s 44(1)).

(b) The relevant provisions of the Regulations

Regulations were made under the WLA. Regulations may be looked at, not to construe an overall scheme, or to throw light on ambiguity in a statutory provision, but to ascertain what the scheme is (per Mason J in Brayson Motors Proprietary Limited (In liquidation) v The Commissioner of Taxation for the Commonwealth of Australia [1985] HCA 20; (1985) 156 CLR 651 at 652). Two regulations should be noticed for present purposes:

• The Commissioner may at any time cause inspections to be made of any holding in order to ascertain whether the conditions, covenants, provisions and reservations had been or were being complied with (reg 79).
• For the purpose of giving effect to the provisions of the WLA or the regulations, it shall be lawful for any duly authorised person to enter upon any land and to open and remove fences and do all acts necessary for such purpose, provided that no unnecessary damage was done and that all damage, as far as practicable, was repaired (reg 80).

Characteristics of a statutory lease in perpetuity

The characteristics of a statutory lease in perpetuity in New South Wales have been considered by the High Court of Australia and by the New South Wales Court of Appeal, but not in the context of a claim of indigenous rights. Nonetheless, the cases are important for present purposes for their illumination of the nature of a statutory Crown perpetual lease. This is at least our starting point.

A lease in perpetuity of Crown lands was considered by the High Court in Hawkins v The Minister for Lands NSW [1949] HCA 21; (1949) 78 CLR 479. One of the issues was whether land so leased was nonetheless land ‘vested’ in the Crown. The issue arose in this context. On an application to convert a Crown lease into a conditional purchase, it was argued that the conversion was not possible since the lands were no longer ‘Crown lands’, having been reserved from sale, and ‘lawfully contracted to be granted in fee simple’. But it was held that the perpetually leased lands remained ‘Crown lands’ which could be converted; although their reservation from sale precluded their conversion. For our purposes, it follows that although perpetual, the Lease must be viewed as a lease, rather than as a notional fee simple.

Latham CJ said (at 487):

Under a Crown lease, even though it is a perpetual lease, the Crown has become the landlord of the lessee, rent is payable to the Crown as landlord, and if the lessee does not perform the conditions of the lease the lease may be forfeited and then the Crown would have a complete title free from the lease. In my opinion it should not be held that lands subject to a Crown lease are not lands vested in the Crown.

Dixon J said (at 492):

... it is said for the lease-holder that the existence and the incidents of the Crown lease are inconsistent with the land falling within the definition of ‘Crown Lands.’ Because it is a Crown lease in perpetuity the land, it is claimed, is no longer vested in His Majesty within the meaning of the definition. No doubt the reversionary interest in the Crown is slight and it may be said to be technical. But a rent is reserved, there are special conditions, the interest is capable of surrender and, for non-payment of survey fees, of forfeiture. It is difficult to find any ground for giving to the word ‘vested’ anything but its legal meaning. It can hardly be confined to ‘vested in possession.’ The reference in the exclusionary part of the definition to land granted in fee simple tends strongly against the view that after the grant of a limited interest in possession land is no longer ‘vested’ in the Crown for the purpose of the definition. In my opinion land subject to a Crown lease in perpetuity may still be ‘vested in His Majesty.

Some other characteristics of a lease in perpetuity, specifically a perpetual lease, as here, granted under the WLA were considered by the Court of Appeal of the Supreme Court of New South Wales in Minister for Lands and Forests v McPherson above. It was there held (Kirby P, Mahoney and Meagher JJA) that nothing in the WLA precluded the grant of equitable relief against forfeiture of an interest in such a lease. The case is important here, notwithstanding that no question of native title rights arose for consideration.

Kirby P (with whom Meagher JA agreed in material respects) first noted the ‘emphasis upon the parliamentary definition of rights and obligations’ in respect of Crown land in de Britt v Carr [1911] HCA 32; (1911) 13 CLR 114 (per Griffith CJ at 122) and in Davies v Littlejohn [1923] HCA 64; (1923) 34 CLR 174 (per Isaacs J at 187-188). Kirby P went on to say (at 695-696):

The conditional purchase was not an interest which existed at common law. It was therefore natural that, in respect of such a right, created purely by statute, that its incidents, features and obligations should be taken as defined by the statute creating that right. A lease, on the other hand, is an interest which has been known to the common law for centuries. Long before the Western Lands Act, and indeed long before the discovery and settlement of this country, the Crown had leased land to its subjects. Those subjects thereby acquired interests in such Crown leases.

Kirby P referred (at 696) to frequently cited observations of Griffith CJ in O’Keefe v Williams [1910] HCA 40; (1910) 11 CLR 171. Griffith CJ said at 191-193:

In my opinion, when one man is put in possession of land by another, full effect cannot be given to the intention of the parties without implying an obligation that the lessor shall neither disturb the possession himself nor authorise its disturbance by others ...

I do not know of any ground in reason or authority for applying different canons to the construction of contracts between the Crown and a subject and contracts between subject and subject ... I am of the opinion that a contractual obligation is to be implied in the case of a demise by the Crown under the Australian Crown Lands Act, to the effect that the Crown will not disturb or authorise the disturbance of the lessee in his occupation.

Kirby P concluded (at 696) that there was ‘no inherent conflict’ between the reasoning in O’Keefe and Davies, noting that in O’Keefe, Griffith CJ had said (at 190) that the ‘mutual rights and obligations of the Crown and the subject depend, of course, upon the terms of the Statute’. Kirby P said (at 696-697):

The clear principle of all these decisions of the High Court is that the first duty of the Court is to examine the statute to see whether, consistently with its terms, other rights and obligations that would apply by the general law attach to the statutory entitlements and duties of the parties. In the case of an interest called a ‘lease’, long known to the law, the mere fact that it also exists under a statute will not confine its incidents exclusively to those contained in the statute. On the face of things, the general law, so far as it is not inconsistent with the statute, will continue to operate. Thus, the answer to whether relief against forfeiture of a statutory lease under the Act is available to a party having an interest in that lease depends not upon any broad exclusion of the general law (including of forfeiture) but upon a detailed consideration of whether that law is compatible with the provisions of the Act, specifically those providing for forfeiture. (Emphasis added)

Kirby P next analysed the provisions of the WLA with respect to forfeiture against the background of first, ‘the presumption of our legal system that Acts of Parliament are intended to operate justly’ (at 698); and secondly, the ‘[equitable] jurisdiction [which] included a power, in special and extraordinary circumstances, to provide relief to a person with an interest in a leasehold, from forfeiture of that interest’ (at 702). Observing (at 702) that none of the State legislation, including the WLA, had expressly revoked that jurisdiction, his Honour went on to conclude (at 702-703) that the power to provide relief had not been ousted by implication, because he could ‘see no mischief in the simultaneous existence of a statutory and equitable procedure for relief against forfeiture of the interests in leases under the Act’. Kirby P said (at 702-703):

Whilst the ‘leasehold’ envisaged by the Act has particular incidents, it remained a ‘leasehold’. No express provision excluding the jurisdiction of the Supreme Court in its Equity Division or repealing or limiting its power to provide relief is stated in the Act. Such restrictions must therefore be left to the work of implication. But why cannot this ancient and beneficial remedy co-exist with the Minister’s powers?

Meagher JA (at 716) agreed with this conclusion.

Mahoney JA arrived at the same conclusion.

...

The reasoning in McPherson was referred to with approval in Wik.

McPherson in the Court of Appeal (at 697-703; and at 713-715, together with the decision of Kearney J to similar effect at first instance at (1990) 22 NSWLR 671 at 682-683) was cited by Gummow J, a member of the majority in Wik (at 198), as authority for the proposition that —

In the circumstances of the particular case and depending upon the particular incidents attached by statute to the interest in question, there may be an equity to relief against forfeiture of that interest.

Kirby J in Wik (at 245) referred to McPherson as authority for the proposition that a lessee under the Queensland Crown Lands legislation ‘would be entitled to seek relief in equity in certain circumstances as under a private lease’.

McPherson was also approved by Brennan CJ, with whom Dawson and McHugh JJ agreed, as members of the minority in Wik.

...

McPherson is significant here for two reasons. First, it is the only authority of an Australian appellate court deciding the nature of a lease under the WLA. Secondly, as a matter of comity, this Court should follow an interpretation placed on such legislation by such a court ‘unless convinced that that interpretation is plainly wrong’ (see Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 at 492). This is particularly so when the decision is one of a Court of Appeal of a State considering the State’s property legislation, and which has the approval of the High Court.

As I understand the arguments before us, it was not suggested, nor in my view, could it be suggested, that McPherson was wrongly decided. But for obvious reasons, the arguments focussed upon the later important decision of the High Court in Wik which is central to the present issues and to which I now turn.

Reasoning and decision in Wik

At first instance in Wik, Drummond J had determined, as a preliminary issue, the effect of the grant of several Queensland pastoral leases (referred to as the Holroyd Leases and the Mitchellton Leases respectively) upon any native title which might be found to exist. His Honour’s decision on this issue was expressed in the answers to two questions. In the course of those answers, his Honour held that each of the leases conferred on the lessee ‘rights to exclusive possession’ of the land, and that thereby the grant of each lease ‘necessarily extinguish[ed] all incidents of Aboriginal title ... in respect of the land demised under the pastoral lease’ (see The Wik Peoples v The State of Queensland (1996) 63 FCR 450; and see per Toohey J in Wik in the High Court at 103).

An appeal to the Full Federal Court from the judgment of Drummond J was removed into the High Court. By a majority (Toohey, Gaudron, Gummow and Kirby JJ; Brennan CJ, Dawson and McHugh JJ dissenting) the appeal was allowed.

In respect of the Holroyd leases, it was ordered by majority, that relevant questions be answered as follows (at 261-262):

Question 1(B)
If at any material time Aboriginal title ... existed in respect of the land demised under the pastoral lease in respect of the Holroyd River Holding ...
(b) does the pastoral lease confer rights to exclusive possession on the grantee?
...
Answer
(b) No.

...

Question 1B(d)
(d) did the grant of the pastoral lease necessarily extinguish all incidents of Aboriginal title ... of the Wik Peoples in respect of the land demised under the pastoral lease?
Answer
(d) Strictly does not arise but is properly answered No.

By a majority, similar answers were ordered to be given (at 262-263) in respect of the Mitchellton leases.

Each member of the majority published full reasons. Given the obvious significance of Wik for our purposes, and the immense complexity of the issues that have arisen in this area, it will be necessary to refer to their individual reasons at some length. As Toohey J said of the questions asked in Wik, they ‘reduce to straightforward propositions what are in truth complex issues of law and fact’ (at 131).

...

Justice Beaumont then provided an extensive point-form summary of the respective majority judgments in Wik. The summary is not essential to His Honour’s reasoning and therefore has not been reproduced in full. It merely serves as a preliminary step in His Honour’s determination of the ratio in Wik, which he subsequently articulates under the heading ‘Identification of the Ratio of the Majority Judgments in Wik’. However, Beaumont J’s short summary of the postscript to Toohey J’s judgment is reproduced below because according to His Honour, it is crucial to the Wik ratio, and to the outcome of the present case.

...

Toohey J’s postscript

Accordingly Toohey J proposed to answer the relevant questions in the negative. However, importantly in my view, his Honour, with the concurrence of Gaudron, Gummow and Kirby JJ, added a postscript so ‘that the significance of the answers proposed should be properly understood’ (at 132).

The postscript, which in my view, is of critical significance in the present case, was to this effect: (1) To say that the leases did not confer rights to exclusive possession ‘is no way destructive of the title of those grantees’. Rather, it is ‘to recognise that [their] rights and obligations ... depend upon the terms of the grant ... upon the statute which authorised it’. (2) Whether there was extinguishment ‘can only be determined by reference to such particular rights and interests as may be asserted and established’. (3) If inconsistency is held to exist between the rights and interests conferred by native title and the rights conferred under the statutory grants, native title rights and interests ‘must yield, to that extent, to the rights of the grantees’ (at 132-133).

...

Identification of the ratio of the majority judgements in Wik

In litigation of this complexity, the identification of a majority ratio is necessarily difficult. But, in my view, the following ratio may be found in the majority judgments:

• Neither lease conferred a right to exclusive possession (viz. the answer given by the majority to question 1B(b)).
• There was no provision, express or implied, in any of the Queensland legislation, nor in the leases themselves, evidencing a clear and distinct intention necessarily to extinguish all incidents of any native title that may be held to exist (viz. the answer given by the majority to question 1B(d)).
• The conclusion that the leases did not confer rights to exclusive possession was in no way destructive of their title which depended upon the terms of their leases and the statutes (postscript at 132).
• Whether there was extinguishment can only be determined by reference to such particular rights and interests as may be held to exist (postscript at 133).
• If inconsistency is held to exist between the native title rights and the lessees’ rights the native title rights must ‘yield’, to that extent, to the lessees’ rights (ie be extinguished to that extent) (postscript at 133).

Identification of matters not part of the majority ratio in Wik

It will be seen then that, in some respects, the process of reasoning in the majority judgments appears to proceed beyond matters which constitute the strict ratio. Two aspects in particular should be identified: first, the use to be made of early colonial history; and secondly, the legal significance of the vast size and remote location of the Holroyd and Mitchellton holdings.

(a) The use of early colonial history

It is true that each of Toohey, Gaudron and Kirby JJ referred at some length to the early colonial history. In particular, as we have seen, each apparently placed considerable emphasis upon the views expressed by Earl Grey in his despatches in the late 1840s. But the postscript to Toohey J’s judgment makes no reference to this early history as a decisive consideration. On the contrary, as noted above, the postscript states (at 132) that the lessees’ rights and obligations ‘depend upon the terms of the ... lease and upon the statute which authorised it’.

...

On behalf of Mr Wilson, a valiant attempt was made in argument in the present case to invite this Court to revisit, and review, some of the history described by Toohey, Gaudron and Kirby JJ in Wik. This aspect is more fully dealt with in the Appendix to these reasons. For immediate purposes, it suffices to say that this historical ‘issue’ is beset with its own immense complexities. If, contrary to my understanding, historical considerations had, in truth, formed part of the ratio of those members of the majority in Wik, it would have been necessary for us to address these multidisciplinary questions. But, we have not had the benefit of expert evidence or full arguments from both sides on these questions. In the circumstances, in my view, it is not appropriate that we pursue them further.

This is not, however, to say that in the interpretation of this legislative scheme, regard cannot be had, as part of the immediate ‘context’, to the material in the 1901 Parliamentary Report and the Second Reading speeches, in interpreting the WLA including its 1934 amendments. On any view, they are a legitimate resource in the process of statutory interpretation (see CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at 408; Newcastle City Council v GIO General Limited [1997] HCA 53; (1997) 191 CLR 85 at 99 and 112-113). I mention this material below. But the point is that, once it is accepted, as I think, that the interpretation to be placed upon the early colonial history did not form an essential part of the majority reasoning in Wik, we need not embark upon the complex undertaking of endeavouring to relate that early historical material to twentieth century legislation in the form of the WLA.

The significance of the vast size and remote location of the lands leased in Wik

Again, it is true that Toohey, Gaudron and Kirby JJ referred to these factors. Kirby J (at 233) described them as ‘context’ of such significance that, if a conclusion of ‘exclusive possession’ were to be drawn, ‘... it would require very clear law to drive me to such an apparently unrealistic conclusion’. Despite this, upon analysis, it does not seem that degrees of size, or of remoteness, were part of the ratio. Being dependent upon matters of degree, rather than of kind, it is not to be expected that such matters could translate easily into a known legal principle. More importantly, these aspects were not incorporated into the postscript, which, as Toohey J explained, was intended to illuminate the process of reasoning of the majority in answering the questions.

The difficulties in attempting to incorporate factors such as these into legal doctrine are well illustrated in the present case. By suburban standards, an area of 10,000 acres is immense. But judged by the standards of the zone in question, as recognised by the statute itself, it is no more than the minimum area required to make a living for a single family. The significance of this and the need to place the size of these areas in realistic perspective, are made clear by the material previously referred to, the 1901 Parliamentary report, and the Second Reading speeches in 1901 and 1934. This material was confirmed by the provisions of the statute and by the terms of the lease, limiting the purposes for which the land may be used, requiring bona fide residence on the lands leased, and contemplating a holding of the size of a home maintenance area. Moreover, the remoteness described in Wik is to be contrasted with the detailed requirements prescribed by the WLA, its regulations and the lease obliging the lessee to undertake upon the lands leased a whole range of activities.

These considerations reinforce the point that, for legal purposes, we should not attempt to assess, even if it were practicable, relativities of size and remoteness as decisive considerations in the present context.

Conclusions on the separate questions

It will be convenient to consider first the issues concerning the right to possession, and then to turn to the extinguishment issues.

(a) Possession issues — the lessee’s rights

As I followed the arguments before us, it was not, and could not be, seriously in dispute that the lessee had a right to possession for grazing and for the incidental purposes of the kind described by Toohey J in Wik (at 114, see para 84). That is to say, the provisions of the legislative scheme, and of the lease itself, to the effect that the lessee is to use the lands for a particular purpose, must carry with them, by necessary implication, the intention of the Parliament and the Executive that the lessee have such possession of the area which is needed to achieve that purpose. Moreover, that a possessory or proprietary right was intended by the Parliament and the Executive to be granted is indicated by other express provisions of the legislative scheme and of the lease. The residence requirement, the fencing obligations, the requisite home maintenance area, the elaborate provisions dealing with the transfer or mortgage of a WLA lease and its devolution upon death, together with the detailed provisions with respect to improvements previously described, illustrate and confirm this. These provisions are more consistent with an intention to create a more permanent, possessory title than the merely personal, ephemeral relationship which is found in, for example, a bare licence.

The real issue here is whether that possession was ‘exclusive’. On any view, to use Toohey J’s words, the answer to this question must be accepted to be a complex question of law and fact.

The decision and the reasoning in McPherson stand for the proposition that, for the purposes of the availability of relief against forfeiture, the lessee should be treated as having exclusive possession: that is, in the sense that, in this context, a WLA lease in perpetuity is to be regarded as relevantly the same as, or equivalent to, a common law lease. But in the light of Wik, the reasoning in McPherson must, I think, now be read as directed only to its context, ie forfeiture. The ratio in McPherson did not encompass any claim of native title, which was not in issue there. In other words, we should not interpret McPherson as deciding that the right to possession under a WLA lease carried with it the right to exclude Aboriginals: that question was simply not there an issue. This is not to cast any doubt at all upon the decision in McPherson. There is nothing in the statutory scheme (relevantly described at paras 23-48 above), or in the High Court decision in Hawkins or in Wik, which detract from what McPherson actually decided. As I have said, I respectfully agree with what it decided, and with the reasons given by each member of the Court of Appeal for the decision.

But, at all events, a WLA lease could never be regarded as conferring a legal right to ‘exclusive’ possession in any literal, absolute, unconditional or universal sense, even if the relative status of native title rights are put to one side for the moment; that is to say, the lessee’s right to possession was already expressly qualified or conditional in several respects, whatever the position would be vis-à-vis native title interests. One qualification has already been mentioned, namely the existence of the requisite purpose, viz. grazing. The lessee had no right to use the land for any activity not incidental to grazing. Other express conditions or qualifications clearly limit the lessee’s possessory title. As has been seen, Toohey J in Wik (at 122) observed that the lessee in Wik was granted, by the statute, possession for pastoral purposes, that is, such possession as was required for the occupation of the land for those purposes. But his Honour went on to note the reservation of rights of entry, to which the lessee’s right to possession must yield. Likewise, Kirby J in Wik at 245, in the passage cited above, observed that the lessee would be entitled (but with exceptions and reservations aside) to enforce as against the Crown an entitlement to be given quiet enjoyment. The same comments can be made of the explicit exceptions and reservations in the present case.

As has been seen, the Lease itself is expressed to be subject to the following additional qualifications upon the lessee’s right to possession:

• The reservation of minerals etc.
• The reservation of the State’s right to proclaim Roads, Travelling Stock, Camping or other Reserves and to withdraw land for these purposes without compensation.
• The reservation of the State’s power to resume land for mining, townships or public purposes.
• The lessee’s obligations (a) to permit authorised persons to enter and search for, remove etc. minerals etc. (condition 16); and (b) to permit the Minister for Conservation, or any person acting on his behalf, to enter for the purposes of survey or investigation in connection with soil conservation etc. (condition 22).

These qualifications upon the lessee’s right to possession are clearly within power, being specifically mentioned, as has been seen, in paras (k), (l), (m), (p) and (o) of Schedule A to the WLA.

In addition, as noted above, s 44(1) of the WLA confers upon the Governor the power to withdraw leased lands for settlement purposes.

As has also been noticed, further qualifications are imposed by the Regulations, ie the Commissioner’s power to cause inspections (reg 79); and the power of an authorised person to enter and to open and remove fences (reg 80).

Again, as I followed the arguments before us, the existence of these qualifications upon the lessee’s right to possession was not, and could not be, seriously in dispute. But in my opinion, no useful purpose could be served here by answering the separate questions by first referring to the existence of the lessee’s right to possession, and then attempting (especially at this early stage of the principal proceedings) an exhaustive catalogue of the numerous express exceptions and reservations, some mentioned above, and which could not be in serious contention. Rather, as has been said, the real question here, and the aspect that the Court should now address, is whether the lessee had the right to exclude those claiming native title rights. And, as Toohey J noted in Wik (at 131), the questions framed by reference to exclusive possession ‘tend to obscure what is the critical question, that of extinguishment’ (ie the present question (c), which I will next address).

In these circumstances, before proceeding to questions (a) or (c), I would answer question (b) as follows:

The Lease confers upon the lessee a right to the possession of the leased land. This right is subject to certain exceptions and reservations that are not presently material. It is not appropriate to answer this question further at this stage of the principal proceedings.

In these circumstances, I need not answer question (a).

Extinguishment issues — native title holders rights

It follows that, as in Wik, this (question (c)) is the central question here.

In Commonwealth of Australia v Yarmirr [1999] FCA 1668; (1999) 168 ALR 426 (at 436-439), and in State of Western Australia v Ward [2000] FCA 191 (at pars 55-120) von Doussa J and I referred to the High Court decisions which have explained authoritatively the general concept of extinguishment, including partial extinguishment.

In addressing question (c), it is pertinent to note that Toohey J’s postscript in Wik contemplates (1) an inquiry whether inconsistency exists between (a) the rights and interests conferred by native title and (b) the rights conferred by the statutory grants of the leases; and (2) if so, an identification of the extent of the inconsistency, because if inconsistency is held to exist, the native title rights and interests will ‘yield’ (ie will be extinguished) to that extent. For our purposes, this statement of principle is, in my view, authoritative and squarely in point. Accordingly, it should, in my opinion, be applied here.

I propose to answer question (c) accordingly, and to add, for the reasons which now follow, that it is not appropriate to answer this question further in respect of extinguishment, or suspension, at this stage of the proceeding.

In answering the questions in Wik, Toohey J said (at 131):

The questions reduce to straightforward propositions what are in truth complex issues of law and of fact. They look for a certainty in the answers which, in the circumstances of the present appeals, is a mirage. There have been no findings as to whether native title rights even exist in connection with the land, let alone the content of any such rights.

Gummow J also noted (at 169, 204) that it was significant that, in Wik, there had not then been a trial of the facts, so that the range and scope of the incidents of any native title rights that might be found to exist were not then known.

And more recently in Yanner v Eaton [1999] HCA 53; (1998) 166 ALR 258 Callinan J, expressing a similar sentiment, said (at 300):

In this case there was evidence which was uncontradicted and uncontested, relevantly directed to the rights, traditions, customs and practices of the Aboriginal group of which the appellant was a member, and findings of them by the magistrate of sufficient particularity to enable, indeed to compel, the carrying out of the exercise which the majority in Wik was unable to carry out in order to decide whether the leases extinguished wholly or partially any of the native title rights claimed.

In the present forensic circumstances, which are similar to those before the High Court in Wik, it is not now appropriate to pursue the operation, if any, of the doctrines of extinguishment or ‘suspension’, beyond making the general answer mentioned in response to the generally expressed question asked.

I would therefore answer question (c) thus:

The grant of the Lease extinguished such incidents of native title (as may be held to exist), as were inconsistent with the rights conferred by the Lease upon the lessee. It is not appropriate to answer this question further at this stage of the principal proceedings.

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POSTSCRIPT

Since writing the above, I have had the advantage of reading the reasons of Black CJ and Sackville J.

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Whilst, some differences of emphasis do appear, each of our respective approaches follows, as we are bound to do, the majority opinions in Wik. We all also hold that the questions asked in Wik, and here, tend to conceal, rather than reveal, the true issues. For that reason, I have chosen to apply the particular reasoning of the Wik majority stated, with the concurrence of the other members of the majority in the postscript in the judgment of Toohey J.

Counsel for the Applicant:

Mr Patrick Larkin

Solicitor for the Applicant:

Craddock Murray & Neumann

Counsel for the First Respondent:

Mr Alan Sullivan QC with Mr John Emmerig

Solicitor for the First Respondent:

Blake Dawson Waldron

Counsel for the Second Respondent:

Mr Vance Hughston

Solicitors for the Second Respondent:

Crown Solicitor’s Office

Counsel for the Third Respondent:

Mr John Basten QC with Mr Robert Blowes

Solicitor for the Third Respondent:

Andrew Chalk Associates

^[1] The full text of this judgement is available at <http://www.austlii.edu.au/au/cases/cth/federal_ct/2000/394.html>.